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Exhibit 10.39
SECOND ADDENDUM TO LEASE AGREEMENT
This Second Addendum to Lease Agreement (the "Amendment") is made and
entered into as of the 31 day of December, 1997 by and among UPPER MILL, L.P.,
a Pennsylvania limited partnership, and BLUE FISH CLOTHING, INC.
WITNESSETH:
WHEREAS, the parties hereto entered into a Lease Agreement dated October
15, 1996, as amended by a First Addendum to Lease Agreement dated as of May 19,
1997 and assigned by Assignment of Lease and Assumption of Obligations dated
October 21, 1997 (collectively the "Lease Agreement"); and
WHEREAS, the parties hereto desire to further amend the Lease Agreement
as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises contained herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Section 2.1 is amended to change all references to Landlord
and Tenant to Lessor and Lessee and to change the Commencement Date to
June 1, 1998.
2. The second sentence of Section 3.1 is amended to read in its
entirety as follows:
Each minimum annual amount shall be payable in twelve (12)
equal monthly installments in advance, without demand, on or
before the last day of each calendar month during the Term with
each such installment being the rent payable for the following
calendar month.
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3. The first sentence of Section 3.2 is amended to read as follows:
Beginning with the Commencement Date and during the Term of this Lease
Agreement, Lessee shall pay to Lessor:
(a) With respect to the Property of which the Demised Premises is a part,
one hundred percent (100%) of the following:
(i) All garbage and/or trash collection charges assessed or
imposed on the Property during the term of this Lease
Agreement; and
(ii) Any and all other costs reasonably incurred by Lessor in
the operation and maintenance of the Property, including
but not limited to water and sewer rentals, repairs,
management fees, cleaning, maintenance or mechanical
systems and service contracts, the costs of heat, light,
power, steam, fuel, labor, supplies, tools, equipment and
insurance, and all items properly constituting direct
operating costs, which items are or may be deducted (and
not capitalized) for Federal income tax purposes,
according to standard accounting practices as determined
by the Lessor's accountant.
(iii) Notwithstanding the foregoing, should the use of that portion
of the Property leased by Binney & Xxxxx, Inc. change from use
as a warehouse to a use that would increase the foregoing
expenses, Lessor will negotiate in good faith with Lessee for
a reduction in the percentage of said costs paid by Lessee.
(b) A common area maintenance charge of Fifteen Thousand Dollars
($15,000) or five percent (5%) of the Basic Rent, whichever is
greater.
4. The first sentence of Section 3.5 is amended to read in its entirety as
follows:
All payments due from Lessee to Lessor shall be paid to Lessor, absolutely
net, without deduction or offset whatsoever, and without demand, in lawful
money of the United States of America at the Lessor's offices, or to such
other person or at such other place as Lessor may from time to time
designate in writing to Lessee.
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5. Section 4.1 is amended to read in its entirety as follows:
Lessee shall pay as additional rent for the Demised Premises,
sixty percent (60%) of all taxes and assessments, general and
special, including, without limitation, real estate taxes, and all
other impositions (herein "Impositions"), ordinary and extraordinary,
of every kind and nature whatsoever, which may be levied, assessed
or imposed upon the Property of which the Demised Premises is a
part by a municipality, governmental agency, or other governmental
authority, accruing or becoming due and payable during the term
hereof.
6. Section 6.1 is hereby amended to read in its entirety as follows:
6.1 Kinds of Insurance. The following policies of insurance shall
be maintained:
(a) Lessor shall insure the improvements situated upon the
Demised Premises against loss or damage by fire, lightning, wind storm,
hail storm, aircraft, vehicles, smoke, explosion, riot, or civil
commotion as provided by the standard fire and extended coverage
policy and all other risks of direct physical loss as insured against
under special extended coverage endorsement, which insurance coverage
shall be for not less than one hundred percent (100%) of the full
replacement cost of such improvements with all proceeds of insurance
payable to Lessor. Lessee shall be responsible for the payment, as
additional rent, of sixty percent (60%) of the premiums attributable
to such insurance coverage with said additional rent to be paid
according to the provisions of Section 4.3 hereof.
(b) Lessee, at Lessee's own cost and expense, shall provide
insurance insuring Lessor and Lessee from all claims, demands, or
actions for injury to or death of any person in an amount of not less
than One Million Dollars ($1,000,000) for injury to or death of more
than one person in any one occurrence to the limit of Three Million
Dollars ($3,000,000), and for damage to property in amount of not less
than One Million Dollars ($1,000,000) made by or on behalf of, any
person or persons, firm, or corporation arising from, related to or
connected with the Demised Premises, including any period during which
Lessee is engaged in making any repairs or alterations to the premises
and including all damage to or from signs, glass, awnings, fixtures, or
other appurtenances now or thereafter erected by, on or
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about the Property during the term hereof. Such insurance shall
comprehend full coverage of the indemnity set forth in Article 17
hereof;
(c) Lessee, at Lessee's own cost and expense, shall
provide insurance insuring Lessee from all workers' compensation
claims;
(d) Lessee, at Lessee's own cost and expense, shall
provide insurance insuring Lessor and Lessee against breakage of all
plate glass utilized in the improvements on the Demised Premises; and
(e) Lessor shall provide insurance insuring Lessor from
loss of rents during the period while the Demised Premises are
untenantable due to fire or other casualty (for the maximum period for
which such insurance is available), but the purchase of such rent
insurance shall not relieve Lessee from the primary obligation to pay
rent during any such period of untenantability. Lessee shall pay sixty
percent (60%) of the cost of said loss of rents insurance.
7. Sections 9.1 and 9.2 are amended to read in their entirety as follows:
9.1. Termination. If, during the term of this Lease Agreement, or any
renewal or extension thereof, any building is so damaged by fire or
other casualty that the Demised Premises cannot be used for the purposes
for which the premises were leased, as described in Article 5 (whether
or not the Demised Premises are damaged), the Lease Agreement shall,
subject to the provisions of Section 9.2 hereof concerning suspension of
rent, remain in full force and effect and Lessor shall restore the part
of the Property so damaged as provided in Section 9.2 hereof; provided,
however, that if the Property is totally destroyed and cannot be
restored on or before the last date provided for Lessee to purchase the
Property pursuant to Section 24.1 hereof, Lessee shall nevertheless
purchase the Property as provided in Article 24 with rent to be
suspended, and provided further that under said circumstances the
purchase price will be the purchase price set forth in Section 24.1
hereof less the cost to repair the Property (as determined by agreement
of Lessor and Lessee based upon estimates obtained from a contractor or
contractors acceptable to Lessor and Lessee), but not less than (i) the
amount of Lessor's outstanding indebtedness to Core States Bank, N.A.
("Bank") incurred in connection with the renovation
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of the Property and under a Construction Loan Agreement dated October 21,
1997 between Lessor and Bank (after application of any insurance proceeds
paid as a result of said casualty) plus (ii) Eight Hundred Thousand Dollars
($800,000).
9.2. Suspension of Rent. If Lessee does not purchase the Property under the
circumstances described in Section 9.1 hereof, Lessor shall repair the
damaged building and Lessor may enter and possess the Demised Premises for
that purpose. Rent shall be apportioned and suspended if and when Lessee is
deprived of the Demised Premises; provided, however, that if Lessee is only
deprived of a portion of the Demised Premises only an equitable portion of
the rent shall be suspended.
8. Section 27.1 is hereby amended to read in its entirety as follows:
27.1. Zoning. Anything herein contained to the contrary notwithstanding, this
Lease Agreement and all the terms, covenants and conditions hereof are in all
respects subject and subordinate to all zoning laws and ordinances affecting
the Demised Premises and/or the Property and Lessee agrees to be bound by the
same. Further, Lessor does not agree or represent that any licenses or
permits which may be required for the business to be carried on by Lessee in
the Demised Premises will be granted, or if granted will be continued in
effect or renewed. Any failure to obtain such licenses or permits, or any
revocation thereof, or failure to continue or renew the same, shall not
release Lessee from any obligations of this Agreement or reduce the same and
nothing shall obligate Lessor to assist in obtaining any such permit or
license.
9. Section 27.4 is amended to change the notice to be provided to the Lessor to:
Upper Mill, L.P.
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
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10. Except as expressly amended by, or necessarily affected by
reason of, this Amendment, all other provisions of the Lease Agreement shall
remain in full force and effect.
11. Any invalidity, in whole or in part, of any provision of his
Amendment shall not affect the validity or enforceability of any other
provisions of this Amendment or the Lease Agreement.
12. The Lease Agreement and this Amendment constitute the entire
agreement between the parties and supersede all prior written and oral and all
contemporaneous oral agreements or understandings between the parties with
respect to the subject matter hereof. No variation of the terms and conditions
of this Amendment shall be effective unless in writing signed by both parties
hereto.
13. This Amendment shall be governed by, construed and interpreted
in accordance with, the laws of the Commonwealth of Pennsylvania.
14. This Amendment may be executed in more than one (1)
counterpart, and each fully executed counterpart shall be deemed an original,
with all such counterparts, taken together, constituting one and the same
instrument.
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IN WITNESS WHEREOF, this Amendment is made as of the day and year first
above written.
WITNESS/ATTEST: UPPER MILL, L.P.
BY: I.B.S. Development Corporation,
its General Partner
Xxxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, President
WITNESS/ATTEST: BLUE FISH CLOTHING, INC.
By: /s/ Xxxxxxxx X. Xxxxxxx
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Its: Chairman
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