LEASE AGREEMENT
BY AND BETWEEN
PARCEL A-40 ASSOCIATES, LLC
AND
THE COSMETIC CENTER, INC.
TABLE OF CONTENTS
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Section Page No.
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SECTION 1. PREMISES..................................................... 1
SECTION 2. LEASEHOLD IMPROVEMENTS - USE................................. 1
SECTION 3. TERM......................................................... 2
SECTION 4. RENT......................................................... 3
4.01 BASE RENT........................................ 3
4.02 ADDITIONAL RENT.................................. 4
4.03 PARTIAL MONTH.................................... 10
4.04 PLACE OF PAYMENT................................. 10
4.05 RENT ABATEMENT................................... 10
SECTION 5. AGREEMENTS AND COVENANTS OF LANDLORD......................... 10
5.01 QUIET ENJOYMENT................................. 11
5.02 ROOF & EXTERIOR STRUCTURE WALLS.................. 11
5.03 COMMON AREAS..................................... 11
5.04 PARKING.......................................... 11
5.05 OPERATING SERVICES............................... 11
5.06 INSURANCE........................................ 12
SECTION 6. AGREEMENTS AND COVENANTS OF TENANT; HAZARDOUS SUBSTANCES;
INDEMNITIES.................................................. 12
6.01 USE OF PREMISES.................................. 12
6.02 USE OF GROUNDS................................... 14
6.03 CLEANING AND MAINTENANCE OF PREMISES ............ 15
6.04 UTILITIES........................................ 16
6.05 HAZARDOUS WASTES................................. 17
6.06 VEHICLE RESTRICTIONS............................. 20
6.07 STORAGE RESTRICTIONS............................. 21
6.08 ALTERATIONS & MODIFICATIONS...................... 21
6.09 RELEASE; INDEMNIFICATION......................... 23
6.10 OPERATION OF MACHINERY; NOISE.................... 25
6.11 SIGNS AND AWNINGS................................ 25
6.12 SURRENDER OF PREMISES............................ 25
6.13 RIGHT TO SHOW PREMISES........................... 26
6.14 INSURANCE........................................ 26
6.15 COOPERATION-EXPANSION............................ 27
SECTION 7. PERFORMANCE OF OBLIGATIONS................................... 28
7.01 EVENTS OF DEFAULT................................ 28
7.02 LANDLORD'S REMEDIES.............................. 29
7.03 WAIVER OF NOTICE TO QUIT AND REDEMPTION.......... 31
7.04 ATTORNEY'S FEES; WAIVER.......................... 31
SECTION 8. CASUALTY; TAKING OR OTHER DESTRUCTION OF PREMISES............ 32
8.01 EMINENT DOMAIN................................... 32
8.02 DAMAGE BY FIRE................................... 32
SECTION 9. GENERAL PROVISIONS........................................... 33
9.01 HOLDING OVER..................................... 33
9.02 ACCESS TO PREMISES............................... 34
9.03 FORCE MAJEURE.................................... 35
9.04 SECURITY DEPOSIT................................. 35
9.05 ESTOPPEL STATEMENT............................... 35
9.06 SUCCESSORS & ASSIGNS............................. 36
9.07 SUBORDINATION/ATTORNMENT/LENDER RIGHTS........... 36
9.08 TENANT'S FINANCIAL CONDITION..................... 38
9.09 USE OF PAVED AREAS............................... 38
9.10 USE OF TRASH REMOVAL SERVICE..................... 38
9.11 ASSIGNMENT OR SUBLETTING......................... 39
9.12 WAIVER OF TRIAL BY JURY.......................... 40
9.13 NO RECORDATION................................... 40
9.14 CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY....... 40
9.15 EXECUTION OF LEASE............................... 40
9.16 RULES AND REGULATIONS............................ 40
9.17 BROKER........................................... 41
9.18 TOPIC HEADINGS................................... 41
9.19 GOVERNING LAW.................................... 41
9.20 NOTICE........................................... 41
9.21 AMENDMENTS....................................... 42
9.22 TIME IS OF THE ESSENCE........................... 42
9.23. LIABILITY........................................ 42
9.24 RIGHT OF FIRST OFFER............................. 43
9.25 RENEWAL OPTION................................... 44
EXHIBITS
Exhibit A - Description of Property and Premises
Exhibit B - Landlord Work Agreement
Exhibit C - Certificate of Lease Commencement
Exhibit D - Diagram of Parking Areas
Exhibit E - Prohibited Chemicals
Exhibit F - Affected Areas
Exhibit G - Form of Waiver of Landlord's Lien
Exhibit H - Form of Non-Disturbance Agreement
LEASE AGREEMENT
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THIS LEASE AGREEMENT (this "Lease") is made and entered into as of the
first day of June, 1997, by and between PARCEL A-40 ASSOCIATES, LLC, a Maryland
limited liability company (hereinafter called "Landlord"), and THE COSMETIC
CENTER, INC., a Delaware corporation (hereinafter called "Tenant").
For and in consideration of the rents, covenants and conditions
described below and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereinafter
covenant and agree as follows:
SECTION 1. PREMISES. Landlord does hereby lease and demise
to Tenant, and Tenant does hereby rent and lease from Landlord, for the term or
terms and pursuant to the provisions hereinafter specified, approximately two
hundred five thousand three hundred (205,300) square feet of gross leasable
space (referred to hereinafter as the "Premises"), which is a portion of the
building(s) currently existing and located on Landlord's land at Gateway
Commerce Center (the "Property"), in Columbia, Xxxxxx County, Maryland,
together with a right to use, in common with others, the Common Areas
(hereinafter defined), other than those portions of the Common Areas which
have been identified and dedicated for the exclusive use of tenants. The
Premises is outlined in red (with diagonal lines) on Exhibit A attached
hereto, but the Premises does not include any basement that exists within
the boundaries of the Premises outlined in red (with diagonal lines) on
Exhibit A attached hereto. A metes and bounds description of the
Property is attached as part of Exhibit A. The determination of the number of
square feet of gross leasable area in the Premises or improvements on the
Property shall be determined by any method of measurement reasonably determined
by Landlord, provided that notwithstanding anything to the contrary contained
in this Lease, for purposes of determining the Base Rent and any Additional
Rent, the Premises (excluding any Offered Space that might become part of the
Premises pursuant to Section 9.24 below) shall be deemed to contain Two Hundred
Thousand (200,000) square feet of gross leasable area. Neither Landlord nor
Tenant shall be entitled to any adjustment of the Premises, the Base Rent, or
Additional Rent based on the actual square footage of the Premises. Tenant
shall have a right of first offer to expand the Premises as set forth in
Section 9.24 below.
SECTION 2. LEASEHOLD IMPROVEMENTS. Landlord agrees that it shall
improve the Premises by performing the following work ("Landlord's Work"):
(i) installation of a demising wall, pit levelers, doors and other work in
the warehouse portion of the Premises as more particularly described in
Schedule 1 of the Landlord Work Agreement attached hereto as Exhibit B
("Landlord's Warehouse Work"); (ii) construction of certain
additional improvements in the warehouse portion of the Premises as more
particularly described in Schedule 2 of the Landlord Work Agreement
("Landlord's Additional Warehouse Work"); and (iii) construction of twenty-five
thousand (25,000) square feet of office space within the
Premises in accordance with the Landlord Work Agreement ("Landlord's Office
Work"). Landlord will design and construct Landlord's Warehouse Work at
Landlord's cost and expense. Landlord will design and construct Landlord's
Additional Warehouse Work at Tenant's cost and expense. Landlord will provide
Tenant with an allowance of Five Hundred Sixty-Two Thousand Five Hundred
Dollars ($562,500.00) (the "Allowance") to cover the cost of designing and
constructing Landlord's Office Work. If the cost of designing and constructing
Landlord's Office Work is less than the Allowance, such savings shall be
retained by Landlord. If the cost of designing and constructing Landlord's
Office Work exceeds the Allowance, Tenant shall pay such excess in accordance
with the Landlord Work Agreement as Additional Rent. Landlord's Warehouse Work,
Landlord's Additional Warehouse Work, and Landlord's Office Work each shall be
deemed to be substantially completed on the date that Landlord has
substantially completed such portion of Landlord's Work, subject to completion
of "punch list" items, as determined in accordance with the Landlord Work
Agreement. By taking possession of the Premises, Tenant will be deemed to have
accepted the Premises and Landlord's Work and to have waived all claims of
defect in the Premises, subject to completion of punch list items during the
first thirty (30) days following substantial completion of each of the
warehouse and office portions of the Premises, respectively, and correction of
latent defects during the first one hundred eighty (180) days following
substantial completion of each of the warehouse and office portions of the
Premises, respectively. Prior to taking occupancy of each of the warehouse and
office portions of the Premises, Landlord and Tenant shall jointly inspect the
applicable portion of the Premises and jointly prepare a punch list of items to
be completed. During the first month of Tenant's occupancy of each of the
warehouse and office portions of the Premises, respectively, from time to time
at Tenant's request, Landlord and Tenant shall jointly re-inspect the Premises
and jointly update the applicable punch list. If Landlord and Tenant cannot
agree on the punch list, the Architect shall make such determination. Landlord
shall proceed in a commercially reasonable manner to diligently correct or
complete all punch list items. With respect to latent or hidden defects not
discovered during the first thirty (30) days following substantial completion
of each of the warehouse and office portions of the Premises, respectively,
Tenant may give Landlord written notice during the first one hundred eighty
(180) days following substantial completion of each of the warehouse and office
portions of the Premises, respectively, and Landlord shall proceed in a
commercially reasonable manner to diligently correct such latent or hidden
defects as soon as practicable.
SECTION 3. TERM. The term of this Lease shall begin on the June
1, 1997 ("Commencement Date"). Tenant shall be obligated to accept delivery of
the warehouse portion of the Premises when Landlord's Warehouse Work is
substantially completed, even though Landlord's Additional Warehouse Work
and/or Landlord's Office Work is not then substantially completed. The term of
this Lease shall end on the 31st day of May, 2007 (the "Termination Date"),
unless sooner
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terminated as provided herein or extended as set forth in Section 9.25 below.
Tenant agrees that it shall execute the Certificate of Lease Commencement, in
the form attached hereto as Exhibit C, simultaneously with its execution of
this Lease. Execution and delivery of such certificate shall be without
prejudice to Tenant's rights to require Landlord to correct or complete punch
list items and latent or hidden defects pursuant to Section 2.
SECTION 4. RENT.
4.01 BASE RENT. Tenant agrees to pay to Landlord the
amounts set forth below for each year of the original Lease term (the "Base
Rent"), payable without deduction, set-off or demand:
Lease Year Annual Base Rent
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1 $1,020,000.00
2 $1,020,000.00
3 $1,080,000.00
4 $1,130,000.00
5 $1,130,000.00
6 $1,130,000.00
7 $1,160,000.00
8 $1,160,000.00
9 $1,170,000.00
10 $1,170,000.00
The foregoing amounts shall be paid in equal monthly installments, in advance,
on the first day of each calendar month during such term, plus Additional Rent
(hereinafter defined), as hereinafter set forth; provided that notwithstanding
the foregoing, Base Rent shall not commence with respect to certain portions of
the Premises until the applicable rent commencement dates set forth in Section
4.05 below. The terms Base Rent and Additional Rent and any other amounts
payable by Tenant to Landlord under this Lease are sometimes hereinafter
referred to collectively as the "Rent". The first Lease Year shall run from the
Commencement Date through the last day of the month during which the first
anniversary of the Commencement Date shall occur. Each Lease Year thereafter
shall be a period of twelve (12) full months, commencing on the first day of
the calendar month following the last calendar month of the first Lease Year,
except that the final Lease Year shall end on May 31.
4.02 ADDITIONAL RENT. Tenant hereby agrees to pay to Landlord,
as additional rent, the following amounts, together with all other
amounts Tenant is obligated to pay hereunder (collectively, the "Additional
Rent") in the manner and at such times as stated below:
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(a) Taxes.
(i) Tenant shall pay Landlord, as Additional Rent, its pro-rata
share of any "Taxes" (as defined below) in excess of "Base Year Taxes" (as
defined below). Tenant's pro-rata share shall be determined by multiplying such
Taxes in excess of Base Year Taxes by a fraction, the numerator of which shall
be the number of gross leasable square feet deemed to be contained within the
exterior boundaries of said Premises, which on the date hereof is two hundred
thousand (200,000) square feet, and the denominator of which shall be the then
existing number of square feet of gross leasable area of improvements on the
Property (excluding mezzanine and basement, if any), which on the date hereof
is seven hundred two thousand (702,000) square feet. Initially, Tenant's pro
rata share of Taxes shall be twenty-eight and forty-nine/one-hundredths percent
(28.49%), subject to adjustment in the event Tenant exercises its right to
expand the Premises pursuant to Section 9.24 or Landlord expands the
improvements on the Property. The amount of Tenant's pro-rata share of Taxes
shall be estimated annually by Landlord on the basis of the July 1 - June 30
tax year utilized by the applicable governmental authorities (the "Tax Year")
and written notice thereof shall be given to Tenant for each Tax Year.
Landlord's estimate shall be based on the assessment of the Property by the
taxing authorities and the tax rate which will be in effect during the Tax
Year, and shall be revised during the Tax Year in the event of any change in
the assessment or the tax rate. Tenant shall pay monthly, as Additional Rent,
at the same time as the monthly installment of Base Rent is due, an amount
equal to one-twelfth (1/12) of Tenant's estimated pro-rata annual share of such
Taxes in excess of Base Year Taxes. Tenant's pro rata share of Taxes shall be
reconciled on an annual basis, and Tenant shall promptly pay to Landlord, or
Landlord shall promptly pay or provide credit to Tenant (against the next
installment of Base Rent and Additional Rent coming due), for the difference
between Tenant's pro-rata share of the actual Taxes in excess of Base Year
Taxes and Tenant's estimated monthly payments theretofore paid with respect to
each Tax Year.
(ii) As used in this Lease, the term "Taxes" shall mean all real
estate, franchise, or excise taxes levied upon the Premises, or upon the use or
occupancy of the Premises, or upon any leasehold improvements in the Premises,
or any business conducted at the Premises, or upon this Lease or the Rent
payable hereunder, whether measured on the basis of gross or net rentals,
square footage, or otherwise; other taxes, levies, and assessments imposed upon
the Premises, and upon any personal property of Landlord used solely in the
operation thereof, or upon Landlord's interest in the Premises or such personal
property; charges, fees, and assessments for transit, housing, police, fire,
development districts, or other governmental services or purported benefits to
the Premises or user payments in lieu of taxes; any and all other taxes,
levies, betterments, assessments, and charges
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arising from the ownership, leasing, operating, use or occupancy of the
Premises, or based upon rentals derived therefrom, which are or shall be
imposed by national, state, municipal, quasi-governmental, or other authorities
having jurisdiction over the Premises; and any other tax, excise, fee, levy,
charge or assessment, however described, that may in the future be levied or
assessed as a substitute for, or in addition to, in whole or in part, any tax,
levy or assessment which would otherwise constitute Taxes, whether or not now
customary or in the contemplation of the parties on the date this Lease is
executed. Taxes shall also include expenses of tax abatement or other
proceedings contesting assessments or levies with respect to Taxes payable for
a Tax Year which occurs, in whole or in part, during the term.
(iii) Taxes shall not include any income taxes, corporate
franchise taxes, personal property taxes (other than taxes on personal property
used solely in the operation of the Property), payroll taxes, inheritance
taxes, estate taxes, gift taxes, and recordation and transfer taxes, and real
estate taxes allocable to limited purpose improvements which do not benefit any
tenant in occupancy of any portion of any building on the Property, such as a
microwave, television or radio antenna (the "Limited Purpose Improvements").
(iv) As used in this Lease, the term "Base Year Taxes" shall mean
the Taxes due and payable for the Tax Year ending June 30, 1998. If Landlord
contests the assessment of its real property during the Base Year, Landlord
must at the same time contest its real property assessment for each of the
remaining years of the three (3) year assessment cycle that includes the Base
Year, and if as a result of such contest Base Year Taxes are reduced, Landlord
also shall contest its real property assessment with respect to each year of
the next succeeding three (3) year assessment cycle.
(v) Should the taxing authorities include in the tax base upon
which such Taxes are levied or assessed the value of any improvements made by
Tenant, or of any machinery, equipment, fixtures, inventory or other personal
property or assets of Tenant, then Tenant shall pay the entire Tax attributable
to such items in addition to the portion of such Taxes payable by Tenant as
aforesaid. A tax xxxx issued by the taxing authority with jurisdiction over the
Property or true copy thereof submitted by Landlord to Tenant shall be evidence
of the amount of Taxes assessed or levied against any leasehold interest
hereunder or any personal property of any kind owned, installed or used by
Tenant on or at the Premises, and shall be presumed to be correct unless
rebutted by clear and convincing evidence to the contrary. If at any time
during the term of this Lease, a Tax is separately imposed on this Lease or the
Premises, whether measured by the Rent expressly reserved under this Lease (or
any other leases or leasehold interests in the Property) or the size of the
Premises or otherwise, as a substitute for or in addition to Taxes assessed or
imposed on land and buildings, the full amount of such Tax shall be paid
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by Tenant as Additional Rent hereunder. If any Tax levied against the land,
buildings or improvements covered hereby, or the Rent reserved under this
Lease, shall be payable in annual installments, only the amount paid or payable
with respect to any Lease Year or Tax Year shall be included in Taxes for that
Lease Year or Tax Year for the purposes of this Section 4.02(a).
(vi) In the event that any Lease Year does not coincide with the
Tax Year applicable to any Taxes payable hereunder, Tenant's pro rata share of
Taxes shall be determined by multiplying the amount of the Taxes for each Tax
Year occurring during the Lease Year by a fraction, the numerator of which
shall be the number of days during the applicable Tax Year which occur during
the Lease Year and the denominator of which shall be three hundred sixty-five
(365); and adding such products together. In the event any governmental
authority with jurisdiction over the Premises changes its Tax Year, or any
Lease Year is more or less than three hundred sixty-five (365) days, Base Year
Taxes shall be equitably adjusted to reflect the change in the Tax Year or the
actual number of days in the Lease Year.
(vii) Landlord represents and warrants all Taxes on the Property,
except current taxes not delinquent, have been paid in full and that the
Property constitutes one tax parcel for the assessment of real property taxes
and assessments. Landlord shall pay all Taxes on a timely basis, before any
interest or penalties accrue thereon. Taxes shall not include any such interest
or penalties. Tenant shall receive credit for its proportionate share of any
refunds or rebates of Taxes paid to Landlord and attributable to the term of
this Lease or any extension thereof, which right shall survive the expiration
of the term of this Lease. After expiration of the term and the payment of all
Rent due to Landlord, any credit shall be paid by Landlord in cash.
(b) Insurance. Tenant shall pay Landlord, as Additional Rent, its
pro-rata share of any insurance premiums (the "Insurance Premiums") paid by
Landlord on account of the Property (other than property damage insurance for
any Limited Purpose Improvements) pursuant to Section 5.06 in excess of the
Insurance Premiums payable by Landlord for the first Lease Year ("Base Year
Insurance Premiums"). Tenant's pro-rata share shall be determined by
multiplying such Insurance Premiums in excess of Base Year Insurance Premiums
by a fraction, the numerator of which shall be the number of gross leasable
square feet deemed to be contained within the exterior boundaries of the
Premises, which on the date hereof is two hundred thousand (200,000) square
feet, and the denominator of which shall be the then existing number of square
feet of gross leasable area of improvements on the Property (excluding
mezzanine and basement, if any), which on the date hereof is seven hundred two
thousand (702,000) square feet. Initially, Tenant's pro rata share of Insurance
Premiums shall be twenty-eight and forty-nine/one-hundredths percent (28.49%),
subject to adjustment in the event Tenant exercises its right to expand the
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Premises pursuant to Section 9.24 or Landlord expands the building(s) on the
Property. The amount of Tenant's pro-rata share of Insurance Premiums for a
particular calendar year shall be estimated annually by Landlord and written
notice thereof shall be given to Tenant for each calendar year. Landlord's
estimate shall be based on the then current xxxx for Insurance Premiums, and
shall be revised during the year in the event of any change in the Insurance
Premiums. Tenant shall pay monthly, as Additional Rent, at the same time as the
monthly installment of Base Rent, an amount equal to one-twelfth (1/12th) of
Tenant's estimated pro-rata annual share of such Insurance Premiums in excess
of Base Year Insurance Premiums. Tenant's pro rata share of Insurance Premiums
shall be reconciled on an annual basis, and Tenant shall promptly pay to
Landlord, or Landlord shall promptly pay or provide credit to Tenant (against
the next installment of Base Rent and Additional Rent coming due), for the
difference between Tenant's pro-rata share of actual Insurance Premiums in
excess of Base Year Insurance Premiums and Tenant's estimated monthly payments
theretofore paid with respect to each calendar year during the term. If the
last Lease Year does not coincide with a calendar year, the annual Insurance
Premiums and the Base Year Insurance Premiums for such partial calendar years
shall be multiplied by a fraction, the numerator of which shall be the number
of days in such partial calendar year and the denominator of which shall be
three hundred sixty-five (365).
(c) Operating Expenses.
(i) Tenant shall pay, as Additional Rent, its pro-rata share of
the "Operating Expenses" (as defined below). Tenant's pro-rata share shall be
determined by multiplying the total amount of Operating Expenses incurred by
Landlord in any calendar year by a fraction, the numerator of which shall be
the number of gross leasable square feet of space deemed to be contained within
the exterior boundaries of the Premises, which on the date hereof is two
hundred thousand (200,000) square feet, and the denominator of which shall be
the then existing number of square feet of gross leasable area of improvements
on the Property (excluding mezzanine and basement, if any, and excluding the
square footage attributable to any other tenants at the Property that are
maintaining their own Common Area at their own cost and expense), which on the
date hereof is five hundred eighty-two thousand one hundred fifty (582,150)
square feet. Initially, Tenant's pro rata share of Operating Expenses is
thirty-four and thirty-six/one-hundredths percent (34.36%), subject to
adjustment in the event Tenant exercises its right to expand the Premises
pursuant to Section 9.24 or Landlord expands the improvements on the Property.
The amount of Tenant's pro-rata share of Operating Expenses for a particular
calendar year shall be estimated annually by Landlord and written notice
thereof shall be given to Tenant for each calendar year. Landlord's estimate
shall be based on the evidence then available to Landlord with respect to its
Operating Expenses, and shall be revised during the year as better information
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becomes available. Tenant shall pay monthly, as Additional Rent, at the same
time as the monthly installment of Base Rent is due, an amount equal to
one-twelfth (1/12) of Tenant's estimated pro-rata annual share of such
Operating Expenses. Such estimated amount shall be reconciled on an annual
basis and Tenant shall promptly pay to Landlord, or Landlord shall promptly pay
or provide a credit to Tenant (against the next installment of Base Rent and
Additional Rent coming due), for the difference between Tenant's pro-rata share
of the actual Operating Expenses and Tenant's estimated monthly payments
theretofore paid with respect to each calendar year (or portion thereof) during
the term.
(ii) The term "Operating Expenses" shall mean any and all expenses
incurred by Landlord in connection with the operation, management, maintenance
and repair of the Property, including, without limitation: the cost of
maintaining or repairing all service pipes, electric, gas and water lines, and
sewer mains in the Common Areas; all utility charges incurred in operating the
Common Area; the cost of maintaining, operating, repairing, and repaving the
parking areas; gardening and landscaping; water and sewer charges to the extent
not included in Taxes; lighting; security; sanitary control; removal of ice,
snow, trash, rubbish, garbage and other refuse; cleaning; directional signs,
pavement marking, and parking lot striping; depreciation on machinery,
equipment and furnishings used exclusively at the Property in the operation and
maintenance thereof; the cost of personnel to implement such services, to
direct parking, and to police the Common Areas; management and administrative
fees (in an amount not to exceed four percent (4%) of base rents); legal fees;
accounting fees; and other professional fees.
(iii) Operating Expenses shall not include any of the following:
all costs incurred in maintaining, operating or repairing the roof and the
structural elements of the Property or any Limited Purpose Improvements;
expenses for capital improvements made to the Property (except for capital
expenditures to reduce Operating Expenses); expenses incurred by other tenants
at the Property in maintaining their own Common Area, which are not incurred or
paid by Landlord; interest and amortization of funds borrowed by Landlord,
whether secured or unsecured; depreciation of the Property; advertising
expenses incurred in procuring tenants for the Property; salaries, wages or
other compensation paid to officers or executives of Landlord; income, excess
profits, franchise taxes or other such taxes imposed on or measured by the
income of Landlord from the operation of the Property; Taxes; Insurance
Premiums; painting, redecorating or other work which Landlord performs for any
other tenant or prospective tenant in their respective premises which is not
part of the standard maintenance or repair for the Property which Landlord
performs for all tenants without extra charge; repairs or reconstruction
occasioned by fire, windstorm or other casualty or condemnation; repairs,
improvements, electricity, special cleaning or overtime services to the extent
such services are expressly reimbursed to Landlord by tenants (as opposed to
partial
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reimbursement in the nature of rent escalation provisions), separately charged
to and payable by tenants, or compensable by insurance proceeds; leasing
commissions and expenses of procuring tenants, including lease concessions and
lease take-over obligations; rent payable under any lease to which this Lease
is or becomes subject; supervisory personnel or property manager(s) included in
the management fee; enforcement of leases against tenants, including legal
fees; damages payable to tenants or lenders as a result of Landlord's violation
of the terms of any lease (including a ground or underlying lease) of space in
the buildings, or mortgage to which this Lease is subordinate; and testing for,
and clean up of, Hazardous Substances for which GE is responsible under Section
6.05 below or for which Landlord is reimbursed by another tenant at the
Property or by any other third party.
(d) Late Charge. Tenant shall pay, as Additional Rent, a ten percent
(10%) late charge for each monthly payment of Base Rent and Additional Rent for
Taxes, Insurance Premiums, and Operating Expenses received after the tenth
(10th) day of the month for which such payment is due, and for any other
payment of Additional Rent not received by Landlord within ten (10) days of the
date such payment is due; provided that one time per Lease Year such late
charge shall be waived with respect to a late payment of Base Rent and/or
Additional Rent if Tenant makes the required payment in full within five (5)
days of written notice from Landlord that such payment has not been received.
(e) Survival. The covenant of Landlord and Tenant to make adjustment
for items of Additional Rent, as provided above, shall survive termination or
expiration of this Lease. Any payments which Landlord or Tenant shall be
required to make to the other following termination or expiration of this Lease
shall be made as soon as practicable following determination of such
adjustments.
(f) Inspection of Books and Records. Tenant shall have the right, with
respect to each calendar year, to review relevant books and records of Landlord
with respect to the amount of Taxes, Insurance Premiums, and Operating Expenses
incurred by Landlord during such year. Not later than May 1 of each calendar
year during the term, Landlord shall deliver to Tenant a reconciliation in
reasonable detail, with respect to any Additional Rent charged to Tenant in
connection with Taxes, Insurance Premiums, and Operating Charges. Within ninety
(90) days following Tenant's receipt of such reconciliation, Tenant must give
written notice to Landlord of its desire to exercise its right to review such
books and records. Tenant's notice must identify the firm which will conduct
such review on Tenant's behalf, which must either be a "big six" accounting
firm, or an auditing firm under contract to Tenant and/or its affiliates to
conduct their tenant audits in a particular region or for a particular
affiliate or group of affiliates, or permanent employees of Tenant. The review
shall take place, at Landlord's option, at the Property, at any other office of
Landlord in Maryland or Virginia where such books and records are kept, or at
the
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offices of Landlord's accountant in Maryland or Virginia, at a time mutually
agreeable to Landlord and Tenant, within thirty (30) days of Tenant's notice.
The review shall be conducted by the designated firm or employees, and shall be
limited to the immediately preceding calendar year.
4.03 PARTIAL MONTH. In the event that the Lease Commencement
Date shall fall on a day other than the first day of a calendar
month, a proportionate part of the Rent shall be paid in advance at the rate
above specified for the portion of the month in which the term commenced.
Tenant will also pay, at the expiration or other termination of this Lease, a
proportionate part of said Rent for the part, if any, of a month then expired.
4.04 PLACE OF PAYMENT. All payments of Rent shall be made in
lawful money of the United States to Landlord in care of Xxxxxxx
Property Company at 0000 Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 or
in care of such other persons or entities as Landlord shall designate to Tenant
in writing from time to time.
4.05 RENT ABATEMENT.
(a) Base Rent shall commence with respect to the twenty-five
thousand (25,000) square foot office portion of the Premises (at the rate of
Five Dollars Ten Cents ($5.10) per square foot per annum) on the later of (i)
the date substantial completion of Landlord's Office Work has occurred, or in
the case of Tenant Delay (as defined in the Landlord Work Agreement) the date
substantial completion of Landlord's Office Work is deemed to have occurred, as
determined in accordance with the Landlord Work Agreement, or (ii) June 15,
1997.
(b) Base Rent shall commence with respect to one hundred
twenty-five thousand (125,000) square feet of the warehouse portion of the
Premises (at the rate of Five Dollars Ten Cents ($5.10) per square foot per
annum) on June 15, 1997.
(c) Base Rent shall commence with respect to the remaining fifty
thousand (50,000) square feet of the warehouse portion of the Premises (at the
rate of Five Dollars Ten Cents ($5.10) per square foot per annum) on September
15, 1997.
(d) If by August 15, 1997 substantial completion of Landlord's
Office Work and Landlord's Additional Warehouse Work has not occurred, or in
the case of Tenant Delay is not deemed to have occurred, as determined in
accordance with the Landlord Work Agreement, Base Rent shall be suspended for
the entire Premises until substantial completion of Landlord's Office Work and
Landlord's Additional Warehouse Work has occurred, or in the case of Tenant
Delay, is deemed
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to have occurred, in accordance with the Landlord Work Agreement; provided that
the August 15, 1997 date shall be extended pursuant to Section 9.03 if the
delay in achieving substantial completion of Landlord's Office Work and
Landlord's Additional Warehouse Work is due to force majeure conditions.
SECTION 5. AGREEMENTS AND COVENANTS OF LANDLORD. Landlord hereby
covenants and agrees as follows:
5.01 QUIET ENJOYMENT. Tenant shall have the quiet enjoyment of
the Premises during the term of this Lease provided that no Event
of Default by Tenant shall exist and be continuing. Landlord represents and
warrants to Tenant that Landlord is vested with fee simple title to the
Property and Premises and has full right and lawful authority to lease the
Premises to Tenant. Landlord has provided Tenant with a copy of its title
insurance policy.
5.02 ROOF & STRUCTURAL ELEMENTS. Landlord shall maintain in good
condition and repair the roof (exclusive of skylights and signs) and
structural elements (exclusive of plate glass, windows, window glass,
loading docks, doors, pit levelers and related apparatus, bumpers and dock
seals) of the Premises. Landlord shall not be required to make any repairs
necessitated by reason of any negligent act or omission of, or willful or
intentional misconduct of, or breach of this Lease by, Tenant or its
employees or agents, or anyone claiming under or through Tenant, or caused
by any alteration, addition or improvement made by Tenant or anyone
claiming under Tenant, and if Landlord does make any such repairs,
Tenant shall, within ten (10) days of written demand therefor (which demand
shall include reasonable evidence of the costs incurred by Landlord in
connection with such repairs), pay to Landlord the cost thereof as Additional
Rent.
5.03 COMMON AREAS. Landlord shall maintain, or cause to be
maintained, in good condition and repair all areas which are located outside
the walls of any building located within the Property (the "Common Areas").
Any costs incurred by Landlord in maintaining and repairing the Common Areas
pursuant to the previous sentence shall be included as Operating Expenses
of the Property. Landlord shall not be required to make any repairs
necessitated by reason of any negligent act or omission of, willful or
intentional misconduct of, or breach of this Lease by, Tenant or its employees
or agents, or anyone claiming under or through Tenant, or caused by any
alteration, addition or improvement made by Tenant or anyone claiming under
Tenant, and if Landlord does make any such repairs, Tenant shall, within ten
(10) days of written demand therefor (which demand shall include reasonable
evidence of the costs incurred by Landlord in connection with such repairs),
pay to Landlord the cost thereof, as Additional Rent.
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5.04 PARKING. Landlord shall provide for Tenant's exclusive
use the parking spaces for automobiles, the one hundred twenty foot (120') deep
parking spaces for trucks, and the staging areas for loading and unloading
trucks, all as shown on Exhibit D attached hereto and made a part hereof.
5.05 OPERATING SERVICES. Landlord shall provide the following
operating services to the Property: snow removal, parking lot maintenance,
water and sewer and utilities to Common Areas of the Property to the extent
necessary for the operation of the Property, and any other services that
Landlord, in its sole discretion, deems necessary or appropriate. Any cost
incurred by Landlord in providing such operating services shall be included as
Operating Expenses of the Property.
5.06 INSURANCE. Landlord shall maintain for the Property
a primary, non-contributory, "all-risk" policy of property damage insurance
insuring the Property (including the Premises but excluding Tenant's leasehold
improvements and all personal property located at the Premises) in an amount
equal to the full replacement value thereof, less a reasonable deductible. Such
insurance shall contain an express waiver of any right of subrogation and an
express consent to a waiver of right of recovery against Tenant, its employees
and its agents. Landlord shall also maintain during the term of this Lease
comprehensive general liability insurance, with limits of not less than
$5,000,000.00 combined single limit for personal injury, bodily injury, or
property damage or destruction (including loss of use thereof) for any one
occurrence. The cost incurred by Landlord in providing these insurance
coverages shall be included as Insurance Premiums pursuant to Section 4.02(b)
of this Lease.
SECTION 6. AGREEMENTS AND COVENANTS OF TENANT; HAZARDOUS
SUBSTANCES; INDEMNITIES. Tenant hereby covenants and agrees as follows:
6.01 USE OF PREMISES.
(a) Permitted and Prohibited Uses. Tenant will use and occupy the
Premises solely for purposes of storage and distribution of the products and
inventory manufactured, used or sold by Tenant and its affiliates, including
without limitation, perfumes, fragrances, cosmetics and other health and beauty
aid products, and office uses incidental thereto, but only in accordance with
applicable zoning and other municipal regulations; without the prior written
consent of Landlord, the Premises will not be used for any other purpose.
Notwithstanding the foregoing, Tenant shall not store tires, Hazardous
Substances (as defined in Section 6.05(a) below, except to the limited extent
such Hazardous Substances are permitted by Section 6.05(a)), and other
materials that emit noxious fumes or odors, increase fire hazards, or are
deemed to interfere with, be incompatible with, or inconsistent with the use of
the
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Property by other tenants, in Landlord's reasonable discretion. Tenant shall
not use, or suffer or permit the use or occupancy of, or suffer or permit
anything to be done in or anything to be brought into or kept in or about the
Property, the Premises or any part thereof (i) which would violate any of the
covenants, agreements, terms, provisions and conditions of this Lease or any
other document otherwise applicable to, or binding upon, the Premises; (ii) for
any unlawful purposes or in any unlawful manner; (iii) which, in the reasonable
judgment of Landlord shall in any way (A) impair the appearance or reputation
of the Premises, or (B) permit any nuisance or illegal activity of any kind in
the Property or in the Premises. Tenant shall comply with all present and
future laws, ordinances, regulations and orders of the United States of
America, the State of Maryland, Xxxxxx County, and any other public or
quasi-public authority having jurisdiction over the Premises; provided that
during the last twelve (12) months of the term of this Lease, Tenant shall not
be required to make any material Alterations (as defined in Section 6.08(b)
below) to the Premises to bring the Premises into compliance with any laws,
ordinances, regulations or orders not in effect on the Commencement Date of
this Lease, if Tenant vacates the Premises and pays all Rent due for the
remainder of the term, as and when due, regardless of whether Landlord relets
the Premises after Tenant vacates the Premises; and provided further, that
nothing herein shall be deemed to excuse Landlord from its obligations under
Sections 2, 5.02, 5.03, 5.05, 6.01(b), 6.05(b), 6.05(c), 6.06 and 8.02. Tenant
represents and warrants to Landlord that Tenant has entered into this Lease
entirely for a business or commercial purpose.
(b) Licenses and Permits. Upon substantial completion of
Landlord's Work, Landlord will obtain and deliver to Tenant the initial
certificate of occupancy or use and occupancy permit for the Premises.
Thereafter, Tenant will obtain any and all permits, licenses and certificates
required by applicable laws or regulations for the use or occupancy of the
Premises by Tenant and provide copies of same to Landlord within five (5) days
of Landlord's request therefor. It is expressly understood and agreed that if
any future law, ordinance, regulation, or order requires a new certificate of
occupancy for the Premises, Tenant will obtain such certificate at Tenant's own
expense. Notwithstanding the foregoing, if the Premises do not qualify for a
certificate of occupancy or other permit because of structural matters,
environmental contamination not caused by Tenant, or its agents, employees,
contractors, or invitees, or the failure of Landlord's Work to conform to
applicable laws or regulations, Landlord will be responsible for the correction
of such items. If any governmental license, permit, registration or approval
shall be required for the proper and lawful conduct of Tenant's business, and
if the failure to secure such license, permit, registration or approval would
in any way materially and adversely affect Landlord, the Premises or Tenant's
ability to perform any of its obligations under this Lease, Tenant, at Tenant's
expense, shall duly procure and thereafter maintain such license, permit,
registration or approval and, following Landlord's request, submit the same to
inspection by Landlord. Tenant, at Tenant's expense, shall at all times
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comply with the terms and conditions of each such license, permit, registration
or approval; provided that during the last twelve (12) months of the term of
this Lease, Tenant shall not be required to make any material Alterations to
the Premises to bring the Premises into compliance with such license, permit,
registration or approval if Tenant vacates the Premises and pays all Rent due
for the remainder of the term, as and when due, regardless of whether Landlord
relets the Premises after Tenant vacates the Premises. Tenant shall furnish all
data and information to governmental authorities and Landlord as may be
requested by such authorities in accordance with legal, regulatory, licensing
or other applicable governmental requirements as they relate to Tenant's use or
occupancy of the Premises, and shall furnish copies of such data and
information to Landlord, to the extent such data and information relates to the
Property. If Tenant indicates to Landlord, at the time such data and
information is provided to Landlord, that the data and information is
confidential, Landlord shall use commercially reasonable efforts to keep such
information confidential.
(c) Prohibited Materials; Property and Activity. Tenant shall not
bring or permit to be brought or kept in or on the Premises (i) any flammable,
combustible or explosive fluid, material, chemical or substances, except for
cosmetics and other inventory stored at the Premises in the ordinary course of
business, and cleaning products and office supplies used in the ordinary course
of business, or (ii) any diesel forklifts, or (iii) any data processing,
electronic, optical or other equipment or property of a delicate, fragile or
vulnerable nature unless the same are housed, shielded and protected against
harm and damage, whether by cleaning or maintenance personnel, radiations or
emanations from other equipment now or hereafter installed in the Premises, or
otherwise. Nor shall Tenant cause or permit any objectionable odors to emanate
from the Premises.
(d) Requirements of Law - Fines and Penalties. Tenant, at its
sole expense, shall comply with all laws, rules, orders and regulations
including, without limitation, all energy-related requirements, of Federal,
State of Maryland and other authorities and with any direction of any public
officer or officers, pursuant to law, which shall impose any duty upon Landlord
or Tenant with respect to, or arising out of, Tenant's use or occupancy of the
Premises and/or the Property. Tenant shall reimburse and compensate Landlord
for all expenditures made by, or damages or fines sustained or incurred by,
Landlord due to nonperformance or noncompliance with, or breach or failure to
observe, any item, covenant, or condition of this Lease upon Tenant's part to
be kept, observed, performed or complied with. If Tenant receives notice of any
violation of law, ordinance, order or regulation applicable to the Premises
and/or the Property, it shall give prompt notice thereof to Landlord.
Notwithstanding the foregoing, nothing in this Lease shall obligate Tenant to
remediate or remove from the Property any Hazardous Substances introduced onto
the Property by GE, Landlord, or any other person or entity other than Tenant,
its agents, employees, contractors, or invitees.
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(e) Damage to Premises. Tenant shall not suffer or permit the
Premises or any fixtures, equipment or utilities therein or serving the same,
to be overloaded, damaged or defaced. Tenant shall not suffer or permit any
employee, contractor, business invitee or visitor to violate any covenant,
agreement, or obligation of Tenant under this Lease.
6.02 USE OF GROUNDS. Tenant shall use the parking lot for cars
and/or trucks and/or tractor trailers owned or used by Tenant and
its employees, customers, and invitees and otherwise in compliance with Section
9.09 below; Tenant shall not permit such cars, trucks or tractor trailers to be
parked on any portion of the Property other than the areas designated therefor
on Exhibit D. Vehicles which are not being used in Tenant's business on a
regular basis (including personal cars used by Tenant's employees, customers
and invitees, which for purposes hereof shall be considered to be used in
connection with Tenant's business) are not permitted to be parked in the
parking lot. All vehicles owned by Tenant, its employees and agents must be
currently registered and licensed, or be subject to towing without notice by
Landlord, the cost of which shall be Additional Rent if Tenant fails to cause
the removal of such vehicles upon Landlord's request. Tenant will not obstruct
the buildings comprising the Property nor allow the same to be obstructed in
any manner. Tenant shall not place, or cause to be placed, anything on the
exterior of the Premises or the Common Areas (including, but not limited to,
raw materials, merchandise, inventory, trash, fences, storage facilities,
rubbish or vending machines) without the prior written consent of Landlord.
6.03 CLEANING AND MAINTENANCE OF PREMISES.
(a) Exterior. Tenant shall keep the windows, plate glass, doors,
loading docks, loading dock covers, pit levelers and related apparatus,
bumpers, dock seals, and signs (if any) neat, clean and in good order and
repair, at Tenant's expense, and shall not store any material or trash of any
nature whatsoever on the exterior of the Property, nor erect any screen or
fence thereon.
(b) Interior. Tenant shall keep the interior of the Premises in a
neat, clean, and sanitary condition at all times, at Tenant's expense.
(c) Electrical & Mechanical Systems. Landlord represents and
warrants that the electrical and mechanical systems installed in the Premises
or on the exterior of the Premises, including, but not limited to, electrical,
plumbing, heating, ventilating, air-conditioning, lighting, doors, sprinkler
systems, security systems and locks, are in good operating condition as of the
Commencement Date of this Lease. Subject to the foregoing representation and
warranty by Landlord, Tenant
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shall maintain in good working order, repair and appearance, at Tenant's
expense, the electrical and mechanical systems installed in the Premises or on
the exterior of the Premises, including, but not limited to, electrical,
plumbing, heating, ventilating, air conditioning, lighting, doors, sprinkler
systems, security systems and locks. Tenant further agrees to have repairs
performed by a qualified tradesperson using the manufacturer's recommended
parts and materials or the substantial equivalent thereof. Tenant further
agrees to enter into a service contract with a qualified contractor for
maintenance of heating, ventilating and air conditioning systems. Tenant may
request that Landlord waive such service contract requirement, but Landlord
shall grant such waiver only if Tenant implements other procedures with respect
to the maintenance of such systems that are satisfactory to Landlord, in its
sole discretion. If such service contract should not be obtainable, Tenant
agrees to have such systems or equipment inspected periodically, but not less
than twice each Lease Year by a qualified tradesperson. Tenant further agrees,
at the request of Landlord, to forward to Landlord evidence of such service
contract work or semi-annual inspections and necessary repairs. Tenant shall
keep all drain lines clear, and not permit the placement of any materials into
drains which would adversely affect the main sewage lines servicing the
property.
(d) Heat. Tenant shall maintain sufficient heat during the winter
months to insure against freezing of the water pipes, sprinkler systems and
bathrooms.
(e) Machinery & Equipment. Tenant shall regularly, at
commercially reasonable intervals, inspect all portions of the Premises, both
interior and exterior, and all machinery and equipment therein, so as to enable
Tenant to promptly detect the need for repairs to any part thereof; shall make
such repairs as Tenant is herein obligated to make, and shall promptly notify
Landlord in writing of the need for any repairs Landlord is obligated to make
pursuant to the provisions of Section 5.02 above.
(f) Janitorial Services and Trash Removal. Tenant shall provide,
at its sole expense, all janitorial services and trash removal services
required in connection with its use of the Premises.
(g) Vacating Premises. Tenant shall keep the Premises in good
order and condition and at the expiration of the term hereof, or at such other
time as Tenant may vacate the Premises, surrender the same in as good condition
and repair as when received, reasonable wear and tear and damage or destruction
by fire or other casualty excepted.
(h) Damage to Premises. All damage or injury to the Premises or
to any part thereof, or to its fixtures, equipment and appurtenances, whether
requiring
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structural or nonstructural repairs, caused by or resulting from the
negligence, wilful or reckless misconduct, or breach of this Lease by Tenant,
Tenant's agents, servants, employees, contractors, customers, invitees or
licensees, shall be repaired promptly, at Tenant's sole cost and expense, by
Tenant subject to Landlord's direction and supervision (and in accordance with
paragraph 6.08 hereof). If Landlord gives Tenant written notice that Tenant
will be required to make any such repairs and Tenant fails within five (5)
business days of the giving of such notice to proceed with due diligence to
arrange for plans, specifications, cost estimates and/or bids and as soon as
practicable thereafter diligently to pursue and make the required repairs, the
same may be made by Landlord, in which event all expenses incurred by Landlord
therefor shall be paid by Tenant to Landlord within ten (10) days of written
demand therefor (which demand shall include reasonable evidence of the costs
incurred by Landlord in connection with such repairs) as Additional Rent.
6.04 UTILITIES. Tenant shall pay charges for (i) all utilities
consumed or used by Tenant during the term hereof, including but not
limited to electricity, gas, fuel, water and sewer, and (ii) telephone services
used on the Premises, as they become due and payable, and shall transfer all
accounts therefor to Tenant's name (if separately metered) at the outset of the
term of this Lease, and shall keep the Premises free and clear of mechanics'
and materialmen's liens. Utilities which are not separately metered shall be
prorated equitably among Tenant and other tenants in the Property by Landlord
based on the proportionate shares used for allocation of Taxes and Insurance,
equitably adjusted for any excess usage requirements of Tenant or other tenants
or users of the Property.
6.05 HAZARDOUS WASTES.
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(a) Environmental Requirements. Tenant shall refrain from using,
storing or placing upon the Premises, any materials which, under federal, state
or local law, statute, ordinance or regulation, or court or administrative
order or decree, or private agreement (hereinafter called "Environmental
Requirements"), require special handling in collection, storage, treatment or
disposal, including but not limited to, any asbestos, PCBs, those substances
described in Exhibit E attached hereto, petroleum and petroleum products, or
other toxic, hazardous or contaminated substances (hereinafter collectively
called "Hazardous Substances"); provided that Tenant shall be permitted to
store cosmetics and other inventory at the Premises (some of which Landlord
acknowledges might contain Hazardous Substances which shall be stored in strict
compliance with all Environmental Requirements) in the ordinary course of
business and use cleaning products and other office supplies in the ordinary
course of business, provided that Tenant strictly complies with all
Environmental Requirements in connection therewith. Tenant hereby indemnifies,
defends, and saves Landlord harmless from all liabilities and claims arising
from the use, storage or placement of any Hazardous Substances upon the
Premises or elsewhere within the Property (if brought or placed thereon by
Tenant, its agents, employees, contractors or invitees); and Tenant shall (i)
within twenty-one (21) days after written notice thereof, take or cause to be
taken, at its sole expense, such actions as may be necessary to comply with all
Environmental Requirements, and (ii) within twenty-one (21) days after written
demand therefor, pay Landlord, as Additional Rent, any amounts incurred by
Landlord to comply with any Environmental Requirements with respect to the
Premises or with respect to any other portions of the Property as the result of
the placement or storage of Hazardous Substances by Tenant, its agents,
employees, contractors or invitees, or in connection with any judicial or
administrative investigation or proceeding relating thereto, including, without
limitation, reasonable attorneys' fees, fines or other penalty payments. The
indemnification set forth herein shall forever survive the expiration or
earlier termination of this Lease. If Tenant has violated the Environmental
Requirements as determined by any governmental agency, body, or court, or if
Landlord obtains and delivers to Tenant a report prepared by an engineer or
other party engaged in the business of testing and determining the existence of
Hazardous Substances, which report demonstrates that there are Hazardous
Substances used, stored or placed upon the Premises by Tenant, its agents,
employees, contractors or invitees, in violation of this Lease or any
Environmental Requirements, then Landlord shall have the right and option, if
such Hazardous Substances are not removed or brought into compliance with all
Environmental Requirements within twenty-one (21) days after written notice
thereof to Tenant, to remove such Hazardous Substances or bring such Hazardous
Substances into compliance with the Environmental Requirements (provided that
such notice and grace period shall not be required in an emergency), and to
exercise any other rights and remedies available under Section 7.02 of this
Lease. During such twenty-one (21) day period, Tenant shall have the
opportunity to cause such report prepared on Landlord's behalf to be reviewed
by Tenant's own
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environmental consultants, and if the Tenant's consultant disagrees with the
information or conclusions contained in Landlord's report, to cause its
consultant to deliver a report to Landlord stating the reasons for the
disagreement. Landlord and Tenant shall use their best efforts to reconcile the
conflicting reports, but if Landlord or its environmental consultants
reasonably continue to believe that Tenant, or its agents, employees,
contractors, or invitees have violated any Environmental Requirements, then
Landlord shall have all rights and remedies available under this Section
6.05(a) or Section 7.02 of this Lease, subject to Tenant's right to defend.
(b) Access. The parties to this Lease acknowledge that the
Environmental Protection Agency ("EPA") has issued a RCRA Corrective Action
Permit No. MDD046279311 (the "Permit") to General Electric Company ("GE"), a
previous owner of the Property. The Permit requires GE, as the responsible
party, to investigate and, where required, remediate certain Hazardous
Substances that were placed on the Property while GE owned the Property. GE has
covenanted to, and agreed with, Landlord that GE will perform all
investigations, studies and remedial activities necessary to comply with the
Permit and to remediate certain Hazardous Substances placed on the Property in
violation of any Environmental Requirements while GE owned the Property
(collectively, the "Remediation Activities"). GE has also agreed to indemnify
Landlord with respect to Hazardous Substances introduced onto the Property by
GE pursuant to a certain Indemnification Agreement between GE and Landlord
dated April 25, 1996 (the "GE Indemnity"), a copy of which has been delivered
to Tenant subject to the understanding that its terms and provisions be kept
confidential. Landlord covenants that if GE fails to comply with the Permit, or
to complete all Remediation Activities, or to comply with the provisions of the
GE Indemnity, Landlord will take all commercially reasonable action necessary
to require GE to comply with the Permit, to complete all Remediation
Activities, and to comply with the provisions of the GE Indemnity. Landlord
shall indemnify, defend, and hold harmless Tenant from any direct out of pocket
cost or expense (excluding any lost profits or other indirect, special or
consequential damages) incurred by Tenant as a result of GE's failure to comply
with the Permit, to perform all Remediation Activities, and to comply with the
GE Indemnity, to the same extent that Landlord is entitled to be indemnified by
GE pursuant to the GE Indemnity, and subject to the same limitations set forth
in the GE Indemnity. The foregoing indemnity is a personal obligation of the
original Landlord and any purchaser of the Property other than a purchaser as a
result of a foreclosure action or deed in lieu of foreclosure. No party that
becomes the successor Landlord hereunder as a result of a foreclosure action or
deed in lieu of foreclosure shall have any obligation with respect to such
indemnity. However, the personal obligation with respect to such indemnity of
the original Landlord and any purchaser of the Property other than a purchaser
as a result of a foreclosure action or deed in lieu of foreclosure shall
survive any transfer of title. EMG, an environmental consulting firm located in
Baltimore, Maryland, has advised Landlord that there is no human health threat
to Landlord or Tenant as a result of GE's prior activities or the Remediation
Activities covered by the Permit. Neither EPA nor any other governmental
authority has provided Landlord with any notice that there is a human health
threat to Landlord or Tenant as a result of
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GE's prior actions or the Remediation Activities, or that any use of the
Premises should be limited while the Remediation Activities are pending. In
order to permit GE to monitor and complete any Remediation Activities required
by EPA, Landlord has agreed with GE that it will provide access to GE to
certain monitoring xxxxx within the Property and the Premises (each of which is
circular in shape, and has a diameter of less than one foot) shown on the
diagram attached hereto as Exhibit F (the "Affected Areas"). Tenant hereby
grants to GE the right to enter upon the Premises and other portions of the
Property for the purpose of reasonable ingress and egress to and from the
Affected Areas and the performance of any and all Remediation Activities,
subject to the following limitations:
(i) Prior to entry of the Property for any reason, GE has
agreed to so advise Landlord at least fourteen (14) days in advance, which
notice shall include a description of the work or activity to be performed, the
location of the work or activity, and the time of day such work or activity
will be performed (with all reasonable efforts to be made by GE to have such
work or activity performed during non-traditional or "off-peak" working hours
or other hours acceptable to Tenant). For emergencies or other good cause which
would preclude GE from giving such fourteen (14) day prior written notice, GE
shall give notice to Landlord as soon as practical. Landlord agrees to promptly
notify Tenant whenever it receives notice from GE, and promptly to provide
Tenant with copies of any written notice Landlord receives from GE with respect
to GE's entry onto the Premises.
(ii) In conducting its Remediation Activities, GE has agreed
to use all reasonable and diligent efforts to minimize disruption of or
interference with any of Tenant's activities on the Property. Landlord will
take all commercially reasonable action to require GE to comply with such
agreement. If as a result of GE's Remediation Activities Tenant is required to
close its operations at the Premises for more than four (4) hours, Tenant may
bring legal action against GE, and, if GE is thereby in default under the GE
Indemnity, Landlord will take all commercially reasonable action to cooperate
with Tenant in bringing such action, including joining such action as a party,
if necessary. In addition, if as a result of GE's Remediation Activities Tenant
is unable to use five (5) or more of its loading docks, or twenty-five thousand
(25,000) square feet or more of its Premises, for five (5) consecutive business
days or more, a just and proportionate part of the Rent, based on the portion
of the Premises rendered unusable, shall be suspended and abated from such
fifth (5th) business day until such use is restored.
(c) Placement of Fixtures. Tenant agrees that it shall not place
fixtures or equipment or inventory that can not be easily moved (i.e.,
equipment or
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inventory that can not be moved either by hand or by fork lift or other similar
equipment) in any location which would materially restrict GE's access to the
Affected Areas as shown on Exhibit F to perform its activities. To the extent
that GE's performance of its activities requires that equipment and/or
inventory be relocated, GE has agreed, at its cost and expense, to move such
equipment and/or inventory and promptly and diligently restore any disturbed
area to its original condition and relocate such equipment and/or inventory to
its proper location when finished. Landlord will take all commercially
reasonable action to require GE to comply with such agreement. Tenant agrees
that it will not make or permit any alterations, modifications or improvements
to the Premises that would materially impair GE's access to the Affected Areas.
(d) Cooperation and Communication. Tenant agrees to cooperate
with any reasonable request of Landlord or GE to facilitate GE's completion of
the Remediation Activities.
6.06 VEHICLE RESTRICTIONS.
(a) Parking Lot. Tenant shall be liable for damage to asphalt
pavings, walkways, and adjoining areas caused by any spillage or leakage of
gas, oil or any solvent caused by Tenant, or its agents, employees,
contractors, or invitees, or anyone claiming under or through Tenant. Tenant
agrees that parking areas are not to be used for the storage of tractor
trailers, except in areas designated by Landlord in Exhibit D attached hereto.
Tenant will take all reasonably necessary steps to see that the supports for
any trailer that is disconnected and/or parked in areas designated by Landlord
do not cause damage to the asphalt pavement. Tenant is responsible for the cost
of repairing any damage to the paved area of the Property, or the areas
adjacent thereto, including all parking areas, landscaped areas, access drives
and entrance drives where such damage is caused by Tenant, or its employees,
contractors, or invitees, or anyone claiming under or through Tenant, unless
such damage is caused by Landlord's failure to construct (i) the primary truck
pad for longer trucks which is a part of Landlord's Warehouse Work, and which
shall run the length of the dock doors serving the Premises, be eight (8) feet
wide, and begin thirty-three (33) feet from the edge of the docks at the
Premises, or (ii) an optional secondary truck pad for shorter trucks which is
not part of Landlord's Warehouse Work, but which, if constructed, would be
located within thirty-three (33) feet from the edge of the docks at the
Premises. Tenant shall pay Landlord, as Additional Rent, the cost incurred by
Landlord of any such repairs for which Tenant is responsible within ten (10)
days of written demand therefor (which demand shall include reasonable evidence
of the costs incurred by Landlord in connection with such repairs).
(b) Premises. Tenant shall protect the floor of the Premises from
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damage, subject to ordinary wear and tear. Tenant is responsible for the cost
of repairing any damages to the concrete floor of the Premises and shall pay
Landlord, as Additional Rent, the cost of such repairs within five (5) days of
written demand therefor (which demand shall include reasonable evidence of the
costs incurred by Landlord in connection with such repairs).
6.07 STORAGE RESTRICTIONS. Tenant shall not store any materials or
equipment (including, without limitation, vehicles) on the outside of the
building(s) that comprise the Property, without the prior written consent
of Landlord.
6.08 ALTERATIONS & MODIFICATIONS.
(a) Mandatory Alterations. Subject to compliance with the
remaining provisions of this Section 6.08, Tenant shall make, at Tenant's
expense, (i) such alterations, modifications, and improvements to the Premises
as may be required by the building codes or other applicable laws, rules,
ordinances or regulations in effect in the jurisdiction in which the Premises
are located, or by Landlord's insurance carrier to avoid cancellation or
increase in the rate(s) of Landlord's insurance or to secure adequate
additional insurance coverage, and (ii) such alterations, modifications,
additions, installations or improvements to the Premises as may be required for
the safety and health of Tenant's employees, pursuant to the Xxxxxxx-Xxxxxxx
Occupational Safety and Health Act of 1970 (OSHA) and the equivalent Maryland
statutes (MOSHA), as the same may be amended or implemented from time to time,
unless such alterations, modifications, additions, installations or
improvements described in clause (i) or (ii) hereof are required in order to
obtain the initial certificate of occupancy or use and occupancy permit, or are
required by reason of the Remediation Activities or the introduction of
Hazardous Substances onto the Property by GE, Landlord, or any person or entity
other than Tenant, its agents, employees, contractors, or invitees, or relate
to the roof or structural walls, or are required as a result of any defect in
the Landlord's Work not waived pursuant to Section 2 of the Lease, except to
the extent any change in the roof or structural walls is required solely
because of any special use being made of the Premises by Tenant.
Notwithstanding the foregoing, during the last twelve (12) months of the term
of this Lease, Tenant shall not be required to make any material Alterations to
the Premises to bring the Premises into compliance with any of the legal
requirements described in this Section 6.08(a) not in effect on the
Commencement Date of this Lease, if Tenant vacates the Premises and pays all
Rent due for the remainder of the term as and when due, regardless of whether
Landlord relets the Premises after Tenant vacates the Premises.
(b) Restrictions or Alterations. Tenant will not make or permit
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anyone to make any alterations, decorations (other than decorations reasonably
and customarily made in connection with Tenant's business), additions or
improvements (collectively "Alterations"), structural or otherwise, in or to
the Premises, without the prior written consent of Landlord (which consent
shall not be unreasonably withheld, conditioned, or delayed) and then only
those made by contractors or mechanics approved by Landlord (which approval
shall not be unreasonably withheld, conditioned, or delayed). All of such
approved Alterations done by Tenant shall be at its sole expense and shall at
all times comply with (i) laws, rules, orders and regulations of governmental
authorities having jurisdiction thereof; (ii) orders, Rules and Regulations of
any Board of Fire Underwriters, or any other body hereafter constituted
exercising similar functions, and governing insurance rating bureaus; (iii)
rules and regulations of Landlord promulgated in the ordinary course of
business and consistently applied to all tenants of the Property; and (iv)
plans and specifications prepared by and at the expense of Tenant theretofore
submitted to and approved by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed. No installations or work shall be undertaken
or begun by Tenant until (A) Landlord has approved written plans and
specifications therefor; (B) Tenant has made provision for either written
waivers of liens from all contractors, laborers and suppliers of materials for
such installations or work, the filing of xxxx xxxxx on behalf of such
contractors, laborers and suppliers if the estimated cost of the work will
exceed Two Hundred Fifty Thousand Dollars ($250,000), or other appropriate
protective measures reasonably approved by Landlord; and (C) Tenant shall have
secured all necessary building and other permits. No amendments or additions to
such plans and specifications shall be made without the prior written consent
of Landlord, which consent shall not be unreasonably withheld, conditioned, or
delayed. Landlord shall respond to requests for approval of any plans and
specifications, or modifications thereof, or contractors or mechanics, within
ten (10) business days of its receipt of a written request for approval.
Landlord's failure to respond within ten (10) business days shall be deemed to
be an approval of the request.
(c) Mechanic's Liens. If, notwithstanding the foregoing, any
action to maintain a mechanic's or materialman's lien is filed against the
Premises or any part thereof for work claimed to have been done for, or
materials claimed to have been furnished to, Tenant, such action shall be
contested by Tenant and if such lien is permitted to attach to the Premises or
the Property such lien shall be discharged by Tenant within ten (10) days
thereafter, at Tenant's sole cost and expense, by the payment thereof or by
filing any bond required by law. If Tenant shall fail to so discharge any such
mechanic's or materialman's lien, Landlord may, at its option, discharge the
same and treat the cost thereof as Additional Rent payable within five (5) days
of demand therefor; it being hereby expressly covenanted and agreed that such
discharge by Landlord shall not be deemed to waive or release the default of
Tenant in not discharging the same. It is understood and agreed that in the
event Landlord shall give its written consent to Tenant's making any such
Alterations, such
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written consent shall not be deemed to be an agreement or consent by Landlord
to subject Landlord's interest in the Premises to any mechanic's or
materialman's liens which may be filed in respect of any such Alterations made
by or on behalf of Tenant and not on behalf of Landlord.
(d) Indemnification. Tenant will indemnify, defend, and hold
Landlord harmless from and against any and all expenses, liens, claims or
damages to person or property which arise by reason of the making of any such
Alterations. If any such Alteration is made without the prior written consent
of Landlord, Landlord gives Tenant written notice that Tenant will be required
to correct and remove such unauthorized Alteration, and Tenant fails within
five (5) business days of the giving of such notice to proceed with due
diligence to arrange for plans, specifications, cost estimates and/or bids, and
as soon as practicable thereafter diligently to pursue and complete the
required correction and removal, Landlord may correct or remove the same
(provided that such notice and grace period shall not be required in an
emergency), and any and all expenses incurred by Landlord in the performance of
this work shall be Additional Rent payable by Tenant within five (5) days of
written demand therefor (which demand shall include reasonable evidence of the
costs incurred by Landlord in connection with such correction or removal). All
Alterations in or to the Premises made by either party shall immediately become
the property of Landlord and shall remain upon and be surrendered with the
Premises as a part thereof at the end of the term hereof without disturbance,
molestation or injury; provided, however, Tenant shall have the right to
remove, prior to the expiration of the Term of this Lease, all racking, movable
furniture, movable furnishings, or movable equipment installed in the Premises
at the expense of Tenant which by law are not fixtures or part of the Premises
and which shall be deemed to be the property of Tenant except as set forth in
the next sentence. If such property of Tenant is not removed by Tenant on or
prior to the expiration or termination of this Lease, the same shall become the
property of Landlord and shall be surrendered with the Premises as a part
thereof at the end of the term of this Lease (as may be extended) unless their
removal was required at the time Landlord approved a particular Alteration.
6.09 RELEASE; INDEMNIFICATION.
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(a) No Liability. Landlord shall not be liable to Tenant, its
employees, agents, contractors, business invitees, licensees, customers,
clients, family members, guests, or any other person claiming under or through
Tenant, for any damage, compensation or claim arising from (i) the necessity of
repairing any portion of the Premises, (ii) the interruption in the use of the
Premises, (iii) accident or damage resulting from the use or operation (by
Landlord, Tenant, or any other person or persons whatsoever) of elevators or
heating, air-conditioning, electrical or plumbing equipment or apparatus, (iv)
the termination of this Lease by reason of the destruction of the Premises, (v)
from any fire, robbery, theft, mysterious disappearance and/or any other
casualty, (vi) any personal injury arising from the use, occupancy and
condition of the Premises, (vii) any suspension or curtailment of utility
services or systems, (viii) any failure to provide a security system or
security services, (ix) any defect in the Premises or the Property, (x) any
equipment or appurtenances requiring repair; (xi) the bursting, leaking, or
running of any sprinkler, water or drainage line, tank, wash stand, water
closet, waste pipe, drain or any other pipe or tank in, upon, or about the
Premises; (xii) the backing up of any sewer pipe or roof drain; (v) the escape
of steam or hot water; (xiii) water, snow, or ice being upon or coming through
the roof, skylight, or any other place upon or near the Property, Premises or
otherwise; (xiv) the falling of any fixture, plaster, or skylight; (xv) broken
glass; or (xvi) any act or omission of co-tenants or other occupants of the
Property or of adjoining or contiguous property or buildings, unless any of the
foregoing is caused by the gross negligence or reckless or willful misconduct
of Landlord. In no event shall Landlord or its agents or employees have any
liability to Tenant for lost profits or any consequential damages whatsoever,
or for any damage caused by other occupants of the Premises or any other person
claiming under or through Tenant, or their agents or employees, or for any
damage caused by governmental or quasi-governmental authorities or public
utilities, or their agents or employees. Tenant shall not be entitled to any
abatement or diminution of Rent as a result of any of the foregoing
occurrences, except to the extent Tenant is entitled to an abatement as a
result of a casualty pursuant to Section 8.02 below or as a result of certain
actions of Landlord pursuant to Sections 6.05(b), 6.15 and 9.02 hereof, nor
shall the same release Tenant from its obligations hereunder or constitute an
eviction. Any goods, property or personal effects of Tenant, its employees,
agents, contractors, business invitees, licensees, customers, clients, family
members or guests, stored or placed in or about the Premises shall be at their
risk, and Landlord shall not in any manner be held responsible therefor, unless
caused by the gross negligence or reckless or willful misconduct of Landlord.
Tenant acknowledges that Landlord will not carry insurance on Tenant's
furniture, furnishings, fixtures, equipment and/or improvements in or to the
Premises. It is expressly understood and agreed that Tenant shall look to its
business interruption and property damage insurance policies, and not to
Landlord or its agents or employees, for reimbursement for any damages or
losses incurred as a result of any of the foregoing occurrences, and that said
policies must contain waiver of subrogation clauses. Although the risk of loss
for
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these matters has been allocated to Tenant and its insurance policies, nothing
in this Section 6.09(a) shall be deemed to release Landlord from its
performance obligations under Sections 2, 5.02, 5.03, 5.05, 6.01(b), 6.05(b)
6.05(c) 6.06, and 8.02 of this Lease.
(b) Tenant's Indemnity. Subject to the limitations on the right
of recovery described in Section 6.14(d) below, Tenant hereby agrees to
indemnify, defend, and hold Landlord harmless from and against any cost,
damage, claim, liability or expense (including reasonable attorneys' fees)
incurred by or claimed against Landlord, directly or indirectly, which is
occasioned by or results from (i) any default by Tenant hereunder, (ii) any
act, omission, fault, negligence or misconduct on the part of Tenant, its
agents, employees, contractors, or invitees, or (iii) from Tenant's use and
occupancy of the Premises, except to the extent such cost, damage, claim,
liability or expense is caused by the negligent acts or omissions of Landlord
or its agents, employees, contractors or invitees. Landlord shall give Tenant
written notice when it becomes aware of a claim against Landlord which is
covered by this Section 6.09(b), and shall cooperate with Tenant as may
reasonably be required in connection with any appropriate actions taken by
Tenant to contest a third party claim. Any cost, damage, claim, liability or
expense incurred by Landlord for which Tenant is obligated to pay Landlord
pursuant to this Section 6.09(b) shall be deemed Additional Rent due and
payable within ten (10) days after notice to Tenant that payment is due. Such
notice shall include copies of any bills, invoices, or other evidence of the
amount of any such cost, damage, claim, liability or expense incurred by
Landlord. It is expressly understood and agreed that Tenant's liability under
this Section 6.09(b) extends to the acts and omissions of any subtenant and any
agent, employee, contractor, or invitee, of any subtenant, but not to the acts
or omissions of Landlord, or Landlord's employees, agents or contractors or
other parties for whom Landlord is legally responsible.
(c) Landlord's Indemnity. Subject to the limitations set forth in
Section 6.09(a) and with respect to the right of recovery as set forth in
Section 6.14(d) below, Landlord hereby agrees to indemnify, defend, and hold
Tenant harmless from and against any cost, damage, claim, liability or expense
(including reasonable attorneys' fees) incurred by or claimed against Tenant
which is occasioned by or results from (i) any default by Landlord hereunder,
or (ii) any act, omission, fault, negligence or misconduct on the part of
Landlord or its agents, employees, contractors, or other parties for whom
Landlord is legally responsible, except to the extent caused by the negligent
acts or omissions of Tenant or its agents, employees, contractors or invitees.
Tenant shall give Landlord written notice when it becomes aware of a claim
against Tenant which is covered by this Section 6.09(c), and shall cooperate
with Landlord as may reasonably be required in connection with any appropriate
actions taken by Tenant to contest a third party claim.
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6.10 OPERATION OF MACHINERY; NOISE. Tenant shall not operate any
machinery on the Premises which may cause excessive vibration, noise or
damage to the Premises or the exterior of the Premises and shall not use a
loud speaker or generate sounds which can be heard outside the Premises.
6.11 SIGNS AND AWNINGS. Tenant shall have the right, at its sole
expense, to install a sign on the exterior of its Premises, subject to
Landlord's reasonable approval. Any such sign shall comply with all
ordinances, regulations, and requirements of Xxxxxx County, Gateway Commerce
Center, and other applicable authorities. Tenant shall not place any other
exterior signs or awnings upon the Premises or place any signs or posters on
the interiors of any windows or change the color of the exterior painting,
without obtaining Landlord's prior written approval, which approval shall not
be unreasonably withheld, conditioned, or delayed.
6.12 SURRENDER OF PREMISES. Tenant shall quit and surrender the
Premises upon the termination hereof and surrender the Premises to Landlord
at that time, together with any fixtures thereon, broom clean, in good
condition and repair, reasonable wear and tear and damage or destruction by
fire or other casualty excepted, and shall remove from the
Premises at the expiration or other termination of this Lease, all personal
property, goods and personal effects not belonging to Landlord, and repair any
damage caused by such removal, all at Tenant's sole cost and expense. If Tenant
shall fail to perform any of the foregoing obligations, Landlord may, at its
option, (i) retain such property as the exclusive property of Landlord, (ii)
remove and store such property at the expense of Tenant, or (iii) dispose of
such property at a private sale or auction. In the event Landlord elects to
sell such property at a private sale or auction, the proceeds thereof may be
applied by Landlord against any amounts of Rent due hereunder or toward the
expense thus incurred in selling such items, and Tenant agrees to promptly pay
to Landlord the difference (if any) between the cost of conducting such sale
(including attorney's fees) and the proceeds of such sale. Tenant shall
indemnify, defend and hold harmless Landlord against all loss or liability
incurred by Landlord resulting from any delay by Tenant in surrendering the
Premises in accordance with this Section, including, without limitation, any
loss of rent.
6.13 RIGHT TO SHOW PREMISES. Tenant shall permit Landlord access to
the Premises in accordance with Section 9.02 below.
6.14 INSURANCE.
(a) Required Insurance. Tenant shall obtain and pay premiums for,
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and at all times during the term hereof maintain in effect, at Tenant's sole
cost and expense: (i) standard fire and extended coverage insurance, with
flood, malicious mischief and vandalism endorsements covering (A) Tenant's
fixtures, furnishings and equipment installed in or about the Premises, (B) all
partitions, mechanical, electrical, plumbing, floor covering or similar
installations made by Tenant, if any, under the authority and provisions of the
Lease, (C) all alterations, additions, modifications, improvements,
installations and changes to the Premises made by Tenant or for Tenant's
account as permitted hereunder, and (D) all of Tenant's inventory and other
personal property, in an amount equal to the full insurable value of all such
items (i.e., replacement values without regard to depreciation); (ii) public
liability insurance protecting both Landlord and Tenant with limits of at least
Five Million Dollars ($5,000,000) for each occurrence and Five Million Dollars
($5,000,000) in the aggregate and which includes property damage liability
coverage; (iii) business interruption insurance in an amount sufficient to
cover temporary relocation and Rent and other expenses for up to one (1) year;
and (iv) worker's compensation or similar insurance affording statutory
coverage and containing statutory limits. Such coverages may be provided by
blanket policies. Tenant shall name as an additional insured on any liability
policy maintained by Tenant pursuant to this Section 6.14 Landlord and any
other parties in interest from time to time designated in writing by notice
from Landlord to Tenant. Certificates evidencing such policies or other
reasonably satisfactory evidence of such coverage shall be provided to Landlord
within five (5) days of the execution hereof, and annually thereafter. All
insurance policies required by this Section 6.14 shall be written as primary
policy coverage and not contributing with or in excess of any coverage which
Landlord may carry; provide for thirty (30) days prior written notice to
Landlord of any cancellation or other expiration of such policy; and contain an
express waiver of any right of subrogation and an express consent to a waiver
of right of recovery against Landlord, its employees, and its agents.
(b) Insurance Rating. Tenant will not conduct or permit to be
conducted any activity, or place any equipment in or about the Premises, which
will in any way increase the rate of fire insurance or other insurance on the
Property. If any increase in the rate of fire insurance or other insurance is
stated by any insurance company or by the applicable insurance rating bureau to
be due to activity or equipment in or about the Premises, such statement shall
be evidence that the increase in such rate is due to such activity or equipment
and shall be presumed to be correct unless rebutted by clear and convincing
evidence to the contrary. Tenant shall have the right to contest the decision
of the insurance company or insurance rating bureau. Tenant shall pay to
Landlord the amount of any such increase in insurance rates to the extent
attributable to Tenant's activities or equipment at the Premises as Additional
Rent within ten (10) days of written demand therefor.
(c) Premiums. Tenant shall pay as they become due all premiums
for
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the insurance required by this Section 6.14, and shall timely renew or replace
each policy. In the event of Tenant's failure to comply with any of the
foregoing requirements, Landlord shall be entitled, five (5) days after giving
notice to Tenant, to procure such insurance if Tenant shall not have complied
with the foregoing requirements; provided that such five (5) day period shall
be waived if Tenant's insurance has lapsed. Any amounts incurred by Landlord in
procuring such insurance shall be Additional Rent hereunder and shall be repaid
by Tenant within ten (10) days of demand therefor by Landlord.
(d) Waiver of Subrogation and Right of Recovery. Landlord and
Tenant each hereby waive any and all rights of recovery against the other, or
against the officers, employees, agents or representatives, of the other, for
loss of or damage to its property or the property of others under its control,
if such loss or damage is covered by any insurance policy in force (whether or
not described in this Lease) at the time of such loss or damage. Such waiver
shall not apply to loss or damage not covered by any insurance policy in force
by virtue of any deductible permitted by the terms of this Lease, but such
waiver shall apply to loss or damage not covered by any insurance policy
because the maximum limit of such policy has been exceeded. Upon obtaining the
policies of insurance described herein, Landlord and Tenant shall give notice
to the insurance carrier or carriers of the foregoing mutual waiver of
subrogation and cause the policies to contain the waiver of subrogation and
recovery provisions.
6.15 COOPERATION-EXPANSION. Tenant shall cooperate with Landlord in
connection with Landlord's redevelopment activities at the Property so long as
such activities do not unreasonably interfere with Tenant's use and occupancy
of the Premises and its conduct of business at the Premises. Without limiting
the generality of the foregoing, Tenant acknowledges that Landlord may (i)
renovate the remainder of the building of which the Premises are a part, (ii)
renovate the unoccupied office building that is part of the Property, (iii)
expand the building of which the Premises are a part, (iv) construct additional
buildings within the Property, (v) change the configuration of any walkways,
driveways, parking lots and other portions of the Common Areas and/or (vi)
grant easements and dedicate for public use portions of the Property. Tenant
shall cooperate with Landlord in connection with such activities, so long as
such activities do not unreasonably interfere with Tenant's intended use of the
Premises. Landlord shall notify Tenant at least fifteen (15) days in advance in
writing in the event that Landlord intends to take any of the actions described
in this Section 6.15. Landlord shall use all commercially reasonable efforts to
minimize disruption to Tenant's use and occupancy of the Premises and the
conduct of its business at the Premises. If, as a result of any of Landlord's
activities described in this Section 6.15, Tenant is unable to use five (5) or
more of its loading docks, or twenty-five thousand (25,000) square feet or more
of its Premises for five (5) consecutive business days or more, a just and
proportionate part of the Rent,
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based on the portion of the Premises rendered unusable, shall be suspended and
abated from such fifth (5th) business day until such use is restored.
SECTION 7. PERFORMANCE OF OBLIGATIONS.
7.01 EVENTS OF DEFAULT. Each of the following events shall be deemed
to be an "Event of Default":
(i) Tenant shall fail to pay any installment of Base Rent or
Additional Rent (as required by Sections 4.01 or 4.02 hereof) when due, if such
failure continues for a period of five (5) days after Landlord's written notice
thereof to Tenant;
(ii) Tenant shall fail timely to make any other payment required
under this Lease, if such failure continues for a period of five (5) days after
Landlord's written notice thereof to Tenant;
(iii) Tenant shall violate or fail to perform any of the other
terms, conditions, covenants or agreements herein made by Tenant, if such
violation or failure continues for a period of thirty (30) days after
Landlord's written notice thereof to Tenant; provided that if the violation or
failure to perform is not susceptible of being completely cured within such
thirty (30) day period using commercially reasonable efforts, then as long as
Tenant has taken all reasonable steps to cure the violation or failure within
such thirty (30) day period and notified Landlord in writing of its efforts,
and diligently and uninterruptedly continues to pursue the cure of the
violation, the cure period shall be extended for such period as reasonably
shall be required to cure the violation or failure;
(iv) The attachment, execution or other judicial seizure of
substantially all of Tenant's assets or of Tenant's interest in this Lease,
which is not vacated within thirty (30) days of its filing;
(v) Tenant shall seek, consent to, or acquiesce in, any petition
to declare Tenant bankrupt or insolvent, or shall fail to contest and cause the
dismissal of an involuntary petition filed in any bankruptcy, reorganization,
composition, extension or insolvency proceedings, within sixty (60) days of its
filing;
(vi) Tenant shall seek, consent to, or acquiesce in, the
appointment of a trustee, receiver or liquidator of Tenant and all or any part
of Tenant's property, or shall fail to contest or cause the dismissal of any
proceeding for the appointment of such a trustee, receiver or liquidator within
sixty (60) days of its filing; or
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(vii) Tenant makes an assignment of all or substantially all of
its property for the benefit of its creditors.
7.02 LANDLORD'S REMEDIES. Should an Event of Default occur and be
continuing under this Lease, Landlord may pursue any or all of the following
remedies:
(a) Termination of Lease. Landlord may terminate this Lease, by
giving written notice of such termination to Tenant, whereupon this Lease shall
automatically cease and terminate and Tenant shall immediately be obligated to
quit the Premises. If Landlord elects to terminate this Lease, everything
contained in this Lease on the part of Landlord to be done and performed shall
cease without prejudice, subject however, to the right of Landlord to recover
from Tenant all Rent and any other sums accrued up to the time of termination
or recovery of possession by Landlord, whichever is later, and any other
monetary damages or loss sustained by Landlord.
(b) Suit for Possession. Whether or not this Lease has been
terminated, Landlord may proceed to recover possession of the Premises under
and by virtue of the provisions of the laws of the State of Maryland or Xxxxxx
County or by such other proceedings, including re-entry and possession, as may
be applicable. Prior to the expiration of the term of this lease (as such term
may be extended pursuant to the terms of this Lease), Landlord shall not
forcibly evict Tenant from the Premises except pursuant to judicial process,
unless Tenant has abandoned the Premises or consented in writing to such
eviction.
(c) Reletting of Premises. Landlord shall have the option to
relet the Premises for such rent and upon such terms as are not unreasonable
under the circumstances and, if the full Rent reserved under this Lease (and
any of the costs, expenses or damages indicated below) shall not be realized by
Landlord, Tenant shall be liable for all damages sustained by Landlord,
including, without limitation, deficiency in Rent, attorneys' fees, brokerage
fees and expenses of placing the Premises in the same rentable condition as
existed on the Lease Commencement Date. Landlord, in putting the Premises in
good order or preparing the same for rerental may, at Landlord's option, make
such alterations, repairs, or replacements in the Premises as Landlord, in its
sole judgment, considers advisable and necessary for the purpose of reletting
the Premises, and the making of such alterations, repairs, or replacements
shall not operate or be construed to release Tenant from liability hereunder as
aforesaid. Landlord shall in no event be liable in any way whatsoever for
failure to relet the Premises, or in the event that the Premises are relet, for
failure to collect the rent under such reletting.
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(d) Monetary Damages. Any damage or loss of Rent sustained by
Landlord may be recovered by Landlord, at Landlord's option, at the time of the
reletting, or in separate actions, from time to time, as said damage shall have
been made more easily ascertainable by successive relettings, or at Landlord's
option in a single proceeding deferred until the Termination Date (in which
event Tenant hereby agrees that the cause of action shall not be deemed to have
accrued until the Termination Date) or in a single proceeding prior to either
the time of reletting or the Termination Date, in which event Tenant agrees to
pay Landlord the difference, if any, between the present value of the Rent
reserved under this Lease on the date of breach and the fair market value of
the Lease on the date of the breach.
(e) Anticipatory Breach; Equitable Remedies. Nothing contained
herein shall prevent the enforcement of any claim Landlord may have against
Tenant for anticipatory breach of the unexpired Term of this Lease. In the
event of a breach or anticipatory breach by Tenant of any of the covenants or
provisions hereof, Landlord shall have the right of injunction, the right of
specific performance, and the right to invoke any remedy allowed at law or in
equity as if re-entry, summary proceedings and other remedies were not provided
for herein; provided that with respect to any anticipatory breach, nothing in
this Section 7.02(e) shall be deemed to be a waiver of any notice or cure
period required or granted by this Lease.
(f) Right of Landlord to Cure Tenant's Default. If an Event of
Default has occurred and is continuing, then Landlord may, but shall not be
required to, make such payment or do such act, and charge the amount of the
expense thereof, if made or done by Landlord, with interest thereon at the rate
per annum of three percent (3%) above the "Prime Rate", from the date paid by
Landlord to the date of payment thereof by Tenant; provided, however, that
nothing herein contained shall be construed or implemented in such a manner as
to allow Landlord to charge or receive interest in excess of the maximum legal
rate then allowed by law. Such payment and interest shall constitute Additional
Rent hereunder due and payable within five (5) days of notice to Tenant that
such amount is due; but the making of such payment or the taking of such action
by Landlord shall not operate to cure such default or to estop Landlord from
the pursuit of any remedy to which Landlord would otherwise be entitled. The
"Prime Rate" shall be the per annum interest rate listed as "the base rate on
corporate loans at large U.S. money center commercial banks" as published under
"Money Rates" in the Wall Street Journal. Such rate shall vary from day to day
as said rate varies according to changes published under "Money Rates" in the
Wall Street Journal. Should the Wall Street Journal stop publishing such "base
rate of interest on corporate loans at large U.S. money center commercial
banks", the rate shall be a comparable rate as reasonably selected by Landlord.
(g) Interest. If Tenant fails to pay any installment of Rent
and/or Additional Rent on or before a late charge is imposed thereon pursuant
to Section
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4.02(d) above, in addition to such late charge, such unpaid installment of Rent
and/or Additional Rent shall bear interest at the rate per annum of three
percent (3%) above the "Prime Rate" from the date such late charge became due
and payable to the date of payment of the unpaid installment by Tenant;
provided, however, that nothing herein contained shall be construed or
implemented in such a manner as to allow Landlord to charge or receive interest
in excess of the maximum legal rate then allowed by law. Such interest shall
constitute Additional Rent hereunder due and payable within five (5) days of
notice to Tenant that such amount is due.
(h) Landlord's Remedies Not Exclusive. The specified remedies to
which Landlord may resort hereunder are cumulative and are not intended to be
exclusive of any remedies or means of redress to which Landlord may at any time
lawfully be entitled, and Landlord may invoke any remedy (including the remedy
of specific performance) allowed at law or in equity as if specific remedies
were not herein provided.
7.03 WAIVER OF NOTICE TO QUIT AND REDEMPTION. At any time an Event of
Default is occurring, and after the expiration of the term of this Lease,
Tenant does hereby waive any and all notices to quit or notice of Landlord's
intention to re-enter the Premises, and waives and surrenders all rights
and privileges which it might have under or by reason of any present or future
law to redeem the Premises or to have a continuance of this Lease for the
term of this Lease after being dispossessed or ejected therefrom by process of
law or under the terms of this Lease orafter the termination of this Lease
as herein provided. Nothing in this Section7.03 shall be deemed to be a
waiver of any notice specifically required by the terms of this Lease.
Notwithstanding anything to the contrary contained in this Article VII,
Landlord agrees that it shall not forcibly evict Tenant from the Premises
except pursuant to judicial process, unless Tenant has abandoned the
Premises or consented in writing to such eviction.
7.04. ATTORNEY'S FEES; WAIVER. In the event that either party brings
a suit to enforce or interpret the provisions of this Lease, the party
against whom judgment is entered shall pay to the prevailing party the
attorneys' fees and costs of litigation incurred by the prevailing party.
If, under the provisions hereof, either party shall institute
proceedings against the other and a compromise or settlement thereof shall be
made, the same shall not constitute a waiver of any other covenant, condition
or agreement herein contained, nor of any of such party's rights hereunder,
except to the extent provided in the compromise or settlement. No waiver by
either party of any breach of any covenant, condition or agreement contained in
this Lease and any rules and regulations promulgated hereunder shall operate as
a waiver of such covenant, condition, agreement, or rule or regulation itself,
or of any subsequent breach thereof. No provision of this Lease shall be deemed
to have been waived by either party unless such waiver is in writing
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and signed by the party against whom enforcement is sought. No payment by
Tenant or receipt by Landlord of a lesser amount than the installments of Rent
herein stipulated shall be deemed to be other than on account of the earliest
stipulated Rent, nor shall any endorsement or statement on any check or letter
accompanying a check for payment of Rent be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord's
right to recover the balance of such Rent or to pursue any other remedy
provided in this Lease.
SECTION 8. CASUALTY; TAKING OR OTHER DESTRUCTION OF PREMISES
8.01 EMINENT DOMAIN. If the whole or a substantial part (as
hereinafter defined) of the Premises (or use or occupancy of the Premises)
shall be taken or condemned by any governmental or quasi-governmental
authority for any public or quasi-public use or purpose (including sale under
threat of such a taking), then the terms of this Lease shall cease and
terminate as of the date when title vests in such governmental or
quasi-governmental authority, and the Rent shall be abated on the date when
such title vests in such governmental or quasi-governmental authority. If less
than a substantial part of the Premises is taken or condemned by any
governmental or quasi-governmental authority for any public or quasi-public use
or purpose (including sale under threat of such taking), the Rent shall be
adjusted equitably (on the basis of the rentable area of the Premises before
and after such event) on the date when title vests in such governmental or
quasi-governmental authority and the Lease shall otherwise continue in full
force and effect. Tenant shall have no claim against Landlord (or otherwise)
and hereby agrees to make no claim against the condemning authority for any
portion of the amount that may be awarded as damages as a result of any
governmental or quasigovernmental taking or condemnation (or sale under threat
of such taking or condemnation) or for the value of any unexpired term of the
Lease or for loss of profits or for any other claim or cause of action (other
than moving expenses and claims for Tenant's personal property if and only if
any such award to Tenant shall not reduce the award available to Landlord). For
purposes of this Section 8.01, a substantial part of the Premises shall be
considered to have been taken if more than fifty percent (50%) of the Premises
are unusable by Tenant as a direct result of such taking.
8.02 DAMAGE BY FIRE.
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(a) In the event the Premises or any part thereof is destroyed or
damaged by fire or other casualty so as to render the Premises unfit for use
and occupancy, a just and proportionate part of the Rent, according to the
nature and extent of the injury to said Premises, shall be suspended and abated
until the portion of the Premises so damaged shall have been restored to
substantially the same condition that existed immediately before the damage or
destruction, or until this Lease shall be canceled and terminated as provided
below. Landlord shall determine and notify Tenant in writing, within thirty
(30) days after such damage or destruction, of Landlord's best estimate (based
upon reasonably applied construction criteria) of the date the Premises can be
fully restored. Tenant may challenge Landlord's estimate if it disagrees with
it. If such damage or destruction is not susceptible of being repaired within
six (6) months after the date such damage or destruction occurred, then either
party hereto shall have the right, to be exercised within thirty (30) days
after receipt of such notice, to cancel and terminate this Lease by giving to
the other party a written notice of its desire to so cancel and terminate.
However, if the date by which such restoration can be completed shall be within
six (6) months after the date such damage or destruction occurred, this Lease
shall remain in full force and effect, the just and proportionate share of the
Rent due hereunder shall be suspended and abated as described above, and the
Premises shall be restored by Landlord using commercially reasonable efforts to
complete such restoration promptly. If, at the expiration of such six (6) month
period, however, the restoration of the Premises shall not have been fully
completed, Tenant shall have the right to terminate this Lease by giving
Landlord thirty (30) days written notice thereof; provided that if restoration
is completed within such thirty (30) day period, such termination shall be null
and void.
(b) Notwithstanding anything contained herein to the contrary, in
the event that damage or destruction of all or any portion of the Premises is
not fully covered by the insurance proceeds received by or payable to Landlord,
or if there are insufficient proceeds after any required payments to mortgagees
of the Property, or Landlord does not provide Tenant with reasonable evidence
that it will be permitted by its mortgagees and ground lessors, if any, to use
the insurance proceeds to restore the Premises and that it has available the
funds to cover any shortfall not covered by available insurance proceeds,
either party may, within sixty (60) days of such casualty, terminate this Lease
by written notice to the other, effective as of the date of such casualty;
provided that neither party shall have any right to terminate this Lease
pursuant to this Section 8.02(b) if the estimated cost of the required repair
is Fifty Thousand Dollars ($50,000) or less; and provided further that Landlord
shall not have the right to terminate this Lease pursuant to this Section
8.02(b) if the reason the insurance proceeds are inadequate is Landlord's
failure to obtain the insurance required of it by Section 5.06 above.
SECTION 9. GENERAL PROVISIONS.
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9.01 HOLDING OVER. In the event that Tenant shall not immediately
surrender the Premises on the Termination Date, Tenant shall, by
virtue of the provisions hereof, become a tenant by the month. In such event,
Tenant shall be required to pay a Base Rent equal to One Hundred Fifty Percent
(150%) times the Base Rent required to be paid by Tenant immediately prior to
the Termination Date. The Base Rent, as adjusted, shall be paid on a monthly
basis beginning on the first day of each and every calendar month after the
Termination Date. Such monthly tenancy shall commence with the first day next
after the Termination Date. Except as otherwise provided above with respect to
the payment of Base Rent, Tenant shall, as a monthly tenant, be subject to all
of the terms, conditions, covenants, and agreements of this Lease, including
the obligation to pay Additional Rent on account of Taxes, Insurance and
Operating Expenses. Tenant shall give Landlord at least fifteen (15) days
written notice of any intention to quit the Premises, and Tenant shall be
entitled to fifteen (15) days' written notice to quit the Premises.
Notwithstanding the foregoing provisions of this Section 9.01, in the event
that Tenant shall hold over after the Termination Date, and if Landlord shall
desire to regain possession of the Premises on or after the Termination Date,
then at any time prior to Landlord's acceptance of Rent for a particular month
from Tenant as a monthly tenant hereunder, Landlord, at its option, may
forthwith reenter and take possession of the Premises without process, or by
any legal process in force in the State of Maryland. In the event of any such
holdover to which Landlord objects, Tenant shall be liable to Landlord for any
and all damages incurred as a result of such holdover, and shall, in addition,
pay to Landlord the reasonable value of the Premises, which is hereby agreed to
be One Hundred Fifty Percent (150%) times the Base Rent and Additional Rent
required to be paid by Tenant immediately prior to the Termination Date.
9.02 ACCESS TO PREMISES. Tenant shall (i) upon prior oral notice
(except that no notice shall be required in emergency situations), permit
Landlord and any mortgagee of the Premises or of the interest of Landlord
therein, and their representatives, to have access to, and to enter upon,
the Premises at all reasonable hours for the purposes of inspection
or of making repairs, replacements or improvements in or to the
Premises or equipment (including, without limitation, sanitary, electrical,
heating, air-conditioning or other systems) or of complying with all laws,
orders and requirements of governmental or other authority or of exercising any
right of Landlord under this Lease (including the right during the progress of
any such repairs, replacements or improvements or while performing work and
furnishing materials in connection with compliance with any such laws, orders
or requirements to take upon or through, or to keep and store within, the
Premises all necessary materials, tools and equipment); and (ii) permit
Landlord, at reasonable times, to show the Premises during ordinary business
hours to any existing or prospective mortgagee, ground lessor, purchaser, or
assignee of any mortgagee, of the Premises or of the interest of Landlord
therein, and during the last
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nine (9) months of the term, to any prospective space lessee. In non-emergency
situations, such oral notice shall be given at least one (1) business day prior
to the proposed entry. In emergency situations, even though no notice is
required, Landlord nevertheless shall make a reasonable effort to give Tenant
notice before entering. Tenant shall have the right to have a representative
present during any proposed entry by Landlord, except in emergency situations.
If Tenant shall not be personally present to open and permit an entry into the
Premises at any time when for any reason an entry therein shall be permitted by
the provisions of this Lease, Landlord or Landlord's agents, after taking
reasonable efforts to notify Tenant, may enter the same by a master key, or may
forcibly enter the same, without rendering Landlord or such agents liable
therefor (if during such entry Landlord or Landlord's agents use reasonable
care with respect to Tenant's property), and without in any manner affecting
the obligations and covenants of this Lease. Landlord shall exercise its rights
of access to the Premises permitted under any of the terms and provisions of
this Lease in such manner as to minimize to the extent practicable interference
with Tenant's use and occupancy of the Premises. If, as a result of any of
Landlord's activities described in this Section 9.02, Tenant is unable to use
five (5) or more of its loading docks, or twenty-five thousand (25,000) square
feet or more of its Premises for five (5) consecutive business days or more, a
just and proportionate part of the Rent, based on the portion of the Premises
rendered unusable, shall be suspended and abated from such fifth (5th) business
day until such use is restored. Neither Landlord, nor its agents, servants, or
employees shall be under any duty to inspect the Premises (other than the roof
and the structural elements) during Tenant's occupancy thereof unless and until
Tenant has notified Landlord in writing of the need of repairs for which
Landlord is responsible.
9.03 FORCE MAJEURE. Landlord and Tenant shall be excused from
performing any obligation or undertakings provided for in this Lease for
so long as such performance is prevented or delayed or hindered by act of God,
fire, earthquake, flood, explosion, action of the elements, war, invasion,
insurrection, riot, mob violence, sabotage, inability to procure labor or
general shortage of labor, equipment, facilities, materials or supplies
in the open market, failure of transportation, strike, lockout, action
of labor unions, condemnation, requisition, laws, orders of government or civil
or military authorities, or any other cause, whether similar or dissimilar to
the foregoing, not within the reasonable control of Landlord or Tenant,
whichever is applicable, including, but not limited to, reasonable delays for
adjustment of insurance; provided that any delays for adjustment of insurance
shall not extend any restoration period under Section 8.02(a) above; and
provided further, if the problem is the unavailability of particular equipment,
facilities, materials or supplies and substantially equivalent substitutes or
alternative means of transportation therefor are available, Landlord or Tenant,
whichever is applicable, shall make commercially reasonable efforts to obtain
or use such substitutes.
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9.04 SECURITY DEPOSIT. Tenant shall not be required to make a
security deposit.
9.05 ESTOPPEL STATEMENT.
(a) Upon Landlord's written request, Tenant shall execute,
acknowledge and deliver to Landlord, any of Landlord's lenders, and any
prospective purchaser of the Property, a written statement certifying: (i) that
this Lease has not been amended (or if it has been amended, attaching the
amendment); (ii) that this Lease has not been canceled or terminated; (iii) the
last date of payment of the Base Rent and Additional Rent and the time period
covered by such payment; (iv) that to the best of Tenant's knowledge Landlord
is not in default under this Lease (or, if Landlord is claimed to be in
default, stating why); and (v) such other matters as may be reasonably required
by Landlord, its lenders, or a prospective purchaser, provided such other
matters do not modify the provisions of this Lease. Tenant shall deliver such
statement within fifteen (15) days after Landlord's request. If Tenant does not
deliver such statement to Landlord within such fifteen (15) day period,
Landlord, and any prospective purchaser or lender, may conclusively presume and
rely upon the following facts, to which Landlord may certify as
attorney-in-fact for and on behalf of Tenant: (A) that this Lease has not been
amended (or if it has been amended, attaching the amendment); (B) that this
Lease has not been canceled or terminated except as otherwise represented by
Landlord; (C) that not more than one month of Basic Rent or Additional Rent
have been paid in advance; and (D) that Landlord is not in default under the
Lease. In such event, Tenant shall be estopped from denying the truth of such
facts.
(b) Upon Tenant's written request, Landlord shall execute,
acknowledge and deliver to Tenant, any of Tenant's lenders, and any permitted
assignee of this Lease or Subtenant of the Premises, a written statement
certifying: (i) that this Lease has not been amended (or if it has been
amended, attaching the amendment); (ii) that this Lease has not been canceled
or terminated; (iii) the last date of payment of the Base Rent and Additional
Rent and the time period covered by such payment; (iv) that to the best of
Landlord's knowledge Tenant is not in default under this Lease (or, if Tenant
is claimed to be in default, stating why); and (v) such other matters as may be
reasonably required by Tenant, its lenders, or a permitted assignee or
subtenant; provided such other matters do not modify the provisions of this
Lease. In addition, upon Tenant's written request, Landlord shall execute,
acknowledge and deliver to Tenant or any of Tenant's lenders a waiver of its
Landlord lien substantially in the form attached hereto as Exhibit G. Landlord
shall deliver such statement or waiver within fifteen (15) days after Tenant's
request.
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9.06 SUCCESSORS & ASSIGNS. Subject to the limitations contained
in Sections 6.05(b) and 9.11, the obligations and liabilities herein given
to, or imposed upon, the respective parties hereto shall extend to and bind
the parties hereto and their respective heirs, personal representatives,
successors, sublessees and assigns.
9.07 SUBORDINATION/ATTORNMENT/LENDER RIGHTS.
(a) Subordination. Tenant agrees that this Lease shall be
subordinate to any mortgages or deeds of trust now or subsequently affecting
the fee title of the Property or the Premises and to any and all advances made
or to be made under them, and to all renewals, modifications, consolidations,
replacements or extensions thereof; provided that with respect to any future
mortgage or deed of trust, this Lease shall not be subordinate thereto unless
Tenant receives a Non-Disturbance Agreement from Landlord's lender
substantially in the form attached hereto as Exhibit H, or containing such
other equivalent or substitute terms upon which the parties, acting in good
faith, may agree. Should Landlord or any lender desire confirmation of this
subordination, Tenant, within fifteen (15) days following Landlord's written
request, agrees to execute and deliver, without charge, all documents
evidencing the subordination of this Lease and Tenant's rights, as reasonably
requested by Landlord; provided that with respect to any future mortgage or
deed of trust, Tenant shall not be obligated to execute a subordination
agreement unless it receives the requisite Non-Disturbance Agreement
substantially in the form attached hereto as Exhibit H, or containing such
other equivalent or substitute terms upon which the parties, acting in good
faith, may agree. However, should Landlord or any lender request that this
Lease be made superior, rather than subordinate, to any mortgage or deed of
trust, then Tenant, within fifteen (15) days following Landlord's written
request, agrees to execute and deliver, without any charge, any and all
documents evidencing the superiority of this Lease, as reasonably requested by
Landlord.
(b) Attornment. If Landlord's interest in the Property is
acquired by a beneficiary under a deed of trust, a mortgagee, or a purchaser at
a foreclosure sale, Tenant shall attorn to the transferee of, or successor to,
Landlord's interest in the Property and shall recognize such transferee or
successor as Landlord under this Lease, and such transferee shall be bound to
Tenant under all of the terms of this Lease. Tenant, shall, from and after the
occurrence of the preceding events, have the same remedies that Tenant might
have had against Landlord provided, however, that any such beneficiary,
mortgagee or purchaser shall not be (i) liable to Tenant for damages for any
acts or omissions of Landlord or any prior landlord occurring prior to
obtaining possession, (ii) subject to any offsets, claims or defenses which
Tenant might have against Landlord or any prior landlord which arise by virtue
of acts or omissions occurring prior to the date such beneficiary, mortgagee or
purchaser obtains title, (iii) bound by any rent or additional rent which
Tenant may have paid to
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Landlord or any prior landlord more than one (1) month in advance or by any
deposit or rental security unless funds therefor have been delivered to such
beneficiary, mortgagee or purchaser, (iv) bound by any amendment or
modification made without the prior consent of the holder of the mortgage or
deed of trust that was foreclosed, (v) obligated or liable to Tenant with
respect to the construction and completion of the initial improvements in the
Premises for Tenant's use, enjoyment or occupancy, except that Tenant shall
have the right to terminate this Lease upon five (5) days written notice if
such mortgagee or holder of a deed of trust fails to pay the Allowance
contemplated by the Landlord's Work Agreement, or to complete the improvements
required thereby, or (vi) liable for any damages Tenant may suffer as a result
of any misrepresentation or breach of warranty of Landlord. Tenant waives the
protection of any statute or rule of law which gives or purports to give Tenant
any right to terminate this Lease or surrender possession of the Property upon
the transfer of Landlord's interest. Tenant, within fifteen (15) days following
Landlord's written request, agrees to execute and deliver, without any charge,
any and all documents evidencing such attornment and recognition, as reasonably
requested by Landlord.
(c) Attorney-in-Fact. If Tenant fails to deliver such documents
evidencing Tenant's subordination or attornment, as described in this Section
9.07, within the prescribed fifteen (15) day periods, Tenant hereby makes,
constitutes and irrevocably appoints Landlord, or any transferee or successor
of Landlord, as Tenant's attorney-in-fact to execute and deliver any such
instrument or document.
(d) Notice to Lenders. Tenant agrees that a copy of any notice of
default from Tenant to Landlord shall also be sent to the holder of any
mortgage or deed of trust on the Property, provided Tenant has been given
written notice that the holder of such mortgage or deed of trust has made such
request, and of the holder's name and address. Tenant shall give any such
lender a reasonable time, not to exceed thirty (30) days from the giving of
said notice, to cure or cause to be cured, any such default. If such default
can not be reasonably cured within the time specified herein, then such
additional time as may be necessary shall be allowed, provided the lender has
commenced such cure within such thirty (30) day period and is diligently and
continuously pursuing such cure to completion, in which event this Lease shall
not be terminated while such remedies are being thus diligently pursued.
9.08 TENANT'S FINANCIAL CONDITION. Prior to the execution of this
Lease, Tenant shall deliver to Landlord its most recent financial statements
filed with the United States Securities and Exchange Commission. Tenant
represents and warrants to Landlord that such financial statement of Tenant
is a true and accurate statement as of the date of such statement.
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9.09 USE OF PAVED AREAS. It is expressly understood and agreed that:
(a) The parking lot, access drives, entrance drives, or areas
adjacent thereto, are not to be used to perform vehicle overhaul or repairs
such as, but not limited to, engine transmission, and/or brake replacement,
repair, and/or modification.
(b) The parking lot, access drives, entrance drives, or areas
adjacent thereto, are not to be used for periodic or preventative vehicle
maintenance such as, but not limited to, oil changes, lubrication, coolant
flushes and changes.
(c) Vehicle body work and/or painting is expressly prohibited.
(d) Vehicles will not be blocked up or placed on stands in the
paved areas, or areas adjacent thereto, or jacked for any reason other than
wheel changes in the event of a flat tire or other emergency situation. No
jacked vehicle will be left unattended and shall be jacked only for such period
of time as is necessary to dismount and remount the wheel. No vehicle will be
lowered to the pavement without all wheels and tires in place. In any case, the
pavement will be protected.
9.10 USE OF TRASH REMOVAL SERVICE.
(a) If Landlord elects, as part of the Common Area Operating
Expenses at the Property, to provide an outdoor metal trash container for
disposal of wastebasket trash for the use of all Tenants at the Property,
Tenant agrees to use such trash container in compliance with local ordinances
and restrictions. Tenant further agrees to use commercially reasonable efforts
to keep all trash container lids and hatches which are under its exclusive
control closed when such container is not being filled or emptied, to collapse
boxes, packaging, or other items to their smallest volume before depositing
them in such container, to police spillage immediately, and to maintain truck
access to the trash container. Should Landlord not elect to provide trash
service as part of the Common Area Operating Expenses, Tenant agrees to
maintain its own trash container in the same manner as previously described.
(b) Tenant shall not deposit the following items in or around
such trash container: trash from other locations, building and/or construction
materials, metal, wood, other rigid material larger than 24 inches in any
dimension, liquids, tires, wheels, automotive equipment or appliances, debris
from remodeling, bi-products of manufacturing or assembly processes.
9.11 ASSIGNMENT OR SUBLETTING. Tenant shall not assign, mortgage,
or encumber this Lease nor sublet or suffer or
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permit the Premises or any part thereof to be used by others without the prior
written consent of Landlord in each instance, which consent shall not be
unreasonably withheld, conditioned, or delayed. As long as Tenant hereunder
shall be a corporation, any transfer, sale, pledge, or other disposition
(whether in a single transaction or a related series of transactions) of
fifty-one percent (51%) or more of the aggregate voting power in the
corporation shall be deemed an assignment of this Lease and therefore
prohibited without the express written consent of Landlord, which consent shall
not be unreasonably withheld, conditioned, or delayed; provided that such
transfer, sale, pledge or other disposition of fifty-one percent (51%) or more
of the corporation's aggregate voting power shall not be deemed an assignment
of this Lease if the corporation is a corporation whose stock is publicly
traded and that is required to file quarterly reports with the United States
Securities and Exchange Commission. In the event as the result of a permitted
assignment Tenant hereunder becomes a partnership or limited liability company,
any transfer, sale, assignment, pledge or other disposition of any of the
interests of the general partners of Tenant or of greater than fifty-one
percent (51%) of the interests of Tenant, whether such interests be those of
the general or limited partners or members, shall be deemed an assignment of
this Lease and therefore prohibited without the express written consent of
Landlord, which consent shall not be unreasonably withheld, conditioned, or
delayed. If Tenant submits to Landlord a written request for Landlord's consent
pursuant to this Section 9.11 and Landlord fails to respond thereto within ten
(10) days of its receipt of such request, and Tenant submits to Landlord a
second written request for Landlord's consent to the same transaction which
clearly indicates thereon that it is a second request, if Landlord fails to
respond to such second request within five (5) business days of its receipt,
such failure to respond shall be presumed to constitute the consent of Landlord
to the proposed transaction. Notwithstanding the foregoing, Landlord shall
consent to any bona fide assignment of this Lease or sublease of the Premises
to an "Affiliate" of Tenant. An "Affiliate" of Tenant shall mean a person or
entity that controls Tenant, is controlled by Tenant, or is under common
control with Tenant, as the term control is defined under the Securities
Exchange Act of 1934, as amended. If this Lease is assigned to an Affiliate or
the Premises is subleased to an Affiliate, any transfer, sale, pledge or other
disposition (whether in a single transaction or a related series of
transactions) of fifty-one percent (51%) or more of the aggregate voting power
in the Affiliate shall constitute an assignment unless the Affiliate meets the
publicly traded exemption set forth above. If this Lease is assigned or if the
Premises or any part thereof is sublet or occupied by anyone other than Tenant
without the express written consent of Landlord, Landlord may collect rent from
assignee, sub-tenant or occupant and apply the net amount collected to all Rent
due hereunder, but no assignment, sub-letting, occupancy, or collection shall
be deemed to be a waiver of this covenant or the acceptance of the assignee,
sub-tenant or occupant as Tenant, or a release of Tenant's duties and
obligations hereunder. In the event this Lease is assigned or the Premises, or
any part thereof, is sublet or occupied by anyone other than Tenant or an
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Affiliate, fifty percent (50%) of any Base Rent received by Tenant and/or the
Affiliate in excess of that defined in Section 4 above shall be paid to
Landlord. No assignment shall release Tenant of any obligations or liabilities
under this Lease.
9.12 WAIVER OF TRIAL BY JURY. Landlord and Tenant waive all rights
to a trial by jury in any action, counterclaim, or proceeding based upon, or
related to, the subject matter of this Lease.
9.13 NO RECORDATION. Tenant shall not record this Lease or a
memorandum thereof without obtaining Landlord's prior written consent.
9.14 CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY.
(a) Tenant represents and warrants that the person signing this
Lease on its behalf has full authority to do so and that this Lease binds
Tenant. Upon execution of this Lease, Tenant shall deliver to Landlord a
certified copy of a resolution of Tenant's Board of Directors authorizing the
execution of this Lease or other evidence of such authority reasonably
acceptable to Landlord.
(b) Landlord represents and warrants that Landlord is the owner
of the Property, and that the person signing this Lease on its behalf has full
authority to do so and that this Lease binds Landlord. Upon execution of this
Lease, Landlord shall deliver to Tenant evidence of such authority reasonably
acceptable to Tenant.
9.15 EXECUTION OF LEASE. This Lease may be executed in counterparts,
and, when all counterpart documents are executed, the counterparts shall
constitute a single binding instrument. The delivery of this Lease by Tenant
and Landlord shall not be deemed to be an offer and shall not be binding
upon either party until executed and delivered by both parties.
9.16 RULES AND REGULATIONS. Tenant, its agents, employees,
contractors and invitees shall at all times abide by and observe such
rules and regulations as Landlord reasonably may promulgate from time to
time, with a copy sent to Tenant, for (i) the reputation, safety, care
or appearance of the Premises, and the preservation of good order therein, and
(ii) the operation and maintenance of the Premises or the equipment thereof;
provided that the same shall be in conformity with common practice and usage in
similar buildings and shall not be inconsistent with the provisions of this
Lease. Nothing contained in this Lease shall be construed to impose upon
Landlord any duty or obligation to enforce such rules and regulations, or the
terms, conditions or covenants contained in any other lease, as against any
other tenant, and Landlord shall not be liable to Tenant for violation of
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the same by any other tenant, its employees, agents, contractors, invitees,
licensees, customers, clients, family members or guests; provided that all
rules and regulations shall be consistently applied (or not applied) to all
tenants at the Property.
9.17 BROKER. Landlord and Tenant each represent and warrant
to the other that Preston Partners, Inc. and KLNB, Inc. (collectively the
"Brokers") are the only brokers with which it has dealt in connection with this
Lease or the Premises. Landlord represents and warrants to Tenant that it has
agreed to pay a leasing/brokerage commission to the Brokers pursuant to a
separate agreement. Landlord represents and warrants to Tenant that Landlord
has not dealt with, or agreed to pay any commission or fee to, any broker or
entity relating to Tenant's leasing of the Premises other than the Brokers.
Landlord shall indemnify, defend, and hold Tenant harmless from and against any
loss, cost or expense that results if Landlord's representations in this
Section 9.17 prove to be false or incorrect. Tenant represents and warrants to
Landlord that Tenant has not dealt with, or agreed to pay any commission or fee
to, any broker or entity relating to Tenant's leasing of the Premises other
than the Brokers. Tenant shall indemnify, defend and hold Landlord harmless
from and against any loss, cost or expense that results if Tenant's
representations in this Section 9.17 prove to be false or incorrect.
9.18 TOPIC HEADINGS. The headings, captions, article numbers,
paragraph and section numbers, and index appearing in the Lease are inserted
only as a matter of convenience and reference and in no way define,
limit, construe, or describe the scope or intent of such articles or paragraphs
of this Lease nor in any way affect this Lease.
9.19 GOVERNING LAW. This Lease shall be construed and governed by and
pursuant to the laws of Maryland (excluding its choice of law provisions).
Should any provisions of this Lease and/or its conditions be determined to be
void, illegal or not enforceable, it or they shall be considered severable,
and the Lease and its conditions shall remain in full force and effect and be
binding upon the parties as though the said provision had never been included.
9.20 NOTICE. Except where this Lease specifically provides
for oral notice, any notice or demand required or permitted by law or any
provisions of this Lease shall be given in writing, shall be deemed to be duly
given three (3) days after deposit in the United States mail if sent by
certified or registered mail, return receipt requested, postage prepaid, or
upon delivery if sent by messenger or overnight delivery service, at the
address or addresses listed below or at such other or additional address or
addresses as either party may hereafter designate in writing:
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LANDLORD:
Parcel A-40 Associates, LLC
c/o Penrose Property Company
0000 Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
with a copy to:
Penguin Group, L.P.
000 Xxxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx Xxxxxxx, Esquire
TENANT:
The Cosmetic Center, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Vice President, Real Estate
9.21 AMENDMENTS. This Lease, including the Exhibits hereto,
constitutes the entire agreement between the parties pertaining to the
lease of the Premises, and there are no other written or oral agreements
between the parties with respect to the lease of the Premises. No amendment,
modification, or alteration of this Lease shall be effective unless it is in
writing and signed by both parties.
9.22 TIME IS OF THE ESSENCE. Time is of the essence with respect
to the performance and observance of each and every covenant and provision
of this Lease.
9.23. LIABILITY. Tenant shall neither assert nor seek to enforce
any claim for breach of this Lease against any of Landlord's assets other
than Landlord's interest in the Property and in the rents, issues and
profits thereof, including without limitation, insurance proceeds and
condemnation awards, and in any tangible personal property of Landlord used in
connection with, and located at, the Premises, and Tenant agrees to look solely
to such assets for the satisfaction of any liability of Landlord under this
Lease, it being specifically agreed that in no event shall Landlord (or any of
the officers, trustees, directors, partners, beneficiaries, joint
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venturers, members, stockholders or other principals or representatives,
disclosed or undisclosed) ever be personally liable for any such liability.
This paragraph shall not limit any right that Tenant might otherwise have to
obtain injunctive relief against Landlord or to take any other action which
shall not involve the personal liability of Landlord to respond in monetary
damages from Landlord's assets other than the Landlord's interest in the
Premises. In no event shall Landlord (or any of the officers, trustees,
directors, partners, beneficiaries, joint venturers, members, stockholders or
other principals or representatives, disclosed or undisclosed) ever be liable
for consequential damages.
9.24 RIGHT OF FIRST OFFER.
(a) Provided there is not then an existing Event of Default under
this Lease, Tenant shall have a right of first offer to lease any space in any
building at the Property that becomes available for lease after the initial
leasing of space at the Property and before the Termination Date. Space shall
not be deemed to be available if the tenant then in occupancy extends its lease
or enters into a new lease with Landlord, whether or not such tenant has formal
option rights. This right of first offer may be exercised only if Tenant
intends to occupy the space itself. Notwithstanding the foregoing, Tenant's
right of first offer shall expire at such time as Tenant occupies three hundred
eighty thousand (380,000) square feet or more of the space at the Property.
(b) If any space qualifying for Tenant's right of first offer
becomes available ("Offered Space"), Landlord shall send to Tenant a notice
(the "Offering Notice") regarding the availability of such Offered Space and
specifying (i) the Base Rent and Additional Rent at which Landlord intends to
offer the Offered Space, (ii) the leasehold improvements and any tenant
allowance to be provided by Landlord for the Offered Space, (iii) the term for
which Landlord intends to offer the Offered Space and the date upon which the
Offered Space shall be available for delivery to any party leasing such Offered
Space, and (iv) any other material condition to the leasing of the Offered
Space that varies from the provisions of this Lease. To accept the terms of the
Offering Notice, Tenant must notify Landlord within thirty (30) days following
receipt of the Offering Notice that Tenant has agreed to lease all of the
Offered Space on the foregoing terms.
(c) In the event Tenant elects to exercise its right to lease the
Offered Space, (i) the Offered Space shall be deemed to be a part of the
Premises and Tenant shall commence paying Rent with respect thereto on the date
the Offered Space is delivered to Tenant, which date shall not be earlier than
the date of delivery specified in the Offering Notice, (ii) except as set forth
in the Offering Notice, the Offered Space shall be leased on the same terms and
conditions as contained in this Lease, and (iii) the Offered Space shall be
leased to Tenant in its then existing
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condition and state of improvement and, except as provided in the Offering
Notice, Landlord shall have no obligation to pay any allowance to Tenant or
make any improvements, repairs or alterations thereof or thereto except as
otherwise specified in the Offering Notice. The Offered Space shall be
delivered to Tenant in good condition and repair, ordinary wear and tear
excepted, and in compliance with all applicable laws, ordinances, rules and
regulations. Landlord and Tenant shall, if requested by either party, execute
and acknowledge an instrument confirming the lease to Tenant of the Offered
Space and the terms and conditions upon which the Offered Space is leased to
Tenant. Notwithstanding the foregoing, if any Event of Default exists on the
first day upon which the Offered Space is to be leased to Tenant, Landlord may
elect, by notice to Tenant within five (5) days following such date, to
terminate Tenant's leasing of the Offered Space, unless the Event of Default
has been cured prior to the giving of such notice.
(d) In the event Tenant does not exercise its right to lease the
Offered Space within the thirty (30) day time period set forth above, Landlord
may proceed to lease such space to the general public, provided that Landlord
shall not lease such space to the general public at an average effective net
rental that is less than ninety percent (90%) of the average effective net
rental proposed in the Offering Notice, or on other terms and conditions which
differ materially from those contained in the Offering Notice, unless Landlord
first reoffers such Offered Space to Tenant in the manner described above on
such changed terms and conditions; provided, however, that with respect to a
reoffer Tenant shall have only ten (10) business days following receipt of the
revised Offering Notice to accept the revised Offering Notice. If Tenant fails
to elect to lease any Offered Space pursuant to an Offering Notice, Landlord
leases the Offered Space to a third party as permitted by this Section, and
thereafter the Offered Space again becomes available, the right of first offer
set forth in this Section 9.24 again shall be applicable to such space.
9.25 RENEWAL OPTION.
(a) Renewal. Provided there is not then an existing Event of
Default under this Lease, Tenant shall have the option to renew the term of
this Lease for one period of five (5) additional years (the "Renewal Term"), to
commence at the expiration of the initial term hereof; provided that Tenant
shall have the right to terminate this Lease at the end of any calendar month
during the Renewal Term by giving Landlord at least twelve (12) months prior
written notice of its exercise of such option. Tenant shall exercise its option
to renew by delivering written notice of such election to Landlord not more
than twelve (12) months and not less than nine (9) months prior to the
expiration of the initial term hereof. The renewal of this Lease shall be upon
the same terms and conditions set forth herein, except (i) the Base Rent during
the Renewal Term shall be calculated based on the prevailing "Market Base
Rental Rate" (as hereinafter defined) at the time the Renewal Term commences,
but
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in no event less than the Base Rent that Tenant is then paying under the
terms of this Lease, (ii) there shall be a corresponding adjustment of Base
Year Taxes and Base Year Insurance Premiums to the levels incorporated in the
determination of the Market Base Rental Rate, (iii) Tenant shall have no option
to renew this Lease beyond the expiration of the Renewal Term, and (iv) the
leasehold improvements will be provided in their then-existing condition (on an
"as is" basis) at the time the Renewal Term commences. Notwithstanding the
foregoing, Tenant shall have no right to exercise such option to renew, and
Landlord shall have no obligation to renew this Lease, unless (A) this Lease
shall be in full force and effect on the date of the exercise of such renewal
option and the date of the expiration of the initial term, and (B) on the date
of the expiration of the initial term there shall not be an Event of Default
under this Lease. If Tenant shall fail timely to exercise such option to renew
or if Tenant is not permitted to exercise such option to renew, this Lease
shall expire at the expiration of the initial term and Tenant shall have no
further right thereafter to renew this Lease or to thereafter maintain any
interest whatsoever in the Premises.
(b) Market Base Rental Rate. Whenever used in this Lease, the
term "Market Base Rental Rate" shall mean Landlord's reasonable determination,
subject to Section 9.25(c), (i) of the annual net effective rental rate per
square foot (exclusive of expense pass-through additions) of gross leasable
area then being charged in warehouse buildings located in Xxxxxx County,
Maryland, and (ii) of the amount of, or formula for determining, Base Year
Taxes and Base Year Insurance Premiums, then prevailing for space comparable to
the Premises. It is agreed that bona fide written offers to or from third
parties unrelated to Landlord to lease comparable space located elsewhere at
the Property (at arm's length) may be used by Landlord as the primary factor in
determining the Market Base Rental Rate.
(c) Resolution of Dispute Over Market Base Rental Rate. At any
time that is not more than eighteen (18) months and not less than twelve (12)
months prior to the expiration of the initial term hereof, Tenant may request
in writing that Landlord provide Tenant, in writing, its estimate of the then
prevailing Market Base Rental Rate and supporting evidence therefor. In the
event Tenant exercises its option to renew in accordance with Section 9.25(a)
above but disagrees with Landlord's determination of the Market Base Rental
Rate, then Tenant's renewal notice shall set forth Tenant's estimate of the
Market Base Rental Rate and its supporting evidence therefor. If, within thirty
(30) days after Tenant exercises its renewal option, Landlord and Tenant have
not agreed upon the Market Base Rental Rate, Tenant shall give Landlord notice
of its desire to arbitrate such rate, which notice shall be accompanied by the
identity of an arbitrator appointed by Tenant. Thereafter, Landlord shall have
fifteen (15) days in which to appoint its arbitrator, and within fifteen (15)
days after the appointment of Landlord's arbitrator the two arbitrators
theretofore appointed shall appoint a third arbitrator. If the two arbitrators
cannot agree on the appointment of a third arbitrator within fifteen (15) days,
then
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either party shall have the right to apply to the presiding judge of the
Circuit Court of Xxxxxx County, Maryland for the selection of the third
arbitrator. After the selection of the third arbitrator, the arbitration board
thus elected shall have thirty (30) days in which to reach a majority agreement
on the Market Base Rental Rate as defined above. If the arbitrators are unable
to reach a majority agreement within such thirty (30) day period, then each of
the arbitrators shall render his or her separate appraisal within such
stipulated time, and the three appraisals shall be averaged in order to
establish such rate; provided, however, that if the low appraisal and/or the
high appraisal are more than ten percent (10%) lower and/or higher than the
middle appraisal, the low appraisal and/or the higher appraisal shall be
disregarded. If only one appraisal is disregarded, the remaining two appraisals
shall be averaged in order to establish such rate. If both the low appraisal
and the high appraisal are disregarded, the middle appraisal shall be the
Market Base Rental Rate. After the Market Base Rental Rate has been
established, the arbitrators shall immediately notify the parties in writing.
Each arbitrator appointed hereunder shall be a member of the American Institute
of Real Estate Appraisers (MAI) with at least five (5) years of full-time
commercial appraisal experience in Xxxxxx County, and no such arbitrator shall
have any other existing contractual relationship with either party hereto.
Landlord and Tenant shall pay the fees of their respectively appointed
arbitrators and the fee of the third arbitrator shall be shared equally by
Landlord and Tenant. If on the date the Renewal Term commences the appraisers
have not determined the Market Base Rental Rate pursuant to the provisions of
this Section 9.25, Tenant shall commence making monthly installments of Rent
based on the greater of (i) the Rent payable during the last Lease Year of the
initial term, or (ii) the Market Base Rental Rate set forth in the appraisal
prepared by Tenant's appraiser. If the Market Base Rental Rate is ultimately
determined to be more than Tenant has paid during the Renewal Term, Tenant
shall pay the entire difference to Landlord within ten (10) days of the
determination of the final Market Base Rental Rate, and if the Market Base
Rental Rate is lower than the amounts actually paid by Tenant during the
Renewal Term, Landlord shall refund the entire difference to Tenant in a lump
sum within ten (10) days of the final determination of the Market Based Rental
Rate.
IN WITNESS WHEREOF, the parties hereto have hereunto subscribed their
names and affixed their seals, on the day and year first hereinbefore mentioned
(in
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case either party is a corporation, its name has been hereunto subscribed and
its seal hereunto affixed and attested by its duly authorized officers).
LANDLORD:
---------
PARCEL A-40 ASSOCIATES, LLC
By: Parcel A-40 Management Associates, LLC, its
Manager
By: Xxxxxxx Land Consultants, LLC, its
Manager
By: /s/ Xxxx X. Xxxxx
----------------------------
Xxxx X. Xxxxx,
Authorized Person
and By: Amalgamated Investors, L.P., its Member
By: /s/ J. Xxxxx Poormen
----------------------------
J. Xxxxx Poormen,
Vice President
TENANT:
THE COSMETIC CENTER, INC.
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Xxxxxx Xxxxxx
President and Chief Executive Officer
