HomeMy WebLinkAbout08-5527SMITH LAND & IMPROVEMENT IN THE COURT OF COMMON PLEAS
CORPORATION, OF CUMBERLAND COUNTY,
PENNSYLVANIA
Plaintiff
V. CIVIL ACTION - LAW
TIMOTHY R. MALEC t/d/b/a NO.
MALEC' S PETS :
Defendant
CONFESSION OF JUDGMENT
Pursuant to the authority contained in the warrant of attorney, the original or a copy of
which is attached to the complaint filed in this action, I appear for the defendant and confess
judgment in favor of the plaintiff and against the defendant as follows, plus interest and costs
from the date of judgment and costs of collection as follows:
Principal sum:
Rent and other charges currently due $ 76,069.54
Attorneys' Fees and Costs: $ 5,000.00
TOTAL $81,069.54 plus interest
RHOADS & SINON LLP
By: 1
Stephanie E. DiVittore, Esquire
John M. Coles, Esquire
One South Market Square
P.O. Box 1146
Harrisburg, PA 17108-1146
(717) 233-5731
Attorneys for Defendant for the sole
purpose of confessing judgment;
attorneys for the Plaintiff for all
other purposes
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Stephanie E. DiVittore, Esquire
John M. Coles, Esquire
RHOADS & SINON LLP
One South Market Square
P.O. Box 1146
Harrisburg, PA 17108-1146
(717) 233-5731
Attorneys for Plaintiff
SMITH LAND & IMPROVEMENT
CORPORATION,
Plaintiff
V.
TIMOTHY R. MALEC t/d/b/a
MALEC' S PETS
Defendant
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY,
PENNSYLVANIA
CIVIL ACTION - LAW
NO. 7
COMPLAINT IN CONFESSION OF JUDGMENT
NOW COMES Plaintiff, Smith Land & Improvement Corporation, by its undersigned
attorneys, Rhoads & Sinon LLP, and files the within Complaint in Confession of Judgment, stating
as follows:
1. Smith Land & Improvement Corporation ("Smith Land") is a Delaware corporation
having an office at 2010 State Road, Camp Hill, Pennsylvania 17011.
2. Defendant Timothy R. Malec t/d/b/a Malec's Pets ("Malec") is an adult individual
having an address at 50 Sugar Maple Road, Etters, Pennsylvania 17319.
3. At the time of the events relevant to this Complaint, Smith Land was the owner of
real property, a retail property consisting of approximately 14,650 square feet identified as Store
No. 368 in the West Shore Plaza, located at 1200 Market Street, Lemoyne, Cumberland County,
Pennsylvania (the "Premises")
703554.1
4. On or about August 21, 1996, Smith Land entered into a Lease Agreement (as
amended, the "Lease") with Marge Malec t/d/b/a Malec's Pets ("Marge") whereby Marge was to
lease from Smith Land certain retail space at the West Shore Plaza Shopping Center (the
"Shopping Center") consisting of approximately 3,432 square feet and identified as Store No.
310. Since the Lease was originally executed in 1996, it has subsequently been amended by a
First Lease Amendment dated on or about January 25, 1999, a Second Lease Amendment dated
on or about August of 2001, a Third Lease Amendment dated on or about March 3, 2003 and a
Fourth Lease Amendment dated on or about December 3, 2003. These amendments, inter alia,
amended the Lease to change the Tenant from Marge Malec to Timothy R. Malec and to reflect
that the Tenant has relocated and now occupies the current Premises, which is Store 268 in the
Shopping Center. (A true and correct copy of the Lease, including all amendments, is attached
hereto as Exhibit "A" and incorporated herein by reference).
5. A Deliberate Event of Default has occurred under the terms of the Lease, as
Malec has failed, more than two (2) times within the preceding twelve (12) months, to pay
certain Fixed Minimum Rent, Percentage Rent, Tax Rent, Tenant's proportionate share of
operating costs, promotion charges and other expenses, all as required by the Lease. (Lease,
119.02). As of the date hereof, Tenant currently owes Landlord $76,069.54 in past due amounts.
6. No written notice to the Tenant is required in the case of a Deliberate Event of
Default, nor is Tenant entitled to an opportunity to cure such a default (Lease 119.02).
7. Malec remains in default under the Lease.
8. Paragraph 19.06 of the Lease contains confession of judgment and warrant of
attorney provisions which empower any attorney of any court of record to appear for and enter
judgment against Malec and in favor of Smith Land.
9. Judgment is not being entered by confession against a natural person in
connection with a consumer credit transaction.
10. The Lease has not been assigned and Smith Land remains the Landlord and Malec
remains the Lessee.
11. Judgment has not been entered on the warrant of attorney contained in the Lease
in any jurisdiction.
12. As of the date hereof, the actual amounts presently due and payable to Smith
Land under the Lease are itemized as follows:
Principal sum:
Rent and other charges currently due $ 76,069.54
Attorneys' Fees and Costs: $ 5,000.00
TOTAL
$81,069.54 plus interest
WHEREFORE, Plaintiff, Smith Land & Improvement Corporation, demands judgment
in its favor and against Defendant, Timothy R. Malec t/d/b/a Malec's Pets in the amount of
$81,069.54, together with accruing interest, costs of suit, including attorneys' fees, and such
other charges as authorized by the warrant contained in the Lease.
Respectfully submitted,
RHOADS & SINON LLP
By:1 v ¢n-?-_
Stephanie E. DiVittore, Esquire
John M. Coles, Esquire
One South Market Square
P.O. Box 1146
Harrisburg, PA 17108-1146
(717) 233-5731
Attorneys for Smith Land
& Improvement Corporation
VERIFICATION
R. E. Jordan III hereby deposes and says, subject to the penalties of 18 Pa. C.S. § 4904
relating to unsworn falsification to authorities, that he is the Vice President of Smith Land &
Improvement Corporation, that he makes this verification as such officer by its authority, and
that the facts set forth in the foregoing Complaint in Confession of Judgment are true and correct
to the best of his knowledge, information and belief.
Hate: l LOV W?
R. E. Jor I
EXHIBIT A
WEST SHORE PLAZA
LEASE AGREEMFaNT
PART I
THIS LEASE, made on the2)5f day of +ls? 1996, by HIGH
ASSOCIATES, LTD., 4909 Louise Drive, Suite 209, Mechanicsburg, PA 17055 (hereinafter called
"Agent', Agent for S;tiIITH LAND & WROVElMENT CORPORATION, 2001 State Road, Camp Hill,
PA 17001-3134 (hereinafter called `Landlord), and MARGE MALEC, a sole proprietorship, trading as
MALEC'S PETS, with a notice address at R. D. ml, Box 131, Alum Bank, PA 15521, and an address for
receipt of invoices at 1200 Market Street, Lemoyne, PA 17043, (hereinafter called "renant').
WITNESSETE:
1. Lensed Premises.
Landlord hereby leases to Tenant and Tenant hereby rents from Landlord the store premises (hereinafter
referred to as the "Premises' designated on the plan attached as Exhibit "A" hereto as Store Number 310
erected as part of a shoppin, center presently known as WEST SHORE PLAZA (hereinafter referred to as
the "Shopping Center" and presently compromising the area shown in Exhibit "A"), located at 1200 West
Market Street, Lemoyne, PA 17043, the Premises being measured and described by the following
approximate dimensions which are measured from the outside building lines of each wall of the Premises
or, in the case of this walls separating the Premises from other stores in the Shopping Center, from the
center lines of such walls: Main Store: 2,400 square feet
Front: 20
Depth: 120
Plus warehouse area of 1,032 square feet
Total Rentable Square Feet of Premises: 3,432
together with the right to the non-exclusive use in common with others entitled to use same of all such
automobile parking areas, driveways, corridors, footways, loading facilities and other facilities as may be
designated by Landlord from time to time as more fully set forth and subject to the terms and conditions of
this Lease and the Lease Agreement (hereinafter collectively referred to as the "Lease'o, and to such
reasonable rules and regulations for the use thereof as may be prescribed from time to time by the Landlord
in accordance with Section 5.04 of Part II of the Lease.
2. Length of Term.
The original term of this Lease and Tenant's obligation to occupy the Premises in accordance with the
terms of the Lease shall commence on the earlier of the following dates (such earlier date being hereinafter
called the "commencement date"): (1) October 1, 1996; (2) the date on which Tenant shall first open the
Premises for business with the public. The term of this Lease shall be for a period of three (3) years phis
one month, plus the period, if any between the commencement date (if it falls on a day other than the first
day of the month) and the first day of the first calendar month in the term.
The Tenant's obligation to pay rent shall commence on November 1, 1996, thirty days after the
commencement date, to allow time for Tenant to complete necessary fixtning and construction; but
payment of rent shall in no event commence later than the first day during which Tenant opens the
Premises for business with the public.
Tenant shall have the option, so long as Tenant is not in default per Part IL Article XIX of the Lease, to
lease the Premises for one additional term of two (2) years. To exercise this option, the Tenant must give
Landlord written notice thereof not less than six (6) months prior to the end of the original term.
3. Fixed lYlinimum Rent
Over the course of the original lease term, Tenant shall pay to Landlorda minimum rent of $96,504.00
which is the sum of the "Fixed Minimum Rent" for each of the following periods during the original lease
term:
RENT 2,400 SF MO. WHSE. RENT.
TIME PERIOD ® S/SFNIL 1,032 SF @ S/SFNM MO. AMOUNT DUE ANNUM, summ
1011196-10/31/96 NO RENT DUE
11/1/96-10/31/97 512.00+ 52.35 S2,400.00+S202.00=,52,602.00 S31,2?4.00
11/1/97-10/31/98 512.36+ 32.42 S2,472.00+S208.00 a 52,680.00 532,160.00
11/1/98-10/31/99 512.73+ 52.49 S2,546.00+S214.00 - $2,760.00 533,120.00
Over the course of the option term, if exercised by Tenant pursuant to Paragraph 2 above, Tenant shall pay
Landlord a minimum rent of $69,264.00, which is the sum of the "Fixed Ntuiimum Rent" for each of the
following periods during the option term of the Lease:
RENT 2,400 SF MO. WHSE. RENT
TIME PERIOD Q 5/ ENIL 1,032 SF ® S/SF/YR. MO. AMOUNT DUE ANNUAL AMT.
11/1/99-10/312000 313.11+ 52.57 52,622.00+5221.00 - $2,343.00 534,116.00
II/l/2000-10/31/2001 $13.J1+ $2.64 S2.702.00+5227.00 - 52,929.00 535,148.00
Each such installment shall be due and payable on or before the first day of each calendar month in the
original term of this Lease, in advance, to the attention of:
Cash Management Department
High Industries, Inc.
P. O. Box 10008
1853 William Penn Way
Lancaster, PA 17605-0008
or at such other place as may be designed by Landlord from time to time, without any prior demand
therefor and without any deduction or setoff whatsoever, the first installment to be paid on the
commencement date whether or not the commencement date is the first day of a calendar month. In the
event that the commencement date of the term of this Lease shall be a day other than the first day of a
calendar month, Tenant's first payment of Fixed Minimum Rent shall be prorated for the fractional month
between the commencement date and the first day of the first full calendar month in the term hereof, on a
per diem basis (calculated on a thirty (30) day month).
4. Percentage Rent
In addition to the Fined Minimum Rent, Tenant, in accordance with Part II, Section 2.01 of the Lease, shall
pay to Landlord, as additional rent hereunder (hereinaftef referred to as "Percentage Rene% and as part of
the consideration of the tenancy of the Premises, for each lease year in the original term of this Lease a sum
equal to eight percent (8%) of that portion of Gross Sales (as defined in Section 2.02 of Part II the Lease)
during such lease year which is in excess of the applicable Percentage Rent Gross Sales Base. The
Percentage Rent Gross Sales Base for the following periods within each lease year shall be:
TRV1E PERIOD
10/1/96-10/31/96
11/1/96-10/31/97
11/1/97-10/31/98
11/1/98-10/31/99
PERCENTAGE RENT
NO RENT DUE
8%
8%
8%
GROSS SALES BASE
5360,000.00
$370,800.00
$381,900.00
In addition to the Fixed Minimum Rent, Tenant, in accordance with Part H, Section 2.01 of the Lease, shall
pay to Landlord, as additional rent hereunder (hereinafter referred to as "Percentage Rent', and as part of
the consideration of the tenancy of the Premises, for each lease year in the option term of this Lease a sum
equal to eight percent (8%) of that portion of Gross Sales (as defined in Section 2.02 of Part II the Lease)
during such lease year which is in excess of the applicable Percentage Rent Gross Sales Base. The
Percentage Rent Gross Sales Base for the following periods within each lease year shall be:
2
T tI VM PERIOD PERCE AGE RENT
II/l/99-10/31/2000 8%
11/1/2000-10/31/2001 3%
GROSS SALES BASE
S393,300.00
.5405,300.00
5. Use of Premises.
Subject to the provisions of Article V of Part II of the Lease, Tenant shall use the Premises solely for the
purpose of conducting the business of conducting the business of pet shop selling pets and pet supplies and
for no other use. Landlord agrees to give Tenant the exclusive right to sell live animals in the Shopping
Center, provided that Tenant agrees to dispose of animal waste and bedding material in a manner which
meets all federal, state and local health regulations. In no case will animal fecal matter or animal hair or
feathers be disposed of in the sewers.
6. Shopping Center Hours of Operation.
The present hours of operation of the Shopping Center during which Tenant must have the Premises open
for business with the public (subject to adjustment by Landlord as set forth in Section 5.01) are:
Monday through Friday 10:00 am. to 9:00 P.M.
Saturday 10:00 a.m. to 9:00 p.m.
Sunday Noon to 5:00 p.m.
7. Common Cost of Maintenance and Operation.
In accordance with and subject to the adjustments set forth in Section 7.03 of Part II of the Lease, for each
"Accounting Period" (as defined in said Section) during the term of this Lease, Tenant shall pay Landlord
on account of Tenant's proportionate share of "Operating Costs" (as therein defined), the annual amount
of S 1.36 multiplied by the number of square feet of floor area contained within the Main Store area (2,400
square feet, assuming 1,032 square feet is used for warehousing).
8. Taxes.
In accordance with and subject to the adjustments set forth in Section 2.04 of Part R of the Lease, for each
"Tax Year" (as defined in said Section) during the term of this Lease, Tenant shall pay Landlord on
account of Tenant's share of any "taxes" as defined in such Section), the annual amount of S.91 multiplied
by the number of square feet contained within the Main Store area (2,400 square feet, assuming 1,032
square feet is used for warehousing).
9. Promotion Charge.
In accordance with and subject to the adjustments set forth in Article XV of Part II of the Lease, for each
year during the term of this Lease, Tenant shall pay to Landlord the annual amount of S.50 multiplied by
the number of square feet contained within the Main Store area (2,400 square feet, assuming 1,032 square
feet is used for warehousing.
10. Proportionate Insurance.
In accordance with and subject to the adjustment set forth in Section 7.04 of Part II of the Lease, for each
Accounting Period during the original term hereof, Tenant shall pay Landlord on account of Tenant's share
of the cost of Landlord's policy of fire insurance with extended coverage insuring portions of the Shopping
Center, the annual amount of S.19 multiplied by the number of square feet of floor area contained within
the Main Store area (2,400 square feet, assuming 1,032 square feet is used for warehousing).
11. Landlord's Modifications of Premises for Tenant:
Except to the extent outlined in Exhibit "B" hereto entitled "Landlord's Work in Premises," Tenant agrees
to accept the Premises in as-is condition from Landlord.
12. Remodeling.
In accordance with the provisions of Section 4.02 of the Lease, Tenant shall remodel the entire Premises
not later than October 31, 2001.
13. Security Deposit.
Tenant, contemporaneously with the execution of this Lease, has deposited with Landlord the sum of
Two Thousand Four Hundred Dollars, ($2,400.00) receipt of which is hereby acknowledged by Landlord,
which deposit is now the property of the Landlord and is to be held as security for the faithful performance
by Tenant of all of the terms, covenants and conditions of this Lease by said Tenant to be kept and
performed during the term hereof, subject to Article XX of Part II of the Lease.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have caused this Lease
to be duly executed the day and year first above written.
HIGH ASSOCIATES; LTD. (Agent)
Attest: i BY: L,r
SMITH LAND & IMPROVEMENT CORPORATION (Landlord)
Attest. Qwa--?C?' ) BY:
President
L/)L 61 MARGE MALEC, d/b/a/ MALEC'S PETS (Tenant)
Attest. Y: 'eA!:Ce - z? ??
President
4
CONTENT'S OF PART H
Article I Term
Article II Rent
Article III Books of Account and Audit
Article IV Condition and Remodeling of the Premises:
Changes to Shopping Center
Article V Conduct of Business
Article VI Grant of Concessions
Article VII Common Areas
Article VIII Signs: Awnings; Canopies; Fixtures; Alterations
Article IX Maintenance and Repair; Surrender of Leased Premises
Article X Indemnification; Subrogation
Article M Insurance
Article MI Utilities
Article XIII Estoppel Certificate; Subordination; Attomment
Article XIV Assignment and Subletting
Article XV Promoting the Center
Article XVI Destruction of Premises
Article XVU Eminent Domain "
Article XVIII Bankruptcy
Article XIX Events of Default; Landlord's Remedies
Article XX Security Deposit
Article XXI Environmental Considerations
Article XXII Miscellaneous
PART II
WEST SHORE PLAZA
LEASE AGREEMENT
ARTICLE I
TEM"Y1
SECTION 1.01. Confirmation of the Term
(a) At any time after the commencement date of the term of the Lease the parties shall execute
and deliver to each other, at the option of Landlord, either an instrument in recordable form or a letter
agreement prepared by Landlord, wherein Tenant shall:
(1) certify that the Lease is in full force and effect and (2) certify the commencement and termination dates
of the original term of this Lease.
(b) This Lease and the tenancy hereby created shall terminate at the end of the term hereof without
the necessity of any notice from either Landlord or Tenant to terminate the same, and Tenant hereby
waives notice to vacate the Premises and agrees that Landlord shall be entitled to the benefit of all
provisions of law respecting the summary recovery of possession of Premises from a tenant holding over to
the same extent as if statutory notice had been given.
(c) The period commencing on the date hereof and terminating at midnight on the date
immediately prior to the commencement date is herein referred to as the "initial term," and the period from
the commencement date to the stated expiration date or earlier termination of this Lease is herein referred
to as the "original term." For the purposes of this Lease the words "the term of this Lease" and "term
hereof' shall be deemed to mean the initial term and the original term of this Lease, and all extensions,
such as by the exercising of options granted by Landlord, or any other renewals of the original term.
During the initial term, all of the terms, covenants and conditions hereof shall be in :111 force and effect,
but Tenant's monetary obligations hereunder shall be abated until the original term has commenced.
SECTION 1.02. Failure of Tenant to Open; Failure to Operate.
It is expressly understood and agreed that Landlord does not consider the Fixed Minimum Rent in
itself a fair and adequate rental for the Premises and would not have catered into this Lease unless Tenant
had obligated itself to pay Percentage Rent which Landlord expects to supplement the Fixed Minimum
Rent to provide such fair and adequate rental return. Therefore, (a) if Tenant fails to open for business at
the commencemeat date and/or (b) thereafter, if Tenant fails to continuously operate its business in
accordance with the terms of this Lease or vacates the Premises prior to the expiration of the term hereof,
Landlord will suffer damages in an amount which are not readily ascertainable and thus in any such event
Landlord shall have the right, at its option, to collect as liquidated damages and not as a penalty, in addition
to all other charges which are due hereunder, one thirtieth (IrOth) of an amount equal to the monthly
installment of Fixed Minimum Rent for each day which Tenant fails to so operate and, in addition,
Landlord shall have the right to treat any of the aforesaid events as a "Deliberate Event of Default"
pursuant to Section 19.02(b) hereof.
ARTICLE II
RENT
SECTION 2.01. Percentage Rent.
(a) The Percentage Rent shall be payable without prior demand and without any setoff or
deduction whatsoever at the times set forth hereinafter at the place then fixed for the payment of Fixed
Minimum Rent
(b) Not later than thirty (30) days after the expiration of the first "lease year" (hereinafter defined)
of the term hereof and, unless Landlord exercises its option as set forth in the next sentence hereof, Tenant
shall pay to Landlord the Percentage Rent due for the lease year in question. In the event that Percentage
Rent shall be payable for any lease year in the term hereof, after the expiration of the first lease year
containing twelve (12) complete calendar months, Landlord, at Landlord's option to be exercised by
written notice to Tenant, may require Tenant to pay, as additional rent, together with each monthly
installment of Fixed Minimum Rent due hereunder commencing with the first such payment due
immediately after the receipt by Tenant of such notice an amount equal to one-twelfth (1/12th) of eighty
percent (80%) of the Percentage Rent payable for the immediately preceding lease year. Thereafter,
Tenant shall continue to pay such estimated payments of Percentage Rent together with each mourhly
installment of Fixed Minimum Rent due for each calendar month in the term hereof; provided, however,
that the amount of such estimated monthly payments of Percentage Rent may, at Landlord's option be
adjusted at the expiration of each subsequent lease year after receipt by Landlord of Tenant's statement
referred to in Section 2.03(b) to an amount equal to one-twelfth (1/12th) of eighty percent (80%) of the
Percentage Rent payable for the lease year immediately preceding such adjustment and commencing with
the payment of Fixed Minimum Rent due immediately after receipt by Tenant of notice of such adjustment,
Tenant shall continue to pay such adjusted amount until the next adjustment. Although estimated
Percentage Rent shall be payable monthly as aforesaid, the final computation and payment shall be on an
annual basis. Within thirty (30) days after receipt of each notice from Landlord implementing the
foregoing adjustment, Tenant shall pay the Landlord an amount equal to the aforesaid monthly estimated
payment of Percentage Rent retroactive to the first day of the current lease year.
(c) Whenever used in the Lease the. words "lease year" shall mean the twelve (12) full calendar
months of the term commencing with the January Ist immediately following the commencement date and
ending December 31st of such calendar year and each succeeding twelve (12) month period; provided,
however, that the first lease year shall commence on the commencement date and terminate on the
immediately following thirty-first (31st) day of December in the term of this Lease and the last lease year
shall terminate on the last day of the term of this Lease. In the event that the first or last lease year shall
consist of other than twelve (12) full calendar months, the Percentage Rent Gross Sales Base for such lease
year shall be deemed to be that portion of such Sales Base obtained by multiplying the applicable
Percentage Rent Gross Sales Base set forth in Part I of the Lease by a fraction, the numerator of which shall
be the number of days contained in such lease year and the denominator of which shall be three hundred
sixty-five (365). In the event the amount of the Percentage Rent Gross Sales Base set forth herein subject
to adjustments during the term of this Lease, and the date on which such adjustment is to occur (hereinafter
referred to as the "Rental Adjustment Date's is other than the first day of a lease year, the Percentage Gross
Sales Base for the lease year in which the Rental Adjustment Date shall fall shall be the sum of: (1) the
lowest Percentage Rent Gross Sales Base set forth in Part I of the Lease multiplied by a fraction, the
numerator of which shall be the number of days in the period commencing on the first day of the lease year
in which the Rental Adjustment Date shall fall and ending on the day immediately prior to the Rental
Adjustment Date, and the denominator of which shall be three hundred sixty-five (365); plus (2) the greater
Percentage Rent Gross Sales Base set forth in Part I of the Lease multiplied by a fraction, the numerator of
which shall be the number of days in the period commencing on the Rental Adjustment Date and ending on
the last day of the lease year in which the Rental Adjustment Date shall fall and the denominator of which
shall be three hundred sixty-five (365).
2
(d) If, in each of at least two (2) of the first three full lease years in the term hereof, Tenant shall
not have been obligated to pay Percentage Rent in an amount equal to at least ten percent (10%) of the
annual Fixed Minimum Rent then payable hereunder, Landlord may terminate this Lease upon written
notice to Tenant given at any time within six (6) months after the receipt by Landlord of Tenant's annual
statement of Gross Sales for such third full lease year, (or, if earlier, the due date thereof) and this Lease
shall terminate and be null and void ninety (90) days after receipt of such notice, or Tenant shall enter into
an agreement with Landlord increasing the Fixed tMinimum Rent for each year in the balance of the tern of
this Lease to an amount equal to one hundred twenty-Five percent (125%) of the amount of Fixed
Minimum Rent otherwise due hereunder.
(e) Except as provided herein to the contrary, there shall be no abatement, apportionment or
suspension of the Percentage -Rent payable hereunder. If pursuant to any other section of this Lease,
Tenant should be entitled to an abatement, apportionment or suspension of the Fixed Minimum Rent
payable hereunder, Tenant shall continue to pay to Landlord the Percentage Rent during the period in
which the Fixed Minimum Rent shall have been abated, apportioned or suspended; and during any and all
lease years in which there shall be one or more such periods, the Percentage Rent Gross Base shall be
reduced in the same proportion as the Fixed Minimum Rent shall have been abated, appropriated or
suspended. If during any lease year the Premises shall not be open for business on one or more days on
which Tenant is obligated to conduct business pursuant to this Lease and for which days Tenant shall not
be entitled to an abatement, apportionment or suspension of the Fixed Minimum Rent, the Percentage Rent
Gross Sales Base shall be deemed to be reduced to zero for such days. In the event that any reduction of
the Percentage Rent Gross Sales Base is applicable to one or more days during a lease year, the Percentage
Rent Gross Sales Base to be used in calculating the percentage Rent for such lease year shall be determined
by averaging on a daily basis (excluding from the calculation those days during which the majority of
stores in the Shopping Center shall not have been open for business) the Percentage Rent Gross Sales Base
applicable during such lease year.
SECTION 2.02. Gross Sales Defined.
(a) The words "Gross Sales" as used herein shall mean the gross amount of ail revenue generated
by sales, rental, performance of services or otherwise by Tenant and/or any subtenant, licensee or
concessionaire in, at or from the Premises (including, but not limited to, catalogue sales made at or from
the Premises) whether for cash, credit or other consideration, with such other consideration being
determined at fair market value and financing charges on all Gross Sales (without reserve or deduction for
inability or failure to collect) including, but not limited to, such sales, rental and services (1) as a result of
transaction s originating in, at or from the Premises, whether delivery of performance is made from the
Premises or from some other place; (2) pursuant to mail, telephone, telegraph, closed TV circuit, and other
devices, automated or otherwise, whereby orders are received at the Premises or (3) which Tenant or any
subtenant, licensee or concessionaire in the normal course of its business would attribute to its operations at
the Premises. Gross Sales also include all deposits not refunded to purchasers. Each sale upon installment
or credit shall be treated as a sale for the foil price in the month which such sale shall be made, irrespective
of the time when Tenant shall receive payment therefor.
(b) The following shall be deducted from Gross Sales if originally included therein, or excluded
therefrom, as the case may be, provided separate records as supplied supporting such deductions or
exclusions, namely: (1) any exchange of merchandise between stores of Tenant where such exchange is
made solely for the convenient operation of Tenant's business and not for the purpose of consummating
sale made in, at or from the Premises, (2) returns to shippers or manufacturers, (3) cash or credit refunds to
customers on transactions otherwise included in Gross Sales, (4) sales of fixtures, machinery and
equipment after use thereof in the conduct of Tenant's business in the Premises, (5) amounts collected and
paid out by Tenant for any sales tax imposed by and duly constituted governmental authority provided
such tax is both added to the selling price as a separate and distinct amount in addition to the regular price
of Tenant's merchandise and paid to the taxing authority by Tenant (but not by any vendor of Tenant), (6)
the amount of any discount on sales to employees, and (7) receipts from the permitted pay telephone and
vending machines referred to in Section 5.03(q). No value added tax, and no franchise or capital =ck-tax
3
and no income, gross receipts or similar tax based upon income, profits or gross receipts as such shall be
deducted from Gross Sales.
SECTION 2.03. Percentage Rent Statements.
(a) Not later than the fifteenth (15th) day after the end of each calendar month in the term hereof
Tenant shall submit to Landlord an itemized and accurate written statement signed by Tenant, its duly
authorized officer or duly authorized representative reflecting the full amount of Gross Sales made during
the preceding calendar month. If the commencement date hereof shall not be the first day of a calendar
month, the period between the commencement date and the first day of the first full calendar month in the
term and Tenant's Gross Sales during such period shall be added to the first calendar month for both the
purpose of the computation of Percentage Rent and the purpose of reporting Gross Sales.
(b) Not later than the date set forth in Section 2.01(b) hereof, Tenant shall submit to Landlord a
complete written statement of Tenant's Gross Sales for the preceding lease year in such reasonable detail as
requested by Landlord, accompanied by a statement signed and certified by Tenant, its duly authorized
officer or representative, stating that the Gross Sales reported by Tenant are in accord with the amount
thereof set forth on Tenant's regularly maintained books and records. Simultaneously with the delivery of
the statement referred to in the preceding sentence, Tenant shall pay to Landlord the full unpaid balance of
the Percentage Rent due and payable for such lease year, if any. In the event Tenant is making estimated
payments of Percentage Rent and Tenant is not then in default hereunder or otherwise indebted to
Landlord, any excess of estimated Percentage Rent that Tenant may have paid for such lease year over the
Percentage Rent actually due for such lease year shall be refunded to Tenant within thirty (30) days;
provided, if such overpayment is for the last lease year, Landlord shall not be obligated to refund to Tenant
the amount of such overpayment until Tenant has fully performed all of its obligations under the Lease, is
not indebted to Landlord and has vacated the Premises in accordance with the provisions of this Lease. In
the event Tenant is indebted to Landlord for-my reason whatsoever, Landlord may deduct such amount
owed from such overpayment.
(c) The acceptance by Landlord of payments of Percentage Rent or reports thereof shall be
without prejudice, and shall in no event constitute a waiver of Landlord's rights to claim a deficiency of
such Percentage Rent or to audit Tenant's books and records as set forth in Section 3.01 hereof.
(d) If Tenant shall fail to deliver such statement as required by Section 2.03(b), within the period
set forth therein and such failure shall continue for ten (10) days after the date of written notice of such
failure from Landlord, Landlord shall have the right thereafter to employ an accountant to make such
examination of Tenant's books and records as may be necessary to certify the amount of Tenant's Gross
Sales for said lease year, the certification so made shall be binding upon Tenant and Tenant shall promptly
pay to Landlord the cost of the examination, together with the full balance of Percentage Rent due and
payable for said lease year. In addition, Landlord may treat the failure to deliver such statement within ten
(10) days after the aforesaid notice as a Deliberate Event of Default.
SECTION 2.04. Taxes.
(a) For the purposes of this Section 2.04, the word "taxes" shall include all taxes attributable to
improvements now or hereafter made to the Shopping Center or any part thereof or attributable to the
present or future installation in the Shopping Center or any part thereof of fixtures, machinery or
equipment, all real estate taxes, assessments, water and sewer and other governmental impositions and
charges of every kind and nature whatsoever, nonrecurring as well as recurring, special or extraordinary as
well as ordinary, foreseen, and unforeseen, and each and every installment thereof, which shall or may
during the term of this Lease be levied, assessed or imposed, or become due and payable or become liens
upon, or arise in connection with the use, occupancy or possession of, or any interest in, the Shopping
Center or any part thereof. or any land, buildings or other improvements therein less all amounts paid to
Landlord or others by the occupants of any "excluded areas" (as defined in Section 2.04(d) below). The
word "taxes" shall not include any charge, such as water meter charge and sewer rent based thereon, which
is measured by the consumption by the actual user of the item or service for which the charge is made.
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(b) For each "Tax Year" (as defined in Section 2.04(e) hereof) during the original term of this
Lease, Tenant shall pay to Landlord as additional rent (hereinafter called "Tax Rent % the.amount obtained
by multiplying the total of all taxes payable during such Tax Year less the amount of taxes received from
excluded areas by a fraction, the numerator of which shall be the square feet of floor area of the Premises
and the denominator of which shall be the total amount of square feet in the Shopping Center less excluded
areas. On account of Tax Rent, Tenant shall pay monthly, in advance, as additional rent, together with each
monthly installment of Fined Minimum Rent, without demand or setoff, an amount equal to one-twelfth
(1/12) of the annual amount payable on 'account of Tax Rent, as set forth in the paragraph of Part I of the
Lease entitled "Taxes," for each square foot of floor area contained within the Premises. Such amount may
be adjusted by Landlord at any time during the term hereof to an amount equal to one-twelfth (1/12) of the
Tax Rent payable by Tenant for the preceding Tax Year. If Tenant's payment on account of Tax Rent for
any Tax Year exceeds the actual amount due by Tenant as Tax Rent for such Tax Year and Tenant is not in
default hereunder or otherwise indebted to Landlord, Landlord shall apply such overpayment to Tenant's
account as a credit; provided, Tenant has fully performed all of its obligations under this Lease, is not
indebted to Landlord. In the event Tenant is indebted to Landlord for any reason whatsoever, Landlord
may deduct such amount owed from such overpayment.
(c) Landlord shall have the right to bill Tenant for Tax Rent at any time after each receipt by
Landlord of a bill, assessment, levy, notice of imposition or other evidence of takes due or payable all of
which are hereinafter collectively referred to as a "tax bill" (whether such bill is a final bill, an estimate of
annual taxes or represents a tar bill based upon a final or partial assessment or determination). Tenant
shall pay the balance of its Tax Rent within thirty (30) days of receipt from Landlord of a written statement
setting forth the taxes for which Landlord has received a tax bill, Tenant's share of taxes, and Tenant's
payments theretofore made on account of such Tax Rent. All subsequent monthly payments on account of
Tax Rent made by Tenant during such Tax Year after receipt of such bill and statement shall be applied by
Landlord toward payment on account of Tenant's obligation for Tax Rent for the next ensuing Tax Year
and shall not reduce Tenant's obligation to pay the balance due Landlord pursuant to such statement. In
making the computations as aforesaid, a tax bill or photocopy thereof submitted by Landlord to Tenant
shall be conclusive evidence of the amount of the taxes included in the computation of the Tax Rent in
question; provided, however, Landlord shall have the right to bill Tenant for Tenant's share of the Tax
Rent for the last Tax Year in the term hereof whether or not Landlord shall theretofore have received a tax
bill covering the period from the date of the tax bill which formed the basis of the most recent installment
on account of Tax Rent billed to Tenant to the expiration of the term hereof. If Landlord has not received a
tar bill, Landlord shall estimate the amount of the last installment of Tax Rent on the basis of information
contained in the tax bill most recently received by Landlord. Tenant shall pay such adjusted amount upon
billing by Landlord. -
(d) As used in this Lease "excluded areas" shall mean all basement space, all portions of the
Shopping Center shown on Exhibit "A" attached hereto which are highlighted by diagonal lines, the variety
store (currently referenced as Store 268 on Exhibit A) and the grocery store as may be expanded (currently
referenced as Store 100 on Exhibit A), and any portions of additions to the Shopping Center referred to in
Section 4.04(b) which Landlord hereafter designates as an excluded area.
(e) For the purpose of this Lease the words "Tax Year" shall mean the twelve (12) full calendar
months of the term commencing with the January 1st immediately following the commencement ending
December 31st of such calendar year and each succe•ding twelve (12) month period thereafter; provided,
however, the first Tax Year shall commence on the commencement date and terminate on the immediately
succeeding December 31st.
(f) If the original term hereof commences or terminates (other than by reason of Tenant's default)
on a day other than the first or last day, respectively, of a Tat Year, Tenant's Tax Rent for such Tax Year
shall be pro-rated
(g) If, after Tenant makes the required annual payment of Tax Rent, Landlord receives a refund
of any portion of the taxes (provided Tenant is not then in default hereunder) Landlord will, within forty-
five (45) days after receipt of the refund, pay to Tenant a pro-rata net refund after deducting all costs and
expenses (including, but not limited to, attorneys' and appraisers' fees) expended or incurred in obtaining
such refund. Tenant shall not institute any proceedings with respect to the assessed valuation of the
Shopping Center or any part thereof for the purpose of securing a tax reduction.
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(h) If at any time during the term of this Lease, under the laws of any one or more jurisdictions in
which the Shopping Center is located, a tax, imposition, charge, assessment, levy, excise or license fee is
levied on, imposed against or measured, computed or determined, in whole or in part, by: (1) rents payable
hereunder (Fired Minimum, Percentage, Tax and/or addition) or (2) the value of any lien plated against the
Shopping Center-or against the real property comprising the Shopping Center or any obligations secured
thereby, or if any other tax (except income tax), imposition, charge, assessment, levy, excise or license fee
which is not referred to in Section 2.04(a), however described or denoted, shall be levied or imposed by
any such jurisdiction, to the extend that the cost of any of the foregoing shall be imposed, either directly or
indirectly, on Landlord, such tax, imposition, charge, assessment, levy, excise or license fee, shall be
deemed to constitute "taxes" for the purposes of this Section 2.04.
(i) In the event of any dispute as to the floor area in the Shopping Center or any portion thereof
(other than the Premises which shall be determined by the provisions of Part I of the Lease), the
determination of Landlord shall be binding upon the parties.
SECTION 2.05. Additional Rent.
All sums of money or charges required to be paid by Tenant under this Lease, whether or not the
same are designated as "additional rent," shall for all purposes hereunder be deemed and shall be paid by
Tenant as rent. If such amounts or charges are not paid at the time provided in this Lease, they shall
nevertheless be collectible as rent with the next installment of Fixed Minimum Rent thereafter falling due
hereunder together with a late charge of fifteen percent (15%) per annum from the due dale thereof to the
date thereof to the date of payment, but not in excess of the highest rate allowed by law. In the event any
check tendered by Tenant to Landlor4 is not honored on initial presentation, Tenant shall pay Landlord the
greater of Twenty-Five Dollars ($25.00) or the amount Landlord's bank charges Landlord for processing
such returned check.
ARTICLE III
BOOKS OF ACCOUNT AND AUDIT
SECTION 3.01. Tenant's Records.
(a) Tenant covenants and agrees the business records of Tenant and of any subtenant, licensee, or
concessionaire upon the Premises shall be maintained in accordance with generally accepted accounting
principles. Furthermore, Tenant shall keep at all times during the term hereof; at the Premises or at the
general office of Tenant, full, complete and accurate books of account and records in accordance with
accepted accounting practices with respect to alloperations of the business to be conducted in or from the
Premises including, without limitations, the recording of Gross Sales and the receipt of all merchandise
into and the delivery of all merchandise from the Premises during the term hereof and shall retain such
books and records, copies of all tax reports submitted to the appropriate taxing authorities, as well as copies
of contracts, vouchers, checks, inventory records, dated cash register tapes and other documents and papers
in any way relating to the operation of such business (all of which are hereinafter collectively referred to as
"books and records', for at lease three (3) years from the end of the lease year to which they are
applicable, or, if an audit is commenced or if a controversy should arise between the parties hereto
regarding the rent payable hereunder, until such audit or controversy is terminated even though such
retention period may be after the expiration of the term of, or earlier termination oil this Lease. Such
books and records shall be open at all reasonable times during the aforesaid retention period, after prior
written notice to Tenant, to the inspection of Landlord or its duly authorized representatives, who shall
have full and free access to such books and records, the right to audit such books and records and the right
to require of Tenant, its agents and employees, such information or explanation with respect to such books
and records as may be necessary for a proper examination and/or audit thereof. If for any reason Tenant
does not fatly comply with the above obligations on the date designated by Landlord for an inspection
and/or audit of Tenant's books and records, and Landlord agrees to reschedule such inspection and/or
audit, Tenant shall reimburse Landlord, on demand, for Landlord's out-of-pocket expenses relating to such
rescheduling.
(b) In the event Tenant violates the provisions of Section 3.01(a) and as a result of such
violation, Landlord, or its duly authorized represpntative, is unable to conduct a proper examination and/or
audit, the parties agree that Landlord shall have been deprived of an important right under this Lease and,
as a result thereof, will suffer damages in an amount which is not readily ascertainable and thus, in such
event, Landlord, in addition to and not in lieu of any other remedies which Landlord has under this Lease,
at law or in equity, shall have the right, at its option, to collect, as liquidated damages and not as a penalty,
an amount equal to twenty percent (20%) of the greater of (1) Percentage Rent reported for the period or
periods in question, or (2) the annual Fixed Minimum Rent payable for the period or periods in question.
SECTION 3.02. Audit
If the examination and/or audit referred to in Section 3.01 shall disclose that Tenant has
understated its Gross Sales by $1,000.00 or more for any lease year during the period being examined,
Tenant shall pay to Landlord, upon demand, the cost of such examination and/or audit. Any deficiency in
Percentage Rent shall be payable in any event. In addition, Landlord may treat the existence of such
liability as a Deliberate Event of Default.
ARTICLE IV
CONDITION AND REMODELING OF THE PREMISES: CHANGES TO SHOPPING CENTER
SECTION 4.01. Condition of Premises.
(a) Tenant has had the opportunity to examine the Premises and hereby agrees to accept them in
the "as is" condition existing on the commencement date. Tenant further acknowledges that neither
Landlord nor Arent has made any representations as to the present or future condition of the Premises, the
presence or absence of hazardous materials (as defined in Section 2122) therein or what items the prior
occupant of such Premises is required to or may leave in the Premises. Landlord shall not be liable for any
inability to deliver possession of the Premises to Tenant by the commencement date, except that any such
inability shall extend the commencement date by a period of time equal to the period between the
commencement date and the date Landlord delivers possession; provided, however, if Landlord has not
turned over possession by a date which is 120 days after the commencement date, Tenant may, at Tenant's
option, terminate this Lease provided that Tenant has not caused the delay, and this Lease shall be null and
void and neither party shall have any liability hereunder to the other.
(b) Tenant acknowledges that it assumes all responsibility and expense for achieving compliance
with Americans with Disabilities Act of 1990, Pennsylvania Department of Labor and Industry Code
pertaining to Universal Accessibility Standards, Building Officials and Code Administrators (B.O.C.A.)
Accessibility Standards for Handicapped Persons or any future federal, state or local laws, ordinances,
building codes or standards that may become applicable to the Premises.
SECTION 4.02. Remodeling of the Premises.
(a) Tenant shall fully and completely remodel the Premises in accordance with the plans and
specifications referred to below, such work to be completed by the date specified in the Paragraph of Part I
of the Lease captioned "Remodeling." Not later than thirty (30) days after the date hereof, Tenant shall
deliver to Landlord detailed plans and specifications prepared by Tenant's licensed architect disclosing
Tenant's proposed remodeling of the Premises. Landlord shall review such plans and specifications and
advise Tenant of any changes required by Landlord; Tenant shall promptly revise such plans and
specifications to incorporate Landlord's required changes and submit the revised plans to Landlord within
twenty (20) days after being advised of Landlord's changes, if any. Tenant shall commence such
renovations within ten (10) days after Landlord has approved Tenant's plans and specifications and has
turned over possession of the Premises. All such work shall be promptly commenced and thereafter
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continued with due diligence and be fully completed and the Premises opened for business in accordance
with the provisions hereof not later than the commencement date. Tenant shall perform no.work in the
Premises until such plans and specifications have been approved by Landlord. Together with the initial
submission of plans and specifications for (i ) the remodeling required by this Lease and (ii) relating to any
other work in the Premises which Tenant desires or is required to perform, Tenant shall pay Agent 5300.00
to defray the cost of reviewing Tenant's plans and specifications.
(b) In the event that the Premises contain vinyl asbestos floor file or any other typeof non-friable
asbestos containing material (A.C.M.), tenant acknowledges and accepts all responsibility and expense for
repairing, maintaining, or encapsulating the A.C-M. in accordance with approved federal, state and local
protocols, practices and procedures for such repair, maintenance or encapsulation..
In the event that Tenant's renovations or repairs to the Premises cause or threaten to cause (in the
sole determination of the Landlord) the A.CJVf. to become friable, Tenant acknowledges and accepts all
responsibility and expense for the removal and disposal of the A.C.M. in full compliance with all federal,
state and locally-approved protocols, practices and procedures for the removal and disposal of A.C.M.
Any such removal and disposal shall be accomplished by contractors licensed to do such removal and
disposal and such contractors shall carry insurance and performance bonds in amounts and with insurance
carriers acceptable to landlord.
Original copies of any and all documentation relating to the repair, maintenance, encapsulation,
removal, and/or disposal of A.C.YI. shall, immediately become property of the Landlord. This
documentation shall include, but not be limited to, inspection reports, remediation contracts, maintenance
logs and reports, removal contracts, permits required by federal, state or local authorities having
jurisdiction over asbestos removal, transportation and chain of custody documents, and disposal and/or
landfill acceptance records. Failure of Tenant to provide these documents shall constitute a Deliberate Act
of Default.
(c) All work required under this Section and all other alterations to the Premises performed by
Tenant pursuant to this Lease (including, without limitation, any work required by Article XXI) are
collectively referred to as "Tenant's Work." Any work to be completed by Landlord shall be referred to as
"Landlord's Work" and shall be referenced in Exhibit "B." All of Tenant's Work shall be completed at
Tenant's sole cost and expense. In performing Tenant's work, Tenant shall comply with the following
requirements:
1. In addition to, and not in lieu of the other policies of insurance required by this Lease,
at all times between the start and completion of Tenant's Work (such period is herein referred to as
"Tenant's Construction Period!% Tenant, at its own cost and expense, shall maintain in effect with a
responsible insurance company, a policy of "All Risk" Builder's Risk Insurance in the standard form for
the State where the Shopping Center is located. Said insurance shall cover the full replacement value of all
work done and fixtures and equipment installed or to be installed at the Premises by Tenant.,
2. At all times during Tenant's Construction Period, Tenant's contractors and
subcontractors shall maintain in effect worker's compensation insurance as required by the laws of the
State in which the Shopping Center is located.
3. Repair and/or reconstruction of all or any portion of Tenant's work damaged or
destroyed by any casualty occurring during Tenant's Construction Period shall be commenced by Tenant
as soon as possible after such casualty; provided that if all or any portion of Landlord's Work is also
damaged or destroyed by such casualty, Landlord shall notify Tenant when repairs or reconstruction of
Landlord's work is substantially completed and, within fifteen (15) days after receipt of such notice,
Tenant shall diligently pursue such repair and/or reconstruction to completion.
4. Any approval or consent by Landlord of any or all of Tenant's criteria, systems, plans
specification or drawings shall neither constitute an assumption of responsibility by Landlord for any
aspect of such criteria, systems, plans specifications or drawings including, but not limited to, their
accuracy or efficiency or obligate Landlord in any manner with respect to Tenant's Work and Tenant shall
be solely responsible for any deficiency in design or construction of all portions of Tenant's Work.
5. Tenant shall obtain and pay for all necessary permits and shall pay all other fees
required by public authorities or utility companies with respect to Tenant's Work.
6. Tenant shall maintain the Premises and the Common Areas (as defined in Section
7.01) adjoining the same in a clean and orderly condition during construction. Tenant shall promptly
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remove all unused construction materials, equipment shipping containers, packaging, debris and waste
from the Shopping Center. Tenant shall contain all construction materials, equipment, fixtures,
merchandise, shipping containers and debris within the Premises. Public corridors, service corridors and
the exterior of the building shall be clear of Tenaat's equipment., merchandise, refuse, and debris at all
times. The location of Tenant's dumpster for construction debris shall be subject to approval of Landlord
and/or Agent
7. Only those contractors and subcontractors as have been duly licensed by the
municipality in which the Shopping Center is located and, if applicable, the authority having jurisdiction
over the appropriate profession, and which have been approved in writing by Landlord may perform any
portion of Tenant's Work for Tenant in or upon the Premises.
3. At any time and from time to time during the performance of Tenant's Work,
Landlord, Agent, Landlord's architect and/or Landlord's construction consultant may enter upon the
Premises and inspect the work being performed by Tenant and take such steps as they may deem necessary
to desirable to assure the proper performance by Tenant of Tenant's Work and/or for the protection of the
building and/or any other premises adjacent to the Premises. In addition, Tenant's Work shall be
performed in a thoroughly first-class and worktnanhlte manner, shall incorporate only new materials and
shall be in good and usable condition at the date of completion.
9. Tenant's Work shall be coordinated with all work being performed or to be performed
by Landlord and other occupants of the Shopping Center to the end that Tenant's Work will not interfere
with the operation of the Shopping Center or interfere with or delay the completion of any other
construction within the Shopping Center, and each such contractor and subcontractor shall comply with all
procedures and regulations prescribed by Landlord or Agent for integration of Tenant's Work with that to
be performed in connection with any construction in the Shopping Center and in connection with the
operation of the Shopping Center.
10: Neither Tenant nor its contractors or subcontractors may use any space within the
Shopping Center (except the Premises) for storage, handling and moving of materials and equipment, and
if Tenant or such contractors and/or subcontractor shall use any space in the Shopping Center (except the
Premises) for any of the aforesaid purposes without obtaining Landlord's prior written approval therefore,
Landlord shall have the right to terminate such use or remove all of Tenant's and such contractor's or
subcontractor's material, equipment and other property from such space without Landlord being liable to
Tenant and/or such contractors or subcontractors; and the cost of such termination and/or removal shall be
paid by Tenant to Landlord. It shall be Tenant's responsibility to cause each contractor and subcontractor
to maintain continuous protection of adjacent property and improvements against damage by reason of
Tenant's Work, including at Landlord's request, the installation of lights, guard rails, barricades and
temporary store fronts of a design approved by Landlord, or at Landlord's option, Tenant shall reimburse
Landlord, on demand, for the cost incurred in Landlord's installation of such items.
11. Tenant shall promptly pay all contractors and materialmcn so as to minimize the
possibility of a lien or claim of lien being filed with respect to the Premises or the Shopping Center, and
should any such lien be made or filed, Tenant shall cause the same to be discharged by bond or otherwise
within ten (10) days after written request by Landlord. If Tenant shall fail to cause such lien or claim of
lien to be bonded against or to be discharged within the period aforesaid, then, in addition to any other
right or remedy which Landlord may have under this Lease, at law or in equity, Landlord may, but shall
not be obligated to, discharge the same either by paying the amount claimed to be due or by procuring the
discharge of such lien or claim of lien by deposit or by bonding proceedings and, in any such event,
Landlord shall be entitled, if Landlord so elects, to compel the prosecution of any action for the foreclosure
of such lien or claim of lien by the lienor with interest, costs and expenses. Any amount so paid by
Landlord and all costs and expenses incurred by Landlord in connection therewith or in connection with
insuring the title to the Shopping Center or any interest herein free of such lien or claim of lien, together
with a late charge thereon at the rate set forth in Section 2.OS, from the respective dates of Landlord's
making of the payment and incurring of the cost and expense, shall constitute additional rent payable by
Tenant under this Lease and shall be paid by Tenant to Landlord on demand.
(d) Within ten (10) days after initially opening the Premises for business with the public, Tenant
shall supply to Landlord the following:
9
1. An executed and acknowledged release of mechanic's liens with respect to the
Premises executed by Tenant's general contractor and by every subcontractor and supplier of labor and/or
materials engaged in Tenant's Work.
2. Properly issued certificates evidencing acceptance or approval of the Premises by
appropriate governmental authorities, including the underwriter's approval of Tenant's sprinkler
installation and electrical system.
3. A set of "as-built' plans and specifications for Tenant's Work prepared and sealed by
Tenant's architect, together with names and addresses of Tenant's electrical, plumbing, and other
contractors.
(e) Nothing in this Lease shall be construed as in any way constituting a consent or request by
Landlord, expressed or implied, by interference or otherwise, to any contractor, subcontractor, laborer, or
materiahnan for the performance of any labor or the furnishing of any materials for any specific or general
improvement, alteration, or repair of or to the Premises or to any buildings or improvements thereon, or to
any part thereof. Notwithstanding anything in this Lease, or in any other writing signed by Landlord to the
contrary, neither this Lease nor any other writing signed by Landlord shall be construed as evidencing,
indicating, or causing an appearance that any erection, construction, alteration or repair to be done, or
caused to be done, by Tenant is or was in fact for the immediate use and benefit of Landlord.
SEC'T'ION 4.03. Panting Facilities.
Tenant and its employees shall park their can only in those portions of the parking area
designated for that purpose by Landlord. Tenant shall furnish Landlord with automobile license numbers
assigned to Tenant's car or cars and can of its employees within five (5) days of a request therefor and
shall thereafter notify Landlord of any changes within five-(5) days after such changes occur. In the event
that Tenant or its employees park their cars in area other than such designated parking areas, then Landlord
after giving notice to Tenant of such violation shall have the right to charge Tenant Ten Dollars (SI0.00)
per day per car parked in any areas other than those designated.
SECTION 4.04. Roof, Walls, Changes and :additions to Shopping Center.
(a) Landlord hereby reserves the exclusive right at any time and from time to time to use all or
any part of the roof, exterior walls and air space above the finished ceiling of the Premises for any purpose;
to erect scaffolds, protective barriers or other aids to construction on, around and about the exterior of the
Premises, provided that access to the Premises shall not be substantially denied. Landlord also reserves the
right after written notice to Tenant to enter the Premises (except that in the event of an emergency, no
notice shall be required), at any time and from time to time to make such repairs, additions or alterations as
it may deem necessary or desirable to the Premises, to the building in which the Premises is contained, or
the Shopping Center in general; to shore the foundations and/or walls thereof and/or to install, maintain,
use, repair, inspect and replace foundations, columns, pipes, ducts, conduits and wires leading through or
located adjacent to the Premises and serving other parts of the Shopping Center. Landlord shall use
reasonable efforts to install such pipes, ducts, conduits or wires in the space above Tenant's finished ceiling
(or if Tenant does not have finished ceiling), in the space above the height where, in Landlord's opinion, a
finished ceiling would otherwise exist, or another location which does act materially interfere with
Tenant's use of the Premises. Landlord's rights hereunder may be exercised by Landlord's designee.
Tenant shall not remove or tamper with any such pipes or other apparatus installed by Landlord.
(b) Landlord hereby reserves the right at any time to make alterations or additions to, and to build
additional stories on, and to build adjoining any buildings in the Shopping Center, including the building in
which the Premises are contained and to construct other buildings or improvements in the Shopping Center
and Tenant shall have not interest of any kind whatsoever in the said additions or additional stories or
adjoining buildings. Landlord also reserves the right to reduce or enlarge the area of the Shopping Center
by excluding portions of the ground therefrom or adding additional ground thereto from time to time and,
whether or not so reduced or enlarged, to construct double-deck elevated or subterranean parking facilities.
(c) If any excavation shall be made or authorized to be made upon land adjacent to the Premises,
Tenant shall afford to the person causing or authorized to cause such excavation license to enter upon the
10
Premises for the purpose of dcing such work as Landlord shall deem necessary to preserve the wail or, the
building of which the Premises form a part from injury or damage and to support the same. by proper
foundations, without any claim for damages or indemnification against Landlord or diminution or
abatement of rent.
(d) Landlord reserves the right to install kiosks, fountains, benches, seating arrangements,
promotional activities, seasonal displays, temporary stores, amusement devices and other amenities in
certain portions of the Common Areas selected by Landlord from time to time, all of which shall be done at
Landlord's sole cost and expense and without any approval and consent of Tenant. Landlord also reserves
the right to enclose any open sections of the Shopping Center.
(e) Tenant acknowledges that Landlord's implementation of its rights set forth in Section 4.04
may interfere with access to or visibility of the Premises or the availability of certain panting areas and
Common Areas and Tenant agrees that the exercise of any such rights shall not constitute any grounds for
an abatement of any rent hereunder to be deemed an eviction or disturbance of Tenant's use and possession
of the Premises nor shall the same render Landlord liable in any manner to Tenant for any inconvenience,
disturbance, loss of business or any other occurrence arising from the exercise of any such rights.
SECTION 4.05 Right to Relocate.
(a) The purpose of the plan hereto annexed as Exhibit "A" is solely to show he approximate
locarion of the Premises and the present layout of the Shopping Center, but Landlord does not warrant or
represent to Tenant that the Shopping Center will continue to be improved as shown thereon. Landlord
hereby reserves the right at any time and from time to time to make changes or revisions in such plan and
the Shopping Center, including but not limited to, additions to, subtractions from, and/or relocations or
rearrangements of, the buildings, parking areas, and other Common Areas shown on such plan.
(b) Notwithstanding anything to the contrary contained in this Lease, in connection with any
expansion, enlargement or rearrangement of the Shopping Center or any aspect thereof, Landlord shall
have the right on one or more occasions to require that Tenant relocate from the Premises to a location
designated by Landlord ("Relocated Premises' which shall contain approximately the same number of
square feet as currently contained within the Premises, such relocation to be implemented in accordance
with the terms and conditions set forth below. Landlord shall advise Tenant in writing as to the location of
the Relocated Premises and the date by which Landlord will require that Tenant complete such relocation.
Within thirty (30) days after receipt by Tenant of Landlord's notice, Tenant shall advise Landlord in
writing whether Tenant agrees to relocate to the Relocated Premises in accordance with the provisions
hereof. In the event Tenant fails to notify Landlord that Tenant will relocate within the aforesaid
timef ame, or fails to notify Landlord of its decision with respect to such relocation, then at any time
thereafter Landlord may cancel this Lease upon fifteen (15) days' prior written notice to Tenant, in which
event this Lease will expire on such date as though the date set forth in the letter of cancellation was fixed
as the expiration date hereof; and Landlord shall have no liability to Tenant as a result of such cancellation.
If Tenant agrees to so relocate, after notice from Landlord to do so, Landlord will contribute to the cost of
Tenant's relocation in an amount equal to Tenant's documented cost of preparing the original Premises for
occupancy, times a fraction wherein the denominator is the number of months in-the original term and the
numerator is the number of months including fractional months that would remain in the original term after
the Tenant's last day of occupancy in the original Premises. Prior to performing such work, Tenant shall
submit to Landlord for approval the plans referred to in Section 4.02 disclosing all of Tenant's Work to be
performed in the Relocated Premises and no such work shall commence until such plans have been
approved by Landlord. In any event, not later than the date specified for the completion of such move, and
whether or not Tenant shall have commenced business in the Relocated Premises, Tenant shall vacate the
Premises demised hereby and peaceably surrender possession thereof to Landlord in accordance with the
provisions hereof. Commencing as of the last day by which such relocation must be accomplished, or if
sooner, the day Tenant commences business in the Relocated Premises, all of Tenant's right, title and
interest in and to the Premises originally demised hereby shall cease and terminate and from and after such
date the Relocated Premises shall be deemed deriiised hereunder in lieu of the Premises originally demised
hereby. At the request of Landlord, the parties shall enter into an amendment to this Lease which shall
confirm the area and size of the Relocated Premises. The Fixed Minimum Rent and Percentage Rent Gross
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Sales Base shall automatically be amended to bear the same relationship to the Fixed Minimum Rent and
Percentage Rent Gross Sales Base presently set forth in the Lease as the existing area of the Premises bears
to the area of the Relocated Premises.
SECTION 4.06. Financing.
(a) Within ten (10) days of receipt of a requisition from Landlord, Tenant agrees to forward to
Landlord a current financial statement o Tenant and/or if applicable, Tenant's guarantor or surety, in form
satisfactory to Landlord, certified by an independent certified public accountant.
(b) Landlord reserves the right to sell, lease or sever the ownership of or title to the various
sections of the Shopping Center and/or to place separate mortgages on said sections. Tenant shall execute
from time to time such instruments reasonable required by Landlord and its mortgagee to effectuate the
provisions of this Section 4.06(b).
SECTION 4.07. Excuse of Performance.
Notwithstanding anything in this Lease to the contrary, if Tenant shall be delayed or hindered in
or prevented from performance of any act required hereunder by reason of any strike, lock-out, labor
dispute, civil commotion, warlike operation, invasion, rebellion, hostilities, military or usurped power,
sabotage, governmental regulation or controls, failure of power, inability to obtain any material or service,
Act of God or other reasons of a like nature not related to the fault of Tenant_ then performance of such act
by Tenant shall be excused for the period of such delay; provided, however, the foregoing shall not excuse
Tenant from the prompt payment of Fixed Minimum Rent, Percentage Rent, Tax Rent, additional rent or
any other payments required by the terms of this Lease or delay the date on which Tenant's obligation to
commence such payments shall begin. Notwithstanding anything in this Lease to the contrary, Landlord
shall act be deemed in default with respect to the performance of any of the terms, covenants and
conditions of this Lease if Landlord's failure to perform such terms, covenants and conditions is due to any
strike, lockout, labor dispute, civil commotion, war-Like operation, invasion, rebellion, hostilities, military
or usurped power, sabotage, governmental regulations or controls, failure of power, inability to obtain any
material, service or financing, Act of God, fire or other casualty or other cause, whether similar or
dissimilar to those enumerated in this Section, which is beyond the reasonable control of Landlord.
ARTICLE V
CONDUCT OF BUSINESS
SECTION 5.01. Use of Premises.
(a) Except as otherwise specifically provided herein, commencing on the commencement date
and thereafter for the balance of the term of this Lease, Tenant shall continuously occupy and use the
Premises solely for conducting the business specified in Part I of the Lease as the Permitted Use, and will
not use or permit or suffer the use of the Premises for any other business or purpose. In addition, Tenant
agrees that Tenant shall not operate or cause or permit to be operated any catalogue, mail or telephone
order sales in or from the Premises except the incidental sale of merchandise which Tenant is permitted to
sell over the counter to customers in the Premises pursuant to the Permitted Use set forth in Part I of the
Lease, no shall Tenant divert elsewhere any business which would ordinarily be transacted by Tenant at,
in, or from the Premises. The authorization of the use of the Premises for the business purposes set forth in
Part I of the Lease does not constitute a representation or warranty by Landlord that any particular use of
the Premises is now or will continue to be permitted under applicable laws or regulations.
(b) Tenant shall not permit, allow or cause any of the following to be conducted in the Premises:
any public or private auction, or any sale which would indicate to the public that Tenant is bankrupt, is
going out of business, or has lost its-lease. Tenant shall not use or permit any use of the Premises, except
in a manner consistent with the general high standards of merchandising in the Shopping Center, nor shall
Tenant's advertising indicate or imply that Tenant is operating its business in a manner which is not
1?
consistent with the general high standards of merchandising in the Shopping Center. Nothing contained in
this Section 5.0l(b) shall affect or is intended to affect Tenant's pricing policies.
(c) Notwithstanding anything contained herein to the contrary, including the provisions of the
paragraph of Part I of the Lease captioned "Use of Premises," Tenant is specifically prohibited from selling
or distributing tobacco "papers," pipes of the type and nature commonly associated with the smoking if
marijuana (e.g. "water pipes'% "roach clips," cocaine "spoons" and all other types o f smoker's novelty
items, materials or paraphernalia which are, or may reasonably be construed to be, intended for use in
connection with narcotics or other unlawful substances.
(d) Because the adequacy of the rental hereunder is dependent upon Tenant's Gross Sales
whether or not Percentage Rent is payable hereunder, Tenant agrees that commencing with the
commencement date and thereafter throughout the term of this Lease, Tenant will continuously, actively
and diligently operate or cause the permitted business to be operated in good faith and in an efficient,
businesslike and respectable manner, maintaining in the Premises a full staff of employees and a full stock
of seasonable merchandise of the quality, kind, type and breadth which Tenant usually sells, and
employing Tenant's best continual efforts and abilities to the end that the maximum Gross Sales which can
reasonably be produced from the Premises shall be produced.
(e) Throughout the term of this Lease, Tenant shall cause its store to remain open each day of the
week during the hours set forth in the paragraph of Part I of the Lease captioned "Shopping Center Hours
of Operation." Tenant agrees that the hours during which Tenant is obligated to operate may be changed
by Landlord from time to time provided that Landlord will not act in a discriminatory manner.
(f) Tenant shall operate and/or advertise the business operated at or from the Premises only under
the name set forth in the first page of Part I of the Lease, unless and until the use of another name is
permitted in writing, by Landlord.
SECTION 5.02. Storage.
Tenant shall warehouse, store and/or stock in the Premises only such goods, wares and
merchandise as Tenant is permitted and intends to offer for sale at retail in, at or from the Premises. This
shall not preclude occasional transfers of merchandise to other stores of Tenant, if any, not located within
the Shopping Center.
SECTION 5.03. Rules and Regulations.
Tenant covenants and agrees that Tenant at its own cost and expense;
(a) Will. keep all exterior and interior store froat surfaces clean and will maintain the rest of the
Premises and all corridors and loading areas immediately adjoining the Premises in a clean and orderly
condition and free of insects, rodents, vermin and other pests;
(b) Will not permit accumulations of any refuse, but will remove the same and keep such refuse in
odor-proof, rat-proof containers within the interior of the Premises shielded from the view of the general
public until removed and will not bum any refuse whatsoever but will causeAll such refuse to be removed
by such person or companies, including Landlord, as may be designated in writing by Landlord and will
pay all charges therefor, which shall in all events be competitive within the same geographical area for
similar services performed by a reputable person or company; provided, however, that Landlord may
decline to designate any such person or company in which event all such refuse shall be removed by such
person or company as Tenant, subject to Landlord's written approval, shall select;
(c) Will replace promptly with glass of a like kind and quality and any plate glass or window
glass of the Premises which may become cracked or broken;
(d) Will not, without the Landlord's prior written consent, place or maintain any vending
machines, merchandise or other articles in any vestibule or entry of the Premises or on the exterior
sidewalks of the Shopping Center,
(e) Will not use or permit the use of any apparatus for sound reproduction or transmission, or any
musical instrument, in such manner that the sound so reproduced, transmitted or produced shall be audible
beyond the confines of the Premises, and will not use any other advertising medium, including without
limitation flashing lights, or search lights which may be heard or experienced outside the Premises;
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(f) Will keep all mechanical apparatus free of vibration and noise which may be transmitted
beyond the confines of the Premises;
(g) Will not cause or permit objectionable odors to emanate or be dispelled fratn'the Premises;
(h) Will not solicit business, distribute handbills or other advertising matter or hold
demonstrations in the parking areas or other Common Areas in the Shopping Center; .
(i) Will not permit the parking of delivery vehicles so as to interfere with the use of any driveway,
walk, parking area, or other Common Areas in the Shopping Center;
(j) Will comply with all laws, rules, regulations, guidelines, orders and ordinances of applicable
federal, state and local governmental authorities, commissions, boards and agencies with respect to this
Lease, the use of the Premises, the removal of asbestos or any other hazardous material from the Premises,
or any work to be performed in the Premises by Tenant and Tenant shall secure and keep in force all permits, licenses and approvals required for Tenant's use of the Premises. In addition, Tenant shall also
comply with all recommendations of the Association of Fire Underwriters, Factory Mutual Insurance
Companies, the Insurance Services organization, or other similar body establishing standards for fire
insurance ratings with respect to the use or occupancy of the Premises by Tenant and will participate in
periodic fire brigade instruction and drills at the request of Landlord and will supply, maintain, repair and
replace for the Premises any fire extinguishers or other fire prevention equipment and safety equipment
(including installation of approved hoods and ducts if cooking activity is conducted on the Premises)
required by the aforementioned rules, regulations and Association or other body in order to obtain
insurance at the lowest available premium rate throughout the term of this Lease;
(k) Will not receive or ship articles of any kind except through the facilities provided for that
purpose by Landlord; will attempt to direct any delivery of goods, supplies, merchandise, or fixtures to or
from the Premises to be made through the rear entry of Premises; and in no event will permit a delivery
vehicle to be parked in the fire lane or parking facilities of the Shopping Center during the hours of
operation stated in Part I of this Lease;
(1) Will light the show windows of the Premises and exterior signs each day of the year to the
extent which shall be required by Landlord;
(m) Will keep all outside area immediately adjoining the Premises including, but not limited to,
sidewalks and loading docks free from ice and snow and Tenant hereby agrees that Tenant is solely liable
for any accidents occurring on said outside areas due or alleged to be due to any accumulation of ice and
snow;
(n) Will refer to the name of the Shopping Center in all advertising done to promote sales at its
store or stores in the geographical area in which the Shopping Center is located;
(o) Will not use the plumbing facilities for any other purpose than that for which they are
constructed and will not permit any foreign substance of any kind to be thrown therein and the expense of
repairing any breakage, stoppage, seepage or damage, whether occurring on or off the Premises, resulting
from a violation of this provision by Tenant or Tenant's employees, agents or invitees shall be borne by
Tenant. All;cease traps and other plumbing traps shall be kept clean and operable by Tenant at Tenant's
own cost and expense. Tenant shall keep the floor of the Premises and all penetrations thereof properly
sealed and caulked so that water or other substances in use in the Premises shall not leak from the Premises
to any Common Area or adjoining premises or premises located below the Premises;
(p) Will not permit any shopping carts in the Common Areas even if taken there by customers;
(q) Will not place or cause or permit to be placed within the Premises, pay telephones, vending
machines (except those for the exclusive use of Tenant's employees) or amusement devices of any kind
without the prior written consent of Landlord;
(r) Landlord reserves the right from time to time to adopt and promulgate reasonable rules and
regulations applicable to the Premises and the Shopping Center and to amend and supplement such rules
and regulations. Notice of such rules and regulations and of any amendment and supplements thereto shall
be given to Tenant and Tenant agrees thereupon to comply with and observe all such rules and regulations,
provided that, to the extent practicable, the same shall be applied uniformly to substantially all retail
tenants of the Shopping Center, except for grocery and department stores;
(s) Landlord's rights and remedies in the event Tenant shall fail to comply with and observe such
rules and regulations shall be the same as though such rules and regulations were set forth in Section 5.03
of this Lease.
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SECTION 5.04. Competition.
Tenant acknowledges that Landlord's obtaining a fair and equitable rental is dependent upon
Tenant's concentrating all of its business zfforts within the geographical area in which the Shopping Center
is located upon Tenant's business at the Premises so as to maximize Tenant's Gross Sales, and Tenant
further acknowledges that any activity by Tenant within such geographical area in operating or
participating in the operating of a similar or competing business must necessarily have an adverse effect on
the volume of Gross Sales by Tenant at the Premises to the detriment of Landlord and will deprve
Landlord of the fair rental to which the parties agreed. Accordingly, in the event that during the term of
this Lease either Tenant or Tenant's management, or any person or entity controlled by Tenant or
controlling Tenant, or controlled by the same person or entity or persons or entities who control Tenant,
directly or indirectly owns, operates, is employed in, directs or serves any other place of business, the
same, or similar to, or competitive with, Tenant's business as set forth herein, within a radius of three (3)
miles from the Shopping Center, which distance shall be measured in a straight line without reference to
road mileage, then Landlord may either (a) cancel this Lease upon thirty (30) days prior written notice to
Tenant, (b) include the Gross Sales of any such other place of business in the Gross Sales made from the
Premises to determine the Percentage Rent due under this Lease, as fully as though such Gross Sales had
actually been made from the Premises, or (c) increase the annual amount of Fixed Minimum Rent payable
thereafter, and each component thereof if the Fixed Minimum Rent is otherwise subject to increase, by an
amount equal to the highest Percentage Rent payable by Tenant in any calendar year prior to the opening of
such other business. In the event Landlord so elects, all of the provisions of Articles II and III hereof shall
be applicable to the Gross Sales of, and all the books and records pertaining to, such competing store.
ARTICLE VI
GRANT OF CONCESSIONS
SECTION 6.01. Condition to Grant.
The provision against subletting elsewhere contained in this Lease shall be applicable so as to
prohibit Tenant from granting concessions without the consent of Landlord for the operation of one or
more departments of the business of Tenant, and any grant of concessions consented to by Landlord shall
be subject to the conditions that (a) each such concession which may be granted by Tenant shall be subject
to all the terms and provisions of this Lease; (b) the Gross Sales from the operation of each such
concession shall be deemed to be part of the Gross Sales of Tenant for the purpose of determining the
Percentage Rent payable to Landlord; (c) all of the provisions hereunder applying to the business of Tenant
including, but not limited to, the provisions of Articles II and III shall apply to each such concession; (d)
unless otherwise approved in writing by Landlord, such department or departments shall be operated only
as part of the business operation generally conducted by Tenant on the Premises and under the advertised
name of Tenant; and (e) at least seventy-five percent (75) of the sales floor area of the Premises shall at all
times be operated directly by Tenant.
ARTICLE VII
COMMON AREAS
SECTION 7.01. Definition; Control.
All areas, space, facilities, equipment, and signs, to the extent made available by Landlord for the
common and joint use and benefit of Landlord, Tenant and other tenants and occupants of the Shopping
Center, and the respective employees, agents, subtenants, concessionaires, licensees, customers and other
invitees, are collectively referred to herein as "Common Areas." If and to the extent made available by
Landlord, Common Areas shall include, but not be limited to, the sidewalks, parking areas, access roads
15
and drives, driveways, parking decks, bridges, landscaped areas, truck serviceways, tunnels, loading docks,
open enclosed pedestrian walkways, corridors and malls, courts, stairs, ramps, elevators, escalators,
comfort and fast aid stations, public washrooms, community hall or auditorium parcel pick-up stations,
utility lines and utility rooms. All Common Areas in or about the Shopping Center shall be subject to the
exclusive control of Landlord. Landlord shall operate, manage, equip, police, light, surface, and maintain
the Common Areas in such manner as Landlord, in its sale discretion, may, from time to time determine.
Landlord hereby expressly reserves the right from time to time to construct, maintain and operate lighting
and other facilities, equipment and signs on all of the Common Areas; to police and maintain security for
the Common Areas; to use and allow others to use the Common Areas for any purpose; to change the size,
area, level, location and arrangement of the Common Areas; to build multi-story and/or subterranean
parking facilities; to regulate parking by tenants and other occupants of the Shopping Center and the
respective employees, agents, subtenants, concessionaires and licensees; to enforce parking charges (by
operation of meters, or otherwise) with appropriate provisions for parking ticket validation for tenants; to
close temporarily all or any portion of the Common Areas for the purpose of making repairs, changes or
alterations thereto or performing necessary maintenance in connection with any emergency, in connection
with closings resulting from adverse weather conditions or for any other purpose whatsoever, whether such
purpose is similar or dissimilar to the foregoing; to discourage non-customer parking; to establish, modify
and enforce reasonable rules and regulations with respect to the Common Areas and the use to be made
thereof. For the term of this Lease, Tenant is hereby given the license in common with all others to whom
Landlord has or may hereafter grant rights to use, the Common Areas as they may from time to time exist;
provided however, that if such license shall at any time be revoked, in whole or in part, or the size, area,
level, location or arrangement of such Common Areas or the type of facilities at any time forming a part
thereof be changed, altered, rearranged or diminished, Landlord shall not be subject to any liability
therefor, nor shall Tenant be entitled to any compensation or diminution or abatement of rent therefor, nor
shall such alteration, rearrangement, revocation, change or diminution or such Common Areas be deemed a
constructive or actual eviction or otherwise be grounds-for terminating or modifying this Lease. In order to
establish that the Shopping Center or any portion thereof is and will continue to remain private property
and to prevent a dedication thereof of the accrual of any rights to any person or to the public thereon,
Landlord hereby reserves the unrestricted right, in Landlord's sole discretion, to close all or any portion of
the Common Areas to such extent as, in the opinion of the Landlord's counsel, may be legally sufficient to
prevent such dedication thereof or accrual of any rights to any person or the public thereon; provided,
however, Landlord reserves the right at any time and from time to time to dedicate to public use part or all
of the ring roads, access roads, drives and utility lines, together with all easements required to effectuate
such dedications, as it may see frt.
SECTION 7.02. Expenses.
Landlord (subject to reimbursement as set forth in Section 7.03) will at its expense operate and
maintain the Common Areas and the Shopping Center. For the purposes of this Lease, "Operating Costs"
shall be those costs deemed by Landlord to be reasonable and appropriate including, but not limited to, all
costs and expenses, whether expended or incurred, of operating, repairing, maintaiAiag, replacing, lighting,
cleaning, and painting such Common Areas and the Shopping Center and insuring the same with such
policies and companies and in such limits as selected by Landlord. Insurance includes but is not
necessarily limited to, fine insurance with extended coverage, liability insurance covering personal injury,
deaths and property damage with a personal injury endorsement covering false arrest, detention or
imprisonment, malicious prosecution, libel and slander, and wrongful entry or eviction, worker's
compensation insurance, plate glass insurance, contractual liability insurance and fidelity bonds but
excluding the insurance referred to in Section 7.04 hereof. Expenses also include removing snow, ice
rubbish and debris; inspecting, policing, providing security and regulating traffic; rental of sweepers,
trucks, and other equipment; repairing and/or replacing of paving, roofs, curbs, walkways, landscaping,
drainage, in-site water lines, sanitary sewer lines, storm water lines, canopies, skylights, fountains,
electrical lines and other equipment serving the property on which the Shopping Center or any part thereof
is constructed; uniforms and replacement of uniforms; the rental of music programs, services and
loudspeaker systems including the furnishing of electricity therefor, all costs incurred by Landlord in
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compliance with any environmental or other similar laws, rules, regulations, guidelines or orders, including
the cost of removing hazardous materials from the Shopping Center; and Landlord's property management
fees and expenses, including the gross compensation and fringe benefits of on-site personnel required to
supervise and accomplish the foregoing. In the event of any dispute as to whether an item represents an
expense or a capital item, Landlord's accounting practices shall be determinative and binding on the
parties.
SECTION 7.03. Reimbursement of Landlord.
(a) For each "Accounting Period" (as deemed in Section 7.03(f)) during the original term of this
Lease, Tenant shall pay to Landlord as additional rent, as Tenant's share of the Operating Costs, a sum
equal to the product obtained by multiplying (1) the total Operating Costs for such Accounting Period less
all contributions thereto actually made by occupants of any excluded areas by (2) a fraction, the numerator
of which shall be the square feet of floor area of the Premises, and the denominator of which shall be the
total amount of square feet of rentable floor area in the Shopping Center less excluded areas.
(b) On the first day of each calendar month during that portion of the term hereof falling within
the first Accounting Period during the original term hereof Tenant shall pay to Landlord, in advance,
without demand and without any setoff or deduction, as an estimated payment on account of Tenant's
share of the Operating Costs an amount equal to one-twelfth (1/12th) of the sum obtained by multiplying
the square feet of floor area of the Premises by the minimum annual charge per square foot set forth in the
paragraph of the of Lease captioned "Common Cost of Maintenance and Operation." If the
commencement date hereof shall act be the first day of -a calendar month, Tenant's payment of its
proportionate share of Operating Costs for the fractional month between the commencement date and the
first day of the first full calendar month in the term shall be prorated on a per diem basis (calculated on a
thirty (30) day month) and shall be paid together with the first payment of Fixed Minimum Rent.
(c) After the first Accounting Period, Tenant shall continue to pay such estimated amount of
Tenant's proportionate share of Operating Costs on the first day of each month in advance without demand
and without any setoff or deduction, but the aforesaid estimated amount of Tenant's share of Operating
Costs may be adjusted and revised by Landlord after the end of each Accounting Period during the term
hereof on the basis of the actual Operating Costs for the immediately preceding Accounting Period. Upon
Landlord furnishing to Tenant a statement setting forth such revised estimated Operating Costs, Tenant
shall pay to Landlord such revised estimated share in equal monthly installments, each such installment to
be a sum equal to one twelfth (1/12th) of such revised estimated Operating Costs, in advance on the first
day of each calendar month thereafter until the next succeeding revision in such estimate.
(d) Following the end of each Accounting Period, Landlord shall furnish to Tenant a written
statement in reasonable detail covering the Accounting Period just expired and showing the total Operating
Costs for such Accounting Period, the amount of Tenant's share thereof and payments made by Tenant
with respect thereto. All subsequent monthly paymenrs on account of Tenant's share of Operating Costs
made by Tenant during such Accounting Period after reception of such statement shall be applied by
Landlord as payment on account of Tenant's obligation for its share of Operating Costs for the next
ensuing Accounting Period and shall not reduce Tenant's obligation to pay the balance due (if any) to
Landlord pursuant to such statement. Tenant has thirty (30) days to appeal Landlord's statement of
Operating Costs, after which said statement shall be deemed accepted by Tenant
(e) If Tenant's share of Operating Costs exceeds Tenant's payments with respect to any
Accounting Period, Tenant shall pay to Landlord the deficiency within thirty (30) days after the date of the
furnishing of the statement from Landlord. If Tenant's payments exceed Tenant's share of the Operating
Costs and Tenant is not in default hereunder or otherwise indebted to Landlord, Landlord shall, at
Landlord's option, apply such excess to Tenant's account as a credit or refund such excess to Tenant within
thirty (30) days; provided, if such overpayment is for the last Accounting Period, Landlord shall not be
obligated to refund to Tenant the amount of such overpayment until Tenant has fully performed all of its
obligations under this Lease, is not indebted to Landlord and has vacated in accordance with the provisions
of this Lease.
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(f) For the purpose of this Lease, the words "Accounting Period" mean the period consisting of
twelve (12) consecutive calendar months, commencing on a date determined by Landlord from time to
time and each succeeding twelve (12) calendar month period during the original term of this Lease.
(g) If the original term of this Lease commences or terminates (other than by reason of Tenant's
default) during an Accounting Period, Tenant's obligation for Tenant's proportionate share of Operating
Costs for such Accounting Period shall be equitably pro-rated.
SECTION 7.04. Proportionate Insurance.
(a) For each Accounting Period or portion thereof in the original tern hereof, Tenant shall pay to
Landlord, as additional rent, as Tenant's share of the cost of Landlord's policy or policies of fire insurance
with extended coverage insuring the Shopping Center other than such cost relating to the Common Areas, a
sum equal to the square feet of floor area of the Premises multiplied by the charge per square foot set forth
in the paragraph of Part I of the Lease captioned "Proportionate Insurance."
(b) Said sum shall be paid to Landlord on the first day of each calendar month in the original
term, in advance without demand and without setoff, in equal monthly installments. If the original term of
this Lease commences or terminates (other than by reason of Tenant's default) on a date other than the first
or last day, respectively, of an Accounting Period, Tenant's payment of such costs of insuring shall be
equitably pro-rated.
(c) Landlord may adjust the aforesaid amount at any time during an Accounting Period to reflect
Landlord's actual cost of such insurance per rentable square foot of the total Shopping Center area, and
upon receipt of such notice Tenant shall commence payment of such increased sum and shall continue to
pay same until a subsequent adjustment is made hereunder.
(d) Although Tenant shall pay its share of the cost of insuring, as aforesaid, in addition to, and not
as a component oiy its share of Operating Costs, for the purpose of Articles VIII ad ;OTC and Sections
13.02, 14.01 and 21.02 of this Lease, the words "Operating Costs" shall be deemed to include such share of
the cost of insuring.
ARTICLE VIII
SIGNS; AWNINGS; CANOPIES; FIXTURES; ALTERATIONS
SECTION 8.01. Signs, Awnings and Canopies.
(a) Tenant shall neither place nor maintain nor suffer to be placed or maintained on the exterior of
the Premises or on the glass of any window or door of the Premises which shall be visible from the eterior
thereof or within three (3) feet of any such glass (other than neatly lettered signs of reasonable size placed
on the floor of the display window identifying articles offered for sale and the price thereof) any sign,
awning, canopy, decoration, lettering, advertising matter or any other thing without in each instance first
obtaining Landlord's written approval thereof; and Tenant further agrees to design and to maintain such
sign, decoration, lettering, advertising matter or other thing as may be approved in good condition and
repair at all times in compliance with the requirements of the "Sign Regulations" attached hereto, made
part hereof and marked Exhibit "C".
(b) Tenant shall not paint or decorate any part of the exterior of the Premises.
(c) Tenant shall install and maintain at all times, displays of seasonable merchandise in the show
windows of the Premises; and Tenant further agrees that all articles and the arrangement, style, color and
general appearance thereof, in the interior of the Premises which shall be visible from the exterior thereof,
including, but not limited to, window displays, advertising matter, signs, merchandise and store fixtures,
shall be maintained in the Premises so as to be in keeping with the character and standards of the Shopping
Center.
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SECTION 8.02. Trade Fixtures.
All trade fixtures, signs and other personalty hereafter installed by Tenant in the Premises shall be
new or reconditioned and "like new," shall be and remain the property of Tenant and shall be removed by
Tenant at the expiration or earlier termination of this Lease provided that: (a) Tenant shall not at such time
be in default under this Lease and (b) Tenant shall promptly restore the damage done to the Premises by the
installation and/or removal thereof. Should Tenant fail to so remove Tenant's trade fixtures and/or to so
restore the Premises, Landlord may do so, collecting, at Landlord's option, the cost and expense thereof, as
additional rent, upon demand. Any such trade fixtures which are not removed by Tenant at or prior to any
termination of this Lease including, but not limited to, a termination by Landlord pursuant to this Lease,
shall unless Landlord gives Tenant notice to remove any or all of such trade ffixtures, be and become the
property of Landlord (without any obligation by Landlord to pay compensation for such trade fixtures). in
the event Landlord gives Tenant such notice to remove any or all of such trade fixtures, Tenant shall
promptly remove such of the trade fixtures as may be specified by Landlord in such notice.
Notwithstanding anything herein contained to the contrary or any decision of any court to the contrary, the
term "trade fixtures" shall not include any air-conditioning, heating, lighting, electrical and plumbing
equipment installed by Tenant in the Premises, nor any wiring or other apparatus related thereto.
SECTION 8.03. Alterations and Mandatory Refurbishment.
(a) Tenant may, without Landlord's consent, make alterations to the interior of the Premises
which do not alter, modify or in any other manner whatsoever affect the structural portions of the Premises
and/or the roof of the building of which the Premises shall form a part and/or the exterior of the Premises
(including but not limited to the storefront) and/or the structural integrity of the building of which the
Premises shall form a part, and/or the plumbing, electrical, heating, ventilating, air-conditioning, or
mechanical systems and installations in the Premises, provided that any such single alteration (or series of
series of such related alterations) does not involve a cost in excess of Five Thousand Dollars ($5,000.00).
Tenant agrees that it will not make any other alterations, improvements, additions or changes to the interior
or exterior of the Premises during the term of this Lease without in each instance obtaining Landlord's
prior written consent. Furthermore, Tenant will not, except for installation of fixtures or other work
specified on Tenant's approved plans and specifications referred to in Section 4.02 hereof or to the extent
permitted by the first sentence of this Section 8.03(a), cut or drill into or secure any fixture, apparatus or
equipment of any kind to any part of the Premises without in each instance first obtaining Landlord's
written consent. Together with each request for such consent, Tenant shall present to Landlord detailed
plans and specifications for such proposed alterations, improvements, additions or changes as required by
Section 4.02 hereof and Tenant shall comply with such section in performing such approved alterations.
(b) If the term is a period in excess of five (5) years, then as a material inducement to receiving a
term in excess of five (5) years, Tenant shall remodel, at its own expense, the interior of the Premises at
least every five (5) years, measured from the commencement date or from the commencement of the last
remodeling required by this Lease, whichever is later. Tenant shall submit to Landlord for approval, plans
and specifications for such work pursuant to Section 4.02 hereof. The remodeling required by this Section
shall restore the interior of the Premises to a like-new condition and shall incorporate Tenant's latest store
design concept to the extent possible without making structural alterations. Such'remodeling shall include,
without limitation, new floor and wall coverings, and whatever labor and materials are necessary to
generally refurbish the exterior storefront and the interior of the Premises to a like-new condition.
ARTICLE IX
MAINTENANCE AND REPAIR; SURRENDER OF LEASED PREMISES
SECTION 9.01. Repairs and Maintenance by Tenant.
(a) Tenant shall at all times at its own expense keep and maintain all portions of the Premises in
good order and repair, and in a neat, safe, clean and orderly condition, including, but not limited to,
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reasonable periodic painting and making all non=structural ordinary and extraordinary, foreseen and
unforeseen repairs and replacements to the Premises and its component systems. The foregoing sentence
shall obligate Tenant to r:pair, maintain and replace, without limitation, all entrances to the Premises, the
storefront, the glass in all doors and windows of the Premises, all interior portions of the Premises, all trade
fixtures, signs and walls thereof, as well as plumbing, electrical, sprinkler, heating, ventilation and air
conditioning systems, escalators and elevators, if any, mechanical systems, and sewer lines within the
Premises or under the floor slab thereof, including free flow to the main sewer line, as well as all other
apparatus or equipment installed by Tenant outside the Premises. Tenant shall not overload the electrical
wiring serving the Premises, and will install at its own expense (but only after obtaining Landlord's written
approval), any additional electrical wiring which may be required in connection with the Premises. If
Landlord, Agent or affiliates thereof, elect to provide heating, ventilating and air-conditioning inspection,
adjustment, cleaning and repair services to Tenant, Tenant shall utilize such services and pay for the same
at rates which are competitive within the same geographic area for similar services performed by others; if
Landlord elects not to perform such services, the Tenant shall contract for such services with a qualified
service contractor approved by Landlord, and annually shall submit to Landlord a copy of the service
contract.
(b). Tenant will repair promptly at its own expense any damage (whether structural or non-
structural) to the Premises caused by any construction or alterations performed by Tenant or bringing into
the Premises any property for Tenant's use, or by the installation or removal of such property, regardless of
fault or by whom such damage shall be caused, unless caused solely by the negligence of Landlord or its
servants or employees.
SECTION 9.02. Structural Repairs.,
(a) Except as otherwise provided by 9.01(b), structural columns, structural portions of the floors
(excluding floor tile, carpet or other floor coverings), the roof of the Shopping Center and exterior walls
thereof will be repaired by Landlord provided Tenant gives Landlord notice specifying the: need for and
nature of such repairs; provided, however, if Landlord.is required to make any repairs to such portions of
the Premises by reason, in whole or in part, of the negligent act or failure to act by Tenant or Tenant's
agent, servants, employees, contractors or subcontractors, or by reason of any unusual use of the Premises
by Tenant (whether or not such use is a permitted use hereunder), Landlord may collect the cost of such
repairs, as additional rent, upon demand. For the purpose of this Lease, any difference in floor level,
shifting of floor slab, or deviation in finished floor height resulting from the insertion or construction of an
expansion joint or strip in the floor slab shall not be deemed a structural defect requiring repair by
Landlord, but rather, a normal construction practice which shall be Tenant's responsibility to appropriately
plan for in its construction and use of the Premises. The provisions of this subsection shall not apply in the
case of any casualty or condemnation in which event the provisions of Articles XVI or XVII, as the case
may be, shall control.
(b) If, without Landlord's prior consent, Tenant performs any alterations, additions,
improvements, changes, affixations of chattels or other work which affects the structural portions of the
Premises and/or the roof of the building of which the Premises are a part and/or that portion of the exterior
of the Shopping Center which Landlord is obligated to repair pursuant to Section 9.02(a) or which affects
the structural integrity of the building of which the Premises shall form a part, such action by Tenant shall
release and discharge Landlord from such repair obligation and thereafter Tenant agrees to be solely
responsible for the maintenance, repair and replacement of any or all such structural portions, roof; exterior
and building which have been affected; provided, in the event Tenant shall default in the performance of
such responsibilities to the satisfaction of Landlord, in addition to Landlord's other remedies under this
Lease, at law or in equity, Landlord may (but shall not be obligated to do so) cure such default at Tenant's
cost without any liability of Landlord, its agents, servants, employees, contractors or subcontractors for
damage to Tenant's merchandise, fixtures or other property or to Tenant's business by reason thereof:
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SECTION 9.03. Surrender of Premises.
(a) .At the expiration or earlier termination of the term of this Lease, Tenant shall peaceably
surrender the Premises, broom clean, free of debris, in good order, condition and state of repair as required
hereby, ordinary wear and tear excepted. Tenant shall surrender all keys for the Premises to Landlord and
shall notify Landlord in writing of all combinations of locks, safes and vaults, if any, in the Premises.
Tenant shall comply with the provisions of Section 8.02 respecting the removal of its trade fixtures before
surrendering the Premises.
(b) All alterations, improvements, additions or changes made by Tenant acid all air-conditioning,
heating, lighting, electrical and plumbing equipment installed by Tenant shall remain upon the Premises at
the expiration or earlier termination of the term of this Lease and shall become the property of Landlord
immediately upon the installation thereof and shall remain the property of the Landlord without any
obligation of Landlord to pay compensation therefor.
ARTICLE X
INDEN NIFICATION; SUBROGATION
SECTION 10.01. Indemnification and Waiver of Claim.
(a) Tenant will defend and will indemnify Landlord and Agent and save them harmless from and
against any and all claims, actions, damages, liability and expenses (including, but not limited to,
reasonable attorneys' fees and disbursements) in connection with the lass of life, personal injury or damage
or business arising from, related to, or in connection with the performance of Tenant's Work, the
occupancy of the Premises or any part of Landlord's property or the Shopping Center or occasioned wholly
or in part by act or omission of Tenant, its contractors, subcontractors, subtenants, licensees, or
concessionaires, or its or their respective agents, servants or employees. Tenant shall not, however, be
liable for damages or injury occasioned by the negligence or willful acts of Landlord, Agent or their
agents, employees, or servants, unless such damage or injury arises from perils against which Tenant is
required by this Lease to insure. Tenant shall also pay all costs, expenses and reasonable attorneys' fees
that may be expended or incurred by Landlord and/or Agent in successfully enforcing the covenants and
agreements of this Lease.
(b) Unless and then solely to the extent such damage is caused by the negligent acts or omissions
of Landlord, Agent or their respective agents, servants, and employees, neither Landlord,. Agent nor their
respective agents, servants, employees or contractors shall be liable for, and Tenant, in consideration of
Landlord's execution of this Lease, hereby releases all claims for loss of life, personal injury or damage to
property or business sustained by Tenant or any person claiming through Tenant resulting from any fire,
accident occurrence or condition in or upon the Shopping Center or any part thereof (including, without
limitation, the Premises and the building of which the same is a part), including, but not limited to, such
claims for loss of life, personal injury or damage resulting from (1) any defect in or failure of plumbing,
heating or air conditioning equipment, electrical wiring or installation thereof, water pipes, stairs, railings
or walks; (2) any equipment or appurtenances being out of repair; (3) the bursting, leaking or running of
any tank, washstand, water closet, waste pipe, drain or any other pipe or tank in, upon or about the
Shopping Center, (4) the backing up of any sewer pipe; (3) the escape of steam or hot water, (6) water,
snow or ice being upon or coming through the roof or any other place upon or near the Premises or the
building of which the same is a part or otherwise; (7) the falling of any fixture, plaster, ceiling tile or
stucco; (3) broken glass; (9) any act or omission of other tenants or other occupants of the Shopping
Center, and (10) any act or omission of Landlord, Agent or their respective principals, agents, servants and
employees whether occurring on, prior to, or subsequent to the date of this Lease. The foregoing waiver
and release is intended by Landlord and Tenant to be absolute, unconditional and without exception and to
supersede any specific repair obligation imposed upon Landlord hereunder.
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SECTION 10.02. Subrogation.
In the event the Premises or its contents are damaged or destroyed by fire or other insured
casualty, (a) Landlord, to the extent of the coverage of Landlord's policies of fire insurance with extended
coverage endorsements, hereby waives its rights, if any, against Tenant with respect to such damage or
destruction, even if said fire or other casualty shall have been caused, in whole or in part, by the
negligence of Tenant, its agents, servants or employees, and (b) Tenant, to the extent of the coverage of
Tenant's policies of fire insurance with extended coverage, hereby waives its rights, if any against
Landlord with respect to such damage or destruction, even if said fire or other casualty shall have been
caused, in whole or in part, by the negligence of Landlord, its agents, servants, or employers; provided,
however, such waivers of subrogation shall only be effective with respect to loss or damage occurring
during such time as Landlord's or Tenant's policies of fire insurance with extended coverage endorsements
(as the case may be) shall contain a clause or endorsement providing in substance that the aforesaid waiver
of subrogation shall not prejudice the type and amount of coverage under such policies or the right of
Landlord or Tenant (as the case may be) to recover thereunder. If, at any time, Landlord's or Tenant's
insurance carrier refuses to write insurance which contains a consent to the foregoing waiver of
subrogation, Landlord or Tenant, as the case may be, shall notify the other party thereof in writing, and
upon the giving of such notice, the provisions of this Section shall be null and void as to any casualty
which occurs after such notice. If Landlord's or Tenant's insurance carrier shall make a charge for the
incorporation of the aforesaid waiver of subrogation in its policies, then the party requesting the waiver
shall promptly pay such charge to the other party, upon demand. In the event the party requesting the
waiver fails to pay such charge upon demand, the other parry shall be released of its obligation to supply
such waiver.
A12TICLE YI
INSURANCE
SECTION 11.01. Insurance.
(a) Tenant will keep in force in companies who are acceptable to Landlord and licensed to do
business in the state where the Shopping Center is located, at Tenant's expense, at all times during the term
of this Lease and during such other times as Tenant occupies the Premises or any part thereof.
(l) Comprehensive general liability insurance with respect to the Premises, the
sidewalks, if any, abutting and adjoining the Premises, and the business operated by Tenant and any
subtenants, licensees and concessionaires of Tenant in or from the Premises with minimum limits of One
IMMIon Dollars ($1,000,000.00) on account of bodily injuries to or death of one person, and Two Million
Dollars ($2,000,000.00) on account of bodily injuries to or death of more than one person as the result of
any one accident or disaster, and property damage insurance with minimum limits of One Hundred
Thousand Dollars (5100,000.00). If the nature of Tenant's operation is such as to place any or all of its
employees under the coverage of local worker's compensation or similar statutes; Tenant shall also keep in
force, at its own expense, worker's compensation or similar insurance affording statutory coverage and
containing statutory limits. Such liability insurance shall, in addition, extend to any liability of Tenant
arising out of the indemnities provided in Section 10.01 hereof.
(2) Fire insurance, with standard broad form extended coverage endorsement covering
(a) all of Tenant's stock in trade, trade fixtures, furniture, furnishings, such equipment as is not affixed to
the Premises, and (b) Tenant's interest in all of the improvements and betterments installed in the Premises
by Tenant, in each case to the extent of at least eighty percent (30%) of their collective insurable value,
without co-insurance.
(3) Such other types of insurance (excluding rent insurance in favor of Landlord) and
such additional amounts of insurance. as, in Landlord's judgment, are necessitated by good business
practice.
(b) Within ten (10) days of Landlord's request, Tenant will deposit with Landlord policies of
insurance required by the provisions of this Section 11.01, or certificates thereof; together with satisfactory
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evidence of the payment of the required premium or premiums thereof. The insurance required hereby
may be maintained by means of a policy or policies of blanket insurance so long as the provisions of this
Section are fully satisfied.
(c) If Tenant fails to provide Landlord with evidence of adequate insurance as described in
Section 11.01(a) and (b) above, then Landlord shall have the option to secure said insurance coverage and
charge Tenant for the actual cost of said insurance plus a handling charge of twenty-five percent (25%) of
Landlord's cost of the premium.
SECTION 11.02. Insurance Provisions.
All policies of insurance required to be carried by Tenant shall provide that the policy shall not be
subject to cancellation, termination or change except after thirty (30) days prior written notice to Landlord
and the policy referred to in Section 11.01 (a) (1) shall name Landlord as an additional insured.
SECTION 11.03. Effect on Insurance.
(a) Tenant will not do, omit from doing, suffer to be done, or keep or suffer to be kept anything
in, upon or about the Premises which will violate the provisions of Landlord's policies insuring against loss
or damage by fire or other hazards or which will adversely affect Landlord's fire or liability insurance
premium rating or which will prevent Landlord from procuring such policies from companies acceptable to
Landlord at normal rates. If Tenant's acts or omissions as above stated result the premium rate of fire or
other insurance on the Premises or other property of the Shopping Center to be increased, Tenant will pay
the amount of such increase as additional rent upon Landlord's demand. In addition, Landlord may, at its
option, rectify the condition existing on the Premises which caused or was a contributing cause of the
increased premium rate and may charge the cost of such action to Tenant as additional rent, payable on
demand. In determining whether increased premiums are the result of Tenant's use of the Premises, a
schedule, issued by the organization making the insurance rate on the Premises, showing the various
components of such rate, shall be conclusive evidence of the several items and charges which make up the
fire insurance rate on the Premises.
(b) If for any reason whatsoever Tenant fails to provide and keep in force any or all of the
insurance policies set forth in Section 11.01 hereon then in such event Tenant shall indemnify and hold
Landlord harmless against any loss which would have been covered by such insurance.
ARTICLE XII
UTILITIES
SECTION 12.01. Utilities.
(a) Tenant shall be solely responsible for and promptly pay all charges for heat, water, electricity,
sewer rents or charges, and any other utility used or consumed in the Premises of in providing heating and
air-conditioning to the Premises, including in each instance, all sales and other taxes applicable to the sale
or supply of such utilities, said responsibility commencing on the earlier of the commencement date or the
date Tenant first enters the Premises for any reason. Should Landlord elect.or be required to supply or
make available any utility used or consumed at the Premises, Tenant agrees to purchase and pay for same
at reasonable costs reflecting the Tenant's use and consumption of the utility, as additional rent, every
month in the term hereof.
(b) In the event that Tenant does not have a water meter installed in the Premises, Tenant will pay
to Landlord, as additional rent, every month during the term of this Lease the minimum charge for the size
of the water line installed in the Premises in accordance with the rates established from time to time by the
company or authority supplying water to the Premises.
(c) In the event the local authority, municipality, utility or other body collects for the water and/or
sewerage or sanitary service and/or consumption, as aforesaid, Tenant covenants and agrees to pay the
water and sewer rent charge and any other tax, rent, levy, connection fee or meter or other charge which
23
now or hereafter is assessed, imposed or may become a lien upon the Premises, or the realty of which they
are a part, pursuant to law, order or regulation made or issued in connection with the use, consumption,
maintenance or supply of water, or the water or sewerage connection or system.
(d) In no event shall Landlord be liable to Tenant in damages or otherwise for any interruption,
curtailment or suspension of any of the foregoing utility services in the event to of a default by Tenant
under this Lease or due to repairs, action of public authority, strikes, acts of God or public enemy, or any
other cause.
SECTION 12.02. Application for Utilities.
Tenant shall make all appropriate applications to the local utility companies at such times as shall
be necessary to insure utilities being available at the Premises no later than the commencement date and
pay ail required deposits, connection fees and/or charges for meters within the applicable time period set by
the local utility company.
SECTION 12.03. Operation of Heating and Air-Conditioning.
Tenant must install, and operate heating and cooling equipment to maintain store temperatures at
such temperatures as will prevent the freezing or bursting of pipes and the draining of heated and chilled
air from any existing or future enclosed sections of the Shopping Center.
SECTION 12.04. Utility Charge Defined.
All sums to be paid by Tenant in accordance with this Article XII are collectively herein referred
to as the "Utility Charge."
ARTICLE XIH
ESTOPPEL CERTIFICATE; SUBORDINATION; ATTORNIYIENT
SECTION 13.01. Execution of Estoppel Certificate.
At any time, and from time to time, upon the written request of Landlord or any mortgagee,
Tenant, within twenty (20) days of the date of such written request, agrees to execute and deliver to
Landlord and/or such mortgagee, without charge and in a form satisfactory to Landlord and/or such
mortgagee, a written statement: (a) ratifying this Lease; (b) confirming the commencement and expiration
dates of the term of this Lease; (c) certifying that Tenant is in occupancy of the Premises, and that the
Lease is in full force and effect and has not been modified, assigned, supplemented or amended except by
such writings as shall be stated; (d) certifying that all conditions and agreements under this Lease to be
satisfied or performed by Landlord have been satisfied and performed except as shall be stated; (e)
certifying that Landlord is not in default under the Lease and there are no defenses or offsets against the
enforcement of this Lease by Landlord, or stating the defaults and/or defenses claimed by Tenant; (f)
reciting the amount of advance rent, if any, paid by Tenant and the data to which such rent has been paid;
(,g) reciting the amount of security deposited with Landlord, if any, and (h) any other information which
Landlord or the mortgageee shall reasonably require.
SECTION 13.02. Failure to Execute Estoppel Certificate.
The failure of Tenant to execute, acknowledge and deliver to Landlord and/or any mortgagee a
statement in accordance with the provisions of Section 13.01 above within the period set forth in section
13.01 shall constitute an acknowledgment by Tenant which may be relied upon by any person holding or
intending to acquire any interest whatsoever in the Premises or the Shopping Center that this Lease has not
been assigned, amended, changed or modified, is in full force and effect and that the Fixed Minimum Rent,
Tax Rent, Tenant's share of Operating Costs, Utility Charge, Percentage Rent and additional rent have
24
been duly and fully paid not beyond the respective due dates immediately preceding the date of the request
for such statement and shall constitute as to any persons entitled to rely on such statements a waiver of any
defaults by Landlord or defenses or offsets against the enforcement of this Lease by Landlord which may
exist prior to the date of the written request, and/or Landlord, at its option, may treat such failure as a
Deliberate Event of Default.
SECTION 13.03. Subordination and Attornment.
Tenant agrees: (a) that, except as hereinafter provided, this Lease is, and all of Tenant's rights
hereunder are and shall always be, subject and subordinate to any first mortgage, ground lease pursuant to
which Landlord has derived its interest in the Shopping Center, installment sales agreement or other
instrument of encumbrance heretofore or hereafter placed upon any or all of Landlord's Lessors or
Landlord's estate in the Shopping Center and all renewals, replacements, consolidations, amendments and
extensions thereof (collectively called "Mortgage") and to all advances made or to be made thereunder and
to the interest thereon; and (b) that in case Landlord's interest under the Mortgage shall terminate for any
reason and if the holder of any such Mortgage ("Mortgagee's or if the grantee of a deed in lieu of
foreclosure, or if the purchaser at any foreclosure sale or at any sale under a power of sale contained in any
Mortgage shall at its sole option so request, Tenant will attorn to and recognize such Mortgagee, grantee
or purchaser, as the case may be, as Landlord under this Lease for the balance then remaining of the term
of this Lease, subject to all terms of this Lease; and (c) that the aforesaid provisions shall be self operative
and no further instrument or document shall be necessary unless required by any such Mortgagee, grantee
or purchaser. Notwithstanding anything to the contrary set forth above, any Mortgagee may at any time
subordinate its Mortgage to this Lease, without Tenant's consent, by execution of a written document
subordinating such Mortgage to this Lease to the extent set forth therein, and thereupon this Lease shall be
deemed prior to such Mortgage to the extent set forth in such written document, without regard to their
respective dates of execution, delivery and/or recording and in that event, to the extent set forth in such
written document, such Mortgageee shall have the same rights with respect to this Lease as though this
Lease had been executed and a memorandum thereof recorded prior to the execution, delivery and
recording of the Mortgage and as though this Lease had been assigned to such Mortgagee. Should
Landlord or any Mortgagee, grantee or purchaser desire confirmation of either such subordination or such
attornment, as the case may be, Tenant upon written request, and from time to time, will execute and
deliver without charge and in form satisfactory to Landlord, the Mortgagee, grantee or purchaser all
instruments and/or documents in recordable form that may be requested to acknowledge such
subordination and/or agreement to attorn.
ARTICLE XIV
ASSIGNMENT AND SUBLETTING
SECTION 14.01. Assignment and Subletting.
(a) Tenant shall not voluntarily, involuntarily, or by operation of law, assign, transfer, mortgage
or otherwise encumber (herein collectively referred to as an "assignment's this Lease or any interest of
Tenant herein, in whole or in part, nor sublet the whole or any part of the Premises, nor permit the Premises
or any part thereof to be used or occupied by others, without first obtaining in each and every instance the
prior written consent of Landlord. Any consent by Landlord to an assignment or subletting or use of
occupancy by others shall be held to apply only to the specific transaction thereby authorized and shall not
constitute a waiver of necessity for such consent to any subsequent assignment or subletting or use by
occupancy by others, including, but not limited to a subsequent assignment or subletting by any trustee,
receiver or liquidator, nor shall the references anywhere in this Lease to subtenants, licensees and
concessionaires be construed as a consent by Landlord to an assignment. Tenant shall pay to Landlord
monthly, as additional rent, the excess of the consideration received during such month of the sublease
over the then current rental Tenant shall pay to Agent the sum of Five Hundred Dollars (3500.00), in
advance, to defray Agent's administrative costs, overhead and counsel fees in connection with the
25
consideration, review or document preparation of any consent to assignment or subletting, such sum to be
paid at the time Tenant requests Landlord's execution of such document. This fee will be waived in the
event of an assignment between Marge Malec and Tim Malec.
(b) If Tenant is a partnership and if at any time during the term of this Lease any person who at
the time of the execution of this Lease owns a general partner's interest ceases to own such general
partner's interest, such cessation of ownership shall constitute an assignment of this Lease for all purposes
of this Section.
(c) Any sublease or assignment by Tenant, or occupancy of Premises by a party other than
Tenant, without Landlord's express written approval, may be treated as a Deliberate Event of Default.
ARTICLE XV
PROMOTING THE CENTER
SECTION 15.01. Promotion Fund.
P91r--
(a) Landlord has elected to provide or cause to be provided an ongoing program of pro)notional
events which, in Landlord's judgment, will serve to promote the Shopping Center and attract customers
thereto. Landlord has established a separate bank account into which Landlord shall deposit the
coatributions referred to herein to be made by Tenant and other tenants, the aggregate of such fiords on
hand from time to time being referred to herein as the "Promotion Fund." Tenant shall pay the Landlord,
as Tenant's contribution to the Promotion Fund, an annual charge ("Promotion Charge's in the amount
specified in the paragraph of Part I of the Lease captioned "Promotion," such amount to be increased on
January 1 st of each year during the term hereof by six percent (6%) of the previous year's payment. The
Promotion Fund shall be used to pay all costs and expenses associated with the formation and carrying out
of an ongoing program for the promotion of the Shopping Center, which program may include, special
events, shows, displays, signs, seasonal events, and other activities designed to attract customers to the
Shopping Center, including the purchase of electronic, print and other advertising. In connection with the
operation of the Promotion Fund, Landlord shall have the right to contract for or otherwise employ a
professional promotional consultant which, in Landlord's judgment, is necessary to administer the
Promotion Fund and such promotional activities to be implemented by Landlord, and consultant shall be
under the exclusive control and supervision of Landlord. The Promotion Fund may be used to defray the
cost of administration of such marketing activities including the salary or payments and reimbursements
due consultant, advertising, travel expenses, and other business expenses.
(b) If requested to do so by Landlord, Tenant shall submit to Landlord or Landlord's designee
advertising material to be used in connection with the Promotion Fund, such materials to be submitted in
such format and at such times as shall be designated from time to time by Landlord or such designee.
Neither Landlord nor Landlord's designee shall have control over the contents of any such advertising
copy submitted by Tenant with regard to sales prices of merchandise or the cost of services offered, nor
shall either be responsible for the content of any advertising copy supplied by Tenant or prepared by
Landlord or Landlord's advertising agency, organization or personnel, including-typographical errors.
Should Tenant fail to submit requested materials as specified herein on a timely basis, Landlord may, but
shall not be obligated to, insert an advertisement indicating Tenant's business or trade name and a
description of Tenant's business or, in the alternative, not submit any advertising on behalf of Tenant for
the particular advertising campaign then being conducted. In the event Tenant fails to timely submit any
required advertising copy, Landlord may treat such failure as an Event of Default under this Lease.
SECTION 15.02. Merchants' Association.
In the event there presently exists either a merchants' association, promotion fund, or other similar
entity the purpose of which is to advertise the Shopping Center, Landlord agrees that unless Landlord shall
hereafter direct otherwise, the Tenant shall not be obligated to contribute any sums thereto. If Landlord
shall direct, in lieu of Tenant's payments to the Promotion Fund, Tenant shall commence paying an amount
equal to the then current Promotion Charge to Landlord, as agent for such merchants' association and/or
26
promotion fund. Tenant does hereby irrevocably assign to Landlord all of Tenant's voting rights contained
in any by-law or other similar document forming or governing the administration of any.such association
or other entity. Tenant further agrees that Landlord shall have the option at any time during the term
hereof to discontinue and dissolve such merchants' association and/or other entity then in effect and to pay
over to the Promotion Fund in such percentages as Landlord shall determine, any sums remaining therein.
SECTION 15.03. Payment of Obligations to the Promotion Fund.
All sums required to be paid by Tenant pursuant to this Article XV shall be deemed "additional
rent," shall be payable with each monthly installment of Fixed Minimum Rent, without demand, deduction
or offset, shall be prorated for partial time periods during the term hereof and for the purposes of any other
articles of this Lease, shall be collectively referred to as the Promotion Charge.
ARTICLE XVI
DESTRUCTION OF PREMISES
SECTION 16.01. Total or Partial Destruction.
(a) If the Premises shall be damaged by fire or other casualty covered by Landlord's policies of
fire and broad form extended coverage insurance but are not thereby rendered untenantable in whole or in
part, subject to the limitations hereafter set forth, Landlord, at its own expense, shall cause such damage to
be repaired, and the rent shall not be abated. If by reason of such occurrence, the Premises shall be
rendered untenantable in whole or in part, subject to the limitations hereinafter set forth, Landlord, at its
own expense, shall cause the damage to be repaired and the Fixed Minimum Rent shall be abated
proportionately as to the portion of the Premises rendered untenantable. If the Landlord, at its. option,
decides not to repair and restore the Premises, Landlord shall have the right, to be exercised by notice in
writing delivered to Tenant within sixty (60) days from and after the occurrence of such casualty, to cancel
and terminate this Lease. In no event shall Landlord be obligated to expend for any repairs or
reconstruction pursuant to this Section 16.01 an amount in excess of the mi surance proceeds recovered by it
and allocable to the damage to the Premises after deduction therefrom of Landlord's reasonable expenses
in obtaining such proceeds and any amounts required to be paid to Landlord's mortgagee. Nothing in this
section shall be construed to permit the abatement, in whole or in part, of the Percentage Rent, and the
calculation of Percentage Rent shall be governed solely by Section 2.01(e) hereof.
(b) If the Landlord is required to repair or reconstruct the Premises pursuant to the provisions of
this Section 16.01, its obligation shall be limited to the construction of the structural demising walls
(without drywall) and roof of the Premises. Tenant shall submit to Landlord for Landlord's approval
detailed plans and specif cations for all other work not required to be done by Landlord and upon approval
of such plans and specifications and, within fifteen (15) days after the Tenant has been notified that the
Landlord has completed its work on the Premises, Tenant shall re-enter the Premises and therein diligently
pursue to completion such work at Tenant's expense and immediately thereafter-commence doing business
all in accordance with the provisions of this Lease. Landlord shall not be liable for delays occasioned by
adjustment of losses with insurance carriers or by any other cause, so long as Landlord shall proceed in
good faith.
(c) Notwithstanding anything set forth herein to the contrary, Tenant shall be responsible for all
repairs and replacements of damage and/or destruction of the Premises necessitated by burglary or
attempted burglary, or any other illegal or forcible entry into the Premises.
(d) Tenant covenants that it will give notice to Landlord of any accident or damage, whether such
damage is caused by insured or uninsured casualty, occurring, in, on or about the Premises within.seventy-
two (72) hours after Tenant has lozowledge of such accident or damage. If Tenant breaches its covenant set
forth in this Section 16.01(d), Landlord in addition to all other rights and remedies wader this Lease, at law
or in equity shall, at its option, be relieved of any of its obligations under Section 16.01.
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ARTICLE XVII
EMWNT DOMAIN
SECTION 17.01. Total Condemnation.
If the whole of the Premises shall be taken by any public or quasi-public authority under the
power of eminent domain, condemnation or expropriation or in the even to of a conveyance in lieu thereof,
then this Lease shall terminate as of the date on which possession of the Premises is required to be
surrendered to the condemning authority, and Tenant shall have no claim against Landlord or the
condemning authority for the value of the unexpired term of this Lease.
SECTION 17.02. Partial Condemnation.
If any part of the Premises shall be so taken or conveyed and if such partial taking or conveyance
shall render the Premises unsuitable for the business of the Tenant, then the term of this Lease shall cease
and terminate as of the date on which possession of the Premises is required to be surrendered to the
condemning authority and Tenant shall have no claim against Landlord or the condemning authority for the
value of any unexpired term of this Lease. In the event such partial taking or conveyance is not extensive
enough to render the Premises unsuitable for the business of Tenant, this Lease shall continue in full force
and effect except that the Fixed Minimum Rent and the Percentage Rent Gross Sales Base sha11 each be
reduced in the same proportion that the floor area of the Premises so taken or conveyed bears to such floor
area immediately prior to such taking or conveyance such reduction commencing as of the date Tenant is
required to surrender possession of such portion. With respect to the days during which the Premises are
not open for business, the calculation of Percentage Rent shall be adjusted in accordance with Section
2.01(e) hereof. Landlord shall promptly restore the Premises, to the extent of condemnation proceeds
available for such purpose, as nearly as practicable to a condition comparable to their condition at the time
of such condemnation, less the portion lost in the taking or conveyance, and Tenant shall promptly make
all necessary repairs, restoration and alterations of Tenant's fixtures, equipment and furnishings and shall
promptly re-enter the Premises and commence doing business in accordance with the provisions of this
Lease. For purposes of determining the amount of funds available for restoration of the Premises from the
condemnation award, said amount will be calculated from that part of the award which remains after
payment of Landlord's reasonable expenses incurred in recovering same and after payment of any amounts
due to any mortgagee of Landlord, in such manner to represent that portion of the remaining sum so
available (excluding any award or other compensation for-land) which is equitably allocable to the
Premises.
SECTION 17.03. Partial Condemnation of Shopping Center.
If (a) more than one third (0) of the floor area of the buildings of which the Premises are a part
or more than one-third (U3) of the leasable floor area of the Shopping Center or tgore than one-third (M)
of the Common Areas shall be so taken or conveyed or (b) if any part of the parking area of the Shopping
Center is so taken or conveyed, and as a result of such partial taking or conveyance the size, layout or
location of the remaining parking facilities will violate the requirements of the applicable zoning or similar
law (or any permitted variance or exception thereto), then in any or all such events notwithstanding the fact
that the Premises are not so taken or conveyed, Landlord shall have the right and power, at its option to be
exercised by written notice to Tenant, to terminate this Lease effective either the date title vests in the
condemning authority or the date Landlord is required to deliver possession of the pan so taken or
conveyed; provided, however, in the event of taking or conveyance described in clause (b) if Landlord
shall take immediate steps towards eliminating such violation, this Lease shall be unaffected and remain in
full force and effect. In any event, Tenant shall have no claim against Landlord or the condemning
authority for the value of any unexpired term of this Lease.
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SECTION 17.04. Landlord's Damages
In the event of any condemnation or taking as hereinbefore provided, whether whole or partial,
the Tenant shall not be entitled to any part of the award as damages or otherwise for such condemnation
and Landlord and any mortgagee of Landlord are to receive the full amount of such award as their
respective interests may appear. Tenant hereby expressly waives any right or claim to any part therefor
and assigns to Landlord any such right or claim to which Tenant might become entitled.
SECTION 17.05. Tenant's Damages.
Although all damages in the event of any condemnation are to belong to the Landlord and any,
mortgagee of Landlord as aforesaid, whether such damages are awarded as full compensation for
diminution in value of the leasehold or to the fed of the Premises, Tenant shall have the right to the extent
that same shall not diminish the Landlord's or such mortgagee's award to claim and recover from the
condemning authority, but not from Landlord or such mortgagee, such compensation as may be separately
awarded or recoverable by Tenant, under the applicable eminent domain code in effect where the Shopping
Center is located, in Tenant's own right for or on account of, and limited solely to, any cost to which
Tenant might be put in removing Tenant's merchandise, furniture, fixtures and equipment.
ARTICLE XV M
BANKRUPTCY
SECTION 18.01. Bankruptcy.
(a) If there shall be fled against Tenant or any guarantor or surety of this Lease or any of
Tenant's obligations under this Lease, in any court, pursuant to any statute either of the United States or of
any state, a petition in bankruptcy or insolvency or for reorganization or for the appointment of a receiver
or trustee of all or any portion of Tenant's or such guarantor's or surety's property, and if, within thirty
(30) days thereof, Tenant or such guarantor or surety fails to secure a discharge thereof; or if Tenant or
such guarantor or surety shall voluntarily file any such petition or make an assignment for the benefit of
creditors or petition for or enter into such an arrangement, then this Lease, at the option of Landlord, may
be canceled or terminated, in which event neither. Tenant nor any person claiming through or under Tenant
by virtue of any statute or of an order of any court shall be entitled to acquire or remain in possession of the
Premises, as the case may be, and Landlord shall have no further liability hereunder to Tenant or such
person, and Tenant or nay such person shall forthwith quit and surrender the Premises. If this Lease shall
be so canceled or terminated, Landlord, in addition to the other rights and remedies of Landlord under
Article XVM hereof, or contained elsewhere in this Lease, or by virtue of any statute or rule of law, may
retain as liquidated damages any rent, security deposit and nay other money received by Landlord from
Tenant or others on behalf of Tenant.
(b) If this Lease is assigned to any person or entity pursuant to the provisions of the Bankruptcy
Code, 11 U.S.C. SS 101 et seq. (the "Bankruptcy Code"), fifty percent (50%) of any and all monies or
other consideration payable or otherwise to be delivered in connection with such assignment shall be paid
or delivered to Landlord, shall be and remain the exclusive property of Landlord and shall not constitute
property of Tenant or of the estate of Tenant, within the meaning of the Bankruptcy Code. Any monies or
other consideration constituting Landlord's property under the preceding sentence not paid or delivered to
Landlord shall be held in trust for the benefit of Landlord and shall be promptly paid or delivered to
Landlord-
(c) Any person or entity to which this Lease is assigned pursuant to the provisions of the.
Bankruptcy Code shall be deemed, without further act or deed, to have assumed all of the obligations
arising under this Lease on or after the date of such assignment. Any such assignee shall, upon the request
of Landlord, forthwith execute and deliver to Landlord an instrument, in form and substance acceptable to
Landlord, confirming such assumption.
29
(d) In addition to Landlord's right to approve or disapprove the proposed sublease or assignment,
as hereinbefore set forth, Landlord shall have the right, to be exercised by giving notice to Tenant within
thirty (30) days after receipt of Tenant's request to assign or sublet, to recapture the Premises, or portion
thereof described in the proposed sublease or assignment. If notice of such recapture is given, it shall serve
to cancel and terminate this Lease with respect to the proposed sublease or assigmneat space, or, if the
proposed sublease or assignment coven the entire Premises and term, it shall serve to cancel and terminate
the Lease, in either case as of the thirtieth (30th) day after the date of Landlord's notice and as fully and
completely as if that date had been definitely fixed as the expiration of the term of this Lease. If this Lease
be canceled pursuant to the term hereof with respect to less than the entire Premises, the Fixed Minimum
Rent shall be adjusted on the basis of the proportion of the total area retained by Tenant to Tenant's total
area originally demised hereby, the Lease so amended shall continue thereafter in full force and effect The
failure of Landlord to exercise its right of recapture shall not be construed in any manner to be an approval
of Tenant's request to assign or sublet, such approval to be effective only if given in writing by Landlord to
Tenant.
ARTICLE =
EVENTS OF DEFAULT; LANDLORD'S REMEDIES
SECTION 19.01. Events of Default.
The following shall constitute Events of Default:
(a) If Tenant defaults in the payment of any sum of money (whether Fixed Minimum Rent,
Percentage Rent, Tax Rent, Tenant's proportionate share of Operating Costs, Promotion Charge, additional
rent or otherwise) when due and such default shall continue for ten (10) days after the date of written
notice from Landlord to Tenant
(b) Except as to the acts, defaults, omissions and/or occurrences specified in subsections (a), (c)
and (d) of this Section 19.01 or those characterized, defined, denoted, or identified in this Lease as
Deliberate Events of Default, if Tenant defaults in fulfilling any of the other covenants of this Lease on
Tenant's part to be performed hereunder and such default shall continue for the period within which
performance is required to be made by specific provision of this Lease, or, if no such period is provided,
for twenty (20) days after the date of written notice from Landlord to Tenant specifying the nature of said
default, or, if the default so specified shall be of such a nature that the same cannot be reasonably cured or
remedied within said twenty (20) day period, if Tenant-shall not in good faith have commenced the curing
or remedying of such default within such twenty (20) day period and shall not thereafter diligently proceed
therewith to completion.
(c) If any execution or attachment shall be issued against Tenant or any of Tenant's property and
shall not be discharged or vacated within ten (10) days after the issuance thereof.
(d) Any event described in Section 13.01 or Section 19.02.
SECTION 19.02. Deliberate Events of Default.
(a) Notwithstanding anything to the contrary set forth in this Lease, if Tenant shall (1) fail timely
to make payment of Fixed Minimum Rent, Percentage Rent, 'Fax Rent, Tenant's proportionate share of
Operating Costs, the Promotion Charge or fail timely to deliver its monthly Gross Sales statements, in each
case on the date such payment or statement is due hereunder without regard to any grace period and/or
written notice otherwise required from Landlord, and any such failure shall be repeated two (2) times in
any period of twelve (12) months; or (2) fail timely to perform any other covenant of this lease more than
three (3) times in any period of twelve (12) months, then notwithstanding that such failures shall have been
timely cured, any further similar failure within such twelve (12) month period shall be deemed to be a
Deliberate Event of default
(b) Any default, act, omission or occurrence characterized, defined, denoted, or identified
elsewhere in this Lease as a Deliberate Event of Default shall also be a Deliberate Event of Default.
30
(c) If Tenant shall abandon the Premises whether they are vacant or not, or if the Premises shall
be permitted to become vacant.
(d) If Tenant shall remove, attempt to remove, or express or display any intention to remove any
of Tenant's goods or property of others from the Premises otherwise than in the ordinary and usually
course of business at any time (regardless of the day, or hour of the day or night, and regardless of whether
any sum of money payable under this Lease is then in arrears) without having paid and satisfied Landlord
for all sums of money which may become due during the entire term of this Lease (whether Fixed
Minimum Rent, Percentage Rent, Tax Rent, Tenant's proportionate share of Operating Casts, the
Promotion Charge, additional rent or otherwise). Any such removal shall be deemed conclusively to have
been made fraudulently or clandestinely with intent to prevent Landlord from distraining or realizing on
such goods or property.
(e) In the event of a Deliberate Event of Default, Landlord, without giving Tenant any notice and
without affording Tenant an opportunity to cure the default (Tenant hereby specifically waiving any right
of tender), may exercise any or all of its rights under this Lease in addition to those it may have at law or in
equity.
SECTION 19.03. Landlord's Remedy of Termination and Possession
(a) Upon or after any one or more Events of Default or Deliberate Event of Default which have
not been cured as set forth in Section 19.01 or Section 19.02 above, Landlord may, without notice,
terminate all services (including, but not limited to, the furnishing of utilities) and/or re-enter the Premises,
either by force or otherwise, and/or by summary proceedings or otherwise dispossess Tenant and the legal
representative of.Tenaat or other occupant of the Premises, and remove their effects and repossess and
enjoy the Premises, together with all alterations, additions and improvements, all without being liable to
prosecution or damages therefor. Ia the event of any entry or taking possession of the Premises as
aforesaid, the Landlord shall have the right, but not the obligation, to remove therefrom all or any part of
the personal property located therein and may place the same in storage at a public warehouse at the
expense and risk of the Tenant and/or owner or owners thereof.
(b) Tenant hereby expressly waives the service of notice by Landlord of intention to re-enter or to
institute legal proceedings to that. end, and any and all rights of redemption granted by or under any present
or future laws in the event of Tenant being evicted or dispossessed as a result of any Event of Default or
Deliberate Event of Default as described in Section 19.01 or Section 19.02 above.
SECTION 19.04. Confession of Judgment for Possession
(a) If an Event of Default or a Deliberate Event of Default occurs and is not cured as set forth in
Section 19.01 or Section 19.02 above, or upon failure of Tenant to vacate the Premises at the expiration of
the term of this Lease, Tenant hereby authorizes and empowers any Prothonotary or any attorney of any
court of record to appear for Tenant and to confess judgment against Tenant and in favor of Landlord in an
amicable action of ejectment for the Premises and to issue writs of possession thereon, with costs of suit
including attorneys fees to be paid by Tenant. Such authority shall not be exhausted by one exercise
thereof, but judgments in ejectment may be confessed from time to time as often as may be necessary for
Landlord to obtain possession of the Premises in accordance with the terms of this Lease.
SECTION 19.05. Landlord's Remedy of Money Damages
(a) In the event of any Event of Default or Deliberate Event of Default which results in the
termination and/or dispossession by summary proceedings or otherwise as provided in Section 19.03 and
19.04 above, the Fixed Minimum Rent and all additional rent shall become due thereupon by Tenanrso
Lance- paid
r turn of cnCll re entry, dlSpOaaraal9 a?n?nril+,• •-•,tiOII.
(b) Ia the Event of any Default or Deliberate Event of Default, if Landlord's elects to not
terminate the Lease, Tenant shall pay Landlord for each month of the balance of the term, as liquidated
damages for the failure of Tenant to observe and perform Tenant's covenants herein, the sum of one
monthly installment of Fixed Minimum Rent; plus one-twelfth (1/12th) of the annual average Percentage
31
Rent payable hereunder for the three (3) lease years immediately preceding (or for the entire preceding
portion of the term of this Lease if less than three (3) lease years); plus the monthly portion of the payment
of Tax Rent;, plus the monthly payment of Tenant's proportionate share of Operating Costs; plus the
Promotion Charge. The refusal or failure of Landlord to relet the Premises or any part of parts thereof shall
not release or affect Tenant's liability for damages.
(c) In the Event of any Default or Deliberate Event of Default, Landlord may collect liquidated
damages from Tenant as described in Section 19.05 (b) above and may also attempt to relet the Premises.
Landlord, at Landlord's option, may make such alterations, repairs, replacements and/or decorations in the
Premises as Landlord, in Landlord's sole judgment, considers advisable and necessary for the purpose of
reletting the Premises; and the making of such alterations and/or decorations shall not operate or be
construed to be a termination of this Lease as described in Section 19.03 above. Landlord shall in no event
be liable for failure to relet the Premises. In the eveat that Landlord elects to attempt to relet the Premises,
additional compensatory damages shall be added to'the monthly liquidated damages described in Section
19.05 (b) above. The compensatory damages due by Tenant to Landlord shall be those costs Landlord
actually incurs in connection with reletting, such as, but not necessarily limited to: advertising expenses;
brokerage commissions; attorneys' fees; costs of putting and keeping the Premises in good order for
showing to prospective replacement tenants; and costs of preparing the Premises for reletting to a
prospective tenant. Compensatory damages may be invoiced by Landlord to Tenant at the convenience of
Landlord, and shall be payable by Tenant to Landlord within thirty (30) days thereafter.
(d) Any action brought to collect the amount of deficiency for any month shall not prejudice in
any the rights of Landlord to collect the deficiency for any subsequent month by a similar proceeding, or
the rights of Landlord to elect to collect liquidated damages calculated by the formula set forth in Section
19.05(b) hereof.
SECTION 19.06. Confession of Judgment for Money
(a) If an Event of Default or a Deliberate Event of Default occurs and is not cured as set forth in
Section 19.01 or Section 19.02 above, Tenant does hereby authorizes and empowers any Prothonotary or
any attorney of any court of record to appear for Tenant and confess judgment against Tenant in favor of
Landlord for any determined amount to which Landlord would be entitled as damages under the provisions
of Article = hereof, including attorneys' fees and costs for collection of the same. This authority shall
not be exhausted by one exercise thereof, but judgment may be corsi?--ssed from time to time and as often as
there is an occurrence of any Event of Default or a Deliberate Event of Default and Tenant fails to cure as
provided in Section 19.01 and Section 19.02 above.
SECTION 19.07. Additional Remedies for Landlord
(a) Mention in this Lease of any particular remedy shall not preclude Landlord from any other
remedies under this Lease, or now or hereafter existing at law or in equity or by statue.
SECTION 19.08. Waivers.
Tenant expressly waives:
(a) The benefit of all laws, now or hereafter in force, exempting any goods on the Premises, or
elsewhere, from distraint, levy or sale in any legal proceedings taken by Landlord to enforce any rights
under this Lease.
(b) The benefit of all laws existing now or hereafter enacted regarding any limitation as to the
goods upon which, or the time within which, distress is to be made after removal of goods of the Tenant or
others from the Premises, and further relieves Landlord of the obligation of proving or identifying the
goods distrained, it being the purpose and intent of this provision that all goods of Tenant, whether upon
the Premises or not, shall be liable to distress for-rent at any time after Tenant's default under this Lease,
including particularly, but not limited to those goods removed from the Premises clandestinely and
fraudulently, as defined above on this Lease.
32
(c) The right to delay execution on any real estate that may be levied upon to collect any amount
which maay become due under the terms and conditions of this Lease and any right to have the same
appraised; _and Tenant authorizes any Prothonotary or clerk to enter a writ of execution or other process
upon Tenant's voluntary waiver and further agrees that said real estate may be sold on a writ of execution
or other process.
(d) All rights relating to the Landlord-Tenant relationship under any law, ordinance or statue, to
the extent that they might limit Landlord's right to cause the distrained goods to be sold, Tenant now
specifically and knowingly authorizes Landlord to sell any goods distrained for rent at a public auction sale
to be held at any time at least seven (7) days after that distraint without appraisement and condemnation of
the goods, but upon five (5) days' notice to Tenant of the date, place and terms of sale, including
Landlord's right to purchase all or any of the property.
(e) If the Shopping Center is located in Pennsylvania, the right to three (3) months' notice and/or
fifteen (15) or thirty (30) days' notice required under certain circumstances by the Landlord and Tenant
Act of 1951, hereby agreeing that seven (7) days' notice shall be sufficient in either or any such case.
ARTICLE XX
SECURITY DEPOSIT
SECTION 20.01. Security Deposit.
(a) Landlord acknowledges receipt from Tenant of the sum set forth in Part I of the Lease to be
held as security for the payment of any rent and all other sums of money payable by Tenant cinder this
Lease and for the faithful performance of all covenants of Tenant hereunder. The amount of such security
deposit, without interest, shall be refunded to Tenant after termination of the term of this Lease, provided
Tenant shall have made all such payments and performed all such covenants. Upon any default by Tenant
hereunder, all or part of such security deposit may, at Landlord's sole option, be applied on account of such
default, and thereafter Tenant shall restore the resulting deficiency in such security deposit upon demand.
Tenant hereby waives the benefit of any provision of law requiring such security deposit to be held in
escrow or in trust, and such security deposit shall be deemed to be the property of Landlord and may be
commingled with Landlord's other funds.
(b) Landlord may deliver the security deposit to any purchaser of Landlord's interest in the
Premises, in the event that such interest be sold, and thereupon Landlord shall be discharged from any
further liability with respect to such security deposit, and Tenant agrees to look solely to such purchaser for
the return of such security deposit. -
ARTICLE XXI
ENVIRONMENTAL CONSIDERATIONS
SECTION 21.01. Definitions.
(a) For the purpose of this Article XXI of this Lease, the following definitions shall apply:
1. "Environmental Release": The term Environmental Release shall mean the releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing, abandoning, discarding or dumping of any Toxic Substance from, on, into or about the Premises
or the Shopping Center.
2. "Municipal Waste": The term Municipal Waste shall have the meaning set forth in
the Pennsylvania Solid Waste Management Act, 35 P.S. s6013.103.
3. "Remediation": Activities in connection with the clean-up of an Environmental
Release, including but not limited to sampling, analysis, excavation, removal, disposal and replacement of
soils, ground water and/or other materials, in accordance with the provisions of all applicable laws,
ordinances and regulations, now or hereafter enacted.
1 ^,
4. "Remediation Plan": The term Remediation Plan shall mean a written plan to effect
the Remediation of the Environmental Release which shall be prepared by an environmental engineer
acceptable to Landlord.
5. "Toxic Substance": The term Toxic Substance shall mean a "hazardous substance,"
"pollutant," or "contaminant," as such terms are now or hereafter defined in all applicable federal, state,
and local laws, ordinances or regulations now or hereafter enacted or amended, and any and all other terms
which are or may be used in any or all applicable environmental laws now or hereafter enacted to define
prohibited or regulated substances.
(b) Tenant shall not use the Premises or any part thereof, or the Shopping Center, or any part
thereof, for the purpose of treating, producing, handling, transferring, processing, transporting, disposing,
using or storing a Toxic Substance.
(c) Tenant and its agents, employees, contractors, licensees and invitees shall not cause or permit
to exist, as the result of intention or unintentional action or omission by one or more of them, an
Environmental Release.
(d) Notwithstanding the foregoing, Tenant may use normal amounts of cleaning materials and
office supplies in the ordinary course of Tenant's business in reasonable quantities and provided the same
are used, stored and disposed of in compliance with all applicable laws, ordinances and regulations, as now
or hereafter enacted.
(e) Tenant shall dispose, remove and/or arrange for the disposal and/or removal of its Municipal
Waste by a licensed Municipal Waste transporter or Municipal Waste disposal company approved by
Landlord, and which shall be operated in accordance with applicable laws, ordinances and regulations.
Tenant and its agents, employees, contractors, licensees and invitees shall not place or permit the
placement of any Toxic Substance in any waste receptacle located in the Premises or Shopping Center, or
the plumbing or sewer systems of the Premises or the Shopping Center.
(f) If an Environmental Release is caused by Tenant as stated in subparagraph 3 above:
1. Tenant shall promptly notify Landlord and any and all governmental agencies
required by law to be notified; and
2. Tenant shall promptly submit to Landlord the Remediation Plan for Landlord's
approval. The Remediation Plan shall disclose a schedule and detailed description of Remediation
activities which shall include information as Landlord may request, including: (i) a plan for Remediation
which shall include all courses of action as may be necessary to obtain a certification from the
Commonwealth of Pennsylvania, Department of Environmental Protection and the Federal Environmental
Protection Agency, and any other appropriate local agency, that the Premises and/or Shopping Center have
been remediated in accordance with all applicable laws, ordinances and regulations, and to the satisfaction
of these agencies; (ii) reasonable safety measures; (iii) a plan to avoid interference with the operation of the
Shopping Center, or any part thereof, and the conduct of business therein, and; (iv) a plan to restore the
Premises and/or Shopping Center to the condition existing prior to the Environmental Release, including
the replacing of soils, landscaping, regrading, repaving and repairing the improvements. Tenant shall
modify the Remediation Plan as requested by Landlord.
3. Landlord may, in its sole discretion, (i) undertake all or part of the Remediation, at
Tenant's sole cost, or (ii) require that Tenant take all steps necessary to prompti}aremediate all or part of
the Environmental Release, in accordance with the Remediation Plan, which shall be performed by
environmental professionals approved by Landlord. Tenant shall, upon the request of the Landlord,
deposit with Landlord 125% of the cost of performance of the Remediation Plan, as reasonably estimated
by Landlord. Portions of the amount deposited with Landlord may, from time to time, be released by
Landlord to be applied to the cost of performance of the Remediation Plan.
4. Upon receipt, Tenant shall immediately submit to Landlord true and complete copies
of any correspondence between Tenant and any regulatory agency, concerning matters arising out of or
relating to an Environmental Release. In addition, Tenant shall keep Landlord fully informed of its
progress in complying with'its obligations under this Article = of this Lease.
5. Landlord shall have the opportunity to participate with Tenant in negotiations with
any governmental authorities involved in the Remediation, leading to the obtaining by Tenant of a
certification from such governmental agency that Tenant has remediated the Environmental Release to the
satisfaction of such agency.
34
6. Tenant shall obtain a certification from the Commonwealth of Pennsylvania
Department of Environmental Protection and the Federal Environmental Protection Agency, and any
appropriate local agency, certifying that Tenant has performed and satisfactorily completed the
Remediation in accordance with all applicable laws, ordinances and regulations, a copy of which shall be
promptly delivered to Landlord.
7. Tenant shall be responsible for the cost of repair or replacement of any part of the
Premises or the Shopping Center, and the fixtures, equipment, personalty, and installations thereon and
therein, necessitated by reason of the Remediation.
(g) Tenant shall comply with all applicable laws, ordinances and regulations of all governmental
authorities, as now or hereafter enacted, and shall be solely responsible for any necessary alterations or
renovations to the Premises, including but not limited to Remediation, structural renovations, or cessation
of activities necessary to comply with such laws, ordinances, and regulations.
(h) If any certification required in this Article XXI shall not be obtained prior to the expiration or
earlier termination of this Lease, then until such certification is obtained, Tenant shall be responsible for
and shall pay to Landlord an amount, for each day, equal to one-three hundred sixty-fifth of the aggregate
of the highest amount of Minimum Annual Rent and Additional Rent payable by Tenant in any Lease Year
during the five (5) year period immediately preceding, diminished by any rent or other revenues received
by Landlord by reason of the occupancy of the Premises during such period.
(i) Tenant represents and warrants that the plans and specifications to be submitted to an/or
heretofore submitted and approved by Landlord for the construction, decoration, improvement and/or
renovation of the Premises are in conformance with all applicable laws, ordinances and regulations of all
governmental authorities. Tenant shall, prior to commencement of construction, obtain all licenses,
permits and approvals necessary for construction of the Premises pursuant to the plans and specifications
approved by Landlord, and for the operation of the Premises as contemplated by this Lease, including all
land development requirements. All construction work performed by Tenant or its contractors shall be in
accordance with applicable laws, ordinances and regulations of the governmental authorities having
jurisdiction thereof.
0) Except as otherwise allowed or provided herein, Tenant shall not use any Toxic Substance on
the Premises or the Shopping Center, other than those substances listed below, which shall be stored in
appropriate safety or protective containers and disposed of in the following amounts and frequencies in
accordance with all applicable laws, ordinances and regulations (If no listing is included hereunder, no
such use shall be permitted or allowed under any circumstances):
TOXIC SUBSTANCE USED STORAGE iv1ETHOD DISPOSAL METHOD
AMOUNT DISPOSED EPA/DER GENERATOR I.D. NUMBER
PER MONTH (if applicable)
Tenant shall give prior written notice to Landlord of any proposed changes in the above schedule, and
within thirty (30) days after Landlord's receipt of such notice, Landlord may approve or reject such
proposed change, in its sole discretion.
(k) The covenants, representations and warranties provided herein shall survive the expiration or
earlier termination of this Lease.
(1) Tenant shall pay, defend, indemnify, and hold harmless Landlord from and against any and all
claims, losses, costs, damages and liabilities arising from or relating to Environmental Releases,
Remediation, or the failure of Tenant, or its agents, employees, contractors, licensees or invitees to comply
with the provisions of this Article XXI.
35
ARTICLE =
MISCELLANEOUS
SECTION 22.01. Access by Landlord.
Landlord may at all reasonable times during the term of this Lease enter in to inspect the Premises
and/or may show the Premises and building to others. At any time within ninety (90) days immediately
preceding the expiration of the term of this Lease, Landlord shall have the right to show the Premises and
all parts thereof to prospective tenants between the hours of 9:00 a.m. and 9:00 p.m. on any day except
Sunday and any legal or religious holiday on which Tenant shall not be open for business.
SECTION 22.02. Holding Over.
Should Tenant hold over in possession of the Premises after the expiration of the term hereof
without the execution of a new lease agreement or extension or renewal agreement, Tenant, at the option of
Landlord, shall be deemed to be occupying the Premises from month to month, subject to such occupancy
being terminated by either parry upon at least thirty (30) days' written notice, at one hundred fifty percent
(150% of the rental, including, but not limited to, Fixed Minimum Rent, Percentage Rent, Tax Rent,
Tenant's proportionate share of Operating Costs, the Promotion Charge, and additional rent provided for
herein, all calculated, from time to time, as though the term of this Lease had continued and otherwise
subject to all of the other terms, covenants and conditions of the Lease insofar as the same may be
applicable to a month to month tenancy.
SECTION 22.03 Successors.
All rights, obligations and liabilities herein given to or imposed upon, the respective parties hereto
shall extend to and bind the several respective heirs, executors, administrators, trustees, receivers, legal
representatives, successors and assigns of the said parties; and if there shall be more than one tenant, they
shall all be bound jointly and severally by the terms, covenants and agreements herein. No rights,
however, shall inure to the benefit of any assignee, legal representative, trustee, receiver, legatee or other
personal representative of Tenant unless the assignment to such parry has been approved by Landlord in
writing as provided in Section 14.01(a) hereof. Landlord shall have the unrestricted right to assign this .
Lease and upon any such assignment, Landlord shall automatically be released from all liability hereunder
from and after the date if such assignment. All of Tena=obligations accruing during the term hereof
pursuant to Sections 2.03, 2.04, 3.01, 3.02, 4.02, 7.03, 7.04, 8.03, 10.0 1, and -2.22 shall survive the
expiration or earlier termination of the term of this Lease.
SECTION 22.04. Quiet Enjoyment.
So long as Tenant shall pay the rents herein provided within the respective times provided
therefor, and provided and so long as Tenant observes and performs all the covenants, terms and conditions
on Tenant's part to be observed and performed, Tenant shall peaceably and quietly hold and enjoy the
Premises for the term hereby demised without hindrance or interruption by Landlord or any other person or
persons lawfully claiming by, through or under Landlord, subject, nevertheless, to the terms and conditions
of this Lease. Landlord's liability under this Section shall cease upon a conveyance by Landlord of the
Premises.
SECTION 22.05. Waiver.
The waiver by Landlord of any breach of any term, covenants or condition herein contained shall
not be deemed to be a waiver or any subsequent breach of the same or a waiver of any other term, covenant
or condition herein contained. The subsequent acceptance by Landlord of rent due hereunder or any or all
other monetary obligations of Tenant hereunder, whether or not denoted as rent hereunder, shall not be
36
deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease,
other than the failure of Tenant to make the particular payment so accepted, regardless of Landlord's
knowledge of such preceding breach at the time of acceptance of such rent. No covenant, term or
condition of this Lease shall be deemed to have been waived by Landlord, unless such waiver be in writing
and executed by Landlord.
SECTION 22.06. Custom and Usage.
Any law, usage or custom to the contrary notwithstanding, Landlord shall have the right at all
times to enforce the covenants and conditions of this Lease in strict accordance with the terms hereof,
notwithstanding any conduct or customer on the part of the Landlord in refi aining from so doing at any
time or times with respect to the Tenant hereunder or with respect to other tenants of the Shopping Center.
The failure of Landlord at any time or times to enforce its rights under said covenants and provisions
strictly in accordance with the same shall not be construed as having created a custom in any way or
manner contrary to the specific terns, provisions and covenants of this Lease or as having in any way or
manner modified the same.
SECTION X1.07. Accord and Satisfaction.
No payment by Tenant or receipt by Landlord of a lesser amount than any payment of rent or
additional rent herein stipulated shall be deemed to be other than on account of the earliest stipulated rent
or additional rent then due and payable. Tenant is hereby advised that Landlord may instruct Tenant to
forward all sums due Landlord to a "lock box" account maintained by Landlord which will result in such
checks being automatically deposited to Landlord's account without review or inspection prior to the same
being deposited. Accordingly, Tenant agrees that Landlord shall not be bound by any endorsement or
statement or any check or any letter accompanying any check or any letter accompanying any check or
payment and no such endorsement, statement or letter shall be deemed an accord and satisfaction, whether
such check or letter is forwarded to landlord's "lock box" or directly to Landlord, Agent or elsewhere and
Landlord or Landlord's bank may accept such check or payment without prejudice to Landlord's right to
recover the balance of such rent or pursue any other remedy provided in this Lease, at law or in equity.
SECTION 22.08. Performance of Tenant's Covenants.
Tenant covenants and agrees that it will perform all agreements and observe all covenants herein
expressed on its part to be performed and observed and that it will promptly, upon receipt of written notice
specifying action required by this.Lease, comply with such notice; and further, that if Tenant shall not
comply with any such notice to - e satisfaction of Landlord prior to the date on which such non-
compliance would constitute an Event of Default, in addition to, and not in lieu of or in limitation of any
other remedy which Landlord may have pursuant to this Lease, at law or in equity, Landlord may, but shall
not be obligated to, enter the Premises and do the things specified in said notice. Landlord shall have no
liability to Tenant for any loss or damage resulting in any way from such action and Tenant agrees to pay
upon demand, asadditional rent, any sums or costs incurred by Landlord in taking such action, plus
administrative costs of Landlord in a sum equal to twenty percent (20%) of such sums and/or costs.
Notwithstanding the foregoing, Landlord's performance of any or all of Tenant's covenants shall not
release Tenant from liability for non-performance.
SECTION 22.09. Entire Agreement
Parts I and H of the Lease Agreement, the Exhibits and Rider, if any, set forth all the covenants,
promises, agreements, conditions, representations, promises, and understandings between Landlord and
Tenant concerning the Premises and there are no covenants, agreements, conditions representations,
promises or understandings, either oral or written, between them other than as herein set forth. All prior
communications, negotiations, arrangements, representations, agreements and understandings, whether
oral, written or both, between the parties hereto, and their representatives, are merged herein and
3 7
extinguished, this Lease superseding and canceling the same. Except as herein otherwise provided, no
subsequent alteration, amendment, change or addition to this Lease shall be binding upon Landlord or
Tenant unless reduced to writing and executed by the parry against which such subsequent alteration,
amendment, change or modification is to be enforced. If any provision contained in any rider hereto is
inconsistent with any printed provisions of this Lease, the provision contained in such rider shall supersede
said printed provision. Tenant hereby acknowledges that: (a) this Lease contains no restrictive covenants
or exclusives in favor of Tenant; (b) this Lease shall not be deemed or interpreted to contain, by
implication or otherwise, any warranty, representation or agreement on the part of Landlord that any
grocery store, department store or regional or national chain store or any other merchant shall open for
business or occupy or continue to occupy any premises in or adjoining the Shopping Center during the
term of this Lease or any part thereof and Tenant hereby expressly waives all claim with respect thereto
and acknowledges that Tenant is not relying on any such warranty, representation or agreement by
Landlord either as a matter of inducement in entering into this Lease or as a condition of this Lease or as a
covenant by Landlord.
SECTION 22.10. No Partnership.
Landlord does not, in any way or for any purpose, become a partner of Tenant in the conduct of
its business, or otherwise, or joint venture or a member of a joint enterprise with Tenant. The provisions of
this Lease relating to the Percentage Rent payable hereunder are included solely for the purpose of
providing a method whereby adequate rent is to be measured and ascertained.
SECTION 22.11: Notices.
All payments of rent and any and all other monetary obligations of Tenant accruing hereunder,
whether or not denoted as rent, shall be paid to High Associates, Ltd., Agent for Smith Land &
Improvement Corporation, Attention Cash Management Department, High Industries, Inc., 1853 William
Penn Way, P.O. Box 10008, Lancaster, PA 17605-0008, until Tenant is notified otherwise in writing, and
all notices given to Landlord hereunder shall be in writing and forwarded to its agent, High Associates,
Ltd., Attention Regional Manager, at 4909 Louise Drive, Suite 209, Mechanicsburg, PA 17055, postage
prepaid, by registered or certified mail, return receipt requested or by expedited delivery service such as
Federal Express. All notices to Tenant shall be forwarded to it at the address set forth in Part I of the Lease
by postage prepaid, registered or certified mail, return receipt requested or by expedited delivery service
such as Federal Express or by delivery in person and in the event of a delivery in person, the affidavit of
the person making such delivery shall be conclusive proof of the delivery and of the date and time of such
delivery. All changes of notice address requested by Tenant shall only be valid and binding on Landlord if
executed by a duly authorized officer, partner or owner of Tenant and acknowledged in writing by an
officer of Landlord or Agent. All notices shall be deemed to have been given on the date when deposited
in the mail receptacles maintained by the corporation which has been chartered by the United States
Government to operation and deliver the mail as aforesaid or, in the case of notices delivered by expedited
delivery service, when received or in the case of notices delivered in person the Tenant, when so delivered.
Notices by the Landlord may be given on its behalf by Agent or by any attorney for Landlord or Agent.
SECTION 22.12. Captions.
The captions appearing in this Lease are inserted only as a matter of convenience and in no way
define, limited, construe or describe the scope or intent of such sections or articles of this lease nor in any
way affect this Lease.
SECTION 22.13. Tenant Defined; Use of Pronoun.
The word "Tenant" shall be deemed and taken to mean each and every person or party mentioned
as a tenant herein, be the same one or more; and if there shall be more than one Tenant, any notice
required or permitted by the terms of this Lease may be given by or to any one thereoZ and shall have the
38
same force and effect as if given by or to all thereof. The use of the neuter singular pronoun to refer to
Landlord or Tenant shall be deemed a proper reference even though Landlord or Tenant may be an
individual, a partnership, a corporation, or a group of two or more individuals or corporations. The
necessary grammatical changes required to make the provisions of this Lease apply in the plural number
where there is more than one Landlord or Tenant and to either corporations associations, partnerships or
individuals, males or females, shall in all instances be assumed as though in each case fully expressed.
SECTION 22.14. Negation of Personal Liability.
Notwithstanding anything contained herein to the contrary, Tenant agrees that Landlord shall have
no personal liability with respect to any of the provisions of this Lease and Tenant shall look solely to the
estate and property of Landlord in the land and buildings comprising the Shopping Center of which the
Premises forms a part for the satisfaction of Tenant's remedies, including without limitation, the collection
of any judgment or the enforcement of any other judicial process requiring the payment or expenditure of
money by Landlord in the event of any default or breach by Landlord with respect to any of the terms and
provisions this Lease to be observed and/or performed by Landlord, subject, however, to the prior rights of
any holder of any Mortgage covering all or part of the Shopping Center, and no other assets of Landlord or
any principal of Landlord shall be subject to levy, execution or other judicial process for the satisfaction of
Tenant's claim and in the event Tenant obtains a judgment against Landlord, the judgment docket shall be
so noted. This Section shall inure to the benefits of Landlord's successors and assigns and their respective
principals.
SECTION 22.15. Liability of Agent.
High Associates, Ltd., in its capacity as Agent, is acting as Agent only and in such capacity shall not in any
event be held liable to the Landlord or to Tenant for the fulfillment or non-fulfillment of any of the terms,
covenants or conditions of this Lease or for any action or proceedings that may be taken by Landlord
against Tenant, or by Tenant against Landlord Any waiver of Landlord's liability hereunder, including
any waiver of subrogation rights, shall apply with equal force and effect of such Agent.
SECTION 22.16. Effect of Governmental Limitation on Rents and Other Charges.
In the event that any law, decision, rule or regulation of any governmental body having
jurisdiction shall have the effect of limiting for any period of time the amount of rent or other charges
payable by Tenant to any amount less than that otherwise provided pursuant to this Lease, the following
amounts shall nevertheless by payable by Tenant: (a) throughout such period of limitation, Tenant shall
remain liable for the maximum amount of rent and other charges which are legally payable (without regard
to any limitation to the amount thereof expressed in this Lease except that all amounts payable by reason of
this Section 22.16 shall not in the aggregate exceed the total of all amounts which would otherwise by
payable by Tenant pursuant to the terms of this Lease for the period of limitation), (b) at the termination of
such period of limitation, Tenant shall pay to Landlord, on demand but only to the extent legally collectible
by Landlord, any amounts which would have been due from the Tenant during the period of limitation but
which were not paid because of such limiting law, decision, rule or regulation, and (c) for the remaining
term of this Lease following the period of limitation, Tenant shall pay to Landlord all amounts due for such
portion of the term of this Lease in accordance with the terms hereof calculated as though there had been
no intervening period of limitations.
SECTION 22.17. Partial Invalidity; Separate covenants.
If any term, covenants or condition of this Lease or the application thereof to any person or
circumstance shall be to any extent, be invalid or unenforceable, the remainder of this Lease or the
application of such term, covenant or condition to persons or circumstances other than those as to which it
is held invalid or unenforceable shall not be affected thereby and each term, covenant and condition of this
lease shall be valid and be enforced to the fullest extent permitted by law. Furthermore, each covenant,
39
agreement, obligation and other provision contained in this Lease is, and shall be deemed and construed as
a separate and independent covenant of the parry bound by, undertaking or making the same, and not
dependent on any other provision of this Lease unless expressly so provided.
SECTION 22.18. Recording.
Tenant shall not record this Lease without the written consent of Landlord. If Landlord requests,
the parties shall execute and acknowledge a short form of Lease for recording purposes which shall be
recorded at Landlord's expense.
SECTION 22.19. Brokerage Commission.
Tenant represents and warrants to Landlord that Tenant has had no dealing, negotiations or
consultations with respect to the Premises, the Shopping Center or this transaction with any broker or
finder except Agent and that with the exception of Agent no broker or finder called the Premises or any
other spaces in the Shopping Center to Tenant's attention for lease. In the event that any other broker or
finder other than Agent claims to have submitted the Premises or any other space in the Shopping Center to
Tenant, to have induced Tenant to lease the Premises or to have taken part in any dealings, negotiations or
consultations with respect to the Premises, the Shopping Center or this transaction, Tenant will be
responsible for and will defend, indemnify and save Landlord and Agent harmless from and against all
costs, fees (including without limitation attorney's fees) expenses, liabilities and claims incurred or
suffered by Landlord and/or Agent as a result thereof.
SECTION 22.20. Construction.
It is the intent of the parties hereto that if any term, covenant, condition or agreement of this Lease
is capable of two or more constrictions, one or more of which would render the provision void, and the
other or other of which would render the provision valid, then the provision shall have the meaning or
meanings which would render it valid. Although the printed provisions of this Lease were drawn by
Landlord, this Lease shall not be construed for or against Landlord or Tenant but this Lease shall be
interpreted in accordance with the general tenor of the language in an effort to reach the intended result.
The Landlord and Tenant agree that time is of the essence with respect to the performance of the respective
obligations set forth in this Lease.
SECTION 22.31. Prior Lease. _
(a) Tenant is presently occupying the Premises pursuant to a lease agreement with Landlord (the
aforesaid lease agreement and any amendment thereto being hereinafter referred to as the "Prior Lease'o.
(b) The patties hereto agree that the execution of this Lease shall be deemed to satisfy the
requirements with respect to notice of termination set forth anywhere in the Prior Lease, and therefore, it is
agreed that the Prior Lease shall terminate on the day prior to the commencement date of this Lease
without the necessity of any other or fiuther notice from or to either party.
(c) Notwithstanding any rule of law, the decision of any court or any inference therefrom to the
contrary, in the event Tenant has failed to comply with any of its obligations under the Prior Lease, if such
failure is continuing, Landlord may treat such failure as having occurred under this Lease, and in such
event, Landlord shall have the right, in addition to, and not in lieu of, any other remedy at law, in equity or
otherwise, to exercise any and all of Landlord's rights and remedies hereunder, including, but not limited
to, those set forth in Article = of this Lease.
(d) As an inducement to Landlord to execute this Lease, Tenant hereby releases and forever
discharges Landlord from all manner of action, causes of action, suits, covenants, agreements, promises,
damages, claims and demands whatsoever, in law or in equity, which Tenant has or may have against
Landlord arising out of the Prior Lease.
40
SECTION 22.22. Submission of Lease to Tenant.
THE SUBMISSION BY LANDLORD TO TENANT OF THIS LEASE SHALL HAVE NO
BINDING FORCE OR EFFECT, SHALL NOT CONSTITUTE AN OPTION FOR THE LEASING OF
THE PREMISES, NOR CONFER ANY RIGHTS OR IMPOSE ANY OBLIGATIONS UPON EITHER
PARTY UNTIL THE UICUTION THEREOF BY LANDLORD AND THE DELIVERY OF AN
E" XECUTED ORIGINAL COPY THEREOF TO TENANT OR ITS REPRESENTATIVE.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have caused this Lease
to be duly executed the day and year first above written.
HIG:
Attest: BY:
SMITH LAND & IMPROVEMENT CORPORATION (Landlord)
Attest: BY: Titgw4n- ? --
President
MARGE MALEC d/b/a/ MALEC'S PETS (Tenant)
Attest. BY:
President
41
E=IT "B"
Landlord's Work in Premises
1. Landlord to remodel as per attached two drawings by Dever Architects dated
marked A2-a and A2-b and labeled "Tenant Fit-Up for Malec's Pet Store."
2. Landlord is to install plugs along back partition and along the wall with Dauphin Deposit as per
specifications below and supplied diagram
Landlord, at Landlord's expense, shall install wire mold bplug strips with outlets every 6 inches on the
length of the wall against the Dauphin Deposit Bank from the yet to be erected partition to the front
window (approx. 97 ft.) and 12 ft. of same plug strip on the back partition as noted in the attached diagram.
The plug strips should be placed on four 20 amp breakers (1 breaker per each 25 ft. section) plus one 20
amp breaker for the 12 ft. section along the back partition. Plug strips should be at 4 ft. above ground
level. The plug strips should be connected to the current breaker box
In addition, where possible and safe, all existing plugs should remain in tact and functional.
3. Landlord, at Landlord's expense, will remove two existing Modine heaters and cap off gas line and flue
pipe and install a new five-ton Luxaire condensing unit and 120,000 BTU horizontal bas-fired furnace and
evaporator coil. Landlord will also supply duct transition to adapt to existing ductwork No heating or air
conditioning is being supplied to the rear 1,032 square foot storage area.
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Tenant's Initials
Date
42
EXHIBIT"C-1"
Sian Criteria
A. General.
1. Tenant is required to identify Premises by a sign, which it shall di nish and install at its own
expense. Signs shall meet the Sign Criteria as outlined herein and shall be approved by local authorities,
which approval shall be obtained by Tenant at its expense. Any sign which does not conform or is
improperly manufactured and/or installed, shall be removed at Tenant's expense.
2. All signs shall be individually lettered and internally illuminated as outlined in this Exhibit.
Signs shall have Underwriter's Laboratories' label of approval on all. parts and completed display.
B. Sign Criteria - Exterior.
1. The sign shall be located on the exterior facia, as determined by the Landlord.
2. Sign wordage shall be limited to the store name only, on a single line.
3. The use of logos or insignia (which shall not exceed the average height of sign letters) may be
permitted, subject to Landlord's approval.
4. The maximum height of sign letters or components shall not exceed 36 inches. The length of
the sign shall not exceed 80 percent of the store front. The length of the sign shall be centered over the
store front
5. Landlord shall provide wiring for one (1) 120-volt circuit only to building facia. Cost and
installation of additional circuits:wM be the responsibility of Tenant
6. A detailed description of design standards is attached hereto as C-2.
C. Sign Approval.
1. No sign shall be erected until written specifications and drawings for said signs are approved in
writing by Landlord.
2. Tenant shall submit to Landlord three (3) sets of all sign drawings and specifications which
shall show the location of the sign on the buildings, the size, construction materials, colors, script,
attachment details, electrical load requirements, brightness, in-foot lamberts and name, address and phone
number of sign manufacturer/installer.
3. Landlord shall return to shall return to Tenant one set of such sign plans within fifteen (15)
days, with suggested modifications or approval.
D. Indemnification by Tenant.
Tenant shall, at its own risk and expense, erect said sign and maintain sign in a good state of repair. Tenant
hereby agrees to indemnify Landlord against and save Landlord harmless from any loss, cost or damage
resulting from the erection, maintenance, existence or removal of said sign and further agrees to repair, at
its sole expense, any damage which may be caused by the erection, maintenance, existence or removal of
such sign. Upon vacating the Premises, Tenant agrees, at its sole expense to remove all signs and repair
any and all damage caused by such removal, within thirty (30) days of vacating Premises.
Date Land 's Initials Tenant's Initials
43
EXHEBIT "C-2"
Tenant acknowledges that Landlord is in the process of remodeling the Shopping Center and, that new sign
design will be an integral part of that activity. The sign regulations are not available at the date of this
Lease.
Landlord agrees to permit Tenant's use of temporary signage, subject to Landlord's approval of the design,
until the remodeling project commences.
Tenant agrees to acquire new signage in conformity with Landlord's sign regulations to be developed in
connection with the remodeling of the Shopping Center, and to install said new signage with thirty days of
Landlord's completion of the remodeling work that must necessarily precede the installation of new
signage.
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Tenant's Initials
Date
44
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FIRST LEASE AMENDMENT
This Lease Amendment (the "Amendment") is entered into on this - ZS.*'h day of
JANOASy 1999, by and between SMITH LAND & EWPROVEMENT CORPORATION
(hereinafter referred to as "Landlord') a Delaware corporation, and MARGE MALEC, a sole
proprietorship, trading as MALEC'S PETS, with a notice address at R D. #1, Box 131, Ahmm Bank, PA
15521, and an address -for receipt of invoices at 1200 Market Street, Lemoyne, PA 17043, (hereinafter
referred to as "Tenant").
WITNESSETH
WHEREAS, Landlord and Tenant have entered into a lease dated August 21, 1996 (the "Lease')
pertaining to a pet store located at the West Shore Plaza Shopping Center (hereinafter referred to as the
"Shopping Center"), 1200 Market Street, in the Borough of Lemoyne, Pennsylvania, County of
Cumberland, Commonwealth of Pennsylvania; and
WHEREAS, Landlord and Tenant desire to amend the Lease in order to facilitate a relocation of
Tenant's leased premises to a larger store within the Shopping Center for a longer term;
NOW THEREFORE, in consideration of the rents, improvements, and mutual covenants and
agreements as set forth in the Lease and as modified herein, Lessor and Lessee do hereby mutually agree to
amend the Lease by eliminating the language in its entirety of said parts below as stated in the original
Lease, and replacing it. with the language stated below as identified by the appropriate Lease Part and
Paragraph or Section:
Part I Paragraph 1 Leased Premises:
Landlord hereby Leases to Tenant and Tenant hereby rents from Tenant the store premises (hereinafter
referred to as the "Premises") designated on the plan attached as Exhibit "A" and identified as Store
Number 240 of the Shopping Center, together with the right to the non-exclusive use, in common with
others entitled to use the same, of all such parking areas, driveways, corridors, footways, loading facilities
and other facilities as may be designated by Landlord from time to time as more fully set forth and subject
to the terms and conditions of the Lease and this Amendment (hereinafter referred to collectively as the
"Lease"), and to such reasonable rules and regulations for the use thereof as may be prescribed by the
Landlord in accordance with Section 5.04 of Part II of the Lease. The Landlord and Tenant either have
measured the size of the Premises, or have hereby waived their respective rights to do so, and hereby agree
that Premises is 4,658 square feet in size for the purposes of this Lease; and the Landlord and Tenant
further agree not to dispute the size of the Premises.
Tenant shall not occupy said new Premises until March 29, 1999, until which time Tenant shall occupy
Store Number 310 of the Shopping Center as Tenant's Premises under this Lease.
Part I Paragraph 2 Length of Term:
The term of this Lease commenced on October 1, 1996, and shall contiime until March 31, 2004. Tenant
shall have the option, as long as Tenant is not in default of this Lease, to lease the Premises for an
additional term of five (5) years by giving Landlord written notice thereof not less than six (6) months prior
to the end of the Tenant's original term
Part I Paragraph 3 Flied Minimum Rent:
Over the future course of the Lease term, Tenant shall pay Landlord a minimrmm rest of $216,760.44, which
is the sum of the "Fixed Minimum Rent" for each of the following periods during the Lease term.
February 1, 1999 to March 31,1999: $2,760.00 per month
April 1, 1999 to March 31, 2000: $3,299.42 per month
April 1, 2000 to March 31, 2001: $3,396.46 per month
April 1, 2001 to March 31, 2002: $3,493.50 per month
April 1, 2002 to March 31, 2003: $3,629.36 per month
April 1, 2003 to March 31, 2004: $3,784.63 per month
Over the course of the option term if exercised by Tenant pursuant to Paragraph 2 above, Tcom shall pay
to Landlord a minimum rent of $254,326.80, which is the sum of the Fixed Minimum Rent for each of the
following periods during the option term of the Lease:
April 1, 2004 to March 31, 2005: $3,920.48 per month
April 1, 2005 to March 31, 2006: $4,075.75 per month
April 1, 2006 to March 31, 2007: $4,231.02 per month
April 1, 2007 to March 31, 2008: $4,405.69 per month
April 1, 2008 to March 31, 2009: $4,560.96 per month
Each installment of rent shall be due and payable on or before the first day each calendar month in the
original term of the Lease, in advance to the attention of
Cash Management Department
High Industries, Inc.
P. O. Box 10008
1852 William Penn Way
Lancaster, PA 17605-008
Or, the rent shall be paid at such other place as may be designated by Landlord from time to time, without
any prior demand thereof or setoff whatsoever.
Part I Paragraph 4 Percentage Rent:
In addition to the Fixed Minimum Rent, Tenant, in accordance with Part H Section 2.01 of Lease, shall pay
to Landlord, as additional rent hereunder (hereinafter referred to as "Percentage Rent"), and as part of the
consideration for the tenancy of the Premises, for each lease year in the term of the Lease a sum equal to
four and one half percent (4.58/o) of that portion of Gross Sales (as defined in Section 2.02 of the Lease)
during such lease year which is in excess of the applicable Percentage -Rent Gross Sales Base. The
Percentage Rent Gross Sales Base for the following periods within each lease year shall be:
TIME PERIOD PERCENTAGE RENT GROSS SALES BASE
February 1, 1999 to March 31, 1999: 4.5% $122,667
April 1, 1999 to March 31,2000: 4.5% $879,844
April 1, 2000 to March 31, 2001: 4.5% $905,722
April 1, 2001 to March 31, 2002: 4.5% $931,600
April 1, 2002 to March 31, 2003: 4.5% $967,829
April 1, 2003 to March 31, 2004: 4.5% $1,009,233
In addition to the Fixed Minimum Rent, Tenant, in accordance with Part Il Section 2.01 of Lease, shall pay
to Landlord, as additional rent hereunder (hereinafter referred to as "Percentage Renf), and as part of the
consideration for the tenancy of the Premises, for each lease year in the option term of the Lease, a sum
equal to four and one half percent (4.5%) of that portion of Gross Sales (as defined in Section 2.02 of the
Lease) daring such option term lease year which is in excess of the applicable Percentage Rent Gross Sales
Base. The Percentage Rent Gross Sales Base for the following periods within each option term lease year
shall be:
TIME PERIOD PERCENTAGE RENT -GROSS SALES BASE
April 1, 2004 to March 31, 2005: 4.5% $1,045,462
April 1, 2005 to March 31, 2006: 4.5% $1,086,867
April 1, 2006 to March 31, 2007: 4.5% $1,128,271
April 1, 2007 to March 31, 2008: 4.5% $1,174,851
April 1, 2008 to March 31,2009: 4.5% $1,216,256
2
Part I Paragraph 7 Common Cost of Maintenance and Operation:
In accordance with and subject to the adjustment set forth in Section 7.04 of Part H of the Lease, for each
Accounting Period (as defined in said Section) daring the term or option term of this Lease, Tenant shall
pay Landlord on account of Tenant's proportional share of Operating Costs (as defined therein) the
estimated annual amount of $1.15 multiplied by 4,658, which is the number of square feet in the Premises.
Part I Paragraph 8 Taxes:
In accordance with and subject to the adjustment set forth in Section 7.04 of Part II of the Lease, for each
Accounting Period (as defined in said Section) during the term or option term of this Lease, Tenant shall
pay Landlord on account of Tenant's proportional share of Operating Costs (as defined therein) the
estimated annual amount of $35 multiplied by 4,658, which is the number of square feet in the Premises.
Part I Paragraph 9 Promotion Charge:
In accordance with and subject to the adjustment set forth in Section 2.04 of Part II of the Lease, for each
"Tax Year" (as defined in said Section) during the term or option term of this Lease, Tenant shall pay
Landlord on account of Tenant's proportional share of any taxes as defined therein the estimated annual
amount of $.50 multiplied by 4,658, which is the number of square feet in the Premises.
Part I Paragraph 10 Insurance: .
In accordance with and subject to the adjustment set forth in Section 7.04 of Part II of the Lease, for each
Accounting Period (as defined m said Section) during the term or option term of this Lease, Tenant shall
pay Landlord on account of Tenant's proportional share of Landlord's policy of fire insurance with
extended coverage for insuring portions of the Shopping Center the estimated annual amount of $.10
multiplied by 4,658, which is the number of square feet in the Premises.
Part I Paragraph 11 Landlord's Modifications of Premises for Tenant.
Except to the extent outline in Exhibit "B" to this Ameadmeot, entitled "Landlord's Work in Premises-
Store 240", Tenant agrees to accept the Premises in as-is condition from Landlord. Landlord's Work shall
be completed as early in March 1999 as possible to allow Tenant several weeks to complete Tenant's work
Part I Paragraph 12 Remodeling
This paragraph is deleted and not replaced
Part I Paragraph 13 Security Deposit
Tenant, prior to the occupancy of the new Premises, shall deposit with Landlord an additional Nine
Hundred Dollars ($900) which along, with Twenty Four Hundred Dollars ($2,400) Landlord hereby
aclmowledges as a prior received Security Deposit, shall be held as a total sum of Tbirty--Three Hundred
Dollars ($3,300), which deposit is the property of Landlord and is to be held as security for the faithful
performance by Tenant of all terms, covenants and conditions of this Lease by said Tenant to be kept and
performed during the term h=4 subject to Article XX of Part II of the Lease.
All other Paragraphs of Part I and all of Part II shall be in effect as per the language of the Lease.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have caused this First
Amendment to the Lease to be duly executed the day and year first above written.
MARGE C, D/BJA MALEC' PETS ?r ?
WITNESS'S SIGNATURE:
BY:L
MAR MALEC PRINTED NAME:
SMITH LAND & IMPROVEMENT CORPORATION
?4-
BY: ??. I F ATTEST:
R. RDAN II, CHAIRMAN A. A. S VARD, SECRETARY
3
EXHIBIT "A" OF FIRST AMENDMENT TO THE- LEASE
See attached blueprint
4
EXHIBIT "B" OF FIRST AMENDMENT TO THE LEASE
"Landlord's Work in Premises-Store 240"
1. Get permits and final certificates of occupanep.
2. Remove existing floor tile.
3. Reinstall new floor tile in main two rooms (about 4,000 SF at front of store). Allow for a pattern of
two tiles to be installed m front room, and blade tile m back store room. Use Armstrong EXCdon or
equal 12 x 12 vcr. Tenant to select from variety of available colors. Install the as needed to patch
existing holes in bathroom floor.
4. Install vinyl cove base where tile has been installed and where otherwise missing and needed Tenant
to select color.
5. Have HVAC units serviced if necessary. Landlord to guarantee operability for 1 pear.
6. Have sprinkler system serviced if necessary.
7. Provide wiring with control to interior of tenant space so tenant can have sign contractor make the
electrical connection to sign on building f Bade. Activate soffit-mounted electrical sign on this same
circuit.
8. Provide one electrical outlet on fiat wall of store above north window.
9. Provide one outlet at base to south side of front door along front wall.
10. Move electrical strip outlets from existing Tenant's store to this new store. This work must be
completed at very end of job, in final days prior to Tenanrt's grand opening, which is scheduled for
March 29. Or, otherwise provide these strip outlets which in either event will run off a mimrm of
four circuits.
11. Relocate wall switch in bathroom.
12. Repair light in electrical room.
13. Install drywall for front of store.
14. Paint new front interior wakL
15. Create a rear cr*=ce, oversized door the same size as the exterior door, with a deadbolt secmity lock
so tenant can access loading platform from "electrical room" through "elevator shaft access room."
Provide keys if necessary for exterior door to elevator shaft access room.
16. Jackhammer floor if necessary to repair plumbing drain where sink was in rear of showroom. Maki
sure all existing plumbing works.
17. Provide a final, 'broom clean" cleaning of the finished Premises-
5
SECOND LEASE AMENDMENT
THIS LEASE AMENDMENT (the "Amendment's is entered into on this day of August, 2001, by and
between SMITH LAND & MOROVEMENT CORPORATION (hereinafter referred to as "Landlord) a
Delaware corporation with an address of 2001 State Road, Camp Hill, PA 17001-8134, and MARGE MALEC, a
sole proprietorship, trading as MALEC'S PETS, with a notice address at R.D. #1, Box 131, Alum Bank, PA 15521,
and an address for receipt of invoices at 1200 Market Street, Lemoyne, PA 17043, (hereinafter referred to as
"Tenant'.
WITNESSETH
WHEREAS, Landlord and Tenant have entered into a lease dated August 21, 1996 (the `Lease'd pertaining to a pet
store located at the West Shore Plaza Shopping Center (hereinafter referred to as the "Shopping Center'j, 1200
Market Street, in the Borough of Lemoyne, Pennsylvania, County of Cumberland, Commonwealth of Pennsylvania:
and
WHEREAS, Landlord and Tenant desire to amend the Lease to reflect that Timothy R. Malec, a sole proprietorship,
trading as Malec's Pets, shall become the Tenant;
NOW THEREFORE, in consideration of the rents, improvements, and mutual covenants and agreements as set
forth in the Lease and as modified herein, Landlord and Tenant do hereby mutually agree to amend the Lease as
follows:
Timothy R. Malec, a sole proprietorship, trading as Malec's Pets, with a notice address at 50 Sugar
Maple Road, Etters, PA 17319 and an address for receipt of invoices at 1200 Market Street,
Lemoyne, PA 17043, will take the place of, and assume all responsibilities of the Tenant.
All other Paragraphs of Part I and Part II shall be in effect as per the language of the Lease.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have caused this Second
Amendment to the Lease to be duly executed the day and year first above written.
MARGE MALEC, D/B/A MA'LEC'S PETS
BY SIGNATURE
WITNESS'S
? l 1
Marge ec Printed Name of Witness: 7- ?b(tL('..?
TIMOTHY R. MALEC, D/B/A MALEC' PETS
• WITNESS'S SIGNATURE.
Timothy R. Malec Printed Name of Witness:
SMITH LAND & IMPROVEMENT CORPORATON
BY: Z- ATTEST: .,r,c- ?? R. E. n, II, Chairman -----VA. Savard, Secretary
THIRD LEASE AMENDMEN Y `
THIS THIRD LEASE AMENDMENT (the "Amendment") is entered into on-this S day of A4&,V 2003,
by and between SMTTH LAND & IMPROVEMENT CORPORATION (hereinafter referred to as "Landlord) a
Delaware corporation with an address of 6375 Mercury Drive, Mechanicsburg, Pennsylvania 17050, and Timothy
R Malec, a sole proprietorship, trading as MALEC'S PETS, with a notice address of 50 Sugar Maple Road,
Etters, Pennsylvania 17319, and an address for receipt of invoices a't 1200 Market Street, Lemoyne, PA 17043,
(hereinafter referred to as "Tenant").
WITNESSETH
WHEREAS, Landlord and Marge Malec, Tenant's mother and predecessor as Tenant, entered into a lease dated
August 21, 1906 (the "Lease's pertaining to a pet store (hereinafter Malec's Pets'0 located at the West Shore Plaza
Shopping Center (hereinafter referred to as the "Shopping Center"), 1200 Market Street, in the Borough of
Lemoyne, Pennsylvania, County of Cumberland, Commonwealth of Pennsylvania: and
WHEREAS, said Lease was amended by a First Lease Amendment dated January 25, 1999 to enable the relocation
and expansion of the Leased Premises and Term; and
WHEREAS, said Lease was amended by a Second Lease Amendment dated August 2001 to remove Marge Malec
and install Timothy R. Malec as Tenant; and
WHEREAS, Landlord and Tenant desire to amend the Lease for a third time to enable an additional relocation and
expansion of the Leased Premises and Term; and
WHEREAS, this Third Amendment shall replace, supercede and/or render as superfluous all provisions of the
original Lease Part I, Exhibit A of the Lease, Exhibit B of the Lease, the First Amendment and the Second
Amendment; and
WHEREAS, this Third Amendment shall ratify and endorse the entirety of Part II of the original Lease and Exhibit
C thereto (which pertains to Sign Criteria);
WHEREAS, to expedite an understanding of the Lease provisions as herein amended, Landlord and Tenant do
hereby mutually agree that it shall no longer be necessary to refer to Part I of the original Lease, the First Lease
Amendment, the Second Lease Amendment, Exhibit A of the Lease, or Exhibit B of the Lease, unless specifically
incorporated by reference by this Third Lease Amendment;
NOW"THEREFORE, in consideration of the rents, improvements, and mutual covenants and agreements as set
forth in the Lease and as modified herein, Landlord and Tenant do hereby mutually agree to amend the Lease by
eliminating the language in its entirety as found in Part I of the original Lease, the First Lease Amendment, the
Second Lease Amendment, Exhibit A of the Lease, and Exhibit B of the Lease, unless specifically incorporated by
reference by this Third Lease Amendment (in which event the validity of the section so referenced shall be limited
to the extent necessary to accomplish the purpose of the reference), and replacing that Part I and Exhibits A and B
with the language and exhibits hereinbelow provided:
WEST SHORE PLAZA LEASE AGREEMENT PART I
WTTNESSETH:
1. Leased Premises.
Landlord hereby leases to Tenant and Tenant hereby rents from Landlord the store premises (hereinafter, referred to as the
"Premises") designated on the plan attached as Exhibit " A " hereto as Store Number 268 erected as part of a shopping center
presently known as WEST SHORE PLAZA (hereinafter referred to as the "Shopping Center" and presently compromising the
area shown in Exhibit " A 'D, located at 1200 West Market Street, Lemoyne, PA 17043, the Premises being measured and
described by the following approximate dimensions which are measured from the outside building lines of each wall of the
Premises or, in the case of this walls separating the Premises from other stores in the Shopping Center, from the center lines of
such walls:
Front: 100'
Depth: 150'
Total Rentable Square Feet of Premises: 14,650
together with the right to the non .lusive use in common with others entitled to use sa-- us all such automobile parking areas-
driveways, corridors, footways, loading facilities and other facilities as may be designated by Landlord from time to time as more
fully set forth and subject to the terms and conditions of this Lease and the Lease Agreement (hereinafter collectively referred to
as the "Lease"), and to such reasonable rules and regulations for the use thereof as may be prescribed from time to time by the
Landlord in accordance with Section 5.04 of Part II of the Lease.
Until such time as the Premises are ready for occupancy by Tenant, which shall be evidenced by Landlord's receipt of an
Occupancy Permit from the Department of Labor and Industry of the Commonwealth of Pennsylvania, Tenant shall occupy
Store Number 240 of the Shopping Center according to the terms and provisions of the First Lease Amendment.
2. Length of Term.
The original term of this Lease commenced on October 1, 1996.
The "Commencement Date" of the expanded term as provided by this Third Lease Amendment shall be the day that Landlord
receives an Occupancy Permit for Store 268 from the Department of Labor and Industry of the Commonwealth of Pennsylvania.
This Commencement Date is expected to be on or before September 1, 2003; although the parties hereto agree that time is not of
the essence and several factors will affect the exact date. However, if the Commencement Date is later than October 1, 2003,
Tenant shall have no obligation to accept Store 268 until February 1, 2004. If the Occupancy Pemmt is not received by Landlord
for Store 268 on or before February 1, 2004, Tenant shall have the right but not the obligation to terminate this Third Lease
Amendment, in which case the Second Lease Agreement and all references therefrom shall be reactivated and shall be the
controlling document of the entire relationship between Landlord and Tenant.
The revised term of this Lease shall continue for a period of ten (10) years plus one (1) month from the first day of the first month
following the Commencement Date.
To allow time for Tenant to complete necessary fixturing and construction, the Tenant's obligation to pay rent shall commence on
the later of October 1, 2003, or thirty (30) days after the Commencement Date; but payment of rent shall in no event commence
later than the first day during which Tenant opens the Premises for business with the public.
Tenant shall have the option, so long as Tenant is not in default per Part H, Article = of the Lease, to lease the Premises for
two additional terms of five (5) years. To exercise the first option, the Tenant must give Landlord written notice thereof not less
than six (6) months prior to the and of this ten year term. To exercise the second option, the Tenant must give Landlord written
notice thereof not less than six (6) months prior to the end of the first five year option term; however, if Tenant fails to execute
the first option in a timely manner, the second option shall be null and void.
As soon as Tenant has vacated Store Number 240 in broom clean condition and Tenant has paid all money due to the reasonable
satisfaction of Landlord, all obligations of Tenant in relation to Store 240 shall terminate.
3. Fixed Minimum Rent.
In relation to Store 240, Tenant shall pay all money due to Landlord according to the First Lease Amendment through the last day
of the month in which Tenant has been open for business on any day at Store 240 prior to relocating to Store 268.
Flied Minimum Rent Option A and Rent Option B.
The rent for Store 268 shall be a combination of a Fixed Minimum Rent and Percentage Rent. The intent of the rent structure is
to recognize that the Tenant will be incurring numerous additional overhead-related expenses to expand the Premises from 4,658
SF to 14,650 SF. Therefore, Tenant's ability to pay the total rent desired by Landlord will not be present until Tenant's sales
reach certain levels. Landlord and Tenant have examined sales projections and expect that Option A based on Tenant's projected
sales will result in lower total rents payable by Tenant to Landlord during the early stages of the expanded ten year term than
Landlord would ordinarily desire, and higher than market rents payable by Tenant to Landlord during the later stages of the
expanded ten year term than Tenant would ordinarily desire.
Landlord hereby agrees that Option B may be selected by Tenant beginning with any year after Tenant's annual Gross Sales Base
exceeds Three Million ($3,000,000) Dollars per year. Tenant shall in that event have the opportunity at Tenant's sole discretion,
but not the obligation, to select Option B at any time thereafter. However, once Tenant selects Option B, Tenant may not revert
to Option A during the extended ten year term. Tenant may not select Option A during renewal periods.
Landlord may only require that the Fixed Mininnma Rent be paid by Option B: if Tenant has selected Option B for a prior year,
as a stipulation of Tenant's subleasing or assignment of this Lease; or if Tenant elects to renew the Lease by exercising a Lease
Renewal Option.
2
The Fixed Minimum Rent and Percentage Rent must be paid both according to the same Option A or Option B, such that neither
Tenant nor Landlord may elect to select Option A for the payment of Fixed Minimum Rent and Option B for Percentage Rent, or
vice versa.
TIME PERIOD
FDfED
MINIMUM RENT
OPTION A
Fixturing period
$3.00/ SF/ YR
MO. AMOUNT DUE
No Rent Due This Month
$3,662.50/month
ANNUAL AMT.
September 1, 2003 to September 30, 2003
October 1, 2003 to October 31, 2013
TIME PERIOD
2101 3?. 3
'31 ."eber¦1, 2003 to ftft zba'", 2004
Oaie4er4, 2004 to zgpwntber , 2005
+ + + L gWber-, 2005 to Ssptwber-30, 2006
t + OWAba-t, 2006 to 2007
t ' Goebert, 2007 to Ssptmber-39, 2008
t + Qaobw4, 2008 to S berg"9, 2009
t i 4k*eber+, 2009 to 2010
+ I Ceteberrl, 2010 to Septerabm-M 2011
Oateber4, 2011 to Ssptember39-11012
9ateber+, 2012 to September 30, 2013
FIRST OPTION TERM
TIME PERIOD
October 1, 2013 to September 30, 2014
October 1, 2014 to September 30, 2015
FIRED
MIrIIMUM RENT
OPTION B
Fixturing period
$8.00/ SF/ YR
$8.24/ SF/ YR
$8.49/ SF/ YR
$8.74/ SF/ YR
$9.00/ SF/ YR
59.27/ SF/ YR
$9.55/ SF/ YR
$9.84/ SF/ YR
$10.13/ SF/ YR
$10.44/ SF/ YR
FIXED
MINIMUM
RENT @
$/SF/YR
Greater of:
$8.00/SF/YR x
(1+ total CPI
percentage
increase from
October 1, 2003
to September 30,
2012); or
$10.75/SF/YR
NOTE: Rents for
years 2 through 5
of First Option
Term shall be
calculated and
fixed prior to the
commencement of
the First Option
Term according to
this formula:
Rent for October
1, 2013 to
September 30,
2004 x Greater of:
1 + average
annual CPI
$43,950.00
OR
MO. AMOUNT DUE
No Rent Due This Month
$9,766.67/month
$10,059.67/month
$10,364.88/month
$10,670.08/month
$10,987.50/month
$11,317.13/month
$11,658.96/month
$12,013.00/month
$12,367.04/month
$12,745.501month
ANNUAL AMT.
$117,200.04
$120,716.04
$124,378.56
$128,040.96
$131,850.00
$135,805.56
$139,907.52
$144,156.00
$148,404.48
$152,946.00
MO. AMOUNT DUE
As calculated, but not less than
$13,123.96/ month
As calculated, but not less than
$13,517.67/ month
3
ANNUAL AMT.
As calculated, but not
less than
$157,487.521 year
As calculated, but not
less than
$162,212.04/ year
October 1, 2015 to September 30, 2016
October 1, 2015 to September 30, 2017
October 1, 2017 to September 30, 2018
SECOND OPTION TERM
TIME PERIOD
October 1, 2019 to September 30, 2020'
October 1, 2020 to September 30, 2021
percentage
increase from
October 1, 2003
to September 30,
2012; or Rent for
October 1, 2013
to September 30,
2014 x or 1.03%
As calculated
above with annual
increase of 1.03%
or average CPI
increase
As calculated
above with annual
increase of 1.03%
or average CPI
increase
As calculated
above with annual
increase of 1.03%
or average CPI
increase
FIILED
MINIMUM
RENT
S/SF/YR
Greater of
Annual Rent for
October 1, 2013
to September 30,
2014 x (1+ CPI
percentage
increase from
October 1, 2013
to September 30,
2017); or Annual
Rent for October
1, 2017 to
September 30,
2018 x 1.03%
NOTE: Rents for
years 2 through 5
of the Second
Option Term shall
be calculated and
fixed prior to the
commencement of
the Second Option
Term according to
this formula:
Rent for October
1, 2019 to
September 30,
2020 x Greater of
1 + average
annual CPI
As calculated, but not less than
$13,923.21/ month
As calculated, but not less than
$14,340.90/month
As calculated, but not less than
$14,771.13 month
MO. AMOUNT DUE
As calculated, but not less than
$15,214.26/ month
As calculated, but not less than
$15,670.69/ month
4
As calculated, but not
less than
$167,078.52 /year
As calculated, but not
less than
$172,090.80/ month
As calculated, but not
less than
$177,253.56/ month
ANNUAL AMT.
As calculated, but not
less than
$182,571.12/ year
As calculated, but not
less than
$188,048.28/ year
Percentage
increase from
October 1, 2013
to September 30,
2017; or Rent for
October 1, 2019
to September 30,
2020 x or 1.03%
October 1, 2021 to September 30, 2022 As calculated As calculated, but not less than As calculated, but not
above with annual $16,140.81/ month less than
increase of 1.03% $193,689.72 /year
or average CPI
increase
October 1, 2022 to September 30, 2023 As calculated As calculated, but not less than As calculated, but not
above with annual $16,625.04/month less than
increase of 1.03% $199,500.48/ month
or average CPI
October 1, 2023 to September 30, 2024 increase
As calculated
As calculated, but not less than
As calculated, but not
above with annual $17,123.79 month less than
increase of 1.03% $205,485.48/ month
or average CPI
increase
Each such installment shall be due and payable on or before the first day of each calendar month in the original term of this
Lease, in advance, to the attention of
West Shore Plaza
c/o AdCom Realty
6375 Mercury Drive
Mechanicsburg, PA 17050
or at such other place as may be designed by Landlord from time to time, without any prior demand therefore and without any
deduction or setoff whatsoever, the first installment to be paid on the commencement date whether or not the commencement
date is the first day of a calendar month. In the event that the commencement date of the term of this Lease shall be a day other
than the first day of a calendar month, Tenant's first payment of Fixed Minimum Rent shall be prorated for the fractional month
between the commencement date and the first day of the first full calendar month in the berm hereof; on a per diem basis
(calculated on a thirty (30) day month).
4. Percentage Rent
In addition to the Fixed Minimum Rent, Tenant, in accordance with Part U, Section 2.0 1 of the Lease, Tenant shall pay to
Landlord as additional rent hereunder (hereinafter referred to as "Percentage Rent', and as part of the consideration of the
tenancy of the Premises, for each lease year in the term of this Lease a sum equal to a specific percentage, as herein provided, of
that portion of Gross Sales (as defined in Section 2.02 of Part II the Lease) during such lease year which is in excess of the
Applicable Percentage Rent Gross Sales Base.
Percentage Rent Option A and Rent Option B.
The rent for Store 268 shall be a combination of a Fixed Minimum Rent and Percentage Rent. The intent of the rent structure is
to recognize that the Tenant will be incurring numerous additional overhead-related expenses to expand the Premises from 4,658
SF to 14,650 SF. Landlord and Tenant have examined sales projections and expect that Option A based on Tenant's projected
sales will result in lower total rents payable by Tenant to Landlord during the early stages of the expanded ten year term than
Landlord would ordinarily desire, and higher than market rents payable by Tenant to Landlord during the later stages of the
expanded to year term than Tenant would ordinarily desire.
Landlord hereby agrees that Option B may be selected by Tenant beginning with any year after Tenant's annual Gross Sales Base
exceeds Three Million ($3,000,000) Dollars per year. Tenant shall in that event have the opportunity at Tenant's sole discretion,
but not the obligation, to select Option B at any time thereafter. However, once Tenant selects Option B, Tenant may not revert
to Option A during the extended ten year term Tenant may not select Option A during renewal periods.
5.
Landlord may only require that the Fixed Minimum Rent be paid by Option B: if Tenant has selected Option B for a prior year,
as a stipulation of Tenant's subleasing or assignment of this Lease; or if Tenant elects to renew the Lease by exercising a Lease
Renewal Option.
The Fixed Minimum Rent and Percentage Rent must be paid both according to the same Option A or Option B, such that neither
Tenant nor Landlord may elect to select Option A for the payment of Fixed Minimum Rent and Option B for Percentage Rent, or
vice versa.
The Percentage Rent Gross Sales Base for the following periods within each lease year shall be:
TIME PERIOD PERCENTAGE RENT
OPTION A
October 1, 2003 to September 30, 2013 Throughout this time period, the annual percentage rent shall be Ten Percent (10%)
of all annual sales over One Million Two Hundred Thousand Dollars ($1,200,000)
and less than Two Million Dollars ($2,000,000.00), plus Five Percent (5%) of all
sales over Two Million Dollars ($2,000,000.00).
OR
TIME PERIOD
October 1, 2003 to September 30, 2004
October 1, 2004 to September 30, 2005
October 1, 2005 to September 30, 2006
October 1, 2006 to September 30, 2007
October 1, 2007 to September 30, 2008
October 1, 2008 to September 30, 2009
October 1, 2009 to September 30, 2010
October 1, 2010 to September 30, 2011
October 1, 2011 to September 30, 2012
October 1, 2012 to September 30, 2013
October 1, 2013 to September 30, 2018
October 1, 2018 to September 30, 2023
5. Use of Premises:
PERCENTAGE RENT
OPTION B
The percentage rent shall be Five Percent (5%) of sales in excess of the Gross Sales
Base, which shall be the "Natural Break Point" as calculated by dividing the Annual
Fixed Minimum Rent payable under Option B by 5%. Listed below is the annual
Gross Sales Base
$2,344,000.80
$2,414,320.80
$2,487,571.20
$2,560,819.20
$2,637,000.00
$2,716,111.20
$2,798,150.40
$2,883,120.00
$2,968,089.60
$3,058,920.00
Escalating Gross Sales Base During First Option Term to be calculated as stated
Escalating Gross Sales Base During Second Option Term to be calculated as stated
Subject to the provisions of Article V of Part II of the Lease, Tenant shall use the Premises primarily for the purpose of
conducting the business of selling live pets, pet services (such as but not limited to pet grooming) and pet supplies, including pet-
related gifts and novelties designed for use by humans who are pet enthusiasts (such as but not limited to coffee mugs, key
chains, T-shirts, hats and other similar products); and Tenant may also use the Premises for lawn and garden supplies, but for no
other use without Landlord's prior written consent
Tenant agrees to dispose of animal waste and bedding material in a -saner which meets all federal, state and local health
regulations. In no case will animal fecal matter or animal hair or feathers intentionally be disposed of in the sewers. If as a result
of pet grooming or other uses of Premises by Tenant, the municipal sewer officials require that an interceptor device such as but
not limited to a grease trap must be installed to intercept unacceptable matter from entering the municipal sewer line, then the
installation and cost of such a device shall be the sole responsibility of Tenant
Landlord agrees to give Tenant the exclusive right within the Shopping Center to sell live animals and/or to operate a business for
which the majority of the business income is generated from the sale of pets and/or pet supplies and/or pet services. Landlord
will not prohibit the incidental sales of pet supplies or novelties by other tenants of the Shopping Center.
6
Provided that Tenant dedicates n, :as that 2,000 square feet of the Premises for the sb- ,awn and garden supplies, Landlord
shall not permit another tenant in the Shopping Center for whom the majority of the tenant's business income is generated from
the sale of lawn and garden supplies. Landlord will not prohibit the incidental sales of lawn and garden supplies by other tenants
of the Shopping Center.
6. Shopping Center Hours of Operation.
The present hours of operation of the Shopping Center during which Tenant must have the Premises open for business with the
public (subject to adjustment by Landlord as set forth in Section 5.01) are:
Monday through Friday 10:00 a.m to 9:00 p.m.
Saturday 10:00 am. to 9:00 p.m.
Sunday Noon to 5:00 p.m.
7. Common Cost of Maintenance and Operation.
In accordance with and subject to the adjustments set forth in Section 7.03 of Part II of the Lease, for each "Accounting Period"
(as defined in said Section) during the term of this Lease, Tenant shall pay Landlord on account of Tenant's proportionate share
of "Operating Costs" (as therein defined), which annual amount is currently estimated to be $1.45 multiplied by the number of
square feet of floor area contained within Premises.
8. Taxes.
In accordance with and subject to the adjustments set forth in Section 2.04 of Part II of the Lease, for each "Tax Year" (as defined
in said Section) during the term of this Lease, Tenant shall pay Landlord on account of Tenant's share of any "taxes" as defined in
such Section),, which annual amount is currently estimated to be $.80 multiplied by the number of square feet of floor area
contained within Premises.
9. Promotion Charge.
In accordance with and subject to the adjustments set forth in Article XV of Part II of the Lease, for each year during the term of
this Lease, Tenant 'shall pay to Landlord the annual amount of $.25 multiplied by the number of square feet contained within, the
Premises. This amount shall increase each year at a rate of three (3 %) percent greater than the previous year.
10. Proportionate Insurance.
In accordance with and subject to, the adjustment set forth in Section 7.04 of Part II of the Lease, for each Accounting Period
during the original term hereof, Tenant shall pay Landlord on account of Tenants share of the cost of Landlord's policy of fire
insurance with extended coverage insuring portions of the Shopping Center, which annual amount is currently estimated to be
$.10 multiplied by the number of square feet of floor area contained within Premises.
11. Landlord's Modifications of Premises for Tenant:
Landlord intends to substantially remodel the Premises including new flooring, lighting HVAC, and restrooms; and refurbished
dock area and renovated walls. Landlord's modifications shall be detailed in Exhibit "B" hereto entitled "Landlord's Work in
Premises," which Exhibit B must be prepared by Landlord and approved by Tenant on or before June 1, 2003. If Exhibit B is not
prepared by Landlord and approved by Tenant on or before June 1, 2003, then either Landlord or Tenant shall have the right but
not the obligation to terminate this Third Lease Amendment, in which case the Second Lease Agreement and all references
therefrom shall be reactivated and shall be the controlling document of the entire relationship between Landlord and Tenant.
Except as stated in Exhibit B, Tenant agrees to accept the Premises in as-is condition from Landlord.
12. Remodeling.
In accordance with the provisions of Section 4.02 of the Lease, Tenant shall remodel the entire Premises not later than the earlier
of the date that Tenant elects to pay Fixed Minimum Rent and Percentage Rent according to Option B as thereinabove described ,
or April 30, 2010. Remodeling shall be according to standards as necessary to keep Tenant's stare within conformance of other
stores in the Shopping Center and other pet stores in the market area In case of a dispute between Landlord and Tenant, Tenant
shall have been determined to fulfill this provision if Tenant invests a minimum of Fifty Thousand Dollars ($50,000.00) after
October 1, 2008 into enhancements of leasehold improvements or trade fixtures.
13. Security Deposit
Landlord shall retain the sum of Three Thousand Three Hundred Dollars, ($3,300.00) now held by Landlord with respect to
Tenant's account, plus the additional sum of Two Thousand Seven Hundred Dollars ($2,700.00), payment of which is required
within ten (10) days of Tenant's approval of Exhibit B, for a total deposit of Six Thousand Dollars (S6,000.00), which deposit
shall be held by Landlord for the faithful performance by Tenant of all of the terms, covenants and conditions of this Lease by
said Tenant to be kept and performed during the term hereof subject to Article XX of Part II of the Lease.
7
All Articles of Part II and E_ _.)it C shall be in effect as per the language o. -"n Lease.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have caused this Third Lease
Amendment to be duly executed the day and year first above written.
AND & lMP + + CORPORATION (Landlord) .
Attest: By:
(As Secretary C/* Jordan, II, Chairman
TIMOTHY R. MALEC, DB/A MALEC'S PETS (Tenant)
Attest: By:
imothy R Malec
TIMOTHY R. MALEC, DB/A MALEC'S PETS
BY:
Timothy A. Malec
COMMONWEALTH OF PENNSYLVANIA:
COUNTY 0& ? Q r 1a n Ca
?the Y ? day of Q 2003, before me
()11i? . _ Lon ?((notary), the undersigned officer, personally appeared
Timothy R. Malec, 50 Sugar Maple Road, Etters, Pennsylvania 17319, known to me (or satisfactorily
proven) to be the person whose name is subscribed within the instrument, and acknowledged that the persons
executed the same for the purposes therein contained.
rt. I-L
( UA -2 Notary Public
NOTARIAL SEAL
My commission expo esANITA L LENKER. Notary Public
Lemoyne Boro, Cumberland County
My Commission Expiree Feb. 8, 2007
In witness whereof, I hereunto set my hand official seals,
seal ? ?Al ?!-?
FOURTH LEASE AMENDMENT
THIS FOURTH LEASE AMENDMENT (the "Fourth Amendment') is made and
entered into as of this 314-* day of NC006" , 2003, but effective November 1,
2003, by and between SMITH LAND & IMPROVEMENT CORPORATION, a Delaware
corporation having an office at 2010 State Road, Camp Hill, Pennsylvania 17011 (the
"Landlord's and TIMOTHY R. MALEC t/d/b/a MALEC'S PETS, an73 Iadult anual
having a notice address of 50 Sugar Maple Road, Ettters, Pennsylvania
address for receipt of invoices of 1200 Market Street, Lemoyne, Pennsylvania 17043 (the
"Tenant'.
Recitals
WHEREAS, Landlord and Tenant have entered into that certain Lease Agreement
dated August 21, 1996, as amended by a First Lease Amendment dated on or about
January 25, 1999 (the "First Amendment'), a Second Lease Amendment dated on or about
August 2001 (the "Second Amendment'%and a Third Lease Amendment dated on or about
March 3, 2003 (the "Third Amendment") (as so amended, the "Lease"), pursuant to which
Landlord leases to Tenant and Tenant leases from Landlord certain store premises known
as Store Number 268 (the "Leased Premises') in the West Shore Plaza, Lemoyne,
Cumberland County, Pennsylvania (the "Shopping Center';
WHEREAS, the Third Lease Amendment establishes certain terms and conditions
for the relocation of Tenant from Store Number 240 to Store Number 268 within the
Shopping Center;
WHEREAS, the Third Lease Amendment provides that Tenant's obligation to pay
rent for its occupation of Store Number 268 is to commence on October 1, 2003;
WHEREAS, Landlord and Tenant desire to establish November 1, 2003, as the date
on which Tenant's obligation to pay rent for Store Number 268 shall commence, and to
further amend the Lease as provided herein. -
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound hereby,
the parties hereto agree as follows:
1. Incorporation of Recitals. The foregoing recitals are incorporated herein by
reference and made a part hereof.
2. Rent Commencement. The parties agree that Tenant's obligation to pay rent
for Store Number 268 shall commence on November 1, 2003.
3. Adiustment of Term. Based upon Tenant's obligation to begin paying rent
for Store Number 268 on November 1, 2003, all time periods established in Paragraphs 3
and 4 of the Third Amendment (pertaining to Fixed Minimum Rent and Percentage Rent,
respectively) that are indicated to commence on October 1 of a given year shall commence
495795.1
on November 1 of that year. All time periods that are scheduled to expire on September 30
of a given year shall expire on October 31 of that year.
4. Change of Notice Address. As of November 1, 2003, Landlord hereby
establishes the following address as the address at which it is to receive all notices under the
Lease:
If to Landlord: Smith Land & Improvement Corporation
2010 State Road
Camp Hill, PA 17011
Attention: Richard E. Jordan III
With a copy to: Rhoads & Sinon LLP
One South Market Square, 12`x' Floor
P.O. Box 1146
Harrisburg, PA 17108
Attention: John M. Coles, Esquire
5. Remainder of Lease Unchanged. Except as otherwise expressly provided
herein, the Lease shall remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to
be executed by their duly authorized representatives, as of the day and year fast above
written.
ATTEST:
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L/ - - iow
SMITH LAND & IMPROVEMENT
CORPORATION
By, QWZU' -r
Print am 02-w b 14 JU
- Title: D
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TIMOTHY R. MALEC
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SMITH LAND & IMPROVEMENT IN THE COURT OF COMMON PLEAS
CORPORATION, OF CUMBERLAND COUNTY,
PENNSYLVANIA
Plaintiff
V. CIVIL ACTION - LAW
TIMOTHY R. MALEC t/d/b/a NO. '
MALEC' S PETS
Defendant
ENTRY OF JUDGMENT
AND NOW, this day of September, 2008, Judgment is hereby entered in favor of
the Plaintiff, Smith Land & Improvement Corporation, and against the Defendant, Timothy R.
Malec t/d/b/a Malec's Pets and damages are assessed in the amount of $81,069.54, together with
interest from the date of judgment. JIF
Prothonotary ,g4_
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Stephanie E. DiVittore, Esquire
John M. Coles, Esquire
RHOADS & SINON LLP
One South Market Square
P.O. Box 1146
Harrisburg, PA 17108-1146
(717) 233-5731
Attorneys for Plaintiff
SMITH LAND & IMPROVEMENT IN THE COURT OF COMMON PLEAS
CORPORATION, OF CUMBERLAND COUNTY,
PENNSYLVANIA
Plaintiff
V. CIVIL ACTION - LAW
TIMOTHY R. MALEC t/d/b/a NO.
MALEC' S PETS
Defendant
NOTICE OF ENTRY OF CONFESSED JUDGMENT
To: Timothy R. Malec t/d/b/a Malec's Pets
50 Sugar Maple Road
Etters, Pennsylvania 17319
You are hereby notified that on September /V , 2008, judgment by confession was
entered against you in the amount of $81,069.54, plus interest from the date of judgment.
Attached hereto are copies of all documents filed with the Prothonotary in support of the
confession of judgment.
Date: , S??1 • /?-- 1,24W
Prothonotary
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.
LAWYER REFERRAL SERVICE
CUMBERLAND COUNTY BAR ASSOCIATION
2 LIBERTY AVENUE
CARLISLE, PENNSYLVANIA 17013
(717) 249-3199
BOYLE, NEBLETT & WENGER
Paul D. Murphy-Ahles, Esquire
PA Reg. No. 201207
4660 Trindle Road
Camp Hill, PA 17011
Phone: (717) 737-2430
Facsimile: (717) 737-2452
Email: pdm@neblettlaw.com
SMITH LAND & IMPROVEMENT
CORPORATION
Plaintiff/Respondent
V.
TIMOTHY R. MALEC t/d/b/a
MALEC'S PETS
Defendant/Petitioner
: IN THE COURT OF COMMON PLEAS
: CUMBERLAND COUNTY,
: PENNSYLVANIA
CIVIL ACTION - LAW
NO. 08-5527-Civil Term
PETITION TO STRIKE OFF OR OPEN CONFESSED JUDGMENT
AND NOW comes Timothy R. Malec t/d/b/a Malec's Pets, Petitioner, by and through his
counsel, Paul D. Murphy-Ahles, and files this Petition to Strike Off or Open Confessed
Judgment, averring as follows:
Counsel For Defendant
Background
1. The Petitioner is Timothy R. Malec t/d/b/a Malec's Pets, the Defendant in this
matter.
2. The Respondent, Smith Land & Improvement Corporation, is the Plaintiff in this
matter.
3. The Respondent entered into a Lease Agreement with Marge Malec t/d/b/a
Malec's Pets on or about August 21, 1996 to lease certain retail space at the West Shore Plaza
Shopping Center as further described in the subject Complaint in Confession of Judgment filed
in this case by the Respondent and the Lease Agreement with Amendments attached thereto. The
Lease Agreement was subsequently amended by a First Lease Amendment dated on or about
January 25, 1999, a Second Lease Amendment dated on or about August, 2001, a Third Lease
Amendment dated on or about March 2, 2003, and a Fourth Lease Amendment dated on or about
December 3, 2003.
4. The Second Lease Amendment dated in August, 2001 amended the Lease
Agreement to assign Marge Malec's interest in the Lease Agreement to Timothy Malec, the
Petitioner herein.
The Petitioner is an officer of Malec's Pets, Inc. which operates a retail
establishment selling pets and pet supplies on the premises subject of the Lease Agreement with
Amendments.
6. On September 18, 2008, the Plaintiff/Respondent commenced this case by filing a
Complaint in Confession of Judgment for money damages due to an alleged breach of the Lease
Agreement, and a Judgment for Money was entered against the Petitioner in favor of the Plaintiff
for the amount of $81,069.54 together with interest accruing from the date of judgment, plus
costs of collection.
Relief Requested
7. The Judgment for Money is improper and should be stricken because the
Petitioner did not sign the original Lease Agreement containing the warrant of attorney to confess
judgment and therefore cannot be bound by it.
In deciding whether a defect in the original judgment appears on the face of the
record, the court will look only at the record as it existed when the judgment was entered.
Triangle Printing Co. v. Image Quest, 730 A.2d 998, 999 (Pa.Super. 1999); Van Brakle v.
Lanauze, 438 A.2d 992, 993 (Pa.Super. 1981).
9. Looking on the face of the record at the time the judgment was entered in this
case, the judgment entered in the within proceeding against the Petitioner was defective,
improper, and invalid due to the fact that the Petitioner did not sign the warrant of attorney to
confess judgment.
10. "...[A] warrant of attorney to confess judgment must be self-sustaining; to be self-
sustaining, the warrant must be in writing and signed by the person to be bound by it; and the
requisite signature must bear a direct relation to the warrant and may not be implied extrinsically
nor imputed from assignment of the instrument containing the warrant." (Emphasis in original).
JBGIRosenfeld Retail Properties v. Anspach, 803 A.2d 783, 784 (Pa.Super. 2002) (citing Frantz
Tractor Co., Inc. v. Wyoming Valley Nursery, 384 Pa. 213, 219-220,120 A.2d 303, 306-07)
(1956)). Even if "an assignee formally agrees with the lessor to an assignment of a lease by
endorsing thereon that he, the assignee, accepts it according to its full tenor and effect," he
cannot be bound by the warrant of attorney to confess judgment. Frantz Tractor Co., Inc. v.
Wyoming Valley Nursery, 384 Pa. 213, 216-17, 120 A.2d 303, 305 (1956).
11. With this Honorable Court's review being limited to the state of the record at the
time of the entry of the confessed judgment, the Judgment for Money herein should be stricken
because it is clear from the Lease Agreement and its Amendments attached to the Complaint in
Confession of Judgment that the Petitioner did not sign the document which contained the
warrant of attorney to confess judgment. See Part II, Article XIX, Section 19.06 and Page 41
(signature page) of the Lease Agreement.
12. Accordingly, the Petitioner herein cannot be bound to a warrant of attorney to
confess judgment because he did not sign the original Lease Agreement which contained the
warrant of attorney, and as a result, the Judgment for Money must be stricken off.
13. In the alternative, the Judgment for Money should be opened and the Petitioner be
permitted to present his defenses on the merits in this proceeding due to the fact that the
calculation of damages by the Respondent is inaccurate.
14. The Petitioner can present meritorious evidence that the calculation of the
Percentage Rent that is due under the Lease Agreement in the event of a default is inflated.
15. Accordingly, if the Court finds that the Judgment for Money cannot be stricken, it
should be opened in order to permit the Petitioner to present his defenses against it.
WHEREFORE, Petitioner, Timothy R. Malec, respectfully requests that this Honorable
Court enter an Order striking, vacating and/or opening the Judgment for Money entered herein.
Respectfully submitted,
BOYLE,
PA Reg. No. 201207
4660 Trindle Road, Suite 200
Camp Hill, PA 17011
(717) 737-2430
Counsel for the Defendant/Petitioner
CERTIFICATE OF SERVICE
I hereby certify that on the 2 t day of October, 2008, a true and correct copy of the
foregoing Petition to Strike Off or Open Confessed Judgment was served upon the following:
Stephanie E. DiVittore
John M. Coles
RHOADS & SINON LLP
One South Market Street
Harrisburg, PA 17108-1146
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