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EXHIBIT 10.16
LEASE AGREEMENT
LANDLORD: VERBAL CORPORATION
TENANT: RESTORATION HARDWARE, INC.
PREMISES: BUILDING TWO, MARSHFIELD BUSINESS PARK, 0000 XXXXX XXXXX,
XXXXXXXXX, XX
DATE: JUNE 30, 1999
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LEASE SUMMARY SHEET
LANDLORD: Verbal Corporation
TENANT: Restoration Hardware, Inc.
BROKER: Xxxxx & Associates\ONCOR International as agent for Landlord.
CB Xxxxxxx Xxxxx as agent for Tenant.
Xxxxxxx & Wakefield of Maryland, Inc. as agent for Tenant.
PREMISES: Building Two of Marshfield Business Park, 0000 Xxxxx Xxxxx,
Xxxxxxxxx, XX
TERM: Eighty Seven (87) months
COMMENCEMENT
DATE: July 1, 1999
BASE RENT: July 1, 1999-September 30, 1999: No Base Rent Due
October 1, 1999-December 31, 1999: $40,940.00/mo/nnn
January 1, 2000-December 31, 2001: $85,100.00/mo/nnn
January 1, 2002-June 30, 2004: $90,620.00/mo/nnn
July 1, 2004-September 30, 2006: $96,370.00/mo/nnn
SECURITY DEPOSIT: $85,100.00
PERMITTED USE: Storage, assembly, warehousing, distribution of consumer goods ,
related office purposes, and/or as a retail outlet store, subject to all
applicable laws, ordinances, codes, regulations, rules, statutes and
requirements of any federal, state, or local governmental body or agency.
LANDLORD'S NOTICE ADDRESS:
VERBAL CORPORATION
c/o UPS Properties
00 Xxxxxxxx Xxxxxxx, X.X.
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
TENANT'S NOTICE ADDRESS:
Restoration Hardware, Inc.
00 Xxxx Xxxx, Xxxxx X
Xxxxx Xxxxxx, XX 00000
Attn: Real Estate Department
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ADDRESS FOR RENT PAYMENT:
Xxxxx Management Services, Inc.
00000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
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TABLE OF CONTENTS
SECTION TITLE PAGE
1 Premises 6
2 Term 6
3 Rent 7
4 Utilities 11
5 Maintenance and Repairs 11
6 Alterations 12
7 Signs 13
8 Surrender 13
9 Insurance and Tenant's Indemnity 14
10 Casualty 16
11 Condemnation 16
12 Use and Compliance with Law 17
13 Environmental Compliance 18
14 Defaults 20
15 Remedies 20
16 Landlord's Default; Limitation on Landlord's Liability 22
17 Rights Reserved by Landlord 23
18 Assignment 24
19 Notices 24
20 Holding Over 24
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21 Quiet Enjoyment 25
22 Subordination and Estoppel Certificates 25
23 Security Deposit 26
24 Expansion Option 26
25 Miscellaneous 26
26 Options to Extend 28
Exhibits
A Sketch of Premises
B Intentionally Omitted
C Rules and Regulations
D Industrial Building Sign Criteria
E Stipulation as to Rejection of Real Property Lease, As Modified
F Certificate of Insurance
G 1998 Actual Project Operating Expenses
H Memorandum of Lease
I Discharge of Memorandum
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COMMERCIAL LEASE AGREEMENT
THIS LEASE AGREEMENT is made the 30th day of June, 1999, between Verbal
Corporation, a Maryland corporation, with an address at 00 Xxxxxxxx Xxxxxxx,
XX., Xxxxxxx, XX 00000 ("Landlord") and Restoration Hardware, Inc., a Delaware
corporation, with an address at 00 Xxxx Xxxx, Xxxxx X, Xxxxx Xxxxxx, XX 00000
("Tenant").
W I T N E S S E T H :
1. Premises. (a) Landlord leases to Tenant, and Tenant hereby takes
from Landlord all that certain space shown on Exhibit A attached hereto and
incorporated herein (the "Premises") in the building (the "Building") which
consists of approximately 276,000 square feet situate on approximately 13.47
acres of land depicted on Exhibit A attached hereto and incorporated herein (the
"Land") pursuant to this Lease, in Marshfield Business Park (the "Park"), in the
City of Baltimore, County of Baltimore, State of Maryland, all upon the terms
and conditions set forth in this Lease. The Premises are commonly referred to as
Building Two, 0000 Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx. The Land and Building are
hereinafter referred to as the "Premises".
(b) The Premises and the existing plumbing, electrical systems, fire
sprinkler system, lighting, air conditioning and heating systems, loading doors,
truck dock levelers, common areas, and all other Building systems shall be in
good operating condition on the Commencement Date. If a non-compliance with the
foregoing statement exists and Tenant notifies Landlord in writing of such
non-compliance within sixty (60) days after the Commencement Date and provided
such non-compliance is not attributable to the acts or omissions of Tenant,
Tenant's employees, agents, contractors, subcontractors or others acting on
Tenant's behalf, Landlord shall, at Landlord's sole cost and expense, promptly
rectify the same.
(c) "Tenant's Premises Proportionate Share" shall mean one hundred
percent (100%) of the Premises Operating Expenses which percentage represents
100% of the Premises. Tenant's proportionate share of the Marshfield Business
Park ("Tenant's Project Proportionate Share") shall mean sixteen and 23/00
percent (16.23%) of the Project Operating Expense which percentage represents
the ratio of the Land to the acreage of Marshfield Business Park.
2. Term. (a) The term of this Lease shall be for a period of
eighty-seven (87) months, the "Term," commencing on July 1, 1999, the
"Commencement Date" and ending September 30, 2006 thereafter unless sooner
terminated as provided in the Lease. Landlord and Tenant acknowledge that the
current tenant of the Premises has filed for Chapter 11 Bankruptcy protection in
the United States Bankruptcy Court of the Southern District of New York (the
"Bankruptcy Court") subsequently converted to Chapter 7 Bankruptcy protection
and that the Trustee in the case of County Seat Stores, Inc., Case No. 99 B
10010 (the "Prior Tenant") has rejected the lease with prior tenant dated
February 26, 1998 between Landlord and Prior Tenant concerning the Premises (the
"Prior Tenant Lease") pursuant to U.S.C. Section 365 (the "Rejection") by
stipulation (the "Stipulation" ). A copy of such Stipulation is attached hereto
as Exhibit E and made a part hereof. Landlord shall deliver approximately
100,000 square feet of warehouse space ("Initial Possession Space") on the
Commencement Date. In addition, Tenant
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shall have available to it vacant office space within the Building. Tenant
grants to Landlord and the current tenant and its contractors reasonable access
to the Premises for the purposes of removing the current tenant's property
including trade fixtures from the Premises and the same shall not constitute any
claim for constructive eviction or cause any abatement in Tenant's obligation to
pay rent or otherwise comply with the terms of this Lease. If Landlord is unable
to deliver possession of the Premises or any part thereof, on the date specified
above for the Commencement Date, Landlord shall not be in default hereunder or
liable to Tenant in any way, and the Commencement Date shall be that date on
which Landlord is able to tender possession of that approximate 100,000 square
foot portion of the warehouse as contemplated herein and the termination date
specified shall be extended accordingly to include the full period stated in
this paragraph. Landlord and Tenant shall within ten (10) days after the
Commencement Date execute a memorandum specifying the Commencement Date and the
expiration date.
(b) Notwithstanding the foregoing, if the current tenant has not vacated
the Building and Landlord is therefore unable to tender possession of the
balance of the Premises to Tenant on or before September 1, 1999, Landlord shall
make promptly available to Tenant the balance of the area of the Premises in
Building Four in the Park, which Building shall be comprised of approximately
288,000 square feet of a warm lit shell. No later than October 1, 1999, Landlord
shall have tendered to Tenant possession of either (1) the Building, or (2)
approximately 276,000 square feet of warehouse space in the Park with office
space and restroom facilities comparable to what exists in the Building,
suitable for the use contemplated hereunder, and subject to the terms of Section
24 (Expansion Option) below. If Landlord fails to provide to Tenant space in
accordance with the foregoing sentence, Tenant may terminate this Lease upon
written notice to Landlord. Landlord will pay any and all of Tenant's reasonable
out-of-pocket costs and expenses incurred with respect to a move by Tenant from
one building in the Park to another.
3. Rent. (a) Tenant shall pay the "Base Rent" commencing on October 1,
1999 ("Rent Commencement Date"). For the period commencing with October 1, 1999
through and including December 31, 1999, Tenant shall pay to Landlord the annual
Base Rent of Four Hundred Ninety-One Thousand Two Hundred Eighty Dollars
($491,280.00/yr/NNN) triple net, payable in monthly installments of Forty
Thousand Nine Hundred Forty Dollars ($40,940.00/mo/nnn) triple net, in advance
on the first day of each month, with the first installment to be paid at the
time of signing the Lease. Commencing on January 1, 2000 through and including
December 31, 2001, Tenant shall pay to Landlord annual Base Rent of one million
twenty-one thousand two hundred dollars $1,021,200.00/yr NNN) triple net,
payable in monthly installments of eighty five thousand one hundred dollars
triple net ($85,100.00), in advance on the first day of each month. Commencing
on January 1, 2002 through and including June 30, 2004, Tenant shall pay to
Landlord annual Base Rent of one million eighty-seven thousand four hundred
forty dollars ($1,087,440.00/yr NNN) triple net, payable in monthly installments
of ninety thousand six hundred twenty dollars triple net ($90,620.00), in
advance on the first day of each month. Commencing on the July 1, 2004 through
and including September 30, 2006, Tenant shall pay to Landlord annual Base Rent
of one million one hundred fifty-six thousand four hundred forty dollars
($1,156,440.00/yr NNN) triple net, payable in monthly installments of ninety-six
thousand three hundred seventy dollars triple net ($96,370.), in advance on the
first day of each month. All Base Rent shall begin as of the Rent Commencement
Date and shall be adjusted proportionately for any partial month at the
beginning or end of the Term; provided,
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however, that in no event shall the Rent Commencement Date be prior to the date
that Landlord has delivered to Tenant approximately 276,000 square feet of space
within a building in the Park in accordance with Section 2 above. In the event
that the Bankruptcy Court shall not have executed and entered an order (the
"Approval Order") in the form set forth on page 7 of the Stipulation, approving
the Rejection of the Prior Tenant Lease, and such Approval Order (i ) shall not
be subject to any stay or pending appeal and (ii) shall have otherwise become
final and non-appealable on or before October 1, 1999, then either party may
terminate this Lease upon written notice to the other party and Tenant shall
promptly but no more than thirty days after such notice vacate any space
occupied by Tenant. All Rent, as herein defined, shall be payable without prior
notice or demand except as expressly set forth herein, and without offset,
deduction or counterclaim, in lawful money of the United States of America, to
Landlord at the address set forth on the Lease Summary Sheet or at such other
place as Landlord may from time to time designate by written notice.
(b) This Lease is what is commonly called a "Triple Net Lease," it being
agreed that Landlord shall receive the rent set forth in Article 3 free and
clear of any and all impositions, taxes, real estate taxes, liens, charges of
any nature whatsoever in connection with the ownership and operation of the
Premises together with the Building and Land and the Marshfield Business Park.
In addition to the rent reserved in Article 3, Tenant shall pay as Additional
Rent Premises Operating Expenses and Tenant's Project Proportionate Share of
Project Operating Expenses. The Premises Operating Expenses shall mean all costs
and expenses incurred by Landlord with respect to the maintenance, operation and
ownership of the Premises including but not limited to of all impositions,
insurance premiums, operating charges, maintenance charges, real estate taxes,
management fees, expenses, and any other costs or expenses which arise or may be
contemplated under any provisions of this Lease during the Term hereof. The
Project Operating Expenses shall mean all costs and expenses incurred with
respect to the maintenance and operation of the common areas of the Marshfield
Business Park including but not limited to common landscaping, grounds,
lighting, and maintenance, operation and repair of the detention/retention
ponds. The following shall not constitute Premises Operating Expenses or Project
Operating Expenses, and nothing contained herein shall be deemed to require
Tenant to pay any of the following: (i) legal fees, brokerage commissions,
advertising costs and other related expenses incurred in connection with the
leasing of any building in the Park; (ii) repairs, alterations, additions,
improvements or replacements made to comply with any requirements of any
governmental authority in effect as of the Commencement Date or to rectify or
correct any defect in the design, materials or workmanship of the common areas
of the Park which common areas shall not be inclusive of the Premises; (iii)
structural repairs or replacements except to the extent necessitated by the
negligence or willful misconduct of Tenant, Tenant's agents, employees,
contractors, subcontractors, invitees, licensees or trespassers (iv) any
improvements, alterations or expenditures of a capital nature except to the
extent the costs of such improvements, alterations, or expenditures of a capital
nature are amortized over their useful life of the improvement, alteration or
expenditure ; (v) except to the extent of any deductible, damage and repairs
attributable to condemnation, fire or other casualty to the extent of Landlord's
recovery from the insurance company provided Landlord uses reasonable efforts to
recover under such policy or the condemning authority; (vi) damage and repairs
covered under any warranty or insurance policy carried by Landlord in connection
with the Building or Park except to the extent of any deductible and to the
extent of Landlord's recovery under such warranty or insurance policy provided
Landlord uses reasonable efforts to recover under such warranty; (vii) to the
extent damage and repairs
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necessitated by the negligence or willful misconduct of Landlord or Landlord's
employees, contractors or agents; (viii) executive salaries of Landlord and
employee bonuses and salaries of service personnel to the extent that such
services are not performed in connection with the management, operation, repair
or maintenance of the Building or common areas; (ix) Landlord's general overhead
expenses not related to the Building; (x) payments of principal or interest on
any mortgage or other encumbrance including ground lease payments and points,
commissions and legal fees associated with financing; (xi) depreciation; (xii)
legal fees and accountants' fees and other expenses incurred in connection with
disputes with Tenant or other tenants or occupants of the Building or Park or
associated with the enforcement of any leases or defense of Landlord's title to
or interest in the Building or Park or any part thereof; (xiii) costs (including
permit, license and inspection fees) incurred in renovating or otherwise
improving, decorating, painting or altering space for other tenants or other
occupants or vacant space in the Building or Park; (xiv) costs incurred due to
violation by Landlord or any other tenant in the Building or Park of the terms
and conditions of any lease; (xv) the cost of any service provided to Tenant or
other occupants of the Building or Park for which Landlord is entitled to be
reimbursed; (xvi) charitable or political contributions; (xvii) except as
otherwise provided herein, any cost or expense related to the testing for,
removal, transportation or storage of Hazardous Substances from the Building or
Park; (xviii) interest, penalties or other costs arising out of Landlord's
failure to make timely payments of its obligations; (xix) costs incurred in
connection with any portion of the Building or Park which is used for parking
and for which parking fees are charged; (xx) property management fees in excess
of three and 1/2 percent (3 1/2%) of the sum of the Base Rent, Premises
Operating Expenses and Project Operating Expenses; (xxi) costs incurred in
advertising and promotional activities for the Building; (xxii) costs of the
construction of new infrastructure on any and all undeveloped land in the Park
and the real estate taxes assessed to such undeveloped land (Notwithstanding
anything to the contrary, such undeveloped land shall not include any common
areas including but not limited to any common driveways, roadways, entranceways,
and undevelopable land reserved for such uses including but not limited to storm
water drainage and retention ponds); (xxiii) intentionally omitted; (xxiv)
separately metered Utilities; and (xxv) costs of new replacement equipment or
alterations placed in service after the date of this Lease and designed to
remedy or ameliorate the inability or failure of any building or project system
("System") to accurately process date and/or time data relating to the years
1999, 2000 and beyond ("Systems" shall include, without limitation, elevator
equipment, fire alarm, protection and security devices [including, but not
limited to, automatic locking devices, card keys and parking access gates], fire
sprinkler systems, heating, ventilating and air-conditioning equipment and
utility equipment) exclusive of any cost associated with the failure of any
utility provider's failure to be Y2K compliant. Nothing herein shall be
construed to require Tenant to pay any income, franchise, gross receipts,
corporation capital levy, excess profits, revenue, inheritance, gift or estate
taxes on the Premises or Project.
(c) All such charges, costs and expenses shall constitute additional
charges and, upon the failure of Tenant to pay any of such costs, charges or
expenses, Landlord shall have the same rights and remedies as otherwise provided
in this Lease for failure of Tenant to pay rent. During each month of the Term
of this Lease, on the same day that rent is due hereunder, Tenant shall escrow
with Landlord an amount equal to 1/12 of the estimated annual cost of Tenant's
Project Proportionate Share plus Premises Operating Expenses . Tenant authorizes
Landlord to use the funds deposited with Landlord under this Paragraph 3 (b) to
pay such costs. The initial monthly escrow payments are based upon the estimated
amounts for the year in question, and shall be increased or decreased as
determined by Landlord in its sole discretion, to reflect the projected
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actual cost of all such items. If Tenant's total escrow payments are less than
the actual amount of Tenant's Project Proportionate Share plus Premises
Operating Expenses , Tenant shall pay the difference to Landlord within ten (10)
days after demand. If the total escrow payments of Tenant are more than the
actual amount of Tenant's Project Proportionate Share plus Premises Operating
Expense by Tenant, Landlord shall retain such excess and credit it against
Tenant's next annual escrow payments. The increase in common area maintenance
charges shall be capped at the rate of four percent per annum compounded
annually for those operating charges which are within the sole control of
Landlord which shall include recurring landscaping maintenance and grounds
maintenance and management fee cost. For illustrative purposes, if the common
area maintenance charges subject to the cap for year one are $1000.00 and the
common area maintenance charges subject to the cap for year two are $1000.00,
then the common area maintenance charges subject to the cap cannot exceed
$1,081.60 for the third year which reflects the compounding of the cap on an
annual basis.
(d) All Base Rent and Additional Rent and all other sums payable by
Tenant under this Lease are referred to collectively herein as "Rent," and shall
be collectible by Landlord as rent. If Tenant fails to pay any Rent as required
in this Lease, Landlord shall have the same rights and remedies as for a failure
to pay Base Rent, without prejudice to any other right or remedy available
therefor. The estimated initial monthly payment of Additional Rent due and
payable on October 1, 1999 shall be Twelve Thousand One Hundred Eighty Dollars
and 80/00 ($12,180.00) which includes $4,130.80/month for real estate taxes,
$1,150/month for insurance and $6,900.00/month for Common Area Charges. For
informational purposes only, the Actual Project and Premises Operating Expenses
for calendar year 1998 are specifically delineated on Exhibit G during which
calendar year no expenses were incurred prior to June, 1998, is attached hereto
and incorporated herein by this reference. The estimated amount of the initial
monthly Base Rent and the initial monthly escrow payments are as follows:
(1) Base Rent as set forth in Paragraph 3. . . . . $ 40,940.00
(2) Tax Escrow Payment . . . . . . . . . . . . . . $ 4,130.80
(3) Insurance Escrow Payment . . . . . . . . . . $ 1,150.00
(4) Utility Charge . . . . . . . . . . . . . . . -----------
(5) Common Area Charge. . . . . . . . . . $ 6.900.00
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ESTIMATED INITIAL MONTHLY PAYMENT
Inclusive of Base Rent $ 53,120.80
(e) The Rent under this Lease is intended to be net to Landlord, except
that Landlord shall be responsible for the maintenance obligations in Section
5(a)(i) and those items set forth in subsection (b) above which shall not be
passed through to Tenant. All other charges and expenses imposed upon the
Premises or in connection with its use, occupancy, and control shall be paid by
Tenant.
(f) Any Rent not paid within ten (10) business days after its due date
shall bear interest from the due date until paid at the rate of twelve percent
(12%) per annum or the highest interest rate allowed by law, whichever is lesser
(the "Default Rate"). Such interest shall constitute Rent hereunder. Payment of
such interest shall not excuse or cure any default by Tenant.
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(g) No payment by Tenant or receipt by Landlord of an amount less than
the Rent payable hereunder shall be deemed to be other than a payment on account
of unpaid Rent, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment for 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 and pursue any other remedy
provided herein or by law.
(h) Landlord shall provide Tenant with a reconciliation statement for
the operating expenses of the Premises and Project once in every twelve month
period which statement shall be delivered to Tenant by April 30th of each
calendar year. Landlord's failure to timely deliver such reconciliation
statement shall not effect Tenant's obligations to make such payments. Tenant
shall continue to pay the then current estimated monthly expenses until such
time as Tenant receives written notice from Landlord of a change in the
estimated monthly expenses. Provided that Tenant is not in default of any of the
terms and conditions of this Lease, Tenant shall have the right, not later than
one hundred twenty (120) days following the receipt of such statement and upon
the condition that Tenant shall first deposit with Landlord the full amount in
dispute, to cause Landlord's books and records maintained by Landlord with
respect to such operating expenses for the Premises and Project for such fiscal
year to be audited by certified public accountants selected by Tenant and
subject to Landlord's reasonable right of approval. The operating expenses shall
be appropriately adjusted as reasonably determined by Landlord on the basis of
such audit. If such audit discloses the statement is in error in Tenant's favor
in excess of seven percent (7%) of the amount charged to Tenant for Premises
Operating Expenses and Project Operating Expenses, the reasonable out-of-pocket
cost of such audit shall be borne by Landlord. If Tenant shall not request an
audit in accordance with the provisions of this Paragraph 3 (g) within one
hundred twenty (120) days after receipt of such Landlord's statement, such
statement shall be final and binding for all purposes hereof.
The right to audit may not be asserted by any sublessee of Tenant.
(i) Tenant shall pay all taxes, assessments and charges of any kind
which shall be levied, assessed or charged upon Tenant's leasehold interest in
the Premises or upon personal property owned by the Tenant and at any time
located within the Premises, including without limitation, all improvements made
within the Premises by or on behalf of the Tenant at the Tenant's expense.
Accordingly, Tenant shall report such leasehold improvements as personal
property in the statement of assessable property that Tenant is required to file
and shall cooperate with the Landlord in insuring that such leasehold
improvements are not assessed as real property.
4. Utilities. Tenant shall pay when due all charges for all utilities
and services for every kind supplied to or imposed against the Premises,
including without limitation water, air conditioning, sewage, heat, gas,
sprinkler charges, light, garbage, electricity, telephone, steam, power, or
other public or private utilities (collectively, "Utilities"). Tenant shall also
pay for all Utilities used by it or its agents, employees or contractors prior
to the Commencement Date. Landlord may cause any of the Utilities to be
separately metered to Tenant provided that the cost to install any and all
separate meters, if same are not installed as of the date of this Lease, shall
be paid by Landlord. Tenant shall pay to Landlord, as Additional Rent, Tenant's
Project Proportionate Share of all charges for jointly metered or billed
Utilities. Tenant shall not be entitled to any abatement of Rent and this Lease
shall not be affected nor shall Landlord be liable
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to Tenant in any way for any interruption or failure of any Utilities; unless
such interruption or failure is caused by the willful misconduct or negligence
of Landlord and continues for more than ten (10) business days in which event
Rent shall xxxxx from the date of such interruption or failure until such
utility service is restored.
5. Maintenance and Repairs. (a) (i) Landlord shall maintain the
structural soundness of the Building, including but not limited to the roof,
foundation, and exterior walls of the Building, and utility connections and
lines existing outside of the Building walls or under the foundation, in good
condition and repair, reasonable wear and tear excluded, except that Tenant
shall be responsible for any repairs or replacements necessitated by the
negligence or willful misconduct or other acts of Tenant, its agents,
contractors, employees and invitees. The term "walls" as used in this Section
5(a)(i) shall exclude windows, glass or plate glass, floors, special store
fronts or office entries. Tenant shall immediately give Landlord written notice
of any defect or need for repairs, after which Landlord shall have reasonable
opportunity to repair or cure such defect.
(ii) Landlord shall also maintain the landscaping, parking areas and
other common facilities, as applicable, on the Land in good condition, and
Tenant shall reimburse Landlord for Tenant's Proportionate Share of such costs
pursuant to Section 3(b) through the Premises Operating Expenses. Landlord shall
also maintain those areas of the Project which have been reserved for common
facilities including but not limited to detention ponds, drainage slopes and
other common facilities of the Project in good condition and Tenant shall
reimburse Landlord for Tenant's Proportionate Share of such costs thorough the
Project Operating Expenses. As used in this Lease, "common facilities" and
"common areas" shall mean all areas within the exterior boundaries of the Park
which are now or hereafter made available for general use, convenience and
benefit of Landlord and other persons entitled to occupy space in the Building
or Park, which areas shall include but not be limited to parking areas,
driveways, pedestrian areas, lobbies, sidewalks, landscaped and planted areas.
(b) Tenant shall keep the Premises and all parts thereof in a clean and
sanitary condition and free from all trash and debris. Tenant shall keep and
maintain the Premises, including without limitation, all floors, floor
coverings, windows, ceilings, skylights, air conditioning, and ventilating
systems, walkways, loading areas, fences and signs in good condition and repair
in all respects normal wear and tear and damage by casualty excepted. If it is
not practical to repair any of the foregoing, Landlord shall replace them as
necessary, and the cost of such replacements shall be amortized over the useful
life of the item replaced at an interest rate of 11%, and Tenant shall pay
Tenant's Premises Proportionate Share of the cost of such item during the Term
of this Lease. All repairs and replacements made by Tenant shall be at least
equal in quality and class to the original work and materials. Tenant shall
enter into maintenance and service agreements acceptable to Landlord with
contractors approved by Landlord for regular servicing of all heating, hot
water, air conditioning and ventilating systems within the Premises. Tenant
shall, immediately upon breakage, replace all broken glass in the Premises with
glass at least equal to the specification and quality of the glass so replaced.
Notwithstanding the foregoing, if Tenant fails to make any repair or maintain
the Premises as required herein and such failure continues after twenty days
notice from Landlord, Landlord shall have the option but not the obligation,
upon notice to Tenant, to assume any or all of the foregoing maintenance and
repair responsibilities (including the obligation to enter into maintenance
contracts) and to require Tenant to reimburse Landlord, as Additional Rent, for
the actual out-of-pocket cost of all such
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services (or contracts, as the case may be), together with an accounting and
management services fee of six percent (6%) of the cost thereof.
(c) Except for the obligations of Landlord expressly stated in Section 5
herein, Landlord shall have no obligations whatsoever to repair and maintain
Land, Building, Premises or any part thereof or equipment therein, whether
structural or nonstructural.
(d) Tenant's maintenance and repair obligations shall exclude: (i)
except to the extent of any deductibles, damage and repairs covered under any
insurance policy carried by Landlord in connection with the Building to the
extent that Landlord has recovered under such policy provided Landlord has used
reasonable efforts to recover from such policy; (ii) damage to the extent caused
by the negligence or willful misconduct of Landlord or Landlord's agents,
employees, invitees or licensees; (iii) repairs covered under Premises Operating
Expenses or Project Operating Expenses; and (iv) conditions covered under any
warranties of Landlord's contractors to the extent Landlord has made a recovery
under such warranties; (v) uninsured acts of God, and (vi) damage or repairs
resulting from condemnation. Notwithstanding anything to the contrary, Tenant
shall be liable for the costs of any damage to the Premises or the Park caused
by Tenant, Tenant's employees, agents, contractors, subcontractors, invitees, or
others acting on Tenant's behalf.
6. Alterations. (a) Tenant shall not, without Landlord's prior written
approval, which approval shall not be unreasonably withheld, conditioned or
delayed, make any alterations, additions or improvements to the Premises,
whether interior or exterior, including without limitation the installation of
lighting fixtures, space heaters, air conditioning, electrical equipment, power
panels, plumbing, ducts, or window coverings (collectively, "Alterations"),
provided that Tenant may install such trade fixtures as are reasonably
appropriate if (i) such items do not alter the basic character of the Building;
or overload or damage the same; (ii) such items may be removed without injury to
the Premises; and (iii) the alterations, additions or improvements are made in
compliance with all Requirements, as herein defined and with Landlord's
specifications and requirements. If Landlord informs Tenant in writing at the
time Landlord consents to any specific Alteration(s) that the same must be
removed, Tenant shall remove such Alteration(s) at the termination of this Lease
and shall repair any damage to the Premises caused by such removal and restore
the portion of the Premises affected by such removal to its condition prior to
the installation of the Alterations subject to reasonable wear and tear and
surrender the Premises in accordance with this Lease. Unless Landlord requires
their removal, all Alterations shall become the property of Landlord and remain
upon the Premises at the expiration or sooner termination of this Lease.
Landlord's consent to any such Alteration shall not be construed to mean that
same is in compliance with all Requirements, as herein defined. If Tenant makes
any Alterations without the prior written approval of Landlord, Landlord may
require that Tenant remove any or all of the same at any time. Tenant shall
deliver to Landlord within thirty (30) days after making final payment to
contractors:
1. Full and unconditional lien waivers from all Tenant contractors,
subcontractors and suppliers and
2. Two blue line sets of clear, definable and comprehensive as-built
drawings.
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(b) Tenant shall make any Alterations in a good and workmanlike manner,
in accordance with all applicable laws and with as-built conditions provided to
Tenant by Landlord. Tenant shall obtain all licenses and permits required for
any Alterations or repairs by Tenant. Tenant shall remove any Alterations
required to be removed hereunder and restore the Premises in a good and
workmanlike manner and in accordance with all applicable Requirements, as herein
defined, including but not limited to applicable state, federal and local law
and such other requirements as Landlord and any governmental or
quasi-governmental agency may impose.
(c) Tenant shall promptly pay and discharge all claims for services,
supplies, labor or materials furnished or alleged to have been furnished to or
for Tenant at or for use in the Premises.
(d) Notwithstanding the foregoing, Tenant shall have the right, without
Landlord's consent, to make non-structural alterations, improvements and/or
additions to the Premises, provided that such alterations, improvements and/or
additions do not effect the Building systems or structures and do not penetrate
the roof, floor or walls and do not exceed a cost of $25,000.00 in aggregate
over a one year period. In addition any such alterations, improvements and/or
additions must be performed in a good and workmanlike manner and in compliance
with all applicable Requirements. Landlord may require that any such
non-structural alterations, improvements, and/or additions be removed at the
expiration or earlier termination of the Lease and that Tenant at Tenant's cost
and expense restore the Premises to the condition prior to such installation
reasonable wear and tear excepted.
7. Signs. Tenant shall not install any signs, decorations, advertising
media, blinds, draperies or other window treatment or bars or other security
installments visible from outside the Premises without Landlord's prior written
consent which consent shall not be unreasonably withheld, conditioned or
delayed. Tenant shall comply in all respects with all Requirements, as herein
defined, and the Sign Criteria attached hereto and made a part hereof and marked
Exhibit D. Tenant shall comply with all applicable Requirements, as herein
defined, including but not limited to all applicable state, federal and local
laws and other requirements of any governmental or quasi-governmental agency. On
or before August 15, 1999, provided the current tenant has vacated the Premises
no later than July 15, 1999, Landlord shall have removed the current tenant's
signage from the Building, and on or before October 1, 1999, Landlord shall have
repainted and otherwise restored exterior portions of the Building where such
signage was located.
8. Surrender. (a) Tenant shall surrender the Premises and all parts
thereof at the expiration or sooner termination of the Lease in the condition
required to be maintained by this Lease and in a "broom-clean" condition,
reasonable wear and tear and damage by casualty excepted. Tenant shall repair
any damage to the Premises occasioned by removal of Tenant's trade fixtures,
furnishings, equipment and machinery, temporary improvements and any Alteration
which Landlord shall require Tenant to remove in accordance with Section 6
above.
(b) All obligations of Tenant hereunder not fully performed as of the
expiration or termination of this Lease shall survive such expiration or
termination, including without limitation all payment obligations with respect
to taxes and insurance premiums and other operating expenses and all obligations
concerning the condition and repair of the Premises.
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9. Insurance and Tenant's Indemnity. (a) Landlord shall maintain the
following insurance coverage protecting Landlord, its agents, partners,
officers, directors and employees, and any mortgagee:
(i) Insurance against damage by fire, extended coverage perils,
vandalism, malicious mischief perils and boiler and machinery accident, if
applicable, including, without limitation, cost of debris removal and
demolition, in an amount not less than the full replacement cost of the
Building.
(ii) Landlord's comprehensive general liability insurance with limits as
Landlord may reasonably require from time to time.
(iii) Such other insurance coverage in such amounts as Landlord may
reasonably require as at the time are commonly insured against with respect to
buildings similar in character, general location and use and occupancy to the
Premises, in relative amounts normally carried with respect thereto.
All losses paid under the insurance carried pursuant to this Section 9(a),
shall, subject to the rights of any mortgagee, be adjusted by Landlord and the
proceeds thereof shall be payable to Landlord.
(b) Tenant shall maintain the following insurance coverage:
(i) comprehensive general liability insurance, insuring against loss,
damage or liability for personal injury bodily injury, or death of any person or
loss or damage to property occurring in, upon or about the premises in the
amount of with a combined single limit coverage of $3,000,000.00;
(ii) insurance against fire, with extended coverage, vandalism, malicious
mischief, perils, and boiler and machinery accident and all risks, upon all
property owned by Tenant and located at or within the Premises or for which
Tenant is legally liable, or installed by or on behalf of Tenant, including,
without limitation, furniture, fittings, installations, Tenant improvements and
betterments, fixtures and any other personal property, in an amount not less
than the full replacement cost thereof;
(iii) loss of income and extra expense insurance in such amounts as will
reimburse Tenant for direct or indirect loss of earnings attributable to all
perils commonly insured against by prudent tenants or attributable to prevention
of access to the Premises as a result of such perils;
(iv) worker's compensation insurance covering all Tenant's employees as
required by any federal, state or local law; and
(v) insurance against such other hazards and in such amounts as Landlord
may reasonably require as at the time are commonly insured against with respect
to buildings similar in character, general location and use and occupancy to the
Premises, in relative amounts normally carried with respect thereto.
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(vi) If, by reason of changed economic conditions, any insurance amounts
referred to in this Section 9 become inadequate in Landlord's sole and
reasonable determination, Landlord shall increase the amounts required by notice
to Tenant and Tenant shall promptly increase or cause to be increased those
coverages to the amounts specified by Landlord.
(c) Tenant shall require any contractor performing work on the Premises
for Tenant to maintain workers' compensation insurance as required by all
applicable laws covering all contractors' employees working on the Premises, and
comprehensive general liability insurance, including contractor's liability
coverage, contractual liability coverage, completed operations coverage, broad
form property damage endorsement and contractor's protective liability coverage,
with combined single limit coverage for each occurrence of not less than
$1,000,000.
(d) All such insurance shall name Landlord, United Parcel Service of
America, Inc. and its subsidiaries, and Landlord's property manager and
mortgagee, if any, as primary additional insured for (or, with respect to
worker's compensation, contain a waiver of subrogation endorsement in favor of
Landlord, United Parcel Service of America, Inc. and its subsidiaries,
Landlord's property manager and mortgagee, if any), and shall provide that the
policy shall not be canceled nor shall coverage be reduced thereunder until
after thirty (30) days written notice to Landlord. Such insurance company shall
be licensed to do business in the state of Maryland and shall be reasonably
satisfactory to Landlord or of at least a Standard and Poor's Rating of A-VII.
Tenant shall deposit each policy or a certificate (such certificate in
substantially the same form as Exhibit F, which is attached hereto and made a
part hereof) thereof with Landlord fifteen (15) days prior to the commencement
of the Term, or, with respect to the insurance required under Section 9(c)
promptly upon commencement of Tenant's obligation to procure the same, with
proof of payment of the premium therefor. At least fifteen (15) days prior to
the expiration date of any policy, Tenant shall deliver to Landlord a renewal or
replacement policy or certificate evidencing the existence thereof, with proof
of payment of the premium therefor. Additionally, United Parcel Service of
America, Inc. and its subsidiaries shall be named as primary additional insureds
under any such policies that Tenant is required to maintain pursuant to this
Lease.
(e) All insurance required under this Section 9a (i) and 9 (b)shall
provide that the insurer waives all rights of recovery by way of subrogation
against Landlord or Tenant in connection with any loss or damage covered by such
policies. Landlord and Tenant, notwithstanding any provisions of this Lease to
the contrary, waive any rights of recovery against each other for loss or injury
against which the waiving party is protected by insurance containing provisions
whereby the insurer has waived any rights of subrogation.
(f) Tenant shall indemnify, defend and save Landlord and Landlord's
agents, employees, partners, officers and directors and United Parcel Service of
America, Inc. and its subsidiaries, and Landlord's property manager and
mortgagee, if any (collectively, the "Indemnitees") harmless against and from
all liabilities, claims, suits, fines, penalties, damages, loses, fees, costs
and expenses (including reasonable attorneys' fees) which may be imposed upon,
incurred by or asserted against any of the Indemnitees by reason of:
(i) Any work or thing done in, on or about the Land or Building or any
part thereof by or on behalf of Tenant or Tenant's officers, employees, agents,
subtenants, contractors, licensees, permittees or invitees;
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(ii) Any use, occupation, condition or operation of the Premises, except
to the extent caused by the willful misconduct or negligence of an Indemnitee;
(iii) Any act or omission on the part of Tenant or Tenant's officers,
employees, agents, subtenants, contractors, licenses, permittees or invitees;
(iv) Any incident, injury (including death) or damage to any person or
property occurring in, on or about the Premises or any part thereof except to
the extent caused by the willful misconduct or negligence of an Indemnitee; or
(v) Any breach of Tenant's obligations under this Lease.
The provision of this Section 9(f) shall survive the expiration or
termination of this Lease with respect to any claims or liability occurring
prior to such expiration or termination.
10. Casualty. (a) If the Building or any part thereof is damaged or
destroyed by fire or other casualty Tenant shall immediately notify Landlord. If
in Landlord's reasonable estimation, which shall be conclusive, the Building
cannot be fully repaired or restored within one hundred eighty (180) days after
the casualty, Landlord may terminate this Lease by written notice to Tenant
within thirty (30) days after the date of the damage or destruction.
(b) Unless this Lease is terminated pursuant to Section 10(a) or 10(d),
Landlord shall restore the Building to substantially its previous condition,
except that Landlord shall not be required to rebuild, repair or replace any
part of the partitions, fixtures, additions and other improvements constructed
or installed in or about the Premises for the benefit of or by Tenant. If such
restoration has not been substantially completed within 180 days after the
casualty (subject to Section 16(b)), Tenant may, as Tenant's sole remedy,
terminate this Lease by prompt written notice to Landlord.
(c) If Tenant determines in its reasonable estimation that continuation
of business in the Premises is not practical pending reconstruction provided
that Tenant has vacated the Premises and is not using the same for the operation
of business, Rent due and payable hereunder shall xxxxx, unless caused by
Tenant's negligence or willful misconduct and provided that Landlord recovers
such Rent through insurance coverage passed through to Tenant, for the period
commencing with such damage or destruction until reconstruction is substantially
completed or until business is totally or partially resumed, whichever is
earlier.
(d) If insurance proceeds (not including deductibles) are not sufficient
to cover ninety percent (90%) of the cost to repair and restore the Premises or
the Building to substantially its condition immediately before such damage and
destruction, Landlord may provide written notice to Tenant, within thirty (30)
days after notice to Landlord that said damage or destruction is not so covered.
Within thirty (30) days of receipt of said notice from Landlord, Tenant may
provide written notice to Landlord that Tenant shall pay the difference between
the amount of the insurance proceeds and ninety percent (90%) of the costs to
repair and restore the Building. If Tenant delivers such notice to Landlord,
Landlord shall rebuild and repair the Building in accordance with this Section.
If Tenant fails to deliver such notice to Landlord, this Lease shall terminate.
If any present or future mortgagee requires that insurance proceeds be applied
to the indebtedness secured by its mortgage, Landlord may terminate this Lease
by written notice to
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Tenant within fifteen (15) days after Landlord receives notice of such
requirement from the mortgagee.
11. Condemnation. (a) If all or any substantial part of the Land and
Building is taken or condemned by any competent authority for any public or
quasi-public use or purpose (including a deed given in lieu of condemnation),
this Lease shall terminate as of the first to occur of (i) the date title vests
in such authority, or (ii) the date of the taking of possession by the
condemning authority.
(b) If part of the Land and/or Building is taken or condemned as
aforesaid and this Lease is not terminated, then the Base Rent shall be reduced
in the same proportion that the area taken bears to the total area of the
Premises prior to the taking. Upon receipt of the award in condemnation or
proceeds of sale, Landlord shall make necessary repairs and restorations
(exclusive of any partitions, fixtures, additions and other improvements
constructed or installed in or about the Premises for the benefit of or by
Tenant) to restore the Premises remaining to as near its former condition as
circumstances permit, and to the Building to the extent necessary to constitute
a complete architectural unit.
(c) Landlord will be entitled to receive the entire price or award from
any such sale, taking or condemnation without any payment to Tenant and Tenant
hereby assigns to Landlord, Tenant's interest, if any, in such price or award;
provided, however, Tenant shall have the right to separately pursue against the
condemning authority an award in respect of the loss, if any, for its relocation
expense and for its personal property.
12. Use and Compliance With Law. (a) Tenant shall use the Premises for
any or all of the Permitted Uses set forth on the Lease Summary Sheet, subject
to all Requirements, as herein defined, and for no other use or purpose. Tenant
shall not permit outside storage, other than the orderly outside staging of
trucks and other vehicles used by Tenant in its day to day operations provided
same does not violate any law, ordinance, rule, covenant or restriction, without
Landlord's prior written approval. Tenant shall not commit waste, or overload
the walls, ceilings, roof, floors or structure, or subject the Premises to any
use which would tend to damage any portion thereof, or permit any nuisance
therein. Tenant will not permit the Premises to be used for any purpose or in
any manner that would void the insurance thereon, increase the insurance risk,
or cause the disallowance of any sprinkler credits, including without
limitation, use of the Premises for the receipt, storage or handling of any
product, material or merchandise that is explosive or highly flammable. Tenant
shall not allow any sale by auction upon the Premises, or place any harmful
liquids in the drainage system of the Building or Land except as used in de
minimus amounts in the ordinary course of Tenant's business and then, in
compliance with all Requirements and provided same do not damage the drainage
system. No waste, materials or refuse shall be dumped upon or permitted to
remain outside the Premises except in trash containers placed inside exterior
enclosures designated for that purpose. Landlord shall not be responsible to
Tenant for the non-compliance by any other tenant or occupant of the Building or
Project with any of the above-referenced rules or any other terms or provisions
of such tenant's or occupant's lease or other contract.
(b) Tenant shall comply with all laws, statutes, codes, orders,
findings, ordinances, rules and regulations or other requirements of any
governmental
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authority or quasi-governmental authority and requirements of any insurer, now
or hereafter in force, pertaining to Tenant's use of the Premises, and with all
restrictive covenants and other requirements affecting the Premises and recorded
in the public records (collectively, the "Requirements"). Tenant shall secure
and comply with all necessary permits and certificates of occupancy for the use
and occupancy of the Premises.
(c) Landlord represents and warrants to Tenant that the Building was
constructed in compliance with all Requirements, as herein defined, and Landlord
has not received any written notice form any governmental authority that the
Premises and/or the Building are in violation of any local, state and federal
laws, statutes, rules, orders, regulations and ordinances, and Requirements,
including, but not limited to, the Americans with Disabilities Act ("ADA"), as
amended. Tenant shall be solely responsible for ADA compliance or compliance
with all Requirements in the Premises to the extent triggered by alterations
made by Tenant in the Premises or Tenant's particular use. Any other
alterations, modifications or improvements in the Premises to comply with
Requirements enacted after the Commencement Date, shall be made by Landlord and
passed through to Tenant in the Premises Operating Expenses. Such costs of such
alterations, modifications or improvements shall be amortized over the useful
life of the alteration, modification or improvement.
13. Environmental Compliance. (a) The following terms shall have the
following meanings herein:
"Environmental Laws" shall mean all laws, statutes, ordinances orders,
executive orders, administrative rulings, court decisions, rules and regulations
of the United States, the state and municipality in which the Premises are
located, and any other Governmental Authority relating to the environmental
condition of the Property or any part thereof, including without limitation the
Resource Conservation Recovery Act, 42 U.S.C. Section 6901 et seq., the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Sections 9601 et seq., and any common law theory as nuisance or strict
liability, as any of the foregoing may be amended from time to time.
"Governmental Authority" shall mean any agency, board, bureau, commission,
department or body of any municipal, county, state or federal government unit,
or any subdivision thereof.
"Hazardous Substance" shall mean any matter now or in the future regulated
by any Environmental Law giving rise to liability or other obligation under any
Environmental Law, and shall also include without limitation petroleum,
petroleum products and oil or used oil, asbestos, PCBs and similar compounds,
lead paint, lead, cyanide, solvents, DDT, ammonia compounds and other chemical
products.
"Release" shall have the meaning set forth in 42 U.S.C. Section 9601, as
such may be amended or replaced from time to time.
"Solid Waste" shall have the meaning set forth in 40 C.F.R. Section 261.2,
as such may be amended or replaced from time to time.
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(b) Tenant shall not cause or permit any Hazardous Substance or other
dangerous toxic substances or any Solid Waste to be generated, manufactured,
refined, transported, treated, stored, disposed of, handled, processed, produced
or Released on the Premises and/or Land except in compliance with all applicable
Environmental Laws. Tenant shall advise Landlord in writing of any Hazardous
Substance introduced by Tenant or any party acting on its behalf before any
Hazardous Substance is brought on the Premises.
(c) Tenant shall promptly provide Landlord with copies of all
communications, permits or agreements with any Governmental Authority or any
private entity relating in anyway to the generation, manufacture, refining,
transportation, treatment, storage, disposal, handling, processing, production
or Release of any Hazardous Substance or Solid Waste at the Premises and/or
Land.
(d) Landlord and Landlord's agents and employees shall have the right,
but not the obligation, to enter the Premises and conduct appropriate tests for
the purpose of ascertaining the Tenant complies with all Environmental Laws.
Upon written request by Landlord, Tenant shall provide Landlord with
copies of the results of appropriate tests of air, water or soil to demonstrate
that Tenant complies with all applicable Environmental Laws.
(e) If the presence on or in the Premises and/or Land or any part
thereof, or the generation, manufacture, refining, transportation, treatment,
storage, disposal, handling, processing, production or Release at the Premises
and/or Land of any Hazardous Substance or other dangerous toxic substances or
Solid Waste: (i) gives rise to liability (including, but not limited to, a
response action, remedial action, or removal action) under any Environmental
Law, (ii) causes a significant public health effect, or (iii) pollutes or
threatens to pollute the environment, Tenant shall promptly take any and all
remedial and removal action necessary to clean up the Premises and/or Land and
mitigate exposure to liability arising from the Hazardous Substance or other
dangerous toxic substances or Solid Waste, whether or not required by law, but
only to the extent caused by Tenant, Tenant's employees, agents, contractors,
subcontractors, licensees, invitees, permittees, or others acting on Tenant's
behalf.
(f) Without limiting Tenant's obligations elsewhere in this Lease,
Tenant shall indemnify, defend and hold Landlord harmless from all damages,
costs, fines, penalties, liability, losses, expenses (including, but not limited
to, actual attorneys' fees and engineering fees, environmental consultant fees)
arising from or attributable to any breach by Tenant, or the act or omission of
Tenant's agents, employees, contractors, subtenants, assignees, or invitees, in
violation of any of Tenant's obligations, warranties or representations in this
Section 13. In addition, Tenant shall indemnify, defend and hold Landlord
harmless from all damages (including, without limitation, remediation, removal,
repair, corrective action, or cleanup expenses), costs, fines, penalties,
liability, losses, expenses (including, but not limited to, actual attorneys'
fees and engineering fees, environmental consultant fees) which are brought or
recoverable against, or suffered or incurred by Landlord as a result of any
release or presence of Hazardous Substances for which Tenant is obligated to
remediate as provided herein. The provisions of this Section 13 shall survive
expiration or sooner termination of this Lease.
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(g) Landlord represents and warrants that Landlord has not received any
written notice of any violations of any Environmental Laws with respect to the
Building or Park. Within five (5) days after mutual execution of this Lease,
Landlord shall deliver to Tenant copies of all reports from environmental
investigations covering all or any portion of the Building or Park in the
possession of Landlord. Tenant acknowledges that such report was prepared by a
third party consultant. Landlord shall deliver such report for the convenience
of Tenant and Landlord does not make any representation or warranty as to the
accuracy, truthfulness, or completeness of the report. As a material
consideration of this provision, Tenant shall not disclose any part of such
environmental report(s) to anyone other than Tenant's attorneys having a need to
know such information. Tenant indemnifies, defends and holds Landlord harmless
from any loss (including consequential damages), injury, costs, or liability
incurred by Landlord which results from Tenant's failure to maintain
confidentiality. The provisions of this Section 13 (g) shall survive the
expiration or earlier termination of this Lease.
14. Defaults. The following shall be events of default by Tenant (an
"event of default" or "default") hereunder:
(a) Tenant shall fail to pay Rent when due and payable under this Lease
and such failure continues for five (5) days from the date Tenant receives from
Landlord written notice that such payment was due;
(b) Any representation or warranty made by Tenant in this Lease shall be
false or misleading in any material respect;
(c) Tenant shall abandon the Premises or any substantial part thereof
and fail to maintain the Premises in the condition required herein;
(d) Tenant or any guarantor of this Lease shall (i) become insolvent;
(ii) admit in writing its inability to pay its debts; (iii) make a general
assignment for the benefit of creditors; (iv) file a voluntary petition or be
the subject of an involuntary petition for arrangement or reorganization that is
not dismissed within sixty (60) days or seeking the appointment of a receiver or
other relief under bankruptcy laws; or (v) take any action to authorize or in
contemplation of any of the actions set forth above in this paragraph;
(e) There shall be an attachment, execution or other seizure of all or
substantially all of Tenant's or any guarantor's assets or this leasehold;
(f) Tenant shall fail to discharge any mechanic's lien or other lien or
encumbrances placed upon the Premises within thirty (30) days after any such
lien or encumbrance is filed against the Premises;
(g) Tenant shall fail to maintain or cause to be maintained any
insurance coverage required to be maintained by Tenant or Tenant's contractors
under this Lease;
(h) Tenant shall fail to comply with Section 13 of the Lease;
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(i) Tenant fails to comply with any covenant, agreement or obligation
hereunder (other than those listed above in this Section), and such failure
continues for thirty (30) days after written notice thereof to Tenant; provided,
however, that if such failure is of a nature that cannot reasonably be cured
within thirty (30) days, Tenant shall not be in default if within said thirty
(30) day period Tenant shall have commenced to cure such failure and shall
diligently prosecute such cure to completion.
15. Remedies. (a) Upon occurrence of an event of default, Landlord shall
have the following rights and remedies, which shall be distinct, separate and
cumulative and shall not operate to exclude or deprive Landlord of any right or
remedy allowed at law or in equity or elsewhere in this Lease:
(i) Landlord may terminate this Lease by written notice to Tenant.
(ii) Landlord may terminate Tenant's right to possession of the Premises
without terminating this Lease by written notice to Tenant.
(iii) Landlord may enforce the provisions of this Lease by a suit or suits
in equity or at law for specific performance or any provisions herein, and for
any other appropriate legal or equitable remedy, including without limitation
injunctive relief and recovery of all Rent due or to become due from Tenant
under this Lease;
(iv) Landlord may declare due and payable by acceleration the aggregate
amount of the Rent (in which event Landlord may estimate the Additional Rent for
the remainder of the Term based upon the then current rate of Additional Rent,
and Tenant shall continue to be responsible for the amount by which the actual
Additional Rent exceeds the accelerated estimate) for the period from the date
of the event of default to the end of the Term, and Tenant shall pay the amount
thereof to Landlord immediately upon demand and Landlord may commence an action
for the recovery thereof without prior notice or grace.
(b) If Landlord terminates this Lease or Tenant's right of possession,
Tenant shall immediately surrender the Premises to Landlord, and Landlord may
reenter and take possession of the Premises, with or without process of law, and
remove all occupants and property therefrom, without being liable for
prosecution of any claim therefor and without waiving any other right of
Landlord hereunder or at law or in equity.
(c) If Landlord terminates Tenant's right of possession without
terminating this Leas, Tenant shall remain obligated to pay all Rent for the
full Term, which shall, at Landlord's option, be immediately due and payable.
Tenant shall continue to be liable for all Rent not so accelerated and all other
sums thereafter coming due under the Lease. Landlord may, but shall not be
obligated to, relet the Premises to such party and for such rent and on such
terms as Landlord elects in its sole discretion. The proceeds of such reletting
shall be applied first to any amounts payable by Tenant hereunder, but in no
event shall such reletting proceeds be paid to Tenant, nor shall such reletting
relieve Tenant of any obligations hereunder.
(d) If Landlord terminates this Lease as provided above, Landlord shall
be entitled to recover from Tenant all Rent for the period up to such
termination date, and all other sums payable hereunder. In addition, Landlord
shall be entitled to recover as damages for loss of
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bargain and not as a penalty (i) the aggregate sum which at the time of such
termination represents the excess if any, of the aggregate Rent payable for the
remainder of the Term (in which event Landlord may estimate Additional Rent for
the remainder of the Term) over the then fair rental value of the Premises for
the balance of the Term, (ii) the unamortized cost of improvements, additions,
and alterations to the Premises, if any, and the unamortized cost of broker's
commissions paid for by Landlord; and (iii) any damages in addition thereto,
including reasonable attorneys' fees and court costs, which Landlord shall have
sustained by reason of the breach of any of the covenants of this Lease other
than for the payment of rent.
(e) Upon an event of default, in addition to any other sum required to
be paid herein, Tenant shall pay to Landlord (i) all brokers fees incurred by
Landlord in connection with reletting the whole or any part of the Premises;
(ii) the costs of removing and storing Tenant's or other occupants' property;
(iii) the costs of repairing, altering, remodeling or otherwise putting the
Premises into condition acceptable to a new tenant or tenants; (iv) all
reasonable expenses incurred in marketing and reletting the Premises; and (v)
all reasonable expenses incurred by Landlord in enforcing or defending
Landlord's rights and/or remedies, including without limitation reasonable
attorneys' fees and court costs.
(f) If Tenant fails to make any payment within five (5) days after
receipt from Landlord of written notice that such payment is due, to help defray
the additional cost to Landlord for processing late payments, Tenant shall pay
to Landlord on demand a late charge in an amount equal to five percent (5%) of
such late payment and the failure to pay such amount within ten (10) days after
demand therefor shall be an additional event of default. Notwithstanding
anything to the contrary herein, no such notice shall be required for any second
late payment in any twelve (12) month period. The provision for such late charge
shall be in addition to all of Landlord's other rights and remedies hereunder or
at law and shall not be construed as liquidated damages or as limiting
Landlord's remedies in any manner.
(g) All property removed from the Premises by Landlord pursuant to any
provisions of this Lease or by law may be handled, removed or stored by Landlord
at the cost and expense of Tenant, and Landlord shall in no event be responsible
for the value, preservation or safekeeping thereof. Tenant shall pay Landlord
for all expenses incurred by Landlord in such removal and for storage charges
for such property. All such property not removed from the Premises or retaken
from storage by Tenant within thirty (30) days after the end of the Term,
however terminated, shall, at Landlord's option, be conclusively deemed to have
been conveyed by Tenant to Landlord as if by xxxx of sale, without payment or
credit by Landlord to Tenant.
(h) If Tenant fails to perform any of Tenant's obligations under any
provision of this Lease, Landlord may, but shall have no obligation to, perform
such obligation and enter upon the Premises for such purposes after twenty (20)
days prior written notice to Tenant, or in the case of an emergency, immediately
without prior notice, notwithstanding any longer notice or grace period set
forth elsewhere in this Lease. The cost of performance by Landlord together with
interest on the sum of those amounts at the Default Rate plus any additional
amount of ten percent (10%) of such cost thereof shall become due and payable as
Additional Rent to Landlord. Without limiting the foregoing, if any mechanic's
lien is filed against the Premises as a result of alterations, additions or
improvements made by Tenant and not discharged by payment or bonding within
thirty (30) days after the lien is filed, Landlord, at its option, may pay and
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discharge such lien, without inquiring into the validity thereof and Tenant
shall immediately on demand reimburse Landlord as Additional Rent for the total
expense incurred by the Landlord in discharging such lien plus an additional
amount of ten percent (10%) thereof together with interest at the Default Rate.
16. Landlord's Default; Limitation on Landlord's Liability. (a) Tenant
shall have no remedy or cause of action against Landlord for Landlord's failure
to perform any of its obligations hereunder unless Landlord fails to cure such
default within thirty (30) days after written notice from Tenant specifying such
default (or, with respect to any default that cannot be cured within thirty (30)
days, if Landlord does not commence to cure within such period and thereafter
diligently pursue such cure), and in such event Tenant's exclusive remedy shall
be an action for damages. Notwithstanding anything to the contrary provided in
this Lease, it is specifically agreed, such agreement being a primary
consideration for the execution of this Lease by Landlord, that there shall be
absolutely no personal liability on the part of Landlord, any partners of
Landlord, its employees, agents, officers, directors, successors, assigns or any
mortgagee in possession, with respect to any of the terms, covenants and
conditions of this Lease, and that Tenant shall look solely to Landlord's
interest in the Premises for the satisfaction of each and every remedy of Tenant
in the event of any breach by Landlord of this Lease.
(b) Except for Tenant's obligation to pay Rent, neither Landlord nor
Tenant shall be in default under this Lease on account of any failure or delay
in performing any obligation to be performed by it if such failure or delay is
due in whole or in part to any strike, riot, lockout, labor dispute, civil
disorder, war, shortage of or delay in obtaining labor or materials, power or
fuel shortage or disruption, restrictive governmental law or regulation,
accident, casualty, act of God, act caused directly or indirectly by the other
party or any of its agents, employees or invitees, or any other cause beyond the
reasonable control of the party invoking the protection of this subsection.
(c) The term "Landlord" as used in this Lease means only the holder, at
the time in question, of record title to the Land and Building. In the event of
a sale or other transfer of the Land and Building, the selling Landlord shall be
entirely relieved of all agreements and obligations of Landlord hereunder
accruing after the date of such sale or transfer, and, without the necessity of
further agreement, the purchaser or transferee shall be deemed to have assumed
and agreed to perform all agreements and obligations of Landlord hereunder
accruing from and after the date of such sale or transfer, including without
limitation any obligation with respect to return of the Security Deposit
provided such Security Deposit was actually transferred to said purchaser or
transferee.
17. Rights Reserved by Landlord. Landlord shall have the following
rights, exercisable without notice, which notice may be oral or written, (except
as expressly provided to the contrary in this Lease) without any liability to
Tenant for damage or injury to person, property or business, without the same
being deemed an eviction or disturbance in any manner of Tenant's use or
possession of the premises and without relieving Tenant from its obligation to
pay all Rent when due or from any other obligation hereunder: (a) upon at least
ten (10) days notice to Tenant, to change the Building's name or street address;
(b) upon reasonable prior notice to Tenant, to install, affix and maintain any
and all signs on the exterior of the Building; (c) to display "for rent" signs
on the Premises and exhibit the Premises to prospective tenants at
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reasonable hours during the last ninety (90) days of the Term and if the
Premises are vacant during the Term, to decorate, remodel, repair of otherwise
prepare the Premises for re-occupancy; (d) to enter upon the Premises for the
purpose of inspecting the Premises at reasonable times upon at least twenty-four
(24) hours prior notice to Tenant; (e) upon five (5) days notice to Tenant, to
make such structural repairs or alterations to the Premises as Landlord may deem
necessary or desirable and to take all material into and upon the Premises that
may be required therefor; provided, however, that Landlord shall not
unreasonably interfere with Tenant's use of the Premises during the course of
Landlord's work; (f) if Tenant is not present, to enter the Premises by a master
key or passkey and in an emergency forcibly to enter same, provided that during
such entry Landlord shall take reasonable care of Tenant's property; (g) upon
reasonable prior notice to Tenant, to take any and all reasonable measures,
including inspections, repairs, alterations, additions and improvements to the
Premises or to the Building as may be necessary or desirable for the operating
or preservation thereof of Landlord's interest therein; provided, however, that
Landlord shall not unreasonably interfere with Tenant's use of the Premises
during the course of Landlord's work; (h) to retain at all times master keys or
passkeys to the Premises; and (i) if Landlord determines in its discretion that
a fire emergency exit (crash door) is required in the interest of public safety,
to install at Landlord's expense such fire emergency exit (crash door) in any
demising wall of the Premises reasonably required for such purpose. Nothing
herein contained however, shall be deemed to impose upon Landlord any
obligation, responsibility or liability whatsoever for the care, supervision or
repair of the Building or the Land or any part thereof other than as provided
elsewhere in this Lease.
18. Assignment. (a) Tenant shall not assign, mortgage, pledge or
otherwise transfer this Lease, in whole or in part, nor sublet or permit
occupancy by any party other than Tenant of all or any part of the Premises (any
of the foregoing being referred to as a "Transfer"), without the prior written
consent of Landlord in each instance which consent shall not be unreasonably
withheld, conditioned or delayed. Transfer shall include any assignment or
subletting by operation of law. Any purported Transfer without Landlord's prior
written consent shall be void. Landlord's consent to any Transfer shall not
constitute a waiver of the necessity for consent to any subsequent Transfer.
(b) Any party to whom this Lease is assigned shall be deemed to have
assumed all of the obligations of Tenant under this Lease on and after the date
of such assignment, and shall upon demand execute and deliver to Landlord an
instrument confirming such assumption. No Transfer, whether or not consented to
by Landlord, shall relieve Tenant of its liability hereunder. If an event of
default occurs while the Premises or any part thereof are assigned or sublet, in
addition to any other remedies available, Landlord may collect directly from
such assignee or subtenant all rents payable to Tenant and apply such rent
against any sums due Landlord hereunder. No such collection shall be construed
to constitute a novation or a release of Tenant from the further performance of
Tenant's obligations hereunder or consent to any purported Transfer.
(c) Notwithstanding anything to the contrary contained in this Lease,
Tenant shall have the right to assign the Premises to an affiliate of Tenant
without Landlord's consent. For purposes of this Lease, "Affiliate" shall mean
(1) any subsidiary of Tenant in which Tenant owns a majority interest, (2) any
subsidiary of Tenant of which Tenant owns a majority interest, or (4) any
corporation into which Tenant merges or consolidates or which purchases
substantially all of
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the assets or stock of Tenant. Furthermore, changes in any interest in the
capital stock or other economic interest of Tenant shall not be deemed an
assignment under this Lease.
(d) Tenant waives notice of any default of any assignee or subtenant and
agrees that the Landlord may, at its option, proceed against Tenant without
having taken action against or joined such transferee notwithstanding any
indulgence, waivers or extensions of time granted by transferee.
19. Notices. All notices, demands, consents and requests required or
permitted hereunder shall be in writing and shall be deemed given upon receipt
if deposited with the United States Postal Service and sent by certified mail,
return receipt requested, or one (1) day after deposit with United Parcel
Service or any other nationally recognized overnight courier and sent by
overnight courier service, fee prepaid, or on the date hand delivered and
properly addressed, at the address for Landlord and Tenant set forth on the
Lease Summary Sheet or at such other addresses as the respective parties may
designate by written notice in writing from time to time. If any notice mailed
or sent by UPS Next Day Air delivery service or any other nationally recognized
overnight courier is properly addressed with appropriate postage or with the
charges prepaid but is returned because the intended recipient refuses delivery
or can no longer be found at the current notice address, such notice shall be
deemed effective notice and to be given on the date such delivery is refused or
cannot be accomplished.
20. Holding Over. If Tenant holds over after the expiration or earlier
termination of the Term without Landlord's express written consent, Tenant shall
become a tenant at sufferance only, at a rental rate equal to the sum of all
Additional Rent plus one hundred fifty percent (150%) of the amount of Base Rent
then in effect, prorated on a daily basis, and otherwise subject to all the
terms of this Lease so far as applicable. Landlord's acceptance of such Rent
shall not result in a renewal. The provisions of this Section 20 are in addition
to and do not affect Landlord's right of reentry or any other rights of Landlord
hereunder or as otherwise provided by law or at equity. If Tenant fails to
surrender the Premises upon the expiration or sooner termination of this Lease,
Tenant shall indemnify and hold Landlord harmless from all loss or liability,
including without limitation any claim made by any succeeding tenant resulting
from such failure to surrender.
21. Quiet Enjoyment. Upon payment of the Rent and performance of all of
its obligations under this Lease, Tenant shall have the peaceful and quiet
enjoyment of the Premises without disturbance by Landlord or those claiming by,
through or under Landlord, subject to the terms and conditions of this Lease and
any present or future mortgages and any other matters of record.
22. Subordination and Estoppel Certificates. (a) This Lease is and shall
be subject and subordinate to the lien of all present and future mortgages
affecting the Land and Building. Tenant shall execute any instrument reasonably
requested by Landlord to evidence such subordination. Landlord may assign this
Lease to any mortgagee in connection with any such lien and Tenant shall execute
any instrument which may be deemed necessary or desirable by Landlord or the
holder of said lien in connection with said assignment.
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(b) If any proceedings are brought for the foreclosure of any mortgage
on the Land and Building or any part thereof or upon transfer in lieu of
foreclosure, Tenant shall attorn to the mortgagee or purchaser upon such
foreclosure or transfer and shall recognize such mortgagee or purchaser as
Landlord under this Lease.
(c) Within ten (10) business days after receipt of written request from
Landlord, Tenant shall deliver a certificate to Landlord or any proposed
mortgagee or purchaser certifying that this Lease is in full force and effect,
that there are no amendments hereto (or identifying such amendments), the date
of Tenant's most recent payment of Rent, that there are no defenses, offsets,
counterclaims or deductions against Rent hereunder (or identifying such
defenses, offsets, counterclaims or deductions), the Commencement Date and
expiration date, and the amount of any Security Deposit delivered to Landlord.
Tenant's failure to deliver to the Landlord said statement in the allotted time
shall be conclusive upon the Tenant that: (a) this Lease is in full force and
effect, without modification except as may be represented by the Landlord, (b)
there are no uncured defaults in the Landlord's performance and the Tenant has
no right of offset, counterclaim or deduction against Rent hereunder, and (c) no
more than one month's Base Rent and one month's installment of Additional Rent
has been paid in advance. Any such statement may be conclusively relied upon by
any prospective purchaser or encumbrancer of the Land and Building.
(d) If any holder of a mortgage, deed of trust, security deed or other
instrument which may hereafter encumber the Premises ("Mortgage") or any nominee
of such Mortgage, or any purchaser from a Mortgagee at foreclosure
("Mortgagee"), shall hereafter succeed to the rights of Landlord under this
Lease, whether through possession or foreclosure action or delivery of a new
lease, Tenant shall, if requested by such successor, attorn to and recognize
such successor as Tenant's landlord under this Lease without change in the terms
and provisions of this Lease, and Tenant shall promptly execute and deliver any
instrument reasonably required to evidence such attornment, provided that such
successor shall not be (I) bound by any payment of Base Rent or Additional Rent
for more than one month in advance, except prepayments in the nature of security
for the performance by Tenant of its obligations under this Lease, (II) liable
for any defaults of Landlord under this Lease, prior to the date such Mortgagee
takes title (but such Mortgagee shall be obligated to cure any defaults which
are of a continuing, on-going nature) or (III) subject to any offsets, defenses,
rights against any Landlord prior to the date such Mortgagee takes title. Upon
such attornment, this Lease shall continue in full force and effect as a direct
lease between each successor landlord and Tenant, subject to all of the terms,
covenants, and conditions of the Lease. Tenant agrees to execute any such
document within ten business days after written request by Landlord. Tenant's
failure to execute such document shall constitute a material default by Tenant
hereunder without further notice to Tenant or, at Landlord's option, deemed
automatic acceptance of such subordination without further act by Landlord or
Tenant.
(e) The effective subordination of this Lease to any Mortgage or
Mortgagee and Tenant's delivery of an instrument of subordination and/or
attornment to any Mortgagee or the holder of any Mortgage shall be subject to
the fulfillment of the conditions precedent that the Mortgagee or holder of the
Mortgage shall first have agreed in writing that so long as Tenant is not in
default, this Lease shall not be terminated by foreclosure or sale pursuant to
the terms for such mortgage or lien.
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23. Security Deposit. Tenant has deposited with Landlord a security
deposit (the "Security Deposit") in the amount of Eighty-Five Thousand One
Hundred Dollars ($85,100.00) as security for performance of Tenant's obligations
hereunder. If Tenant fails to pay Rent or other charges due hereunder, or fails
to perform any other obligation under this Lease, Landlord may use, apply or
retain all or any portion of the Security Deposit for the payment of any Rent or
other charge in default or for the payment of any other sum for which Landlord
may become obligated by reason of Tenant's default or to compensate Landlord for
any loss or damage which Landlord may suffer thereby or to repair or restore the
Premises. Within ten (10) days after written demand Tenant shall deposit cash
with Landlord in an amount sufficient to restore said Security Deposit to its
original amount and Tenant's failure to do so shall be a material breach of this
Lease. Landlord shall not be required to keep the Security Deposit in a separate
account. If Tenant performs all of Tenant's obligations hereunder, the Security
Deposit, or so much thereof as has not been applied by Landlord, shall be
returned without payment of interest to Tenant (or at Landlord's option, to the
last assignee of any Tenant's interest hereunder) within ten (10) days of the
surrender of the Premises to Landlord in the condition required pursuant to the
terms of this Lease.
24. Expansion Option.
(a) Provided that (1) Tenant shall not be in default under the Lease;
(2) the Lease shall not have been assigned or sublet or transferred by Tenant to
any other party except to an Affiliate; (3) Landlord has received written notice
from Tenant no later than October 1, 2000 in which Tenant exercises the
expansion option set forth herein; and (4) such expansion option and such notice
("Tenant's Election Notice") specifies the amount of space that Tenant elects to
lease which expansion space must be at least an additional 53,544 square feet,
then Tenant shall have the one time exclusive right to lease up to approximately
178,480 square feet of additional warehouse space contiguous to the Premises
(the "Expansion Space"). The building comprised of approximately 178,480 square
feet of additional space shall be referred to as the "Expansion Building."
(b) In the event that all the conditions set forth herein are not met or
if Landlord does not receive Tenant's Election Notice on or before October 1,
2000, then this Expansion Option shall be deemed null and void and Landlord
shall be free to lease all or any portion of the Expansion Building to any
party. In the event that Tenant elects to lease the Expansion Space pursuant to
the terms set forth herein, and such Expansion Space is less than all of the
Expansion Building, then Landlord shall be free to lease the balance of such
Expansion Building to any party.
(c) The Expansion Space shall not exceed approximately 178,480 square
feet. The specifications of the Expansion Building shall be of equal or better
quality than those of the Building, shall contain warehouse improvements
comparable to those in, on, and around the Building (including but not limited
to, Expansion Building power distribution, dock levelers, dock seals, and dock
lights), and shall contain office space equal to three percent (3%) of the
amount of expansion warehouse space (but in no event more than 3,000 square feet
of office space) in addition to men's and women's restrooms comparable to the
existing offices and restrooms in the Building. Landlord at Landlord's sole cost
and expense, shall build and deliver turnkey Expansion Space to Tenant. Landlord
shall construct the Expansion Space and all improvements therein in compliance
with all Requirements taking into consideration the
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maximum occupancy allowed in the Expansion Space. Landlord agrees to deliver the
Expansion Space to Tenant within twelve (12) months of Landlord's receipt of
Tenant's Election Notice provided Tenant leases at least 53,544 square feet. If
Landlord fails to timely deliver the Expansion Space, Tenant may terminate this
Lease within fifteen months of Tenant's delivery to Landlord of Tenant's
Election Notice. Notwithstanding anything to the contrary, such fifteen months
shall be extended for any delays caused by Tenant, Tenant's employees, agents,
contractors, invitees, or licensees.
(d) The Expansion Space shall be subject to the same terms and
conditions as the Premises including, but not limited to, the rental rate per
square foot. Base Rent and Additional Rent for the Expansion Space shall
commence upon the delivery of the Expansion Space to Tenant and in accordance
with Subsection (c) substantially complete with all driveways, parking lots and
landscaping. A temporary certificate of occupancy from the municipality shall be
evidence that such Expansion Space is substantially completed. Landlord shall
obtain the certificate of occupancy within a reasonable time after the later of
the delivery of the Expansion Space to Tenant. Once Landlord has delivered to
Tenant the Expansion Space and Rent has commenced with respect thereto, the
Premises and the Expansion Space taken together shall be deemed the "Premises."
In other words, the Expansion Space shall be subject to all the terms and
provisions of this Lease, except that the square footage of the Premises shall
be increased by the square footage of the Expansion Space, and Base Rent,
Additional Rent and Tenant's Project Proportionate Share shall be adjusted
accordingly. Within ten (10) days after the delivery of the Expansion Space to
Tenant, Landlord and Tenant shall confirm the following in a written amendment
to the Lease:
(1) The date Landlord delivered to Tenant the Expansion Space and
thereby the commencement of the adjusted rent;
(2) The location and size of the Expansion Space that was leased by
Tenant with an exhibit annexed showing the space crosshatched;
(3) The total square footage of the Premises (original Premises plus
Expansion Space);
(4) The amount of Base Rent and monthly payments to be paid by Tenant;
and
(5) Tenant Premises Proportionate Share and Tenant's Project
Proportionate Share.
(e) The Expansion Space and the plumbing, electrical systems, fire
sprinkler system, lighting, air conditioning and heating systems, loading doors,
truck dock levelers, common areas, and all other Expansion Building systems
shall be in good operating condition as of the date Landlord delivers to Tenant
the Expansion Space. If a non-compliance with the foregoing statement exists and
Tenant notifies Landlord in writing of such non-compliance within sixty (60)
days after the date Landlord delivers the Expansion Space to Tenant, and
provided such non-compliance is not attributable to the acts or omissions of
Tenant, Tenant's employees, agents, contractors, subcontractors or others acting
on Tenant's behalf, Landlord shall, at Landlord's sole cost and expense,
promptly rectify the same.
25. Miscellaneous. (a) Landlord and Tenant represent and warrant to one
another that neither has dealt with any broker in connection with this
transaction other than Xxxxx &
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Associates/ONCOR International, Xxxxxxx and Wakefield and CB Xxxxxxx Xxxxx, and
each agrees to indemnify and hold the other harmless from any and all claims of
any other brokers resulting from a breach of the foregoing representation.
Landlord shall pay a commissions in accordance with separate agreement entered
into between Landlord and Xxxxx & Associates/ONCOR International.
(b) Within thirty (30) days of the Commencement Date, Landlord and
Tenant shall execute and record a memorandum hereof in substantially the form as
attached hereto as Exhibit H, together with a discharge of such Memorandum
executed by Tenant in recordable form in substantially the form as attached
hereto as Exhibit I. Tenant is authorized to record the Memorandum provided a
copy of the recorded Memorandum, showing the book and page where the Memorandum
has been recorded, is delivered to Landlord within ten (10) days after it is
received by Tenant from the recording office. The Discharge shall be held by
Landlord who is authorized to insert in the Discharge the recording information
regarding the Memorandum. Landlord is authorized to record the Discharge if this
Lease is terminated in accordance with its terms, on three (3) days prior notice
to Tenant.
(c) If any provision of this Lease or its application to any party or
circumstances shall be invalid or unenforceable to any extent, the remainder of
this Lease or the application of such provision to other parties or
circumstances shall not be affected thereby, and each provision of this Lease
shall be valid and enforced to the fullest extent permitted by law.
(d) The parties acknowledge that the terms and provisions of this Lease
have been fully negotiated by both parties hereto and that the Lease shall not
be construed against either party as the author of this Lease, but shall instead
be interpreted as a fully negotiated agreement between parties of equal
bargaining power. This Lease shall be construed and enforced in accordance with
the laws of the State in which the Premises are located.
(e) No waiver of any default of Tenant or Landlord hereunder shall be
implied from Landlord's or Tenant's failure to take any action on account of
such default, whether or not such default persists or is repeated, and no
express waiver shall affect any default other than the default specified in such
waiver, and then only for the time and to the extent therein stated. Failure of
Landlord or Tenant to insist upon strict performance of any of the provisions of
this Lease or to exercise any right herein conferred in any one or more instance
shall not be construed as a waiver or relinquishment for the future of any such
provisions or rights, but the same shall remain in full force and effect. The
receipt of Rent by Landlord, with or without knowledge of any default on the
part of Tenant under this Lease, shall not be deemed to be a waiver of any
provision of this Lease. Neither acceptance of the keys nor any other act or
thing done by the Landlord or any agent or employee during the Term of this
Lease shall be deemed to be an acceptance of a surrender of the Premises,
excepting only an agreement in writing signed by the Landlord accepting or
agreeing to accept such a surrender.
(f) The execution and delivery of this Lease by Tenant to Landlord does
not constitute a reservation of or option for the Premises and this Lease shall
become effective only if and when Landlord executes and delivers the same to
Tenant, provided, however, that the execution and delivery by Tenant of this
Lease to Landlord shall constitute an irrevocable offer
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by Tenant to lease the Premises on the terms and conditions herein contained,
which offer may not be withdrawn or revoked for ten (10) days after such
execution and delivery.
(g) This Lease may be executed in any number of counterparts, each of
which shall be an original and all of which together shall constitute but one
and the same instrument.
(h) If more than one person or entity shall execute this Lease as
Tenant, they shall be jointly and severally liable for performance of Tenant's
obligations hereunder. Wherever the singular number is used herein, the same
shall include the plural, and the masculine gender shall include the feminine
and neuter genders.
(i) The headings herein are for convenience of reference only and shall
not affect the meaning of this Lease and are not to be used in determining the
intent of the parties to this Lease.
(j) This instrument contains the entire agreement between the parties
and no oral statements or representations or prior written matter not contained
in this instrument shall have any force or effect. This Lease shall not be
modified in any way except by a writing executed by both parties.
(k) TIME IS OF THE ESSENCE FOR EACH AND EVERY PROVISION HEREOF.
(l) Tenant shall make any reasonable revisions to this Lease that may be
required in good faith by a bona fide mortgagee, provided that no such revision
shall increase the Rent or materially increase the Tenant's obligations
hereunder.
(m) This Lease shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, successors, legal representatives
and assigns. Nothing herein contained shall be deemed in any manner to give a
right of assignment to Tenant except in accordance with Section 18 above.
(n) Tenant agrees, for itself, its employees, agents, clients,
customers, invitees and guests, to comply fully with the Rules and regulations
set forth in Exhibit C which is attached hereto and made a part hereof and with
such reasonable modifications thereof and additions thereto as Landlord may make
for the Building.
(o) Any approval or consent given by Landlord pursuant to the terms of
this Lease shall not be construed by Tenant as a representation or warranty from
Landlord that the matter consented to by Landlord is in compliance with all
Requirements.
(p) Tenant shall be responsible for the observance of all of the rules
and regulations by Tenant's employees, agents, clients, customers, invitees and
guests. In addition to Landlord's other remedies for Tenant's breach of any of
the foregoing rules and regulations, Tenant shall pay Landlord for all damage
resulting from the violation thereof and for the cost of removing any
obstruction, vehicle or equipment placed on the property or Building in
violation hereof.
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(q) Tenant and Landlord warrant and represent to one another that each
is authorized to enter into the Lease, that the person signing on its behalf is
duly authorized to execute the Lease, and that no other signatures are
necessary.
26. Options to Extend. Tenant shall have two (2) options to extend the
Term for period of three (3) years each (the "Extension Terms"), provided that
at the time Tenant's Extension Notice (defined below) is given and as of the
commencement of the extension term all of the following are true (i) no default
by Tenant exists beyond any applicable cure period; (ii) Tenant has not
assigned, sublet or transferred its interest in the Lease to any party other
than an Affiliate; and (iii) Tenant has timely delivered the Tenant's Extension
Notice to Landlord. Tenant shall exercise its option to extend, if at all by
written notice ("Tenant's Extension Notice") to Landlord no later than one
hundred and eighty (180) days prior to the expiration of the then current Term
or Extension Term. If Tenant exercises its option for an Extension Term, the
Term shall be extended for an additional period of three (3) years on all of the
terms and conditions of this Lease, except that Base Rent during the First
Extension Term commencing October 1, 2006 and ending September 30, 2009 shall be
at the rate of four dollars and forty-three ($4.43/sf/yrNNN) per square foot per
year triple net and the Base Rent during the Second Extension Term commencing
October 1, 2009 and ending September 30, 2012 shall be at the rate of four
dollars and seventy-one ($4.71/sf/yrNNN) per square foot per year NNN each
payable in equal monthly installments. The terms of the Lease for the First
Extension Term and the Second Extension Term shall be the same terms, conditions
and covenants as set forth in this Lease other than the monthly Base Rent term
of the Lease, and Landlord shall have no obligation to make any alterations or
improvements to the Premises. If Landlord does not receive from Tenant written
notice of Tenant's exercise of this option on a date which is at least one
hundred and eighty days prior to the end of the initial term of the Lease, all
rights under this option shall automatically lapse and terminate and shall be of
no further force and effect. Time is of the essence herein.
(2) Time is of the essence as to the giving of Tenant's Extension
Notice.
(3) If Tenant duly exercises its right to extend the term of the Lease
for the Extension Term(s), the term "Term" as used in the Lease shall be
construed to include when practicable the Extension Term as applicable.
(4) If Tenant duly exercises its right to extend the term of the Lease
for the Extension Term(s), such right must be performed in strict accordance
with the terms contained herein then Tenant shall accept the Premises in its
"AS-IS, WHERE-IS" condition and, accordingly, Landlord shall not be required to
perform any additional improvements or refurbishments to the Premises provided
however, Landlord shall not be relieved of its obligations under Paragraph 5.
Landlord shall prepare and Tenant shall execute an amendment to the Lease
confirming the extension of the Lease and the other provisions applicable
thereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
year and date first above written.
LANDLORD: VERBAL CORPORATION
X. Xxxxx
--------------------------------------
Title: Vice President
Date: July 2, 1999
TENANT: RESTORATION HARDWARE, INC.
Xxxxxx Xxx
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Title: SVP CFO
Date: June 30, 1999
ATTEST: X. Xxxxxxx
Title:
Date: June 30, 1999
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EXHIBIT A
THE PREMISES
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EXHIBIT B
INTENTIONALLY OMITTED
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EXHIBIT C
RULES AND REGULATIONS
(a) Tenant shall not use the name of the Building for any purpose other
than that of the business address of Tenant;
(b) Tenant shall provide Landlord with duplicate keys for all locks on
the Premises except to safes and vaults kept in the Premises by Tenant. Upon
termination of this Lease or of Tenant's possession of the Premises, Tenant
shall surrender all keys for door locks and other locks in or about the Premises
and shall make known to Landlord the combination of all locks, safes, cabinets
and vaults that are not removed by Tenant;
(c) Tenant assumes full responsibility for protecting the Premises from
theft, robbery and pilferage;
(d) Tenant shall not install or operate any machinery or mechanical
devices of a nature not directly related to Tenant's ordinary use of the
Premises and shall keep all such machinery free of vibration, noise and air
waves which may be transmitted beyond the Premises;
(e) Tenant shall not overload any driveway, parking area or any floor
and shall not install any heavy objects, safes, machines or other equipment not
ordinarily used in Tenant's business without having received Landlord's prior
written consent as to size, maximum weight, routing and location thereof which
consent shall not be unreasonably withheld, conditioned or delayed;
(f) Tenant shall not in any manner deface or intentionally damage the
Building.
(g) Tenant shall not bring into the Building or Premises flammables such
as gasoline, kerosene, naphtha and benzene, or explosives or any other articles
of an intrinsically dangerous nature or any hazardous materials (except as used
in the ordinary course of Tenant's business and in accordance with all laws);
(h) Tenant shall ascertain from Landlord the maximum amount of
electrical current which can safely be used in the Premises, taking into account
the capacity of the electric wiring in the Building and the Premises and the
needs of other tenants, and shall not use more than such safe capacity.
Landlord's consent to the installation of electric equipment shall not relieve
Tenant from the obligation not to use more electricity than such safe capacity;
(i) Tenant shall not burn any trash or refuse in the Building or on the
Property; and
(j) Tenant shall not permit outside storage, other than the orderly,
outside storage of trucks and other vehicles, or dumping of waste or refuse or
permit any harmful materials to be place in any drainage system or sanitary
system in or about the Premises (except in compliance with all laws).
36
37
EXHIBIT D
INDUSTRIAL BUILDING SIGN CRITERIA
The purpose of the sign criteria is to outline the basic standards which have
been established to govern the design, fabrication and installation of Tenant's
signs.
The most attractive and economically successful properties are those which have
insisted upon sign control. The accompanying SIGN CRITERIA should be given to
your sign company to serve as a guide in preparing their design and cost
estimates for your approval.
Tenant signs must be kept clean and in good operating condition. It is
recommended that the tenant develop a maintenance program to assure that signs
will always appear inviting to its customers and enhance the overall appearance
of the building.
All signs shall meet the following requirements,
1. Prior to fabrication of any exterior signs, prints and specifications must
be submitted to Landlord for written approval.
2. All Tenant's main signs shall be located within the canopy fascia area.
Signs shall be centered over leased property or as specified by the
landlord.
3. Electric signs will not be permitted on the storefront system.
4. Sign boxes will not be permitted.
5. Paper signs and stickers are prohibited.
6. Signs shall have no moving, flickering or flashing lights, nor moving
parts.
7. Signs shall have no exposed neon cross-overs ballast boxes or
transformers.
8. Freestanding signs and portable signs are prohibited.
9. Size of sign to be governed by the following:
No sign shall have horizontal length in excess of 75% of the frontage lease
space. No sign shall have a vertical height in excess of 36" maximum capital
letter height for a standard type style with an average consistent letter height
of no more than 29".
10. The wording of all signs is limited to the name of the business. Tenants
may use corporate crests, logo, xxxxxxx or insignias.
11. Sign company names or stamps shall be concealed.
The Tenant shall be held liable and shall bear all cost for design,
installation, removal and/or correction of sign installation and damage to
building by signs that do not conform to sign criteria.
37
38
NOTE: The above is the minimum specification for sign criteria. Specifications
is excess of the criteria will be accepted upon written approval of the
Landlord.
Tenant shall provide three (3) complete sets of sign drawings to Landlord for
review by Landlord before fabrication. Tenant's sign drawings must include the
following:
1. Elevation view of storefront showing sign (drawn to accurate scale) with
dimensions of height of letter and length of sign;
2. Color sample of sign panel
3. Color sample for sign letters (unless they are to be white);
4. Cross section view of sign letter and sign panel showing location of sign
relative to the sign panel line and showing the dimensions projection of
the face of the letter from the face of the sign panel.
The Landlord shall not be responsible for the cost of refabrication of signs
fabricated, ordered, or constructed that do not conform to the sign criteria.
Tenant shall repair, paint and/or replace the building facia surface to which
its signs are attached upon vacation for the premises and this requirement shall
survive expiration or earlier termination of the Lease.
38
39
EXHIBIT E
STIPULATION AS TO REJECTION OF LEASE
UNITED STATES BANCRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------
In re:
Xxxx Xx. 00 X 00000 (XX)
XXXXXX SEAT STORES, INC., ET AL., Chapter 11
(Jointly Administered)
Debtors.
----------------------------------
STIPULATION AS TO REJECTION OF REAL PROPERTY LEASE, AS MODIFIED
---------------------------------------------------------------
WHEREAS, on January 22, 1999 (the "Commencement Date"), County Seat
Stores, Inc. ("County Seat") and CSS Trade Names, Inc. ("CSS"; together with
County Seat, the "Debtors") each filed with this Court a voluntary petition for
relief under Chapter 11 of Title 11, United States Code (the "Bankruptcy Code");
and
WHEREAS, on February 18, 1999, the Court approved the Final Order
Authorizing Post-Petition Secured Financing Pursuant to Sections 364(c)(2) and
364(c)(3) of the Bankruptcy Code (the "Final Financing Order"). The Final
Financing Order provided that the Debtors' lenders (the "Lenders") would provide
post-petition financing to fund the Debtors' operations; and
WHEREAS, on March 12, 1999, with the consent of the Debtors and the
Official Committee of Unsecured Creditors appointed pursuant to Section 1102 of
the Bankruptcy Code (the "Committee"), this Court entered an Order Directing the
Appointment of Chapter 11 Trustee and the Trustee was appointed, and
40
WHEREAS, on March 26, 1999, the Court entered an Order, inter alia,
(a) approving an Agency Agreement with the joint venture of Schottenstein
Xxxxxxxxx Capital Group, LLC. The Ozer Group LLC, the Nassi Capital Group, LLC
(collectively, "SBON"), (b) authorizing the sale of the Debtors' inventory free
and clear of any and all liens, claims and encumbrances pursuant to Sections
363(b), (f), (m) and (n) of the Bankruptcy Code and Bankruptcy Rule 6004(f)(l)
of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), (c)
approving the conduct of going-out-of-business sales ("GOB Sales"), (d) granting
SBON an administrative super-priority claim subject to the terms of the Agency
Agreement pursuant to Sections 503(b), 507(a) and 507(b) of the Bankruptcy Code,
and (e) approving the form and manner of notice in limiting and shortening time
therefor (the "GOB Order"). The GOB Order provided for the sale of substantially
all of the Debtors' inventory; and
WHEREAS, prior to the Commencement Date, County Seat entered into a
real property lease with Verbal Corporation ("Landlord"), made as of the 26th
day of February, 1998, (the "Lease"), pursuant to which County Seat leased
certain warehouse premises more particularly described as Building #0,
Xxxxxxxxxx Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx (the "Premises") upon the terms
and conditions as contained therein. A copy of the Lease is annexed hereto, made
a part hereof and marked as Exhibit "A"; and
-2-
41
WHEREAS, County Seat was in presentation of the Premises on the
Commencement Date and continues to be in possession of the Premises; and
WHEREAS, County Seat has determined that its continued possession of
the Premises is only needed for a short period of time to enable it to sell
certain furniture, fixtures and equipment ("FF&E") located on the Premises and
that its obligations with respect to the Lease are burdensome to County Seat
and its entire estate, including without limitation, the rentals due under the
Lease; and
WHEREAS, County Seat and the Landlord have agreed to modify the
terms of the Lease to provide for a restructured and limited use of the
Premises by County Seat prior to the rejection of the Lease, the terms of which
are set forth herein.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, receipt of which is hereby acknowledged, County Seat
and the Landlord hereby agree as follows:
1. County Seat shall continue to occupy the Premises up through but
not beyond June 30, 1999 without any obligation to pay any additional rent or
other charges for the unpaid part of May, 1999 and the entire month of
June, 1999.
-3-
42
2. The Landlord shall have the immediate right to show the Premises
to prospective tenants and may enter into a lease and permit possession by
another tenant on July 1, 1999.
3. The FF&E may remain on the Premises following July 1, 1999, but
County Seat agrees that the Landlord shall have no less than 100,000 square feet
of free, usable space.
4. Notwithstanding Landlord's right to re-let the Premises commencing
July 1, 1999, County Seat or its assignee shall have the right to enter the
portion of the Premises where the FF&E is located for the purposes of selling,
disassembling and/or moving the FF&E and other personality from the Premises
through and including July 15, 1999, after which point in time County Seat shall
have no further right to enter the Premises. County Seat shall have no
obligation to pay any rent for the period of July 1 through July 15. If the FF&E
remains on the Premises past July 1, 1999, the Landlord shall have control over
the access of County Seat or its designee to the Premises so as to maintain
security and prevent interference with any new tenant; provided, however, that
Landlord will permit access to County Seat or its designee during normal
business hours.
5. Commencing July 15, 1999, if County Seat or its designee have not
removed the FF&E and other personality from the Premises, the FF&E and other
personality shall be deemed
-4-
43
abandoned to the Landlord and the Landlord's property and County Seat and its
designee will have no further right to enter or utilize the Premises.
6. Effective immediately upon County Seat's vacation of the Premises
on June 30, 1999, the Lease shall be rejected in its entirety pursuant to
Section 365 of the Bankruptcy Code and County Seat will abandon to Landlord all
of its right, title and interest in and to the Premises and under the Lease;
provided, however, that County Seat shall have the right to enter and utilize
the Premises to sell or other dispense of with the FF&E as set forth in
Paragraph 4 hereof through July 15, 1999.
7. Landlord agrees to waive any and all claims to rent or other
charges pursuant to the Lease for the unpaid period of May, 1999, the entire
month of June, 1999 and the month of July through July 15, 1999 and agrees to
return to County Seat any deposit being held, not of any application of the
deposit for damages to the Premises pursuant to the terms of the Lease. In the
event County Seat or its designee fail to remove all FF&E from the Premises by
July 15, Landlord will have the immediate right to remove and dispose of the
FF&E as its own property.
8. This Stipulation shall be binding upon each of the parties hereto
and their successors and assigns.
44
9. This stipulation will not be modified, except in writing, which
modification shall be subject to approval of the Bankruptcy Court.
10. The Stipulation may be executed in any number of separate
counterparts by the parties hereto, and all of said counterparts taken together
shall constitute one and the same instrument.
11. The parties hereto agree to accept facsimile signature pages as
originals.
WHEREFORE, the parties hereto have executed the Stipulation as of
the 10th day of June, 1999.
Dated: New York, New York
June 10, 1999
COUNTY SEAT STORES, INC., Debtor
By: /s/ Sig. Illegible, Attorney In Fact for Xxxx Xxxxx
____________________________________________________
Xxxx Xxxxx, Chapter 11 Trustee
VERBAL CORPORATION
/s/ X. Xxxxx
By: ___________________________________________________
Vice President
Title: ________________________________________________
[SIGNATURES CONTINUED ON NEXT PAGE]
-6-
45
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
SO ORDERED, this _______ day of _________, 1999.
______________________________
United States Bankruptcy Judge
-7-
46
EXHIBIT F
FORM OF CERTIFICATE OF INSURANCE
ACORDTM CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YY)
6/29/99
PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER
OF INFORMATION ONLY AND CONFERS NO RIGHTS
Aon Risk Svcs Inc of No. Cal. UPON THE CERTIFICATE HOLDER. THIS
One Market CERTIFICATE DOES NOT AMEND, EXTEND OR
Spear Street Tower Ste. 2100 ALTER THE COVERAGE AFFORDED BY THE
Xxx Xxxxxxxxx, XX 00000 POLICIES BELOW.
000-000-0000 COMPANIES AFFORDING COVERAGE
COMPANY
A Royal Ins Co of America
--------------------------------------------------------------------------------
INSURED COMPANY
B
Restoration Hardware Inc. COMPANY
00 Xxxx Xxxx, Xxxxx X X
Xxxxx Xxxxxx, XX 00000 COMPANY
D
--------------------------------------------------------------------------------
COVERAGES
-------------------------------------------------------------------------------
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN
ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED,
NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER
DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN,
THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE
TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN
REDUCED BY PAID CLAIMS.
-------------------------------------------------------------------------------
POLICY POLICY
EFFECTIVE EXPIRATION
CO TYPE OF POLICY DATE DATE
LTR INSURANCE NUMBER (MM/DD/YY) (MM/DD/YY) LIMITS
GENERAL LIABILITY GENERAL AGGREGATE $2000000
A /X/ COMMERCIAL GENERAL ASV010054 10/01/98 10/01/99 PRODUCTS-COMP/OP AGG $2000000
LIABILITY PERSONAL & ADV INJURY $1000000
/ / CLAIMS MADE /X/ OCCUR EACH OCCURRENCE $1000000
OWNER'S & CONTRACTOR'S PROT FIRE DAMAGE (Any one fire) $1000000
--------------------------- MED EXP (Any one person) $ 5000
AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $1000000
A /X/ ANY AUTO ASV010054 10/01/98 10/01/99 BODILY INJURY
ALL OWNED AUTOS (Per person) $
SCHEDULED AUTOS BODILY INJURY
/X/ HIRED AUTOS (Per accident) $
/X/ NON-OWNED AUTOS PROPERTY DAMAGE $
----------------------------
GARAGE LIABILITY AUTO ONLY-EA ACCIDENT $
ANY AUTO OTHER THAN AUTO ONLY:
EACH ACCIDENT $
---------------------------- AGGREGATE $
EXCESS LIABILITY EACH OCCURENCE $20000000
A /X/ UMBRELLA FORM ASV010054 10/01/98 10/01/99 AGGREGATE $20000000
OTHER THAN UMBRELLA FORM $
WORKERS COMPENSATION AND /X/ WC STATUTORY LIMITS
EMPLOYERS' LIABILITY OTHER
X 99RTC458937 10/01/98 10/01/99 EL EACH ACCIDENT $1000000
X THE PROPRIETORY EL DISEASE-POLICY LIMIT $1000000
PARTNERS/EXECUTIVE / / INCL EL DISEASE-EA EMPLOYEE $1000000
OFFICERS ARE: / / EXCL
OTHER
-------------------------------------------------------------------------------
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
-------------------------------------------------------------------------------
CERTIFICATE HOLDER CANCELLATION
-------------------------------------------------------------------------------
MASTER CERTIFICATE
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION
DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE
TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO MAIL SUCH NOTICE
SHALL IMPOSE NO LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR
REPRESENTATIVES.
-------------------------------------------------------------------------------
AUTHORIZED REPRESENTATIVE 003613000
Xxxxxx Xxxxxx
47
ACORDTM EVIDENCE OF PROPERTY DATE (MM/DD/YY)
6/29/99
THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS BEEN ISSUED, IS IN
FORCE, AND CONVEYS ALL THE RIGHTS AND PRIVILEGES UNDER THE POLICY.
PRODUCER PHONE
A/C. No. Ext: 000-000-0000 COMPANY
Aon Risk Svcs Inc of No. Cal. Royal Ins Co of America
One Market
Xxxxx Xxxxxx Xxxxx Xxx. 0000
Xxx Xxxxxxxxx, XX 00000
CODE: SUB CODE:
AGENCY
CUSTOMER:
INSURED
Restoration Hardware Inc. LOAN NUMBER POLICY NUMBER
15 Xxxx Road, Suite J XXX000000
Xxxxx Xxxxxx, XX 00000
EFFECTIVE DATE EXPIRATION DATE
10/01/98 10/01/99
/ / CONTINUED UNTIL
TERMINATED IF CHECKED
THIS REPLACES PRIOR EVIDENCE DATED:
--------------------------------------------------------------------------------
PROPERTY INFORMATION
-------------------------------------------------------------------------------
LOCATION/DESCRIPTION
--------------------------------------------------------------------------------
COVERAGE INFORMATION
-------------------------------------------------------------------------------
COVERAGE/PERILS/FORMS AMOUNT OF INSURANCE DEDUCTIBLE
Combined Blanket Limit
Real & Personal Property, Xxxx 17,632,306 25,000,000
Income. Rep Cost, Agreed Amt
--------------------------------------------------------------------------------
REMARKS
-------------------------------------------------------------------------------
evidence of coverage in force
--------------------------------------------------------------------------------
CANCELLATION
-------------------------------------------------------------------------------
THE POLICY IS SUBJECT TO THE PREMIUMS, FORMS, AND RULES IN EFFECT FOR EACH
POLICY PERIOD. SHOULD THE POLICY BE TERMINATED, THE COMPANY WILL GIVE THE
ADDITIONAL INTERESTS IDENTIFIED BELOW 30 DAYS WRITTEN NOTICE, AND WILL SEND
NOTIFICATION OF ANY CHANGES TO THE POLICY THAT WOULD AFFECT THAT INTEREST, IN
ACCORDANCE WITH THE POLICY PROVISIONS OR AS REQUIRED BY LAW.
--------------------------------------------------------------------------------
ADDITIONAL INTEREST
-------------------------------------------------------------------------------
NAME AND ADDRESS / / MORTGAGE / / ADDITIONAL INSURED
/ / LOSS PAYEE / /
sample evidence in force LOAN#
AUTHORIZED REPRESENTATIVE
Xxxxxx Xxxxxx
003613
48
EXHIBIT G
1998 ACTUAL PROJECT OPERATING EXPENSES
Marshfield Building II
INCOME STATEMENT SUMMARY - YTD
January through December 1998
Jan - Dec '98
Income
4000 - Income from Tenants
4010 - Base Rent 595,700.00
4020 - CAM Reimbursement 48,300.00
4030 - Tax Reimbursement 23,980.00
4040 - Insurance Reimbursement 8,050.00
Total 4000 - Income from Tenants 681,030.00
Total Income 681,030.00
Expense
5000 - Common Area Maintenance Costs
5010 - Cleaning
5014 - Day Xxxxxx 750.00
Total 5010 - Cleaning 750.00
5020 - Repairs & Maintenance
5023 - Fire & Life Safety 2,211.00
5032 - R & M - Other 1,081.15
Total 5020 - Repairs & Maintenance 3,292.15
0000 - Xxxxx & Xxxxxxx
0000 - Xxxxxxx Xxxxxxxxxxx Contract 20,768.14
5043 - Other Grounds Maintenance 77.50
Total 5040 - Roads & Grounds 20,845.64
5050 - Utilities
5051 - Electric 2,703.72
5052 - Gas 13,113.95
5053 - Telephone 581.59
5054 - Water & Sewer 1,878.03
Total 5050 - Utilities 18,277.29
5060 - Administrative Expenses
5062 - Bank Charges 0.00
5063 - Admin. - Other 103.90
Total 5060 - Administrative Expenses 103.90
6000 - Professional Fees
6011 - Consulting 1,540.00
Total 6000 - Professional Fees 1,540.00
Total 5000 - Common Area Maintenance Costs 44,808.98
9000 - Management Fee 17,025.75
10000 - Non-Operating Expenses
10010 - Tenant Promos/Holiday 22.58
Total 10000 - Non-Operating Expenses 22.58
Total Expense 61,857.31
Net Income 619,172.69
49
EXHIBIT H
MEMORANDUM OF LEASE
WHEN RECORDED MAIL TO:
Xxxxxxx Xxxxxxx and Xxxxxxxx
Xxxxx Xxxxxx Xxxxx
Xxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
ATTN: Xxxx Xxxxxxxxx, Esq.
Memorandum of Lease
This is a Memorandum of Lease by and between VERBAL CORPORATION, a
Maryland corporation, having its principal place of business at 00 Xxxxxxxx
Xxxxxxx, XX, Xxxxxxx, XX 00000 ("Landlord") and RESTORATION HARDWARE, INC., a
Delaware corporation, having its principal place of business at 00 Xxxx Xxxx,
Xxxxx X, Xxxxx Xxxxxx, XX 00000 ("Tenant"), upon the following terms:
Date of Sublease: June 30, 1999
Description of Premises: 0000 Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxx xx Xxxxxxxxx,
Xxxxxxxx.
Term: 87 months, commencing on July 1,1999 and expiring on September 30,
2006.
Renewal Option(s): Two (2) three (3) year extension options.
The provisions of this Memorandum of Lease are subject in all respects to
the provisions of the Lease, to which reference must be made in connection with
any matters affecting the Lease. Nothing contained in this Memorandum of Lease
shall modify or amend the Lease in any way. In the event of any discrepancy or
inconsistency between the terms and conditions of this Memorandum of Lease and
the Lease, the terms of the Lease shall control. The purpose of this Memorandum
of Lease is to give record notice of the Lease and of the rights and obligations
created thereby, the whole of which are hereby confirmed.
50
IN WITNESS WHEREOF, the parties have executed this Memorandum of Lease as
of the dates set forth in their respective acknowledgments.
LANDLORD: VERBAL CORPORATION
By: X. Xxxxx
---------------------------
Print Name: Xxxxxx Xxxxx
---------------------------
Its: Vice President
TENANT:RESTORATION HARDWARE, INC.
By: Xxxxxx Xxx
---------------------------
Print Name: Xxxxxx Xxx
---------------------------
Its: SVP CFO
2
51
ACKNOWLEDGEMENTS
STATE OF GEORGIA )
) ss:
COUNTY OF XXXXXX )
On the ___ day of June, 1999, before me personally came
____________________to me known, who, being by me duly sworn, did depose and say
that he is Vice President of VERBAL CORPORATION, a Maryland corporation, the
company described in and which executed the foregoing instrument; that the
foregoing instrument was executed with full authority of the company and that he
signed his name thereto by like order.
-------------------------------
Notary Public
[ATTACH APPROPRIATE CALIFORNIA ACKNOWLEDGMENT]
3
52
EXHIBIT I
DISCHARGE OF MEMORANDUM
This is a Discharge of Memorandum of Lease ("Discharge") from RESTORATION
HARDWARE, INC., a Delaware corporation, having an office at 00 Xxxx Xxxx, Xxxxx
X, Xxxxx Xxxxxx, XX 00000 ("Tenant") to VERBAL CORPORATION, a Maryland
corporation, having its principal place of business at 00 Xxxxxxxx Xxxxxxx, XX,
Xxxxxxx, XX 00000 ("Landlord").
Landlord and Tenant entered into a Lease Agreement dated June 30, 1999
("Lease"), for certain premises located at Xxxxxxxxxx Xxxxxxxx Xxxx, 0000 Xxxxx
Xxxxx, Xxxxxxxxx, Xxxxxx of Baltimore, Maryland, a memorandum which was recorded
in the Land Records of Baltimore County at Liber ____, Page ____, on
______________. Said Lease has been terminated and authorization is hereby given
to record this Discharge as notice of such termination.
IN WITNESS WHEREOF, Tenant has executed this Discharge of Memorandum as of
the date set forth in its attached acknowledgement.
TENANT:
RESTORATION HARDWARE, INC.
By: Xxxxxx Xxx
---------------------------------
Print Name: Xxxxxx Xxx
---------------------------------
Its: SVP CFO
---------------------------------
ATTEST: X. Xxxxxxx
------------------------------
[ATTACH APPROPRIATE CALIFORNIA ACKNOWLEDGMENT]
