--------------------------------------------------------------------------------

 

 

LEASE

 

THIS LEASE ("Lease"), is made and entered into as of October 21, 2005 (the
"Effective Date") by and between Lower Macungie Associates, LP, having an office
at c/o RD Management Corp., 810 Seventh Avenue, 28th Floor, New York, New York
10019 ("Landlord"), and Embassy Bank, a Pennsylvania banking company having an
address at 100 Gateway Drive, Suite 100, Bethlehem, PA 18017 ("Tenant").

 

W I T N E S S E T H:

 

ARTICLE I - GRANT AND TERM

 

SECTION 1.01.

Leased Premises.

 

a)

                In consideration of the rents, covenants and agreements
hereinafter reserved and contained on the part of Tenant to be observed and
performed, the Landlord demises and leases to the Tenant, and Tenant rents from
Landlord, those certain premises, now or hereafter to be erected in the Shopping
Center (herein called the "Shopping Center") located at the intersection of
Hamilton Boulevard and Mill Creek Road, Lower Macungie Township. Lehigh County,
Commonwealth of Pennsylvania, which consists of a store and containing an area
of approximately four thousand (4000) rentable square feet (herein collectively
called the "Leased Premises").

 

b)

                 The boundaries and location of the Leased Premises are
crosshatched on the site plan of the Shopping Center ("Site Plan"), which is
marked Exhibit A and is attached hereto and hereby made a part hereof.

 

c)

                Landlord reserves the use of the roof and exterior walls of the
Leased Premises, and the right, from time to time, to install, maintain, use,
repair, place and replace utility lines, pipes, conduits, wires, and satellites
in, on or under the Leased Premises (in locations which shall not materially
interfere with Tenant's use thereof) to serve other parts of or premises in the
Shopping Center. All such work shall be done at Landlord's expense in a manner
which minimizes interference with Tenant’s business.  Landlord shall, at
Landlord’s sole cost and expense, repair and correct any and all damage to the
Leased Premises caused by such work.

 

d)

                The Leased Premises are demised and let subject to (a) the
existing state of the title thereof as of the date of this Lease, (b) any state
of facts which may be shown by an, updated survey or physical inspection of the
Premises, (c) all zoning regulations, restrictions, rules and ordinances,
building restrictions and other laws and regulations now in effect or hereafter
adopted by any governmental authority having jurisdiction over the Leased
Premises, and all agreements, licenses, easements, covenants, restrictions and
other matters which affect the Leased Premises, the title thereto, or the use,
enjoyment, occupancy or possession thereof but do not prohibit or materially
interfere with the use or development of the Leased Premises as a bank office
and (d) the Ground Lease between Landlord, as tenant, and Lloyd Jones and
Blanche M. Jones, as landlord, dated as of July 8, 2005. A redacted copy of the
Ground Lease is attached hereto as Exhibit E.

 

e)

               Tenant's obligations under this Lease are conditioned upon the
approval of this Lease and the location of the bank branch office by the
Pennsylvania Department of Banking and the FDIC for which Tenant shall
diligently and in good faith apply immediately following the execution of this
Lease by Landlord and Tenant. In the event such approvals are not obtained
within 120 days of the date of this Lease, this Lease shall be null and void and
all payments, if any, made by Tenant to Landlord shall be refunded to Tenant
without offset.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

1

--------------------------------------------------------------------------------

   

 

f) 

                Notwithstanding any other provisions contained in this Lease, in
the event (a) Tenant or its successors or assignees shall become subject to a
bankruptcy case pursuant to Title 11 of the U.S. Code or similar proceeding
during the term of this Lease or (b) the depository institution then operating
at the Leased Premises is closed, or is taken over by any depository institution
supervisory authority (hereinafter referred to as the "Authority") during the
term of this Lease, Landlord may, in either such event, terminate this Lease
only with the concurrence of any Receiver or Liquidator appointed by such
Authority or pursuant to appropriate order of the Court with jurisdiction over
such case or proceeding, or upon the expiration of the stated term of this Lease
during the term of this Lease provided that in the event this Lease is
terminated by the Receiver or Liquidator, the maximum claim of Landlord for
rent, damages or indemnity for injury, resulting from the termination,
rejection, or abandonment of the unexpired Lease shall by law in no event exceed
all accrued and unpaid Minimum Rent and Additional Rent to the date of
termination.

 

SECTION 1.02.

Use of Additional Areas.

 

The use and occupancy by the Tenant of the Leased Premises shall include the use
in common with others entitled thereto of the common areas, employees' parking
areas, service roads, loading facilities, sidewalks and customer car parking
areas, shown and depicted on Exhibit A, and other facilities as may be
designated from time to time by the Landlord, subject however to the terms and
conditions of this Lease.

 

SECTION 1.03.

Commencement and Ending Date of Term.

 

(a)                   The term of this Lease shall commence on the date (the
("Commencement Date") on which Landlord delivers the Leased Premises to Tenant
with Landlord's Work (as defined in Section 27.28 hereof) substantially
complete. Landlord's Work will be deemed substantially complete when Landlord's
Work is completed but for minor construction items which do not materially
interfere with Tenant's ability to complete Tenant's initial alterations to the
Leased Premises or conduct business therein. Landlord agrees to perform
Landlord's Work in a good and workmanlike manner, in conformity with the Plans
and Specifications attached as Exhibit C and in compliance with all applicable
laws and codes. Landlord will correct any defects in materials or workmanship or
incomplete items within thirty days after Tenant provides a list of all such
defects, such list to be provided within ninety days of Landlord's delivery of
possession (provided that if the defects are not reasonably capable of
correction within said thirty day period, Landlord agrees to commence correcting
the defect within said thirty day period and thereafter complete correcting the
defects with due diligence).

 

(b)                   Landlord agrees to use commercially reasonable efforts to
deliver possession of the Leased Premises to Tenant, free and clear of any
tenancies or occupancies and with Landlord's Work substantially completed on or
about September 1,  2006 ("Premises Delivery Date"). Landlord agrees to give
Tenant at least ninety days' advance notice of the intended Premises Delivery
Date and to update same as and when reasonably appropriate if there is a
material change in the intended Premises Delivery Date.

 

(c)                The date (the "Rent Commencement Date") on which Tenant is
obligated to commence paying the Minimum Rent and additional rent shall be the
earlier to occur of (a) seventy-five (75) days after the Commencement Date; or
(b) the date on which Tenant opens all or any portion of the Leased Premises for
business.

 

 

   

INITIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

2

--------------------------------------------------------------------------------

   

 

--------------------------------------------------------------------------------

 

(d)                    The initial term of this Lease shall be for a period of
approximately thirteen (13) years running from the Commencement Date through the
last day of the month in which the thirteenth anniversary of the Commencement
Date occurs (the "Termination Date").

 

(e)                    Tenant shall have an option (the "Option") to extend the
term of this Lease for one (1) additional terms of seven (7) years, one
additional term of five (5) years and one additional term of four years and ten
months (each, a "Renewal Term"), each successively, commencing on the first day
next succeeding the Termination Date or the last day of the immediately
preceding Renewal Term, as the case may be, upon the same terms, conditions and
provisions as are provided for in this Lease.

 

The Option may be exercised only by Tenant giving written notice to Landlord of
Tenant's said Option by certified mail, return receipt requested, not more than
fifteen (15) nor less than nine (9) months prior to the Expiration Date of the
term of this Lease or the last day of the immediately preceding Renewal Term, as
the case may be (the "Exercise Notice"). Upon Tenant's giving of the Exercise
Notice, the term of this Lease shall be extended automatically upon the terms
and conditions without the execution of an extension agreement or other
instrument. If Tenant shall not give Landlord the Exercise Notice at the time
and in the manner set form above, the Option shall terminate and be deemed
waived by Tenant. Time is of the essence as to the date for the giving of the
Exercise Notice.

 

Notwithstanding the foregoing provisions, if on the date that Tenant exercises
the Option, or if on any subsequent date up to and including the date upon which
the Renewal Term commences, Tenant is in default, beyond any applicable notice
and grace periods, in the payment of Minimum Rent or additional rent hereunder,
or is in default in the performance of any of the other terms, conditions or
provisions of this Lease, Tenant's exercise of the Option and the extension of
the term contemplated thereby shall, at the option of Landlord exercised by
written notice to Tenant, be rendered null and void and shall be of no further
force and effect and Tenant shall have no other additional right to exercise
such Option, which shall be deemed waived by Tenant.

 

Time shall be of the essence with respect to the exercise of the Option by
Tenant.

 

(f)                    Any access by Tenant to the Leased Premises prior to the
Commencement Date (which prior access shall occur only with Landlord's prior
written consent) shall be upon all of the terms, covenants and conditions of
this Lease, except for the payment of Minimum Rent and Tenant's proportionate
share of additional charges.

 

SECTION 1.04.

Lease Year Defined.

 

The term "Lease Year" as used herein shall mean a period of twelve (12)
consecutive full calendar months. The first Lease Year shall begin on the
Commencement Date and shall continue through the last day of the month in which
the first anniversary of the Commencement Date occurs. Each succeeding twelve
month period shall be the sequential Lease Year.

 

SECTION 1.05.

Holding Over.

 

If Tenant shall be in possession of the Leased Premises after the Termination
Date, in the absence of an agreement extending the term hereof, the tenancy
under this Lease shall become that of "month to month", terminable by either
party upon thirty days' prior written notice, at a monthly rental equal to one
and one-half times the sum of the monthly installment of Minimum Rent, payable
during the last month of the term. Tenant shall also pay all other charges
payable under the terms of this Lease, pro rated for each month during which
Tenant remains in possession. Such month-to-month tenancy shall also be subject
to all other conditions, provisions, and obligations of this Lease. Tenant shall
not interpose any counterclaim or counterclaims in a summary proceeding or other
action based upon such holding over.

 

 

   

INITIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

--------------------------------------------------------------------------------

 

 

   

3

--------------------------------------------------------------------------------

   

 

SECTION 1.06.

Force Majeure.

 

In the event that either party hereto shall be delayed or hindered in or
prevented from the performance of any act required hereunder by reason of
strikes, lock-outs, labor troubles, inability to procure materials, failure of
power, restrictive governmental laws or regulations, riots, insurrection, war or
other reason of a like nature not the fault of the party delayed in performing
work or doing acts required under the terms of this Lease, then performance of
such act shall be excused for the period of the delay and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay. The provisions of this Section 1.06 shall not operate to
excuse Tenant from prompt payment of Minimum Rent, additional rent or any other
payments required by the terms of this Lease.

 

ARTICLE II - RENT

 

SECTION 2.01.

Minimum Rent.

 

(a) From and after the Rent Commencement Date. Tenant agrees to pay to Landlord
on the first day of each and every calendar month at the office of Landlord, or
at such other place designated by Landlord, without any prior demand therefor
and without any deduction or set-off whatsoever, as minimum rent ("Minimum
Rent") as follows:

 

Initial Term

 

Monthly Minimum Rent

 

 

Annual Minimum Rent

 

Lease Years 1-5

 

$

8,333.33 

 

 

$

100,000.00 

 

Lease Years 6-10

 

$

9,333.33 

 

 

$

112,000.00 

 

Lease Years 11-13

 

$

10,333.33 

 

 

$

124,000.00 

 

 

 

Renewal Terms

 

Monthly Minimum Rent

 

 

Annual Minimum Rent

 

Lease Years 14-15

 

$

10,333.33 

 

 

$

124,000.00 

 

Lease Years 16-20

 

$

11,470.00 

 

 

$

137,640.00 

 

Lease Years 21-25

 

$

12,731.70 

 

 

$

152,780.40 

 

Years 26-29 and 10 months

 

$

14,132.19 

 

 

$

169,586.24 

 

 

 

(b) If the Rent Commencement Date is a day other than the first day of a
calendar month, then Tenant shall pay, on the Rent Commencement Date, a pro-rata
portion of the fixed monthly Minimum Rent described in the foregoing clause (a)
prorated on a per diem basis with respect to the fractional calendar month
preceding the commencement of the first Lease Year hereof. The rent for a
partial month shall be prorated on a thirty (30) day month basis in all cases.
Tenant shall contemporaneously with the execution of this Lease, deposit with
Landlord an amount equal to one (1) month's Minimum Rent, which amounts shall be
applied to Tenant's initial Minimum Rent payment due hereunder.

 

(c) No payment by Tenant or receipt by Landlord of a lesser amount than the rent
due pursuant to this Lease shall be deemed to be other than on account of the
earliest stipulated rent, nor shall any endorsement or statement of any check or
any letter accompanying any check or payment as rent be deemed an accord and
satisfaction, and Landlord may accept such check on payment without prejudice to
Landlord's right to recover the balance of such rent or pursue any other remedy
in this Lease provided.

--------------------------------------------------------------------------------

 

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

4

--------------------------------------------------------------------------------

   

 

SECTION 2.02.

Additional Rent.

 

In addition to Minimum Rent, Tenant shall pay as additional rent any money
required to be paid pursuant to the terms hereof, including without limitation,
Sections 2.03, 2.04, 2.05, 8.01, 10.01, 10.03, 12.01, 12.02, 13.02, 13.03,
13.04, 13.05, 13.06, Articles IV and X and 16.02, and all other sums of money or
charges required to be paid by Tenant under this Lease, whether or not the same
be designated as "minimum rent," "rent" or "additional rent". Unless stated
otherwise herein, any and all money, payments, amounts or charges owed by Tenant
under this Lease, shall be due and payable upon demand thereof. Minimum Rent and
additional rent are hereinafter collectively also called "rent."

 

SECTION 2.03.

Late Charge and Dishonored Check Fee.

 

Anything in this Lease to the contrary notwithstanding, at Landlord's option,
Tenant shall pay a "late charge" not to exceed eight (8%) percent on any Minimum
Rent rent and additional rent when said sums are received by Landlord more than
ten (10) days after the due date thereof, to cover the extra expense involved in
handling delinquent payments. Tenant agrees to pay Landlord promptly after
billing as additional rent the sum of $75.00 for each check remitted by it to
Landlord that is dishonored. If two or more checks remitted by Tenant to
Landlord arc dishonored within a six month period, Landlord may require that any
or all future remittances by Tenant to Landlord be in the form of certified or
bank checks.

 

SECTION 2.04.

Rent and Additional Rent More Than 30 Days Overdue.

 

(a)                   If Landlord has not received any rent or additional rent,
or charges of the character described in Article II hereof within ten (10) days
after the same was due and payable, such unpaid amounts shall bear interest from
the date when same was due and payable to the date of payment, at a rate equal
to the lesser of (i) ten (10%) percentage points over the Prime Rate (as defined
below) or (ii) the maximum interest rate permitted by law ("Interest").

 

(b)                    "Prime Rate" shall mean the "Base Rate" (or prime rate or
similar equivalent rate) of interest from time to time in effect established by
Citigroup, Inc. and announced by it as the rate charged by it to its prime
commercial customers on short term unsecured borrowings. If Citigroup, Inc.
ceases to report such rate, the term "Prime Rate" shall mean a substitute and
comparable rate selected by Landlord.

 

SECTION 2.05.

Taxes on Rent and Additional Rents

 

Tenant shall pay to Landlord each month together with Minimum Rent any sales or
other tax imposed upon Minimum Rent and additional rent hereunder by any
governmental (or quasi-governmental) authorities governing the Shopping Center.
Except as other provided in Article IV of this Lease, Tenant will not be
responsible for Landlord's business privilege, gross receipts, earned income,
franchise or any other tax based on the gross receipts or rental income of
Landlord.

 

ARTICLE III - INTENTIONALLY OMITTED

 

ARTICLE IV - TAXES

 

--------------------------------------------------------------------------------

 

(a)                   From and after the Commencement Date, and for each year of
the lease term, or portion thereof, Tenant shall pay to Landlord as additional
rent, Tenant's share of the Real Estate Taxes (as hereinafter defined) which may
be levied or assessed by any lawful authority against the land and improvements
in the Shopping Center.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

5

--------------------------------------------------------------------------------

   

 

(b)                    Tenant shall pay a portion of such taxes equal to the
product obtained by multiplying the total taxes by a fraction, the numerator
being the rentable square foot area of the Leased Premises, and the denominator
of which shall be the total square footage of all leasable First floor area in
the Shopping Center (hereinafter called Tenant's "proportionate share").
Notwithstanding the foregoing, if any portion or portions of the Shopping Center
are separately assessed for real estate tax purposes, at Landlord's option,
Tenant's proportionate share of Real Estate Taxes shall be equal to the product
obtained by multiplying the total taxes on the parcel or parcels containing the
Leased Premises by a fraction, the numerator being the rentable square foot area
of the Leased Premises, and the denominator of which shall be the total square
footage of all leaseable first floor area on such parcel or parcels excluding
any portion of such parcel or parcels which are separately assessed and paid for
directly by another tenant. In the event that certain buildings and/or
improvements in the Shopping Center are separately assessed, but land area is
not, Landlord may, at its option and in its reasonable discretion, calculate
Tenant's proportionate share of each component of Real Estate Taxes in
accordance with the respective formulas set forth herein.

 

(c)                    Tenant shall initially pay an estimated amount of $333.33
per month toward its proportionate share of all Real Estate Taxes. Landlord
shall estimate Tenant's annual share of Real Estate Taxes referred to in this
Section and Tenant shall pay one-twelfth (l/12th) of such estimate monthly in
advance without prior demand therefor and without any setoff or deduction
whatsoever, together with the payment of Minimum Rent. Landlord shall have the
right, at any time and from time to time during each calendar year, to increase
said estimates based on changed circumstances, additional facts previously
unknown to Landlord or for any other reason. After the end of each calendar year
(or fiscal tax year should Landlord so decide), Landlord shall furnish Tenant a
statement of the actual Real Estate Taxes for the Leased Premises as aforesaid,
and there shall be an adjustment between Landlord and Tenant, with payment to
Landlord on demand, or credit to Tenant against the next such payment due, as
the case may require, to the end that Landlord shall receive from Tenant the
entire and proper amount of Tenant's annual share of Real Estate Taxes for such
period.

 

(d)                   For any portion of the aggregate lease term covered herein
which is less than a full calendar year, the allocation of taxes shall be
further reduced to limit such charge to a corresponding proportionate share of
such year. This last provision shall apply both at the beginning and the end of
the lease term.

 

(e)                    "Real Estate Taxes" shall mean any property taxes,
betterments and assessments imposed upon the land and improvements upon said
land, flat rate water and sewer charges, and all other governmental levies made
with respect to real property; Real Estate Taxes shall not include Landlord's
business privilege, franchise, gross receipts, earned income or other taxes
based on the gross receipts or income of Landlord; provided, however, that if
due to a change in the method of taxation, any franchise, income, rent or profit
tax shall be levied against the owner of the Shopping Center or by Landlord in
substitution for or in lieu of any tax which would otherwise constitute a real
estate tax, such franchise, income, rent or profit tax shall be deemed to be a
Real Estate Tax for the purpose hereof. Additionally, Real Estate Taxes shall be
any and all expenses incurred by Landlord, at its discretion, in reducing or
maintaining the existing level of such tax obligations to the taxing
authorities.

 

--------------------------------------------------------------------------------

 

(f)                    Notwithstanding anything herein to the contrary, if at
any time during the term of this Lease any assessment (either general or
special) is levied upon or assessed against the Leased Premises or any part
thereof, and such assessment may be paid in installments, Tenant's obligation
under this Section to pay such assessment shall be limited to the amount of such
installments (plus applicable interest thereon charged by the taxing authority,
if any) which become due during the term hereof, calculated using the payment
option as determined by Landlord.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

6

--------------------------------------------------------------------------------

   

 

(g)             In the event there is currently in effect any law providing for
the taxation of leases or if any law is enacted or adopted after the Effective
Date which changes the laws now in force for the taxation of leases, including
but not limited to a Goods and Services Tax (GST), or the manner of the
operation of any such taxes, or which otherwise imposes a tax either directly or
indirectly on the lease or the rents received therefrom, Tenant will pay such
tax with interest and penalties thereon. This provision shall not be deemed to
impose liability for any income or franchise tax owed by Landlord by reason of
this Lease.

 

(h)             For purpose of this Lease, the periods applicable to the payment
of Real Estate Taxes shall be determined on the basis of the calendar year in
which the Landlord pays the taxes rather than the period as may be stated within
the tax bill.

 

(i)             For the first partial calendar year of this Lease, Tenant shall
pay its proportionate share of the Real Estate Taxes as provided for in this
Article IV for the entire year multiplied by a fraction consisting of the number
of days in the calendar year subsequent to the Commencement Date, divided by the
number of days in that calendar year.

 

ARTICLE V - LANDLORD'S RIGHT TO ALTER AND RELOCATE BUILDINGS.

 

SECTION 5.01.

Changes and Additions to Buildings.

 

Landlord hereby reserves the right at any time to make alterations or additions
to and to build additional stories on the building in which the Leased Premises
are contained and to build adjoining the same. Landlord also reserves the right
to construct other buildings or improvements in the Shopping Center from time to
time and to make alterations thereto or additions or additional stories thereto
and to build adjoining same and to construct double-decker elevated parking
facilities. Any such alterations, additions, new buildings or other improvements
shall not materially affect the visibility of the Leased Premises or access
thereto.

 

SECTION 5.02.

Right to Relocate.

 

The purpose of the Site Plan attached hereto as Exhibit A is to show the
approximate location of the Leased Premises. Landlord reserves the right at any
time to relocate the various buildings, automobile parking areas, and other
common areas shown on said Site Plan; provided, however, that Landlord agrees
that Landlord will not erect buildings or other improvements (other than
standard directional signage and the like) in the area identified as "No-Build
Area" on Exhibit A.

 

ARTICLE VI - CONDUCT OF BUSINESS BY TENANT

 

SECTION 6.01.

Use of Premises.

 

--------------------------------------------------------------------------------

 

(a)                   Tenant shall use the Leased Premises solely as a retail
bank or any other lawful retail use; provided that Tenant may not use the Leased
Premises for a use which (i) violates any then existing exclusive benefiting any
other tenant or occupant of the Shopping Center or in violation of any of the
exclusives attached hereto as Exhibit G or (ii) competes with the use of any
other tenant or occupant in the Shopping Center. Tenant shall occupy the Leased
Premises and shall conduct continuously in the Leased Premises the business
above stated and as further provided in Section 6.02 herein. Provided that
Tenant continuously operates the Leased Premises as a retail bank, Landlord
agrees that Landlord will not lease any other portions of the Shopping Center
for use principally as a retail bank or retail bank office and Landlord will not
allow a retail bank or retail bank office within the space of another tenant of
the Shopping center.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

7

--------------------------------------------------------------------------------

   

 

 

(b)                    Tenant shall not use or permit any person to use, in any
manner whatsoever the Leased Premises for any purpose, trade, business,
occupation or vocation whatever, which may be in any way disreputable, immoral
or pornographic in nature. Tenant will not use the Leased Premises as a "check
cashing" business, "payday loan" business or pawn shop business. Tenant agrees
that it shall not sell, distribute, display or offer for sale any item which, in
Landlord's reasonable judgment, is inconsistent with the quality of operation of
the Shopping Center or may tend to injure or detract from the moral character or
image of the Shopping Center within such community. Without limiting the
generality of the foregoing, Tenant shall not sell, distribute, display or offer
for sale (i) any roach clip, water pipe, bong, toke, coke spoon, cigarette
papers, hypodermic syringe or other paraphernalia commonly utilized in the use
or ingestion of illicit drugs, or (ii) any pornographic, lewd, suggestive, or
"adult" newspaper, book, magazine, film, picture, representation or merchandise
of any kind. Landlord agrees that Landlord will not permit any other tenant or
occupant of the Shopping Center to use its premises for any purpose prohibited
by this Section 6.01(b).

 

(c)                    Tenant shall conduct the operation of its business in
such a manner so as not to permit unreasonable disturbances or other
inconveniences, directly or indirectly, to other tenants, customers or shoppers
in the Shopping Center. Tenant shall not permit loitering in, on or about, the
Leased Premises.

 

(d)                   Tenant shall obtain, at its sole cost and expense and
prior to opening for business, all permits and certificates of occupancy
required for it to open and operate its business at the Leased Premises. Copies
of all permits and certificates of occupancy shall be delivered to Landlord
promptly after receipt by Tenant. Tenant agrees to open the Leased Premises for
business with the general public fully staffed and operational, within sixty
days of Landlord's delivery of possession of the Leased Premises to Tenant.

 

(e)                    Tenant shall not perform any acts or carry on any
practices, which may damage any building or structure within the Shopping Center
or be a nuisance or menace to other tenants in the Shopping Center.

 

(f)                    The Leased Premises shall not be used for any of the
following purposes: a flea market or a business selling so-called "second hand"
goods (the term "second hand" shall mean stores which sell goods primarily as a
service to the public rather than to a retail customer for a profit); cemetery;
mortuary; any establishment engaged in the business of selling, exhibiting or
delivering pornographic or obscene materials; a so-called "head shop"; off-track
betting parlor; junk yard; recycling facility or stockyard; motor vehicle or
boat dealership, repair shop (including lubrication and/or service center) that
stores vehicles outdoors overnight, body and fender shop, or motor vehicle or
boat storage facility; a mini-storage or self-storage facility; a dry-cleaning
facility; a bar, tavern or cocktail lounge; a discotheque, dance hall, comedy
club, night club or adult entertainment facility; billiard or pool hall; massage
parlor, game parlor or video arcade (which shall be defined as any store

--------------------------------------------------------------------------------

 

containing more than three (3) electronic games); a beauty school, barber
college, reading room, place of instruction or any other operation catering
primarily to students or trainees and not to customers; office usage other than
incidental in connection with non-prohibited uses; industrial, residential or
manufacturing uses, school or house of worship.

 

SECTION 6.02.

Operation of Business.

 

(a)                   Tenant shall conduct its business in the Leased Premises
during at least the following days and hours-

 

Monday through Thursday:

9:00 am to 5:00 pm

Friday:

9:00 am to 6:00 pm

Saturday:

9:00 am to Noon

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

8

--------------------------------------------------------------------------------

   

 

(b)                   Tenant shall install and maintain at all times displays of
merchandise in the display windows (if any), of the Leased Premises. Tenant
shall keep the display windows and signs, if any, in the Leased Premises well
lighted during the hours from sundown to 11:00 o'clock P.M. If Tenant or a
permitted assignee of Tenant fails to continuously operate the Leased Premises
for the permitted use under this Lease and same continues for a period of six
months or longer, Landlord will have the right to terminate this Lease upon
notice to Tenant.

 

SECTION 6.03.

Competition.

 

Neither Tenant nor any affiliate, parent or subsidiary of Tenant shall, directly
or indirectly, operate, manage or engage in any similar or competing business
within a radius of one (1) mile from the outside boundary of the Shopping Center
which shall not be applicable if Tenant is acquired by other entity which
maintains a retail bank within said one mile radius. Tenant shall not perform
any acts or carry on any practices which may injure the building or be a
nuisance or menace to other tenants in the Shopping Center.

 

SECTION 6.04.

Storage, Office Space.

 

Tenant shall use for office, clerical or other non-selling purposes only such
space in the Leased Premises as is from time to time reasonably required for
Tenant's business in the Leased Premises. No auction, fire, going out of
business, lost our lease or bankruptcy sales may be conducted in the Leased
Premises without the prior written consent of Landlord.

 

ARTICLE VII - OPERATION OF CONCESSIONS

 

SECTION 7.01.

Consent of Landlord.

 

Tenant shall not permit any business to be operated in or from the Leased
Premises by any sublessee, concessionaire or licensee without the prior written
consent of Landlord.

 

ARTICLE VIII - SECURITY DEPOSIT

 

SECTION 8.01.

Amount of Deposit.

 

--------------------------------------------------------------------------------

 

Tenant shall, contemporaneously with the execution of this Lease, deposit with
Landlord the sum of Thirty One Thousand Dollars ($31,000). Said deposit shall be
held by Landlord, without liability for interest, as security for the faithful
performance by Tenant of all of the terms, covenants, and conditions of this
Lease by Tenant to be kept and performed during the term hereof. If at any time
during the term of this Lease or expiration or early termination thereof, any
rent and additional rent herein reserved shall be overdue and unpaid, or any
other sum payable by Tenant to Landlord hereunder shall be overdue and unpaid
Landlord may, at its option (but Landlord shall not be required to), apply any
portion of said deposit to the payment of any such overdue rent or other sum.
Provided that Tenant is not in default of Tenant's obligations under this Lease,
upon request of Tenant, Landlord agrees to refund to Tenant the then existing
principal amount of the security deposit as of the first anniversary of the Rent
Commencement Date.

 

SECTION 8.02.

Use and Return of Deposit.

 

In the event of the failure of Tenant to keep and perform any of the terms,
covenants and conditions of this Lease to be kept and performed by Tenant, then
Landlord at its option may appropriate and apply said entire deposit, or so much
thereof as may be necessary, to compensate the Landlord for loss or damage
sustained or suffered by Landlord due to such breach on the part of Tenant.
Should the entire deposit, or any portion thereof, be appropriated and applied
by Landlord for the payment of overdue rent or other sums due and payable to
Landlord by Tenant hereunder, then Tenant shall, upon the written demand of
Landlord, forthwith remit to Landlord a sufficient amount in cash to restore
said deposit to its prior level and Tenant's failure to do so within five (5)
days after receipt of such demand shall constitute a default under this Lease.
At the expiration or early termination of this Lease, said deposit shall be
returned to Tenant in full upon the later of (i) delivery by Tenant of the
Leased Premises in good order and condition and in compliance with all of the
provisions of this Lease and (ii) full payment of all rents, additional rents
and other sums due and owing hereunder (including, without limitation, any and
all year end adjustments to additional rents owed by Tenant through the
expiration or earlier termination of the Lease calculated by Landlord in
accordance with the terms of this Lease). In the event of a permitted assignment
or sublet of the Leased Premises, Landlord shall continue to hold the deposit as
if no such assignment or sublet had taken place, and the Tenant and
assignee/sublessee shall look to each other for the settlement of same, it being
understood and agreed that any portion of the deposit to be returned in
accordance with this Section, shall be returned to the Tenant in possession at
the end of this Lease. Tenant and its successors and assigns shall indemnify,
defend and hold Landlord harmless from and against any and all claims, demands,
suits, actions, judgments, costs and obligations, including reasonable
attorneys' fees in connection therewith.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

9

--------------------------------------------------------------------------------

   

 

SECTION 8.03.

Transfer of Deposit.

 

Landlord shall deliver the funds deposited hereunder by Tenant to the purchaser
of Landlord's interest in the Leased Premises, in the event that such interest
be sold and thereupon Landlord shall be discharged from any further liability
with respect to such deposit.

 

ARTICLE IX - PARKING AND COMMON USE AREAS AND FACILITIES

 

SECTION 9.01.

Control of Common Areas by Landlord.

 

All automobile parking areas, driveways, entrances and exits thereto, and other
facilities furnished by Landlord in or near the Shopping Center, including
employee parking areas, the truck way or ways, loading docks, package pick-up
stations, pedestrian sidewalks, curbs and lamps, service and access roads,
drainage facilities, public

--------------------------------------------------------------------------------

 

signage equipment, landscaped areas, exterior stairways, first aid stations,
comfort stations and other areas and improvements provided by Landlord for the
general use, in common, of tenants, their officers, agents, employees and
customers (herein collectively called "Common Areas"), shall at all times be
subject to the exclusive control and management of Landlord, and Landlord shall
have the right from time to time to establish, modify and enforce reasonable
rules and regulations with respect to all facilities and areas mentioned in this
article. Landlord shall have the right to construct, maintain and operate
lighting facilities on all said areas and improvements; to police the same; from
time to time to change the area, level, location and arrangement of and ingress
and egress to such parking areas and other facilities hereinabove referred to;
to restrict parking by tenants, their officers, agents and employees to employee
parking areas; to enforce parking charges (by operation of meters or otherwise),
with appropriate provisions for free parking ticket validating by tenants; to
close all or any portion of said areas or facilities to such extent as may, in
the opinion of Landlord's counsel, be legally sufficient to prevent a dedication
thereof or the accrual of any rights to any person or the public therein; to
close temporarily all or any portion of the parking areas or facilities; to
discourage non-customer parking; and to do and perform such other acts in said
areas and improvements as, in the use of good business judgment, the Landlord
shall determine to be advisable with a view to the improvement of the
convenience and use thereof by Tenant, their officers, agents, employees and
customers. Landlord will operate and maintain the Common Areas referred to above
in such manner as Landlord, in its sole discretion, shall determine from time to
time. Without limiting the scope of such discretion, Landlord shall have full
right and authority to employ all personnel and to make all rules and
regulations pertaining to and necessary for the proper operation and maintenance
of the Common Areas. Landlord agrees to operate and maintain the Common Areas in
a good and proper manner consistent with the manner in which comparable shopping
centers in the vicinity of the Shopping Center are operated.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

10

--------------------------------------------------------------------------------

   

 

SECTION 9.02.

License.

 

All Common Areas not within the Leased Premises, which Tenant may be permitted
to use and occupy, are hereby used and occupied under a revocable license, and
if the amount of such areas be diminished, Landlord shall not be subject to any
liability nor shall Tenant be entitled to any compensation, diminution or
abatement of rent, nor shall such diminution of such areas be deemed
constructive or actual eviction.

 

SECTION 9.03.

Employee Parking.

 

Tenant will cause all of Tenant's employees, servants and agents to park their
vehicles in the area designated as "Tenant's Employee's Parking Area" on Exhibit
A.

 

 

ARTICLE X - COST OF MAINTENANCE OF COMMON AREAS

 

SECTION 10.01.

Tenant's Payments.

 

(a)                   From and after the Commencement Date, and for each year of
the lease term or portion thereof, Tenant shall pay to Landlord as additional
rent, Tenant's share of Common Charges (as defined below). Tenant's share shall
be calculated by dividing the rentable square foot area of the Leased Premises
by the gross leaseable first floor area of the Shopping Center.

 

(b)                   Notwithstanding anything contained in the Lease to the
contrary, space occupied by any other tenant in the Shopping Center that pays
directly for its own Common Charges (or component thereof) or fire

--------------------------------------------------------------------------------

 

and/or extended coverage insurance may be excluded by Landlord from the
denominator when computing Tenant's share of any of such charges.

 

SECTION 10.02.

Definition of Common Charges.

 

"Common Charges" shall mean all costs and expenses incurred by the owner of the
Shopping Center or by Landlord or Landlord's, employees, agents, managing agent
or contractors, either pursuant to this Lease or otherwise, arising from or in
connection with or as a result of the operating, equipping, policing,
protecting, lighting, heating, air conditioning, providing sanitation, sewer,
water, fire protection and other services, insuring, maintaining, repairing and
replacing the Common Areas and all buildings and improvements within the
Shopping Center. Common Charges shall include, but shall not be limited to: (i)
the maintenance, repair and replacement of all roofs, exterior walls and other
structural and exterior portions of the Shopping Center, on and off site sewer
treatment plans and storm water drainage and detention (and/or retention)
facilities, if any, servicing the Leased Premises and/or Shopping Center, on and
off site traffic controls, equipment and systems, the Shopping Center pylon
signs (including all taxes relating thereto), curbs, gutters, sidewalks, pylons
and signs (including all taxes relating thereto), drainage and irrigation
ditches, conduits and pipes, utility systems (permanent and temporary), sewage
disposal or treatment systems, public toilets and sound systems whether within
or without the Shopping Center; (ii) the removal of trash, snow and ice, sanding
and salting; (iii) landscaping, including the maintenance, repair and
replacement of any sprinkler systems and equipment, and the water to operate
same; (iv) supplies; (v) licensing, permits, service and usage charges; (vi)
obtaining and maintaining the insurance policies described in Section 13.01 of
this Lease and the cost of any insured event deductible amounts under such
policies, (vii) the settlement or disposition of any claims against Landlord to
the extent the same are not covered by insurance; (viii) all capital
expenditures, together with reserves for capital improvements required by the
holder of any mortgage; (ix) the repaving, re-striping, re-grading, re- sealing
and general maintenance and repair of parking areas; (x) compliance with all
laws, statues, codes, ordinances, rules, regulations and orders of governmental
authorities pertaining to the Shopping Center including those pertaining to
traffic control, engineering and environmental issues, air pollution control and
the cost of monitoring air quality; (xi) personal property taxes, licensing and
permit fees and taxes; (xii) lighting the Common Areas, including the
maintenance, repair and replacement of the lighting facilities, equipment and
system, and the electricity to operate same (xiii) costs and expenses of
enforcing the rules and regulations established by Landlord for the Shopping
Center; (xiv) the cost, lease payment or depreciation of any equipment used in
the operation or maintenance of the Shopping Center; (xv) total compensation and
benefits (including premiums for workers' compensation or any other insurance or
other retirement or employee benefits, and including all costs incurred in
providing such benefits) paid to or on behalf of employees involved in the
performance of the work specified in this Section or employees otherwise
providing services to tenants or customers of the Shopping Center whether on or
off site including compensation paid for the promotion of the Shopping Center by
any employee or independent contractor; (xvi) the maintenance, repair and
operation of any mall or enclosed common area; (xvii) the costs of performance
of all of Landlord's obligations pursuant to this Lease or as contemplated
herein except those costs of construction of new building areas, the cost of
initial improvements to premises leased to tenants of the Shopping Center other
than Tenant, leasing commissions, ground rent and debt service payable under any
Mortgage; (xviii) other costs and expenses and fees incurred in connection with
the operation and management of the Shopping Center; plus (xix) an amount equal
to ten (10%) percent of all of the foregoing costs and expenses to compensate
Landlord for administrative and overhead expenses. Common Charges shall include
costs and expenses for services, equipment or materials furnished by Landlord or
its affiliates, including management fees, provided the same are furnished at
rates similar to those generally paid.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

11

--------------------------------------------------------------------------------

   

 

SECTION 10.03.

Estimated Payments.

--------------------------------------------------------------------------------

 

 

(a)                   On each date that an installment of Minimum Rent is due,
Tenant shall also pay Landlord an amount equal to one-twelfth (l/12lh) of its
share of such estimated Common Charges (as determined by Landlord) for the
calendar year or portion thereof in which such payment is made. Tenant shall pay
$666.67 per month toward its share of such Common Charges. On or before June 1
of each year (or thereafter if Landlord shall elect), Landlord shall provide
Tenant with a statement setting forth the amount due from Tenant on account of
Common Charges for the preceding calendar year and the amount of estimated
Common Charges paid by Tenant during such year. If the amount due from Tenant
exceeds the amount of estimated payments, Tenant shall pay the difference to
Landlord within ten (10) days of the receipt of such statement. If the amount of
estimated payments exceeds the amount due, Landlord shall credit such difference
to the next installment or installments of estimated payments due under this
Section. During any year, Landlord from time to time, may revise its estimate of
the Common Charges which will be due for that year and the monthly payments to
be made by Tenant on account thereof.

 

(b)                   Tenant shall have the right, upon ten (10) days' prior
written notice to Landlord, to audit the applicable records of Landlord to
confirm that the Common Charges billed to Tenant are proper and conform to the
provisions of this Article X. Such audit right shall be exercisable by Tenant
within two (2) years of Tenant's receipt of Landlord's annual reconciliation
statement of such charges for the applicable year in question. Should any such
audit disclose that Tenant has overpaid the Common Charges, then Landlord shall
promptly refund the amount of the overpayment to Tenant. Should any such audit
disclose that Tenant overpaid the Common Area Expenses by five percent (5%) or
more, Landlord shall promptly pay for the reasonable cost of such audit. If
Tenant does not make an audit within two (2) years from the end of a given year,
then the annual statement of Common Charges and Tenant's share for such year
shall be deemed correct and Tenant shall have no right thereafter to inspect,
audit or contest same.

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

12

--------------------------------------------------------------------------------

   

 

ARTICLE XI - SIGNS, AWNINGS, CANOPIES, FIXTURES, ALTERATIONS

 

SECTION 11.01.

Installations and Alterations by Tenant.

 

(a)                  All fixtures installed or used by Tenant shall be new or
completely reconditioned. Tenant shall not make or cause to be made any
alterations, additions or improvements or install or cause to be installed any
trade fixture, exterior signs, floor covering, interior or exterior lighting,
plumbing fixtures, shades or awnings or make any changes to the store front
without first obtaining Landlord's prior written approval and consent and
without first obtaining, at Tenant's sole cost and expense, all governmental
permits and approvals required for such work ("Permits"). Tenant shall present
to the Landlord detailed plans and specifications for such work at the time
approval is sought and deliver a copy of all Permits to Landlord prior to
commencing any alteration, addition, improvement or installation. All approved
alterations, additions, improvements and installations shall comply with all
governmental laws, rules, regulations and codes.

 

(b)                   Tenant shall not make any alterations, repairs or
installations, or perform Tenant's initial work or any other work to or on the
Leased Premises unless prior to the commencement of such work Tenant shall
obtain (and during the performance of such work keep in force) builders risk,
public liability and workmen's compensation insurance to cover every contractor
to be employed, and any other insurance reasonably required by Landlord and such
insurance shall name Landlord and its designees as additional insureds
(including, without limitation, the owner of the Leased Premises, Landlord's
managing agent and Landlord designees). Such policies shall be non-cancelable
without ten (10) days prior notice to Landlord. The policies shall have amounts
of coverage,

--------------------------------------------------------------------------------

 

and shall be issued by companies reasonably satisfactory to Landlord. Prior to
the commencement of such work, Tenant shall deliver duplicate originals or
certificates of such insurance policies to Landlord.

 

(c)                    To the fullest extend permitted by law, Tenant agrees to
indemnify, defend and hold harmless Landlord and its designees (including,
without limitation, the owner of the Leased Premises, mortgagees and Landlord's
managing agent) from any and all claims, suits, damages, liabilities,
professional fees including, without limitation, attorney's fees, costs, court
costs, expenses and disbursements relating to death, personal injuries or
property damage (including loss of use thereof) arising out of or in connection
with the performance of the work of any contractor, its agents, servants,
subcontractors or employees, or the use by contractor, its agents, servants,
subcontractors or employees, of facilities owned by Landlord. This agreement to
indemnify specifically contemplates full indemnity in the event of liability
imposed against the Landlord and/or managing agent without negligence and solely
by reason of statute, operation of law or otherwise, and partial indemnity in
the event of any actual negligence on the part of Landlord or managing agent
either causing or contributing to the underlying claim, In that event,
indemnification will be limited to any liability imposed over and above that
percentage attributable to actual fault, whether by statute, by operation of law
or otherwise.

 

(d)                   Subject to the terms and provisions of this Lease, Tenant
shall, at its own cost and expense, promptly following delivery of possession,
construct on the Leased Premises a prototypical Embassy Bank retail bank and all
facilities appurtenant thereto, including, without limitation leasehold
improvements, fixtures, furniture and equipment and the like and a drive through
facility appurtenant to the Leased Premises.

 

(e)                   If Tenant fails to commence the construction of the
improvements to the Leased Premises within thirty days of the date of delivery
of possession thereof, Landlord shall, by written notice to Tenant (the
"Termination Notice"), have the right to terminate the Lease on the terms and
conditions set forth herein and recapture the Leased Premises, Any such
termination shall be effective as of the sixtieth (60th) day after the date of
Landlord's Termination Notice. Tenant shall have the right to vitiate the
Termination Notice by providing notice to Landlord that Tenant will commence and
diligently pursue to completion the construction of the building and actually
commences same within sixty (60) days of receipt of the Termination Notice. At
any time after Tenant has opened the Leased Premises for business fully stocked
and staffed as a prototype Embassy Bank facility if Tenant discontinues the
operation of its business in the Leased Premises for more than three months,
Landlord shall have the right, upon notice to Tenant, to terminate this Lease
effective no earlier than thirty days following Landlord's notice to Tenant.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

13

--------------------------------------------------------------------------------

   

 

 SECTION 11.02.

Removal and Restoration by Tenant

 

All alterations, decorations, additions, installations and improvements made by
Tenant, or made by Landlord on Tenant's behalf by agreement under this Lease,
shall remain the property of Tenant for the term of the lease, and any extension
or renewal thereof. Such alterations, decorations, additions, installations and
improvements shall not be removed from the Leased Premises prior to the end of
the term hereof without the prior written consent of Landlord. Upon expiration
of this Lease, or any renewal term thereof, Tenant shall surrender possession of
the Leased Premises to Landlord in the condition required pursuant to Section
1.2.03 and remove all alterations, decorations, additions, installations and
improvements which are specific to Tenant's use of the Leased Premises as a bank
(as opposed to another retail use) such as, by way of example and not
limitation, automatic teller machines, vaults and drive-up facilities, repair
all damage, and restore the Leased Premises as provided in Section 12.03 hereof.
If Tenant fails to remove such alterations, decorations, additions,
installations and improvements and restore the Leased Premises, then upon the
expiration of this Lease, or any renewal thereof, and upon Tenant's vacating the

--------------------------------------------------------------------------------

 

Leased Premises, all such alterations, decorations, additions, installations and
improvements shall, at Landlord's option, become the property of Landlord.

 

SECTION 11.03.

Tenant Shall Discharge all Liens.

 

Tenant shall promptly pay all contractors and materialmen, so as to minimize the
possibility of a lien attaching to the Leased Premises or the Shopping Center,
and should any such lien be made or filed, Tenant shall bond against or
discharge the same within the earlier of: (a) the date Tenant becomes aware of
such lien or (b) ten (10) days alter written request by Landlord. Should Tenant
fail to take any action within said ten (10) day period, Landlord may, at its
option, bond or pay the said lien without inquiring into the validity thereof,
and Tenant shall forthwith reimburse Landlord the total expense incurred by
Landlord as additional rent hereunder.

 

SECTION 11.04.

Signs, Awnings and Canopies

 

(a)                   Tenant shall not place or suffer to be placed or
maintained on any exterior door, wall or window of the Leased Premises any sign,
awning or canopy, or advertising matter or other thing of any kind, and will not
place or maintain any decoration, lettering or advertising matter on the glass
of any window or door of the Leased Premises or in a location within the Leased
Premises visible by the general public from outside the Leased Premises without
first obtaining Landlord's written approval and consent. Tenant must furnish to
Landlord all signage applications and permits for Landlord's prior written
approval, along with a copy of the current local governmental sign regulations
to facilitate the approval process. Landlord will not grant its consent to any
exterior signage that fails to conform to the specifications attached hereto and
made a part hereof as Exhibit B. Landlord hereby consents to the installation by
Tenant of signage on the exterior of the Leased Premises as shown on the
rendering and with the specifications shown on Exhibit B-l hereof. Tenant
further agrees at all times to maintain any such sign, awning, canopy,
decoration, lettering, advertising matter or other thing, as may be approved, in
good condition and repair, and upon the expiration or other termination of this
Lease to remove same and repair all damage resulting therefrom. Tenant shall not
be entitled to utilize space on a Shopping Center pylon, if any, unless
specified herein.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

14

--------------------------------------------------------------------------------

   

 

(b)                    Tenant will be permitted to install a panel on the
Shopping Center pylon sign where indicated on the pylon sign exhibit attributed
hereto as Exhibit F. Tenant shall install and maintain, repair and replace the
panel at Tenant's sole cost and expense. In the event Tenant shall be entitled
to utilize space on a Shopping Center pylon, Tenant shall pay to Landlord as
additional rent (i) Tenant's pro-rata share of Landlord's actual cost to erect
the Shopping Center sign, (ii) the cost of installing Tenant's panel on the
existing Shopping Center sign, and (iii) Tenant's pro-rata share of the
maintenance cost of said Shopping Center sign (including all taxes relating
thereto). Tenant's pro-rata share shall be computed by multiplying such sign
maintenance costs by a fraction, the numerator of which is the total number of
square feet of sign area occupied by Tenant's panel and the denominator of which
is the total number of square feet of sign area on the Shopping Center sign.

 

ARTICLE XII - MAINTENANCE OF LEASED PREMISES

 

SECTION 12.01.

Maintenance by Tenant.

 

Tenant shall at all times keep the Leased Premises (including, but not limited
to, maintenance of exterior entrances, all glass, plate glass and show window
moldings) and all partitions, doors, fixtures, flooring, ceiling tiles,
equipment and appurtenances thereof (including, but not limited to, lighting,
heating, electrical and

--------------------------------------------------------------------------------

 

plumbing fixtures, equipment and systems, escalators, elevators, and any air
conditioning system) in good order, condition and repair, (including all
required replacements and reasonably periodic painting as determined by
Landlord), damage by unavoidable casualty excepted, except for structural
portions of the Leased Premises, which shall be maintained by Landlord, but if
Landlord is required to make repairs to structural portions by reason of
Tenant's negligent acts or omission to act, Landlord may add the cost of such
repairs to additional rent which shall thereafter become due. Tenant agrees to
sweep and clean, and remove snow and ice from the sidewalk and curb in front of
the Leased Premises.

 

SECTION 12.02.

Maintenance by Landlord.

 

If Tenant refuses or neglects to repair any property as required hereunder and
to the reasonable satisfaction of Landlord as soon as reasonably possible after
written demand Landlord, may make such repairs without liability to Tenant for
any loss or damage that may accrue to Tenant's merchandise, fixtures, or other
property or to Tenant's business by reason thereof, and upon completion thereof,
Tenant shall pay Landlord's costs for making such repairs plus twenty (20%)
percent for overhead, upon presentation of a bill therefor, as additional rent.

 

SECTION 12.03.

Surrender of Premises.

 

At the expiration of the tenancy hereby created, Tenant shall surrender the
Leased Premises in the same condition as the Leased Premises were in upon
delivery of possession thereto under this Lease, reasonable wear and tear, and
damage by unavoidable casualty excepted, and shall surrender all keys for the
Leased Premises to Landlord at the place then fixed for the payment of rent and
shall inform Landlord of all combinations on locks, safes and vaults, if any, in
the Leased Premises. Tenant shall remove all its trade fixtures, and any
alterations or improvements as provided in Section 11.02 hereof, before
surrendering the Leased Premises as aforesaid and shall repair any damage to the
Leased Premises caused thereby. Tenant's obligation to observe or perform this
covenant shall survive the expiration or other termination of the term of this
Lease.

 

SECTION 12.04.

Rules and Regulations.

 

The rules and regulations are appended to this Lease as Exhibit D attached
hereto and made a part hereof (the "Rules and Regulations"). Tenant agrees to
comply with and observe the Rules and Regulations. Tenant's failure to keep and
observe the Rules and Regulations shall constitute a default under this Lease in
the manner as if the same were contained herein as covenants. Landlord reserves
the right from time to time to amend or supplement the Rules and Regulations and
to adopt and promulgate additional rules and regulations applicable to the
Leased Premises and the Shopping Center. Notice of such additional rules and
regulations, and amendments and supplements, if any, shall be given to Tenant,
and Tenant agrees thereupon to comply with and observe all such rules and
regulations, and amendments thereto and supplements thereof, provided the same
shall apply uniformly to all tenants of the Shopping Center.

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

15

--------------------------------------------------------------------------------

   

 

ARTICLE XIII - INSURANCE AND INDEMNIFICATION

 

SECTION 13.01.

Liability Insurance.

 

(a)                   Tenant shall, from and after the date Landlord delivers
possession of the Leased Premises and during the entire term hereof, keep in
full force and effect a policy of public liability and property damage insurance
(including terrorism insurance) with respect to the Leased Premises, and the
business operated by Tenant and any subtenants, licensees or concessionaires of
Tenant in the Leased Premises, which limits of public

--------------------------------------------------------------------------------

 

liability and properly damage liability shall not be less than $3,000,000.00 in
respect of any one occurrence. The policy shall name Landlord, its managing
agent any and person, firms or corporations designated by Landlord, and Tenant
as additional insured, and shall contain a clause that the insurer will not
cancel or change the insurance without first giving the Landlord thirty (30)
days prior written notice. The insurance shall be with an insurance company
licensed and admitted in the State that the Leased Premises is located, with a
Best Rating of at lease A VIII and a copy of the policy or a certificate of
insurance shall be delivered to Landlord prior to Tenant entering into
possession of the Leased Premises.

 

(b)                   Landlord shall maintain and keep in full force and effect
a policy of public liability and property damage insurance with respect to the
Common Areas of the Shopping Center in coverage amounts determined by Landlord.

 

SECTION 13.02.

Indemnification of Landlord.

 

Except to the extent due to Landlord's willful misconduct or gross negligence,
Tenant shall indemnify Landlord, its managing agent, agents, contractors,
employees, servants, lessees or concessionaires, and Landlord's mortgagees, and
save them harmless from and against any and all claims, actions, damages,
liability and expense in connection with loss of life, personal injury and/or
damage to property arising from or out of any occurrence in, upon or at the
Leased Premises, or the occupancy or use by Tenant of the Leased Premises or any
part thereof, or occasioned wholly or in part by any act or omission of Tenant,
its agents, contractors, employees, servants, lessees or concessionaires. In
case Landlord shall, without fault on its part, be made a party to any
litigation commenced by or against Tenant, then Tenant shall protect and hold
Landlord harmless and shall pay all costs, expenses and reasonable attorney's
fees incurred or paid by Landlord in connection with such litigation. Tenant
shall also pay all costs, expenses and reasonable attorney's fees that may be
incurred or paid by Landlord in enforcing the covenants and agreements in this
Lease.

 

SECTION 13.03.

Plate Glass.

 

Tenant shall replace, at the expense of Tenant, any and all plate and other
glass damaged or broken resulting from any cause whatsoever in and about the
Leased Premises. Tenant shall insure, and keep insured, at Tenant's expense, all
plate and other glass in the Leased Premises for and in the name of Landlord.

 

SECTION 13.04.

Fire and Extended Coverage Insurance.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

16

--------------------------------------------------------------------------------

   

 

(a)                   Commencing from and after the Commencement Dale, and for
each year of the lease term, or portion thereof, in addition to the insurance
which Tenant is required to maintain pursuant to this Article XIII, Tenant shall
pay to Landlord, as additional rent, Tenant's share of the Fire Insurance (as
defined below) which may be maintained by Landlord on the buildings and
improvements in the Shopping Center, Tenant shall pay as its share of such Fire
Insurance an amount equal to that proportion of the cost of the premiums for the
Fire Insurance as the leaseable square foot area of the Leased Premises bears to
the leaseable square foot area of all the buildings covered under the relevant
policy.

 

(b)                   On each date that an installment of Minimum Rent is due,
Tenant shall pay, as additional rent, an amount equal to one-twelfth (1/12th) of
its share of the estimated total premiums paid by Landlord for Fire Insurance
(as defined below). Tenant shall initially pay $83.33 per month towards its
share of said insurance premium(s). Landlord will bill the Tenant annually for
its proportionate share accompanied by copies of

--------------------------------------------------------------------------------

 

the appropriate invoices setting forth the amount due from Tenant on account of
the Fire Insurance for the preceding year and the amount of estimated Fire
Insurance paid by Tenant during such year. The total billing for the insurance
less the amount previously paid by Tenant will result in an adjustment whereby
Tenant will either receive a credit for an overpayment toward the next
installment or installments due under this Section or Tenant shall pay within
ten (10) days of the receipt of such statement, any balance due to Landlord for
such insurance. The monthly amount to be paid on account will be revised each
year to more closely reflect one-twelfth (1/12th) of Tenant's share of insurance
costs most recently determined. With respect to any insurance effective for a
term extending beyond the term of Tenant's lease, Tenant will be obligated to
pay only such proportion of Tenant's share of the premium as that portion of the
term of the policy lapsing prior to the expiration of the term of Tenant's lease
bears to the entire term of the policy.

 

(c)                   "Fire Insurance" shall mean the fire, extended coverage
and loss of rents insurance (including so-called "extended coverage and/or all
risk endorsement", "flood and earthquake endorsement", "terrorism endorsement"
and "boiler and machinery endorsement"), maintained by Landlord or others upon
all buildings and improvements in the Shopping Center.

 

(d)                   The amount of Fire Insurance to be maintained by Landlord
shall not be less than eighty (80%) percent and not more than one hundred (100%)
percent of the Replacement Cost Valuation of all buildings and improvements in
the Shopping Center as such value may exist from time to time.

 

 

SECTION 13.05.

Increase in Fire Insurance Premium.

 

(a)                   Tenant agrees that it shall not keep, use, sell or offer
for sale in or upon the Leased Premises any article which may be prohibited by
the standard form of fire insurance policy. Tenant agrees to pay any increase in
Landlord’s premiums for fire and extended coverage insurance during the term of
this Lease resulting from Tenant’s use of the Leased Premises or the type of
merchandise sold by Tenant in the Leased Premises, whether or not Landlord has
consented to the same. In determining whether increased premiums are the result
of Tenant's use of the Leased Premises, a schedule, issued by the organization
making the insurance rate on the Leased 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 Leased Premises.

 

(b)                   In the event Tenant's use or occupancy of the Leased
Premises causes an increase in Landlords premiums for the fire, boiler and/or
casualty rates on the Leased Premises or any part thereof above the rate for the
least hazardous type of occupancy legally permitted in the Leased Premises,
Tenant shall also pay in such event, any additional premiums, including on the
rent and terrorism insurance policy that may be carried by the Landlord for its
protection against loss resulting from fire or terrorist act. Bills for such
additional premiums shall be sent by Landlord to

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

17

--------------------------------------------------------------------------------

   

 

Tenant at such times as Landlord may elect, and shall be due from, and payable
by Tenant when sent, and the amount thereof shall be deemed to be, and shall be
paid as, additional rent.

 

SECTION 13.06.

Waiver of Subrogation.

 

Neither party to this Lease shall be liable for any damage by fire or other
peril includable in the coverage afforded by the standard form of fire insurance
policy with extended coverage endorsement attached, no

--------------------------------------------------------------------------------

 

matter how caused, it being understood that the damaged party will look solely
to its insurer for reimbursement, provided that this waiver of liability shall
apply only to the extent that the party incurring such loss is actually
reimbursed for such loss by the proceeds of insurance. Landlord's and Tenant's
policies of insurance shall contain a waiver of subrogation confirming the
foregoing. Any waiver of rights required by this Section 13.06 shall be
ineffective if such waiver shall be unobtainable, or result in a breach of the
insurance contract or in material increase in the cost of insurance of the
waiving party, unless the other party shall pay such increase within ten (10)
days after notice thereof.

 

ARTICLE XIV - UTILITIES

 

SECTION 14.01.

Utility Charges.

 

(a)                   Tenant shall be solely responsible for and promptly pay
all charges for electricity, gas, and water or any other utility used or
consumed in the Leased Premises from and after the date possession of the Leased
Premises are delivered to Tenant. Tenant will pay for electricity, gas and water
as measured by a meter measuring Tenant's consumption thereof directly to
utility provider in question. In no event shall Landlord be liable for an
interruption or failure in the supply of any such utilities to the Leased
Premises. Tenant is responsible for, and shall promptly pay, all charges for
monitoring the sprinkler system (if any) within the Leased Premises.

 

(b)                   Tenant and Landlord agree that any utility easements
requested by Tenant, shall be subject to Landlord's prior written approval,
which approval shall be in Landlord's sole discretion. Such utility easements
shall be in a form acceptable to Landlord, in its sole discretion, and further
Tenant shall reimburse Landlord for any and all costs and expenses relating to
the negotiation and approval of such utility easements (including, without
limitation, reasonable attorneys' fees).

 

ARTICLE XV - OFFSET STATEMENT, ATTORNMENT SUBORDINATION

 

SECTION 15.01.

Offset Statement/Estoppel Certificate.

 

Within ten days after request therefor by Landlord, or in the event that upon
any sale, assignment or hypothecation of the Leased Premises and/or the land
thereunder by Landlord, an offset statement shall be required from Tenant,
Tenant agrees to deliver in recordable form a certificate to any proposed
mortgagee or purchaser, or to Landlord, certifying (if such be the case) that
this Lease is in full force and effect and that there are no defenses or offsets
thereto, or stating those claimed by Tenant and containing such other reasonable
information as Landlord, its mortgagee, or the purchaser shall request.

 

SECTION 15.02.

Attornment.

 

Tenant shall, in the event any proceedings are brought for the foreclosure of,
or in the event of exercise of the power of sale under any mortgage made by the
Landlord covering the Leased Premises, attorn to the purchaser upon any such
foreclosure or sale and recognize such purchaser as the Landlord under this
Lease.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

18

--------------------------------------------------------------------------------

   

 

SECTION 15.03.

Subordination.

 

This Lease, at lender(s) option, as the case may be, shall be automatically
subordinate to any mortgage of the Shopping Center or portion thereof to which
Landlord's interest in the Shopping Center or portion thereof is

--------------------------------------------------------------------------------

 

subordinated and to any overlease by or under which Landlord holds its interest
therein, regardless of the time when any such mortgage or any such overlease (or
any notice thereof) is executed or recorded. Tenant hereby agrees to execute a
confirmatory agreement which shall subordinate the Lease to the instrument(s)
evidencing such loan or overlease in which the lender(s) or overlandlord agree
for itself, its successors and assigns by written instrument in such form which
is acceptable to the lender(s) or overlandlord, as the case may be: (i) to be
bound by the terms of this Lease; provided, however, the lender(s) or
overlandlord, as the case may be, shall not be (a) liable for any act or
omission of any prior landlord (including Landlord); (b) bound by any rent or
additional rent which Tenant might have paid for more than one (1) month in
advance to any prior landlord (including Landlord); or (c) bound by any
amendment or modification of the Lease made without lender's or overlandlord' s
consent; (ii) to not disturb Tenant's use or possession of the Leased Premises
in the event of a foreclosure of such lien or encumbrance so long as Tenant is
not in default hereunder; (iii) to not join Tenant as a party defendant in any
foreclosure proceeding relating to the Shopping Center or any part thereof
(except to the extent required to prosecute said foreclosure proceeding); (iv)
to require Tenant to give notice to the lender(s) or overlandlord, as the case
may be, simultaneous with any notice given by Tenant to Landlord in the event
that Landlord defaults; and (v) to require Tenant to give the lender(s) or
overlandlord, as the case maybe, the right to cure a Landlord default
simultaneous with Landlord's right to cure. If any ground lease covering the
Leased Premises to which this Lease is subordinate shall be terminated, this
Lease, at the option of the then-owner, shall become a direct lease with the
then-owner of the Leased Premises.

 

SECTION 15.04.

Attorney-in-Fact.

 

Tenant shall, upon request of any party in interest, promptly execute such
instruments or certificates necessary to carry out the intent of Article XV as
shall be requested by Landlord. Tenant hereby irrevocably appoints Landlord as
attorney-in-fact for Tenant with full power and authority to execute and
deliver, in the name of Tenant, any such instruments or certificates.

 

SECTION 15.05.

Financial Data.

 

Tenant shall cooperate with Landlord in every reasonable respect to assist
Landlord in securing financing on the Shopping Center, including, but not by way
of limitation, supplying to Landlord and or its proposed lender detailed
financial statements and factual background of Tenant.

 

ARTICLE XVI - ASSIGNMENT AND SUBLETTING

 

SECTION 16.01.

Consent Required.

 

(a)                    Except as otherwise set forth herein, Tenant shall not,
whether voluntarily, involuntarily or by operation of law, without in each
instance obtaining the prior written consent of Landlord, which consent may be
withheld in Landlord's sole discretion (a) assign or otherwise transfer this
Lease or the term or estate herby granted, (b) sublet all or part of the Leased
Premises or allow the same to be used or occupied by anyone other than Tenant,
or (c) mortgage, pledge or encumber this Lease or all or part of the Leased
Premises in any manner by reason of any act or omission on the part of Tenant.
Landlord agrees that Landlord will not unreasonably withhold Landlord's consent
to a sublease of the entire Leased Premises provided that the use thereof is in
compliance with the use requirements and restrictions set forth in this Lease.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

19

--------------------------------------------------------------------------------

   

 

(b)                   The consent by Landlord to any assignment or subletting
shall not constitute a waiver of the necessity for such consent to any
subsequent assignment or subletting. This prohibition against assigning or

--------------------------------------------------------------------------------

 

subletting shall be construed to include a prohibition against any assignment or
subletting by operation of law. If this Lease be assigned, or if the Leased
Premises or any part thereof be underlet or occupied by any entity other than
Tenant, Landlord may collect rent from the assignee, undertenant or occupant,
and apply the net amount collected to the rent herein reserved, but no such
assignment, underletting, occupancy or collection shall be deemed a waiver of
this covenant, or the acceptance of the assignee, under-tenant or occupant as
Tenant, or a release of Tenant from the further performance by Tenant of
covenants on the part of Tenant herein contained.

 

For purposes of this Article 16, (i) the transfer, directly or indirectly, of a
majority of any class of the issued and outstanding capital stock of any
corporate tenant or subtenant, or the direct or indirect transfer or a majority
of the total interest in any other entity (limited liability company,
partnership or otherwise) which is a tenant or subtenant, however accomplished,
whether in a single transaction or in a series of related or unrelated
transactions (including, without limitation, and by way of example only, the
transfer of a majority of the outstanding capital stock of a company which
company owns a second tier company, which in turn owns 51% of the outstanding
capital stock of a corporate tenant hereunder), shall be deemed an assignment of
this Lease, or of such sublease, as the case may be, (ii) a so called "takeover"
agreement (i.e., an agreement where another entity agrees to become responsible
for all or a portion of Tenant's obligations under this Lease without actually
entering into an assignment or sublease) shall be deemed a transfer of this
Lease, (iii) any person or legal representative of Tenant, to whom Tenant's
interest under this Lease passes by operation of law, or otherwise, shall be
bound by the provisions of this Article 16, and (iv) a modification, amendment
or extension without Landlord's prior written consent of a sublease previously
consented to by Landlord shall be deemed a new sublease. Tenant agrees to
furnish to Landlord upon demand at any time and from time to time such
information and assurances as Landlord may reasonably request that neither
Tenant, nor any subtenant, is in violation of the provisions of this Section
16.01. As long as Embassy Bank is Tenant, Tenant shall have the privilege,
subject to the terms and conditions hereinafter set forth, without the consent
of Landlord, to assign its interest in this Lease (i) to any corporation which
is a successor to Tenant either by merger or consolidation, (ii) to a purchaser
of all of Tenant's assets (provided such purchaser shall have also assumed
substantially all of Tenant's liabilities) or (iii) to a person or entity which
shall (1) Control (2) be under the Control of, or (3) be under common Control
with Tenant (any such Person referred to in this clause (iii) being a "Related
Entity"). As long as Embassy Bank is Tenant, Tenant shall have the privilege,
subject to the terms and conditions set forth herein, without the consent of
Landlord to sublease all or any portion of the Leased Premises to a Related
Entity. Any assignment or subletting described above may only be made upon the
condition that (a) any such assignee or subtenant shall continue to use the
Leased Premises for the conduct of the same business as Tenant was conducting
prior to such assignment or sublease, (b) the principal purpose of such
assignment or sublease is not the acquisition of Tenant's interest in this Lease
or to circumvent the provisions of this Section 16.02, and (c) in the case of an
assignment, any such assignee shall have a net worth and annual income and cash
flow, determined in accordance with generally accepted accounting principles,
consistently applied, after giving effect to such assignment, equal to the
greater of Tenant's net worth and annual income and cash flow, as so determined,
on (i) the date immediately preceding the date of such assignment, and (ii) the
Commencement Date. Tenant shall, within ten (10) days after execution thereof,
deliver to Landlord either (x) a duplicate original instrument of assignment in
form and substance reasonably satisfactory to Landlord, duly executed by Tenant,
together with an instrument in form and substance reasonably satisfactory to
Landlord, duly executed by the assignee, in which such assignee shall assume
observance and performance of, and agree to be personally bound by, all of the
terms, covenants and conditions of this Lease on Tenant's part to be observed
and performed, or (y) a duplicate original sublease in form and substance
reasonably satisfactory to Landlord, duly executed by Tenant and the subtenant.
"Control" or "control" shall mean ownership of more than fifty percent (50%) of
the outstanding voting stock of a corporation or other majority equity and
control interest if not a corporation and the possession of power to direct or
cause the direction of the management and policy of such corporation or other
entity, whether through the ownership of voting securities, by statute or
according to the provisions of a contract.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

20

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

   

 

(c)                    In the event the Tenant shall seek Landlord's consent
pursuant to this Section 16.01, Tenant shall furnish Landlord with such
information regarding the proposed assignee or sublessee as the Landlord may
reasonably request, including, without limitation, information regarding the
financial viability and business experience of the proposed assignee or
sublessee.

 

(d)                   Notwithstanding any assignment or sublease: (i) Tenant and
any guarantor, if any, shall always remain fully liable under the lease and
shall not be released from performing any of the terms, covenants and conditions
of this Lease; (ii) the assignment or subletting shall be subject to all of the
terms and conditions of this Lease; (iii) any assignee shall assume, in writing,
all of Tenant's obligations under this Lease; (iv) Tenant shall give Landlord at
least thirty (30) days prior written notice of any such assignment or
subletting; (v) Tenant shall pay over to Landlord, on a monthly basis, all
profit derived by Tenant from any assignment or subletting; and (vi) Tenant
further agrees that it will reimburse Landlord for Landlord's reasonable
expenses, arising out of said assignment or sublet, including reasonable
attorney's fees, whether such assignment or sublease was approved by Landlord or
not.

 

(e)                   Notwithstanding the foregoing, in lieu of consenting to
any such proposed assignment or subletting, Landlord may, within thirty (30)
days following Landlord's receipt of Tenant's notice of such proposed assignment
or subletting, elect to terminate this Lease upon at least sixty (60) days
notice thereof to Tenant.

 

SECTION 16.02.

Additional Security Deposit upon Assignment or Sublease.

 

If Landlord should consent to an assignment or sublease, Tenant agrees to
assign, transfer and set over to its assignee or sublessee all of Tenant's
right, title and interest in and to any and all security deposit(s) held by
Landlord and to look only to assignee or sublessee for reimbursement and to
indemnify, defend and hold Landlord harmless from any and all claims, demands,
suits, actions, judgments, costs and obligations, including reasonable attorneys
fees in connection therewith.

 

ARTICLE XVII - WASTE AND COMPLIANCE WITH LAWS

 

SECTION 17.01.

Waste or Nuisance.

 

Tenant shall not commit or suffer to be committed any waste upon the Leased
Premises or any nuisance or other act or thing which may disturb the quiet
enjoyment of any other tenant in the building in which the Leased Premises may
be located, or in the Shopping Center, or which may disturb the quiet enjoyment
of any person within five hundred feet (500') of the boundaries of the Shopping
Center.

 

SECTION 17.02.

Compliance with Laws.

 

Tenant shall, at Tenant's sole cost and expense, comply with all of the
requirements of all county, municipal, state, federal and other applicable
governmental authorities, and Landlord's insurance underwriters, now in force,
or which may hereafter be in force, pertaining to the Leased Premises, and shall
faithfully observe in the use of the Leased Premises, all county and municipal
ordinances and regulations and all local and state and federal statutes and laws
now in force or which may hereafter be in force.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

21

--------------------------------------------------------------------------------

   

 

SECTION 17.03

Matters of Record.

--------------------------------------------------------------------------------

 

 

The Shopping Center and Tenant's use and occupancy of the Leased Premises, and
Tenant's rights and obligations herein are subject to all matters of record.
Tenant hereby covenants and agrees to abide by the terms and provisions to all
matters of record.

 

ARTICLE XVIII - ADVERTISING, MERCHANTS ASSOCIATION

 

SECTION 18.01.

Intentionally Omitted.

 

SECTION 18.02.

Solicitation of Business.

 

Tenant and Tenant's employees and agents shall not solicit business in the
parking lot or other Common Areas, nor shall Tenant distribute any handbills or
place other advertising matter on automobiles parked in the parking area or in
other Common Areas.

 

SECTION 18.03.

Merchant's Association.

 

Tenant shall become a member of, participate fully in, and remain in good
standing in the Merchant's Association (as soon as the same has been formed)
which shall be limited to tenants occupying premises in the Shopping Center, and
shall abide by the regulations of such Merchants Association. Tenant shall be
entitled to receive notice and the right to vote at all meetings of the
Merchant's Association if in good standing.

 

ARTICLE XIX - DESTRUCTION

 

SECTION 19.01.

Total or Partial Destruction.

 

If the Leased Premises and any necessary Common Areas ancillary or adjacent
thereto shall be damaged by fire, the elements, unavoidable accident or other
casualty, but are not thereby rendered untenantable in whole or in part,
Landlord shall at its own expense cause such damage to be repaired, and the rent
shall not be abated. If by reason of such occurrence, the Leased Premises shall
be rendered untenantable only in part, Landlord shall, at its own expense, cause
the damage to be repaired, and the Minimum Rent and additional rent shall be
abated proportionately as to the portion of the Leased Premises rendered
untenantable provided that same can be accomplished within 90 days of such
destruction. If the Leased Premises shall be rendered wholly untenantable by
reason of such occurrence, Landlord shall, at its own cost and expense, cause
such damage to the Leased Premises (but not to Tenant's improvements or personal
property) to be repaired, and the Minimum Rent and additional rent shall abate
until the Leased Premises have been restored and rendered tenantable, or
Landlord may at its election, terminate this Lease and the tenancy hereby
created, by giving Tenant within the next sixty (60) days following the date of
said occurrence, written notice of Landlord's election so to do and in the event
of such termination rent shall be adjusted as of such date.

 

SECTION 19.02.

Partial Destruction of Shopping Center.

 

In the event that seventy (70%) percent or more of the leasable area of the
Shopping Center shall be damaged or destroyed by fire or other casualty,
notwithstanding that the Leased Premises may be unaffected by such fire or other
casualty, Landlord may terminate this Lease and the tenancy hereby created by
giving to Tenant five (5) days prior written notice of its election to terminate
which notice shall be given, if at all, not later than thirty (30) days
following the date of said occurrence. Rent shall be adjusted as of the date of
such termination.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

22

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

   

 

In the event that seventy (70%) percent or more of the leasable area of the
Shopping Center shall be damaged or destroyed by fire or other casualty,
notwithstanding that the Leased Premises may be unaffected by such fire or other
casualty and such fire or casualty occurs during the last two years of the term
of this Lease, Tenant may terminate this Lease and the tenancy hereby created by
giving to Landlord five (5) days prior written notice of its election to
terminate which notice shall be given, if at all, not later than thirty (30)
days following the date of said occurrence. Rent shall be adjusted as of the
date of such termination.

 

ARTICLE XX - EMINENT DOMAIN

 

SECTION 20.01.

Total Condemnation of Leased Premises.

 

If the whole of the Leased Premises shall be acquired or condemned by eminent
domain for any public or quasi-public use or purpose, then the term of this
Lease shall cease and terminate as of the date of title vesting in such
proceeding and all rent shall be paid up to and including that date and Tenant
shall have no claim against Landlord for the value of any unexpired term of this
Lease.

 

SECTION 20.02.

Partial Condemnation.

 

If any part of the Leased Premises shall be acquired or condemned as aforesaid,
and in the event that such partial taking or condemnation shall render the
Leased Premises unsuitable for the business of Tenant, then the term of this
Lease shall cease and terminate as of the date of title vesting in such
proceeding. Tenant shall have no claim against Landlord for the value of any
unexpired term of this Lease and rent shall be adjusted up to and including the
date of such termination. In the event of a partial taking or condemnation which
is not extensive enough to render the Leased Premises unsuitable for the
business of Tenant, then Landlord shall promptly restore the Leased Premises
(but not Tenant's improvements or personal property) to a condition comparable
to its condition at the time of such condemnation less the portion lost in the
taking, and this Lease shall continue in full force and effect without any
reduction or abatement of rent.

 

SECTION 20.03.

Total Condemnation of Parking Area.

 

If the whole of the parking areas located in the Common Areas of the Shopping
Center shall be acquired or condemned as aforesaid, then the term of this Lease
shall cease and terminate as of the date of title vesting in such proceeding
unless Landlord shall take immediate steps to provide other parking facilities
substantially equal to the previously existing ratio between the parking areas
and the Leased Premises, and such substantially equal parking facilities shall
be provided by Landlord at its own expense within ninety (90) days from the date
of acquisition. In the event that Landlord shall provide such other
substantially equal parking facilities, then this Lease shall continue in full
force and effect without any reduction or abatement of rent.

 

SECTION 20.04.

Partial Condemnation of Parking Area.

 

If any part of the parking areas in the Common Areas of the Shopping Center
shall be acquired or condemned as aforesaid, and if, as the result thereof, the
ratio of square feet of parking field to square feet of the sales area of the
entire Shopping Center buildings is reduced to a ratio below two to one, then
the term of this Lease shall cease and terminate upon the vesting of title in
such proceeding, unless Landlord shall take immediate steps toward increasing
the parking ratio to a ratio in excess of two to one, in which event this Lease
shall be unaffected and remain in full force and effect without any reduction or
abatement of rent. In event of termination of this Lease as aforesaid, Tenant
shall have no claim against Landlord nor the condemning authority for the value
of any unexpired term of this Lease and rent shall be adjusted up to and
including the date of said termination.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

--------------------------------------------------------------------------------

 

   

23

--------------------------------------------------------------------------------

   

 

SECTION 20.05.

Landlord's Damages.

 

In the event of any condemnation or taking as aforesaid, whether whole or
partial, Tenant shall not be entitled to any part of the award paid for such
condemnation and Landlord is to receive the full amount of such award. Tenant
hereby expressly waives any right or claim to any part thereof.

 

SECTION 20.06.

Tenant's Damages.

 

Although all damages in the event of any condemnation are to belong to the
Landlord whether such damages are awarded as compensation for diminution in
value of the leasehold or to the fee of the Leased Premises, Tenant shall have
the right to claim and recover from the condemning authority, but not from
Landlord, such compensation as may be separately awarded or recoverable by
Tenant in Tenant's own right on account of any and all damage to Tenant's
business by reason of the condemnation and for or on account of any cost or loss
which Tenant might sustain in removing Tenant's business by reason of the
condemnation and for or on account of any cost or loss which Tenant might
sustain in removing Tenant's merchandise, furniture, fixtures, leasehold
improvements and equipment.

 

SECTION 20.07.

Condemnation of Less than a Fee.

 

In the event of a condemnation of a leasehold interest in all or a portion of
the Leased Premises without the concurrent condemnation of the fee simple title,
this Lease shall not terminate and such condemnation shall not excuse Tenant
from full performance of all of its covenants hereunder, but Tenant in such
event shall be entitled to present or pursue against the condemning authority
its claim for and to receive all compensation or damages sustained by it by
reason of such condemnation, and Landlord's right to recover compensation or
damages shall be limited to compensation for and damages if any, to its
reversionary interest; it being understood however, that during such time as
Tenant shall be out of possession of the Leased Premises by reason of such
condemnation, the lease shall not be subject to forfeiture for failure to
observe and perform those covenants not calling for the payment of money. In the
event the condemning authority shall fail to keep the Leased Premises in the
state of repair required hereunder, or to perform any other covenant not calling
for the payment of money, Tenant shall have ninety (90) days after the
restoration of possession to it within which to carry out its obligations under
such covenant or covenants. During such time as Tenant shall be out of
possession of the Leased Premises by reason of such leasehold condemnation,
Tenant shall pay to Landlord, in lieu of the Minimum Rent provided for
hereunder, and in addition to any other payments required of Tenant hereunder,
an annual rent equal to the average annual Minimum Rent paid by Tenant for the
period from the commencement of the term until the condemning authority shall
take possession, or during the preceding three full calendar years, whichever
period is shorter. At any time after such condemnation proceedings are commenced
Landlord shall have the right, at its option, to require Tenant to assign to
Landlord all compensation and damages payable by the condemnor to Tenant, to be
held without liability for interest thereon as security for the full performance
of Tenant's covenants hereunder, such compensation and damages received pursuant
to said assignment to be applied first to the payment of rents and all other
sums from time to time payable by Tenant pursuant to the terms of this Lease as
such sums fall due, and the remainder, if any, to be payable to Tenant at, the
end of the term hereof, or on restoration of possession of the Leased Premises
to Tenant, whichever shall first occur, it being understood and agreed that such
assignment shall not relieve Tenant of any of its obligations under this Lease
with respect to such rents, and other sums except as the same shall be actually
received by Landlord.

 

ARTICLE XXI - DEFAULT OF THE TENANT

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

--------------------------------------------------------------------------------

 

 

   

24

--------------------------------------------------------------------------------

   

 

SECTION 21.01.

Right to Re-enter.

 

Tenant shall be deemed in default hereunder in the event of any failure of
Tenant to pay any rent when due hereunder. In the event Tenant shall be in
default or Tenant fails to perform any other of the terms, conditions or
covenants of this Lease to be observed or performed by Tenant for more than
thirty (30) days after written notice of such default shall have been sent by
Landlord, or if Tenant or an agent of Tenant shall falsify any report required
to be furnished to Landlord pursuant to the terms of this Lease, or if Tenant or
any guarantor of this Lease shall become bankrupt or insolvent, or file any
debtor proceedings or take or have taken against Tenant or any guarantor of 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 a portion of Tenant's or any such
guarantor's properly, or if Tenant or any such guarantor makes an assignment for
the benefit of creditors, or petitions for or enters into an arrangement, or if
Tenant shall abandon said premises, or suffer this Lease to be taken under any
writ of execution, the Landlord besides other rights or remedies it may have,
hereunder or by law or in equity, shall have the immediate right of re-entry and
may remove all persons and property from the Leased Premises and such property
may, at Landlord's option, either be removed and stored in a public warehouse or
elsewhere at the cost of, and for the account of Tenant, or may be disposed of
by Landlord as it, in its sole discretion, deems fit, all without service of
notice or resort to legal process and without being deemed guilty of trespass,
or becoming liable for any loss or damage which may be occasioned thereby.

 

SECTION 21.02.

Right to Relet.

 

Should Landlord elect to re-enter, as herein provided, or should it take
possession pursuant to legal proceeding or pursuant to any notice provided for
by law, Landlord may either terminate this Lease or may, from time to time,
without terminating this Lease, make such alterations and repairs as may be
necessary in order to relet the Leased Premises and may relet said Leased
Premises or any part thereof for such term or terms (which may be for a term
extending beyond the term of this Lease) and at such rental or rentals and upon
such other terms and conditions as Landlord in its sole discretion may deem
advisable; and upon each such reletting all rent received by the Landlord from
such reletting shall be applied, first, to the payment of any indebtedness other
than rent, due hereunder from Tenant to Landlord; second, to the payment of any
costs and expenses of such reletting, including brokerage fees, attorney's fees,
free rent and of costs of such alterations and repairs; third, to the payment of
rent due and unpaid hereunder, and the residue, if any, shall be held by
Landlord and applied in payment of future rent as the same may become due and
payable hereunder. If such rent received from such reletting during any month
shall be less than that to be paid during that month by Tenant hereunder, Tenant
shall pay any such deficiency to Landlord. Such deficiency shall be calculated
and paid monthly. No such re-entry or taking possession of said Leased Premises
by Landlord shall be construed as an election on its part to terminate this
Lease unless a written notice of such intention be given to Tenant or unless the
termination thereof be decreed by a court of competent
jurisdiction. Notwithstanding any such reletting without termination, Landlord
may, at any time thereafter, elect to terminate this Lease for such previous
default. Should Landlord at any time terminate this Lease for any default, in
addition to any other remedies it may have, it may recover from Tenant all
damages it may incur by reason of such default, including the cost of recovering
the Leased Premises, reasonable attorneys fees, and including the worth at the
time of such termination of the excess, if any, of the amount of rent and
charges equivalent to rent reserved in this Lease for the remainder of the
stated term over the then reasonable rental value of the Leased Premises for the
remainder of the stated term, all of which amounts shall be immediately due and
payable from Tenant to Landlord. In determining the rent which would be payable
by Tenant hereunder, subsequent to default, the annual rent for each year of the
unexpired term shall be equal to the average annual Minimum Rent payable by
Tenant from the commencement of the term to the time of default, or during the
preceding three full calendar years, whichever period is shorter. If Landlord
terminates this Lease as a result of a default by Tenant under this Lease,
Landlord agrees to use reasonable efforts to re-let the Leased Premises, which
reasonable efforts will be deemed satisfied if Landlord lists the Leased
Premises for re-letting with a local real estate broker.

 

--------------------------------------------------------------------------------

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

25

--------------------------------------------------------------------------------

   

 

SECTION 21.03.

Legal Expense.

 

In the event legal action shall be brought for recovery of possession of the
Leased Premises, for the recovery of rent or any other amount due under the
provisions of this Lease, or because of the default in the performance of any
other covenant herein contained on the part of Tenant to be kept or performed,
and a default shall be established, Tenant shall pay to Landlord all expenses
incurred therefor, including reasonable attorneys' fees. In the event Landlord
sends Tenant a legal notice pursuant to the terms of this Lease due to a default
(monetary or non-monetary), Tenant shall pay to Landlord as additional rent the
sum of Two Hundred and Fifty Dollars ($250.00) to cover the legal fees in
connection with the preparation and service of such notice.

 

In the event Tenant requests Landlord to review and execute any documentation
relating to Tenant's occupancy or use (including, without limitation,
assignments, subletting or tenant financing) of the Leased Premises, Tenant
agrees to promptly reimburse Landlord, for all fees and expenses (legal,
administrative or otherwise) incurred by Landlord in connection with the
processing of such requests and/or transaction regardless of the ultimate
resolution thereof.

 

SECTION 21.04.

Waiver of Jury Trial and Counterclaims,

 

The parties hereto shall and they hereby do waive trial by jury in any action,
proceeding or counterclaim brought by either party hereto against the other on
any matters whatsoever arising out of or in any way connected with this Lease,
the relationship of Landlord and Tenant, Tenant's use or occupancy of the Leased
Premises, and/or any claim of injury or damage. In the event Landlord commences
any proceedings for non-payment of rent, Minimum Rent or additional rent, Tenant
shall not interpose any counterclaim of whatever nature or description in any
such proceedings. This shall not, however, be construed as a waiver of Tenant's
right to assert such claims in any separate action or actions brought by Tenant.

 

SECTION 21.05.

Waiver of Rights of Redemption.

 

Tenant hereby expressly waives any and all rights of redemption granted by or
under any present or future laws in the event of Tenant being evicted or
dispossessed for any cause, or in the event of Landlord obtaining possession of
the Leased Premises, by reason of the violation by Tenant of any of the
covenants or conditions of this Lease, or otherwise.

 

ARTICLE XXII - ACCESS BY LANDLORD

 

SECTION 22.01.

Right of Entry.

 

Landlord or Landlord's agents shall have the right to enter the Leased Premises
at all times (except that, unless such entry is on an emergency basis, Landlord
agrees to give Tenant at least 24 hours' notice) to examine same, and to show
them to prospective purchasers or mortgagees, and to make such repairs,
alterations, improvements or additions as Landlord may deem necessary or
desirable. Landlord shall be allowed to take all material into and upon the
Leased Premises that may be required therefor without the same constituting an
eviction of Tenant in whole or in part and the rent reserved shall in no way
abate while said repairs, alterations, improvements, or additions are being
made, by reason of loss or interruption of business of Tenant, or otherwise.
During the six (6) months prior to the expiration of the term of this Lease or
any renewal term, Landlord may exhibit the Leased Premises to prospective
tenants or purchasers, and place upon the Leased Premises the usual notices "To

--------------------------------------------------------------------------------

 

Let" or "For Sale" which notices Tenant shall permit to remain thereon without
molestation. If Tenant shall not be personally present to open and permit an
entry into said Leased Premises, at any time, when for any reason an entry
therein shall be necessary or permissible, Landlord or Landlord's agent may
enter the same by a master key, or may forcibly enter the same, without
rendering Landlord or such agents liable therefor, and without in any matter
affecting the obligations and covenants of this Lease. Nothing herein contained,
however, shall be deemed or construed to impose upon Landlord any obligation,
responsibility or liability whatsoever, for the care, maintenance or repair of
the building or any part thereof, except as otherwise herein specifically
provided.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

26

--------------------------------------------------------------------------------

   

 

SECTION 22.02.

Excavation.

 

If an excavation shall be made upon land adjacent to the Leased Premises, or
shall be authorized to be made, Tenant shall afford to the person causing or
authorized to cause such excavation, license to enter upon the Leased Premises
for the purpose of doing such work as Landlord shall deem necessary to preserve
the wall or the building of which the Leased 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.

 

ARTICLE XXIII - TENANTS PROPERTY

 

SECTION 23.01.

Taxes on Leasehold.

 

Tenant shall be responsible for and shall pay before delinquency all municipal,
county or state taxes assessed during the term of this Lease against any
leasehold interest or personal property of any kind, owned by or placed in, upon
or about the Leased Premises by the Tenant.

 

SECTION 23.02.

Loss and Damage.

 

Except in the event of Landlord's willful misconduct or gross negligence,
Landlord shall not be liable for any damage to the property of Tenant or of
others located in the Leased Premises, nor for the loss of or damage to any
property of Tenant or of others by theft or otherwise. Landlord shall not be
liable for any injury or damage to persons or property resulting from fire,
explosion, falling plaster, steam, gas, electricity, water, rain or snow or
leaks from any part of the Leased Premises or from the pipes, appliances or
plumbing works or from the roof, street or sub-surface or from any other place
or by dampness or by any other cause of whatsoever nature. Landlord shall not be
liable for any such damage caused by other tenants or persons in the Leased
Premises, occupants of adjacent property, of the Shopping Center, or the public,
or caused by operations in construction of any private, public or quasi-public
work. Landlord shall not be liable for any latent defect in the Leased Premises
or in the building of which they form a part except for a period of one (1) year
from the date Tenant takes possession of the Leased Premises. All property of
Tenant kept or stored in the Leased Premises shall be so kept or stored at the
risk of Tenant only and Tenant shall hold Landlord harmless from any claims
arising out of damage to same, including subrogation claims by Tenant's
insurance carrier, unless such damage shall be caused by the willful act or
gross neglect of Landlord.

 

SECTION 23.03.

Notice by Tenant.

 

Tenant shall give immediate notice to Landlord in case of fire or accidents in
the Leased Premises or in the building of which the Leased Premises are a part
or defects therein or in any fixtures or equipment.

 

--------------------------------------------------------------------------------

 

ARTICLE XXIV - SUCCESSORS

 

SECTION 24.01.

Successors.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

27

--------------------------------------------------------------------------------

   

 

All rights and liabilities herein given to, or imposed upon, the respective
parties hereto shall inure to the benefit of and bind the several respective
heirs, executors, administrators, 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 of Tenant unless the assignment to
such assignee has been approved by Landlord in writing as provided in Section
16.01 hereof.

 

ARTICLE XXV - QUIET ENJOYMENT

 

SECTION 25.01.

Covenant of Quiet Enjoyment.

 

Upon timely payment by Tenant of the rents herein provided, and upon the
observance and performance of all the covenants, terms and conditions on
Tenant's part to be observed and performed, Tenant shall peaceably and quietly
hold and enjoy the Leased Premises for the term hereby demised without
interference by Landlord or any other person or persons lawfully or equitably
claiming by, through or under the Landlord, subject, nevertheless, to the terms
and conditions of this Lease.

 

ARTICLE XXVI - LIMITATION ON RIGHT OF RECOVERY AGAINST LANDLORD

 

SECTION 26.01.

Limitation.

 

(a)                   Tenant acknowledges and agrees that the liability of
Landlord under this Lease shall be limited to its interest in the Shopping
Center and any judgments rendered against Landlord shall be satisfied solely out
of the proceeds of sale of its interest in the Shopping Center. No personal
judgment shall lie against Landlord upon extinguishment of its rights in the
Shopping Center and any judgment so rendered shall not give rise to any right of
execution or levy against Landlord's assets. The provisions hereof shall inure
to Landlord's successors and assigns including any mortgagee and their
respective directors, officers, principals and stockholders. The foregoing
provisions are not intended to relieve Landlord from the performance of any of
Landlord's obligations under this Lease, but only to limit the personal
liability of Landlord in case of recovery of a judgment against Landlord; nor
shall the foregoing be deemed to limit Tenant's rights to obtain injunctive
relief or specific performance or to avail itself of any other right or remedy
which may be awarded Tenant by law or under this Lease.

 

(b)                   Other than as expressly provided herein, no assets of the
Landlord and no assets of any of Landlord's, directors, officers, partners,
agents, members, or employees shall be subject to any remedy exercised by Tenant
hereunder and Tenant agrees that Tenant shall not pursue any remedies against
Landlord or any of Landlord's directors, officers, partners, agents members, or
employees.

 

(c)                   In the event of a transfer of Landlord's interest in the
Leased Premises and/or the Shopping Center, the transferor shall be, and hereby
is, freed and relieved of all covenants and obligations of Landlord under this
Lease arising or to be performed from and after the date of such transfer.

 

ARTICLE XXVII - MISCELLANEOUS

 

--------------------------------------------------------------------------------

 

SECTION 27.01.

Waiver.

 

The waiver by Landlord of any default of any term, covenant or condition herein
contained shall not be deemed to be a waiver of any subsequent default of the
same or any other term, covenant or condition herein contained. The subsequent
acceptance of rent hereunder by Landlord shall not be deemed to be a waiver of
any preceding default by Tenant of any term, covenant or condition of this
Lease, other than the failure of Tenant to pay the particular rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rent. No covenant, term or conditions of this Lease shall be
deemed to have been waived by Landlord, unless such waiver be in writing by
Landlord.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

28

--------------------------------------------------------------------------------

   

 

SECTION 27.02.

Accord and Satisfaction.

 

No payment by Tenant or receipt by Landlord of a lesser amount than the monthly
rent herein stipulated shall be deemed to be other than on account of the
earliest stipulated rent, nor shall any endorsement or statement on any check or
any letter accompanying any check or payment as rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such rent or pursue any other remedy
in this Lease provided.

 

SECTION 27.03.

Entire Agreement.

 

This Lease, the Exhibits and Rider, if any, attached hereto and forming a part
hereof, set forth all the covenants, promises, agreements, conditions and
understandings between Landlord and Tenant concerning the Leased Premises and
there are no covenants, promises, agreements, conditions and understandings,
either oral or written, between them other than as herein set forth. Except as
herein otherwise provided, no subsequent alteration, amendment, change or
addition to this Lease shall be binding upon Landlord or Tenant unless reduced
to writing and signed by both parties.

 

SECTION 27.04.

No Partnership,

 

Landlord shall not, in any way or for any purpose, be construed as a partner of
Tenant in the conduct of its business, or otherwise, or joint venturer or a
member of a joint enterprise with Tenant.

 

SECTION 27.05.

Notices.

 

Any notice, demand, request or other instrument which may be or is required to
be given under this Lease shall be delivered in person or sent by United States
certified mail postage prepaid or by nationally recognized overnight courier (so
long as same provide receipts for the delivery thereof) and shall be addressed
(a) if to Landlord at the address first hereinabove given or at such other
address as Landlord may designate by written notice, with a copy to RD
Management LLC, 810 Seventh Avenue, New York, New York 10019, attention: Legal
Department and a copy to Tannenbaum Helpern Syracuse & Hirschtritt LLP, 900
Third Avenue, New York, New York 10022, attention Neil E. Botwinoff, Esq. and
(b) if to Tenant at the Leased Premises or at such other address as Tenant shall
designate by written notice. Rejection or other refusal to accept or the
inability to deliver because of changed address for which no notice was given,
shall be deemed to be receipt of the notice as of the date of such rejection,
refusal or inability to deliver. All notices on behalf of Landlord may be given
by Landlord's managing agent and/or its counsel with the same force and effect
as if given by Landlord.

 

--------------------------------------------------------------------------------

 

SECTION 27.06.

Captions and Section Numbers.

 

The captions, section numbers, article numbers, and index appearing in this
Lease are inserted only as a matter of convenience and in no way define, limit,
construe, or describe the scope or intent of such sections or articles of this
Lease nor in any way affect this Lease.

 

SECTION 27.07.

Tenant Defined, Use of Pronoun.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

29

--------------------------------------------------------------------------------

   

 

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 thereof, and shall have the 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 sense
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 27.08.

Broker's Commission.

 

Each of the parties represents and warrants that there are no claims for
brokerage commission or finder's fees in connection with the execution of this
Lease, except as listed below, and each of the parties agrees to indemnify the
other against and hold it harmless from all liabilities arising from any such
claim (including, without limitation, the cost of counsel fees in connection
therewith) from any broker or agent it has dealt with or employed except as
follows: Hertzl Benjamini and RD Management LLC, as a broker (which shall be
paid by Landlord pursuant to a separate agreement).

 

SECTION 27.09.

Partial Invalidity.

 

If any term, or covenant or condition of this Lease or the application thereof
to any person or circumstance shall, to any extent, be deemed by a court of law
to 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 or condition of this Lease shall be valid and be
enforced to the fullest extent permitted by law.

 

SECTION 27.10.

No Option.

 

The submission of this Lease to Tenant for examination does not constitute a
reservation of or option for the Leased Premises and, notwithstanding any
correspondence or e-mail transmission to the contrary, any this Lease shall
become effective as a lease only upon execution and delivery thereof by Landlord
and Tenant.

 

SECTION 27.11.

Recording.

 

Tenant shall in no event record this Lease or a memorandum thereof without the
prior written consent of Landlord, which consent may be withheld in Landlord'
sole discretion.

 

--------------------------------------------------------------------------------

 

SECTION 27.12.

Landlord's Default.

 

In the event of any breach under this Lease by Landlord, Landlord shall not be
deemed to be in default under this Lease, unless and until Landlord shall fail
to cure such breach within thirty (30) days after receipt of written notice
thereof from Tenant (provided, however, that Landlord shall not be deemed in
default with respect to any matter which by its nature may not be cured within
thirty (30) days if Landlord shall promptly commence to cure such breach and
thereafter diligently prosecutes the cure to completion). Notwithstanding
anything contained herein or in the Lease, Landlord shall in no event have any
liability hereunder to Tenant for consequential, special or indirect damages. In
no event shall Tenant have the right to terminate or cancel this Lease as a
result of any default by Landlord or breach by Landlord of its covenants or any
warranties or promises hereunder.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

30

--------------------------------------------------------------------------------

   

 

SECTION 27.13.

Parking Lot Lights.

 

(a)                   At Landlord's option, the parking lot lights shall not be
in operation after the regular closing hours of the Shopping Center (11:00 P.M.
is considered closing). Therefore, it is agreed that if Tenant requires parking
lot lighting past the regular hours, Tenant shall pay the cost incurred for
keeping all the parking lot lights on in the Shopping Center since there is no
separate metering or lighting applicable to the Tenant's immediate parking area.
Landlord shall be entitled to charge the entire cost of the extended lighting
period to Tenant and Tenant shall be bound to pay all the additional lighting
costs.

 

(b)                   Tenant shall have the right, subject to Landlord's
reasonable prior written consent, to install lights from the facade of its store
in accordance with all applicable codes and regulations at its sole cost and
expense. Such lights shall be connected to and billed to Tenant's meter.

 

SECTION 27.14.

Intentionally Omitted.

 

SECTION 27.15.

Computation.

 

(a)                   Notwithstanding anything to the contrary herein, for
purposes of computing Tenant's proportionate share of Real Estate Taxes, Common
Charges, and insurance expenses of the Shopping Center, Landlord reserves the
right to make such computation on a basis of a 30 day month and a 360 day year.

 

(b)                   Unless stated otherwise, any time Tenant's proportionate
share of costs and expenses shall be calculated, the square foot area of floor
levels (such as storage basements and mezzanines) not used for sales purposes,
and outdoor selling areas shall be excluded from the square foot areas used to
determine the denominator of the applicable percentage and share.

 

SECTION 27.16.

Tenant Contribution.

 

At Landlord's option, the initial Tenant contributions (for Common Charges, Real
Estate Taxes and fire and extended coverage insurance) for partial months should
be prorated on a thirty (30) day month basis (360 days per year).

 

SECTION 27.17.

Covenants.

 

--------------------------------------------------------------------------------

 

Anything to the contrary in this Lease notwithstanding, the covenants in this
Lease to be performed by Landlord, shall not be binding personally, but instead
said covenants are made for the purpose of binding only the fee simple or
leasehold estate which Landlord owns in the Leased Premises.

 

SECTION 27.18.

Utilities.

 

Upon Tenant taking possession of the Leased Premises, all utilities shall be put
in Tenant's name and Tenant shall pay the bills directly to the utility company.
Upon request, Tenant shall furnish Landlord with evidence of payment of its
utility bills.

 

SECTION 27.19.

Intentionally Omitted.

 

SECTION 27.20.

Hazardous Substances.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

31

--------------------------------------------------------------------------------

   

 

Tenant agrees that it shall not generate, store, manufacture, refine, transport,
treat, dispose of or otherwise permit to be present on or about the Leased
Premises or the Shopping Center, any Hazardous Substances. As used herein,
Hazardous Substances shall be defined as any "hazardous chemical," "hazardous
substance," or similar term as defined in the Comprehensive Environmental
Responsibility Compensation and Liability Act, as amended (42 U.S.C. 59601, et
seq.), any rules or regulations promulgated thereunder, or in any other
applicable federal, state or local law, rule or regulation dealing with
environmental protection. It is understood and agreed that the provisions
contained in this Section shall be applicable notwithstanding the fact that any
substance shall not be deemed to be a Hazardous Substance at the time of its use
by Tenant but shall thereafter be deemed to be a Hazardous Substance. Tenant
shall defend, indemnify and hold harmless Landlord, its agents, contractors,
employees and managing agent from and against any and all costs, expenses,
claims and liabilities whatsoever from the default of this Section by Tenant,
its agents, contractors invitees or employees.

 

SECTION 27.21.

Landlord Consent.

 

If any action by Tenant with respect to any term, provision or condition of this
Lease requires the consent or approval of Landlord, Landlord's consent or
approval of such action on one occasion shall not be deemed a consent to or
approval of the same action on a subsequent occasion. If Landlord's consent or
approval is required with respect to any term, provision or condition of this
Lease to not be unreasonably withheld and a court of competent jurisdiction
determines that Landlord has acted unreasonably, Tenant's sole remedy shall be
the granting by Landlord of the consent or approval theretofore withheld by
Landlord.

 

SECTION 27.22.

Vermin/Odor/Noise.

 

It is understood and agreed that Tenant will use its best efforts to assure that
no pest or vermin are created due to the nature of Tenant's business and it is
further understood and agreed that Tenant will use its best efforts to prohibit
offensive odors (in Landlord's sole judgement) from permeating the air
surrounding the Leased Premises and adjacent premises. Tenant, at its sole cost
and expense, shall take any action required (including, without limitation, the
installation of ventilation systems, filtration systems and physical barriers)
to ensure its compliance with the foregoing. Tenant further agrees not to make
or permit any noise that would disturb other tenants from quiet enjoyment of
their leased premises.

 

SECTION 27.23.

The Office of Foreign Assets Control ("OFAC").

--------------------------------------------------------------------------------

 

 

(a)                   At all times throughout the term of this Lease, Tenant and
all of its respective Affiliates shall (i) not be a Prohibited Person (defined
below) and (ii) be in full compliance with all applicable orders, rules,
regulations and recommendations of OFAC of the U.S. Department of Treasury.

 

(b)                   The term "Prohibited Person" shall mean any person or
entity:

 

i.               listed in the Annex to, or otherwise subject to the provisions
of, the Executive Order No. 13224 on Terrorist Financing, effective September
24, 2001, and relating to Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (the "Executive
Order");

 

ii.             that is owned or controlled by, or acting for or on behalf of,
any person or entity that is listed to the Annex to, or is otherwise subject to
the provisions of, the Executive Order; iii. with whom Landlord is prohibited
from dealing or otherwise engaging in any transaction by any terrorism or money
laundering law, including the Executive Order;

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

32

--------------------------------------------------------------------------------

   

 

iv.            who commits, threatens or conspires to commit or supports
"terrorism" as defined in the Executive Order;

 

v.             that is named as a "specially designed national and blocked
person" on the most current list published by the U.S. Treasury Department
Office of Foreign Assets Control at its official website,
www.ustreas.gov/offices/enforcement/ofac or at any replacement website or other
replacement official publication of such list; or

 

vi.           who is an Affiliate of or affiliated with a person or entity
listed above.

 

b.                    For purposes of this Section 27.26, the term "Affiliate",
shall mean, as to any person or entity, any other person or entity that,
directly or indirectly, is in control of, is controlled by or is under common
control with such person or entity or is a director or officer of such person or
entity or of an Affiliate of such person or entity. As used herein, the term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of management, policies or activities of a person or
entity, whether through ownership of voting securities, by contract or
otherwise.

 

c.                    Tenant represents and warrants to Landlord that neither
Tenant nor any of its respective Affiliates is a Prohibited Person and Tenant
and all of its respective Affiliates are in full compliance with all applicable
orders, rules, regulations and recommendations of the Office of Foreign Assets
Control of the U.S. Department of the Treasury.

 

d.                    Tenant acknowledges that in accepting this Lease and the
other documents relating thereto, Landlord is expressly and primarily relying on
the truth and accuracy of the warranties and representations set forth above
(notwithstanding any investigation of the Tenant by Landlord); that such
reliance existed on the part of Landlord prior to the date hereof; that the
warranties and representations arc a material inducement to Landlord in
executing and delivering the Lease and that Landlord would not enter into this
Lease in the absence of such warranties.

 

--------------------------------------------------------------------------------

 

SECTION 27.24.

Entire And Binding Agreement; Governing Law, Counterparts.

 

This Lease, Exhibits and Riders, if any, attached hereto contain all of the
agreements between the parties hereto, and same may not be modified in any
manner other than by agreement in writing signed by all the party or parties to
be charged or such party's successors in interest. The terms, covenants, and
conditions contained herein shall inure to the benefit of, and be binding upon,
Landlord and Tenant, and their respective successors and assigns, except as may
be otherwise expressly provided in this Lease. Both parties have freely
negotiated this Lease. In any controversy, dispute, or contest over the meaning,
interpretation, validity, or enforceability of this Lease or any of its terms or
conditions, there shall be no inference, presumption, or conclusion drawn
whatsoever against either party by virtue of that party having drafted this
Lease or any portion thereof. This Lease shall be governed by the laws of the
State in which the Shopping Center is located. This Lease may be signed in
counterparts with the same force and effect as if all required signatures were
contained in a single, original instrument.

 

SECTION 27.25.

Provisions Severable.

 

If any term or provision of this Lease, or the application thereof to any person
or circumstance shall, to any extent, be invalid or unenforceable, the remainder
of this Lease, or the application of such term or provision to persons or
circumstances, other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term and provision of this Lease shall
be valid, and be enforced to the fullest extent permitted by law.

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

33

--------------------------------------------------------------------------------

   

 

SECTION 27.26.

Evidence of Formation/Incorporation.

 

In the event that the Tenant named herein is an entity (i.e., not a natural
person), Tenant shall deliver to Landlord, within thirty (30) days following
Landlord's delivery of a fully executed Lease to Tenant, appropriate
documentation evidencing that Tenant has been duly formed or incorporated (as
applicable). In the event Landlord does not receive such evidence within such
thirty (30) day period, the individual (or individuals) executing on behalf of
Tenant shall automatically be deemed the "Tenant" herein.

 

SECTION 27.27.

Rider.

 

SECTION 27.28.

Landlord Work.

 

Landlord will deliver the Leased Premises to Tenant as per the specifications
described on Exhibit C attached hereto and incorporated as part of the Lease
("Landlord's Work").

 

SECTION 27.29.

Landlord Requirements

 

Subject to the provisions of this Lease, prior to commencing Tenant's Work,
Tenant shall comply with Landlord's requirements, which shall include, but not
be limited to the following: (i) Landlord reviewing and approving Tenant's
contractor's insurance coverage (which shall name the parties designated by
Landlord as additional insured); (ii) delivering to Landlord a traffic and
maintenance protection plan for the Leased Premises in form and substance
acceptable to Landlord; (iii) holding pre-construction meetings with Landlord's
representative(s) and thereafter promptly and diligently making the necessary
modifications to Tenant's site plan (other than modifications requiring approval
by the local planning board/building department) and/or construction plan in
order to comply with Landlord's requirements; (iv) designating the staging area
(as such term is commonly used to

--------------------------------------------------------------------------------

 

describe the area for the placement of construction equipment and trailers); (v)
phasing the construction work in order to minimize interference with other
tenant's business operations in the Shopping Center; (vi) cleaning the
construction site on a daily basis and (vii) protecting existing site
improvements from damage during the course of Tenant's Work. Tenant's Work shall
not interfere with or block access to any entrance or access road in or within
the Shopping Center. Tenant shall, at its expense, promptly replace and restore
the areas disturbed by Tenant's Work to substantially the same condition that
existed prior to Tenant's Work (including, without limitation, any and all paved
parking area and utilities that existed within the Leased Premises prior to
commencing Tenant's Work).

 

(Continued on following page.)

 

 

   

INTIALS:

LANDLORD

   

RB

   

   

   

   

   

   

   

TENANT

   

DL

 

   

34

--------------------------------------------------------------------------------

   

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
Effective Date.

 

LANDLORD:

 

Lower Macungie Associates, LP

   

By: Lower Macungie Development LLC G.P.

   

By:

/s/ Richard Berdoff

   

   

Richard Berdoff

   

   

Managing Member

   

   

   

   

   

   

   

   

   

   

TENANT:

   

   

   

   

Embassy Bank

   

   

   

   

By:

/s/ David M. Lobach Jr.

   

 

35

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------