Exhibit 10.15


CERTAIN
PORTIONS


HEREOF
DENOTED WITH "[***]"


HAVE BEEN
OMITTED


PURSUANT
TO A REQUEST


FOR
CONFIDENTIAL TREATMENT


AND HAVE
BEEN FILED


SEPARATELY
WITH THE


COMMISSION


 


STANDARD INDUSTRIAL LEASE


 


1.             BASIC LEASE PROVISIONS


 


1.1           DATE: 
December 22, 2003


 


1.2           LANDLORD: 
The Realty Associates Fund V, L.P.,

a Delaware limited partnership


 


1.3           TENANT: 
K.P.  Sports, Inc.,

a Maryland corporation, trading as Under Armour Performance Apparel


 


1.4           PREMISES ADDRESSES:  1010 Swan Creek Drive

Glen Burnle, Maryland


 


1.5           APPROXIMATE LEASABLE AREA

OF PREMISES:  264,676 rentable square
feet


 


1.6           USE: 
General office warehouse, light manufacturing and distribution and
retail product sales, subject to the requirements and limitations contained in Section 4.1.


 


1.7           TERM: 
Five (5) years


 


1.8           COMMENCEMENT DATE:  April 1, 2004


 


1.9           MONTHLY BASE RENT:  $[***]


 


1.10         ESTIMATED MONTHLY OPERATING

EXPENSE PAYMENT:  $[***]


 


1.11         BASE RENT AND ESTIMATED MONTHLY OPERATING EXPENSE
PAYMENT PAID UPON EXECUTION: 
$[***] (for the first full month of the Term of this Lease)


 


1.12         TENANT’S PERCENTAGE SHARE:  [***]% (See Addendum Paragraph 4) (See also Section 6.4)


 


1.13         SECURITY DEPOSIT:  $[***]


 


1.14         NUMBER OF PARKING SPACES:  Tenant shall be entitled to use Tenant’s
Percentage Share of the parking spaces in the parking areas of the Project on
an unreserved basis in common with other tenants of the Project


 


1.15         REAL ESTATE BROKER:


 





















 


LANDLORD:  Coldwell Banker Commercial NRT


 


TENANT:  Coldwell Banker Commercial NRT


 


1.16         EXHIBITS ATTACHED TO LEASE:  Addendum; Exhibit A — “Premises”; Exhibit A-1
— “Tenant’s Additional Parking”; Exhibit B — “Verification Letter”; Exhibit C
— “Rules and Regulations”; Exhibit D — intentionally omitted; Exhibit E
— “Letter Regarding Retail Sales Use”; Exhibit F — “Form of License
Agreement for Satellite Dish”; Schedule 1 — Intentionally Omitted; Schedule 2
— “Office Work”; Schedule 3 — “Code Compliance Work”; Schedule 4 — “Demising
Work”


 


1.17         ADDRESSES FOR NOTICES:


 


	
  LANDLORD:

  	
  The
  Realty Associates Fund V, L.P.

  
	
   

  	
  c/o
  NAI KLNB, Inc.

  
	
   

  	
  1430
  Joh Avenue

  
	
   

  	
  Suite A

  
	
   

  	
  Baltimore,
  Maryland 21227

  
	
   

  	
  Attention:
  Mr. Jonathan Clapp

  
	
   

  	
   

  
	
  WITH
  COPY TO:

  	
  TA
  Associates Realty

  
	
   

  	
  28
  State Street

  
	
   

  	
  Boston,
  Massachusetts 02109

  
	
   

  	
  Attention:
  Ms. Kimberly Hourihan

  
	
   

  	
   

  
	
  TENANT:

  	
  K.P.
  Sports, Inc. trading as

  
	
   

  	
  Under
  Armour Performance Apparel

  
	
   

  	
  1020
  Hull Street, Third Floor

  
	
   

  	
  Baltimore,
  Maryland 21230

  
	
   

  	
  Attention:
  J. Scott Plank, Vice President of Finance

  



 


2.             PREMISES.


 


2.1           ACCEPTANCE.  Landlord Leases to Tenant, and Tenant Leases
from Landlord, the Premises, to have and to hold for the Term of this Lease,
subject to the terms, covenants and conditions of this Lease.  The Premises is depicted on Exhibit ”A”
attached hereto.  The Premises depicted
on Exhibit ”A” is all or a part of a building (the “Building”) and may
contain areas outside of the Building to the extent such areas are specifically
identified on Exhibit ”A” as being a part of the Premises.  Tenant accepts the Premises in its condition
as of the Commencement Date, subject to all applicable laws, ordinances,
regulations, covenants, conditions, restrictions and easements, and except as
may be otherwise expressly provided herein, Landlord shall not be obligated to
make any repairs or alterations to the Premises.  Tenant acknowledges that Landlord has made no
representation 


 


2





















 


or warranty as to
the suitability of the Premises for the conduct of Tenant’s business, and
Tenant waives any implied warranty that the Premises are suitable for Tenant’s
intended purposes.  The number of square
feet set forth in Section 1.5 is an approximation, and the Base Rent shall
not be changed if the actual number of square feet in the Premises is different
than the number of square feet set forth in Section 1.5.


 


See Addendum Paragraph I


 


2.2           COMMON AREAS.  Landlord hereby grants to Tenant for the
benefit of Tenant and its employees, suppliers, shippers, customers and
invitees during the Term of this Lease, the nonexclusive right to use, in
common with others entitled to such use (including Landlord), the Common Areas
(as hereinafter defined) as they exist from time to time, subject to all rights
reserved by Landlord hereunder and under the terms of all rules and
regulations promulgated by Landlord from time to time with respect
thereto.  Landlord reserves the right
from time to time to (a) make changes in the Common Areas, including,
without limitation, changes in location, size, shape and number of driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas and walkways; (b) close
temporarily any of the Common Areas for maintenance purposes so long as
reasonable access to the Premises remains available; (c) construct parking
areas, loading dock facilities and other improvements within the Common Areas;
and (d) do and perform such other acts and make such other changes in, to
or with respect to the Common Areas as Landlord may deem appropriate, so long
as Landlord’s actions in connection with such rights set forth in clauses (a) through
(d) above do not have a materially adverse effect on Tenant’s use or
occupancy of the Premises.  Landlord
shall use reasonable efforts to minimize unreasonable interference with Tenant’s
use and occupancy of the Premises during Landlord’s actions in connection with
such changes.  As used herein, the term “Common
Areas” means all areas and facilities outside the Premises and within the
exterior boundary lines of that land owned by Landlord that are provided and
designated by Landlord as such from time to time for general nonexclusive use
of Tenant and others, including, if designated by Landlord as Common Areas,
parking areas, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways and landscaped areas. 
The Premises, the Building, the Common Areas, the land upon which the
same are located, along with all other buildings and improvements thereon, are
herein collectively referred to as the “Project.”  Under no circumstances shall the right herein
granted to use the Common Areas be deemed to include the right to store any
property, temporarily or permanently, in the Common Areas, including, without
limitation, the storage of trucks or other vehicles, except as expressly
provided hereinafter.  Any such storage
shall be permitted only by the prior written consent of Landlord, which consent
may be revoked at any time.  In the event
that any unauthorized storage shall occur then Landlord shall have the right, 


 


3





















 


without notice, in
addition to such other rights and remedies that it may have, to remove the
property and charge the cost to Tenant, which cost shall be immediately payable
upon demand by Landlord.  Notwithstanding
the foregoing, Landlord acknowledges that Tenant will place storage containers
in the parking areas of the Project and receive shipments from tractor trailers
and other vehicles as part of Tenant’s operations at the Premises, and
occasional overnight parking of such tractor trailers and/or other vehicles as
well as the temporary placement of storage containers shall be permitted
provided such tractor trailers are parked or such storage containers are placed
in the parking spaces directly behind the Premises and do not interfere with
the loading areas of other Tenants of the Building and are otherwise not
unsightly on the Project.  Any such
parking spaces used by Tenant pursuant to the immediately preceding sentence
shall otherwise be a parking space Tenant is permitted to use pursuant to Section 1.14
above and this provision shall not be construed to increase the number of
parking spaces Tenant is permitted to use pursuant to Section 1.14 above.


 


3.             TERM.


 


3.1           TERM AND COMMENCEMENT DATE.  The term and Commencement Date of this Lease
are as specified in Sections 1.7 and 1.8. 
Tenant shall, within five (5) days after Landlord’s request,
complete and execute the letter attached hereto as Exhibit ”B” and deliver
it to Landlord.  Tenant’s failure to
execute the letter attached hereto as Exhibit ”B” within said five (5) day
period shall be a material default hereunder and shall constitute Tenant’s
acknowledgment of the truth of the facts contained in the letter delivered by
Landlord to Tenant.


 


3.2           DELAY IN POSSESSION.  Notwithstanding the Commencement Date
specified in Section 1.8, if for any reason Landlord cannot deliver
possession of the Premises to Tenant on said date, except as expressly provided
in Paragraph 2 of the Addendum, Landlord shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease or the
obligations of Tenant hereunder; provided, however, in such a case, Tenant
shall not be obligated to pay rent or perform any other obligation of Tenant
under this Lease, except as may be otherwise provided in this Lease, until
possession of the Premises is tendered to Tenant.


 


See Addendum Paragraph 2


 


3.3           DELAYS CAUSED BY TENANT.  [Intentionally omitted].


 


3.4           TENDER OP POSSESSION.  [Intentionally omitted].


 


3.5           EARLY POSSESSION.  If Tenant occupies the Premises prior to the
Commencement Date, such occupancy shall be subject to all provisions of this 


 


4





















 


Lease, such
occupancy shall not change the termination date, and Tenant shall pay Base Rent
and all other charges provided for in this Lease during the period of such
occupancy.  Provided that Tenant does not
interfere with or delay the completion by Landlord or its agents or contractors
of the construction of any Tenant improvements, and provided Landlord has
possession of the Premises, Tenant shall have the right to enter the Premises
prior to the anticipated Commencement Date for the purpose of installing
furniture, trade fixtures, equipment, racking and similar items.  Tenant shall be liable for any damages or
delays caused by Tenant’s activities at the Premises.  [Provided that Tenant has not begun operating
its business from the Premises, and subject to all of the terms and conditions
of the Lease, the foregoing activity shall not constitute the delivery of
possession of the Premises to Tenant and the Lease Term shall not commence as a
result of said activities.]  Prior to
entering the Premises, Tenant shall obtain all insurance it is required to obtain
by the Lease and shall provide certificates of said insurance to Landlord.  Tenant shall coordinate such entry with
Landlord’s manager, and such entry shall be made in compliance with all terms
and conditions of this Lease and the Rules and Regulations attached
hereto.


 


4.             USE.


 


4.1           PERMITTED USE.  The Premises shall be used only for the
purpose described in Section 1.6 and for no other purpose.  Landlord makes no representation or warranty
that Tenant’s use is permitted by applicable zoning laws or other laws and
regulations, including without limitation, Tenant’s intended use of that
portion of the Premises designated as “Retail Space” on Exhibit A for
retail sales use.  A letter from Anne
Arundel County, Maryland obtained by Tenant permitting such use is attached
hereto as Exhibit E.  Tenant shall
not initiate, submit an application for, or otherwise request, any land use
approvals or entitlements with respect to the Premises or any other portion of
the Project, including, without limitation, any variance, conditional use
permit or rezoning, without first obtaining Landlord’s prior written consent,
which may be given or withheld in Landlord’s sole discretion.  Tenant shall not (a) permit any animals
or pets to be brought to or kept in the Premises, (b) except as expressly
provided in Paragraph 11 of the Addendum attached hereto, install any antenna,
dish or other device on the roof of the Building or outside of the Premises, (c) make
any penetrations into the roof of the Building, (d) place loads upon
floors, walls or ceilings in excess of the load such items were designed to
carry, (e) except as expressly permitted in Section 2.2, place or
store, nor permit any other person or entity to place or store, any property,
equipment, materials, supplies or other items outside of the Building in which
the Premises is located or (f) change the exterior of the Premises or the
Building in which the Premises is located. 
In addition to Tenant’s parking spaces granted under Section 1.14,
Tenant shall have the right to use fifteen (15) parking spaces, more
particularly shown on Exhibit A-1 attached hereto, for parking for its
retail store.  In addition, if, as a
result of Tenant’s use of 


 


5





















 


the Premises for
retail sales, Landlord is obligated to comply with the Americans With
Disabilities Act or any other law or regulation and such compliance requires
Landlord to make any improvement or alterations to any portion of the Project,
Landlord shall have the right to require Tenant to pay to Landlord the entire cost
of any improvement or alteration Landlord is obligated to complete by such law
or regulation pursuant to Section 4.2 below.


 


4.2           COMPLIANCE WITH LAWS.  Tenant shall, at Tenant’s sole expense,
promptly comply with all applicable laws, ordinances, rules, regulations,
orders, certificates of occupancy, conditional use or other permits, variances,
covenants, conditions, restrictions, easements, and requirements of any fire
insurance underwriters, rating bureaus or government agencies, now in effect or
which may hereafter come into effect, whether or not they reflect a change in
policy from that now existing (collectively, “Legal Requirements”), during the
Term or any part of the Term hereof, relating to the Premises and arising from
the occupation and use by Tenant of the Premises.  Tenant shall, at Tenant’s sole expense,
comply with all requirements of the Americans With Disabilities Act that relate
to the Premises, and all federal, state and local laws and regulations
governing occupational safety and health. 
Tenant shall not permit any objectionable or unpleasant odors, smoke,
dust, gas, noise or vibrations to emanate from the Premises, or take any other
action that would constitute a nuisance or would disturb, unreasonably
interfere with or endanger Landlord or any other Tenants of the Project.  Tenant shall obtain, at its sole expense, any
permit or other governmental authorization required to operate its business
from the Premises.  Landlord shall not be
liable for the failure of any other Tenant or person to abide by the
requirements of this Section or to otherwise comply with applicable laws
and regulations, and Tenant shall not be excused from the performance of its
obligations under this Lease due to such a failure.  Landlord warrants to Tenant that, to the best
of Landlord’s knowledge, the Project, in the state existing on the date this
Lease is executed by Landlord and Tenant, but without regard to alterations or
improvements to be made by Tenant or the use for which Tenant will occupy the
Premises, does not violate any Legal Requirements in effect on such date.  To the extent that Landlord receives any
notice from a governmental entity that the Project is in violation of any Legal
Requirement and Landlord is obligated pursuant to a final determination to
undertake action in order to comply with any such Legal Requirement, then in
such event Landlord agrees to undertake such remedial action.  If such Legal Requirement was in effect as of
the date hereof and such violation existed as of the date hereof, Landlord
shall be responsible for the cost of curing such violation and such costs shall
not be included in Operating Expenses. 
If such Legal Requirement was not in effect as of the date hereof or
such violation did not exist as of the date hereof, then the cost of curing
such violation shall be included in Operating Expenses, except to the extent
such costs would otherwise be excluded from Operating Expenses pursuant to the
terms of Section 6 hereof.  To the
extent that such notice requires action with regard to 


 


6





















 


Tenant’s
particular use of the Premises, Tenant shall be obligated to undertake such
action at Tenant’s sole cost and expense.


 


5.             BASE
RENT.  Tenant shall pay base rent in the amount set
forth on the first page of this Lease. The first month’s Base Rent, the
Security Deposit, and the first monthly installment of estimated Operating
Expenses (as hereafter defined) shall be due and payable on the date this Lease
is executed by Tenant, and Tenant promises to pay to Landlord in advance,
without demand, deduction or set-off, monthly installments of Base Rent on or
before the first day of each calendar month succeeding the Commencement Date. Payments
of Base Rent for any fractional calendar month shall be prorated. All payments
required to be made by Tenant to Landlord hereunder shall be payable at such
address as Landlord may specify from time to time by written notice delivered
in accordance herewith. Tenant shall have no right at any time to abate, reduce,
or set off any rent due hereunder except where expressly provided in this
Lease.


 


See Addendum Paragraph 3


 


6.             OPERATING EXPENSE PAYMENTS.


 


6.1           OPERATING EXPENSES.  Tenant shall pay Tenant’s Percentage Share
(as defined below) of the Operating Expenses for the Project.  For the purposes of this Lease, the term “Operating
Expenses” shall mean all expenses and disbursements of every kind (subject to
the limitations set forth below) which Landlord incurs, pays or becomes
obligated to pay in connection with the ownership, operation, and maintenance
of the Project (including the associated Common Areas), including, but not
limited to, the following:


 


(a)           wages
and salaries (including reasonable management fees) of all employees, agents,
consultants and other individuals or entities engaged in the operation, repair,
replacement, maintenance, and security of the Project, including taxes,
insurance and benefits relating thereto;


 


(b)           all
supplies and materials used in the operation, maintenance, repair, replacement,
and security of the Project;


 


(c)           annual
cost of all Capital Improvements (as defined below) made to the Project which
although capital in nature can at the time undertaken reasonably be expected to
reduce the normal operating costs of the Project, as well as all Capital
Improvements made in order to comply with any law now or hereafter promulgated
by any governmental authority, as amortized over the useful economic life of
such improvements as determined by Landlord in its reasonable discretion (without
regard to the 


 


7





















 


period over which
such improvements may be depreciated or amortized for federal income tax
purposes);


 


(d)           cost
of all utilities paid by Landlord;


 


(e)           cost
of any insurance or insurance related expense applicable to the Project and
Landlord’s personal property used in connection therewith, including, but not
limited to, the insurance costs described in Section 10.2;


 


(f)            cost
of repairs, replacements and general maintenance of the Project (including all
truck court areas, paving and parking areas, Common Area lighting facilities,
fences, gates, water lines, sewer lines, rail spur areas and any other item
Landlord is obligated to repair or maintain), other than costs necessary to
assure the structural soundness of the roof, foundation and exterior walls of
the Project which are payable solely by Landlord under Section 11;


 


(g)           cost
of service or maintenance contracts with independent contractors for the
operation, maintenance, repair, replacement or security of the Project
(including, without limitation, alarm service, exterior painting, trash
collection, snow, ice, debris and waste removal and landscape maintenance);


 


(h)           the
cost of all reasonable accounting fees, management fees, legal fees and
consulting fees attributable to the operation, management, maintenance or
repair of the Project;


 


(i)            payments
made by Landlord under any easement, license, operating agreement, declaration,
restrictive covenant or other agreement relating to the sharing of costs among
property owners;


 


(j)            reserves
created by Landlord, in Landlord’s sole but reasonable discretion, for future
Operating Expenses or the future replacement of Capital Improvements;


 


(k)           the
cost of all business licenses, permits or similar fees relating to the
operation, ownership, repair or maintenance of the Project; and


 


(l)            the
cost of any other Item the cost of which is stated in this Lease to be an
Operating Expense.


 


For purposes of this Lease, a “Capital Improvement”
shall be an improvement to the Project that Landlord is obligated to make
pursuant to this Lease (other than the Office Work, Code Compliance Work and
Demising Work more particularly defined in Paragraph 10 of the Addendum), the
cost of which is not fully deductible in the year 


 


8





















 


incurred in accordance with generally accepted
accounting principles.  Real Property
Taxes (as defined below) shall be reimbursed to Landlord as provided below and
shall not be treated as an Operating Expense. 
References to facilities, services, utilities or other items in this Section shall
not impose an obligation on Landlord to have said facilities or to provide said
services unless such facilities and services already exist at the Project.


 


6.2           OPERATING EXPENSE EXCLUSIONS.  Notwithstanding anything to the contrary
contained herein, for purposes of this Lease, the term “Operating Expenses”
shall not include the following:  (i) costs
(including permit, license and inspection fees) incurred for Tenant
improvements for other Tenants within the Project; (ii) legal and auditing
fees (other than those fees reasonably incurred in connection with the
maintenance and operation of all or any portion of the Project), leasing
commissions, advertising expenses and similar costs incurred in connection with
the leasing of the Project; (iii) depreciation of the Building or any
other improvements situated within the Project; (iv) any items for which
Landlord is actually reimbursed by insurance or by direct reimbursement by any
other Tenant of the Project; (v) costs of repairs or other work
necessitated by fire, windstorm or other casualty (excluding any deductibles)
and/or costs of repair or other work necessitated by the exercise of the right
of eminent domain to the extent insurance proceeds or a condemnation award, as
applicable, is actually received by Landlord for such purposes; provided, such
costs of repairs or other work shall be paid by the parties in accordance with
the provisions of Sections 11 and 12, below; (vi) other than any interest
charges for Capital Improvements referred to in Section 6.1(c) hereinabove,
any interest or payments on any financing for the Building or the Project and
interest and penalties incurred as a result of Landlord’s late payment of any
invoice; (vii) costs associated with the investigation and/or remediation
of Hazardous Materials (hereafter defined) present in, on or about any portion
of the Project, unless such costs and expenses are the responsibility of Tenant
as provided In Section 27 hereof, in which event such costs and expenses
shall be paid solely by Tenant in accordance with the provisions of Section 27
hereof; (viii) overhead and profit increment paid to Landlord or to
subsidiaries or affiliates of Landlord for goods and/or services in the Project
to the extent the same exceeds the costs of such by unaffiliated third parties
on a competitive basis; (ix) any payments under a ground Lease or master
Lease; and (x) except as provided in Section 6.1(c) and (j) above, the
cost of Capital Improvements.


 


6.3           PAYMENT. 
Tenant’s Percentage Share of Operating Expenses shall be payable by
Tenant within ten (10) days after a reasonably detailed statement of
actual expenses is presented to Tenant by Landlord.  At Landlord’s option, however, Landlord may,
from time to time, estimate what Tenant’s Percentage Share of Operating
Expenses will be, and the same shall be payable by Tenant monthly during each
calendar year of the Lease Term, on the same day as the Base Rent is 


 


9





















 


due
hereunder.  In the event that Tenant pays
Landlord’s estimate of Tenant’s Percentage Share of Operating Expenses,
Landlord shall use its best efforts to deliver to Tenant within one hundred
twenty (120) days after the expiration of each calendar year a reasonably
detailed statement (the “Statement”) showing Tenant’s Percentage Share of the
actual Operating Expenses incurred during such year.  Landlord’s failure to deliver the Statement
to Tenant within said period shall not constitute Landlord’s waiver of its
right to collect said amounts or otherwise prejudice Landlord’s rights
hereunder.  If Tenant’s payments under
this Section during said calendar year exceed Tenant’s Percentage Share as
indicated on the Statement, Tenant shall be entitled to credit the amount of
such overpayment against Tenant’s Percentage Share of Operating Expenses next
falling due.  If Tenant’s payments under
this Section during said calendar year were less than Tenant’s Percentage
Share as indicated on the Statement, Tenant shall pay to Landlord the amount of
the deficiency within thirty (30) days after delivery by Landlord to Tenant of
the Statement.  Landlord and Tenant shall
forthwith adjust between them by cash payment any balance determined to exist
with respect to that portion of the last calendar year for which Tenant is
responsible for Operating Expenses, notwithstanding that the Lease Term may
have terminated before the end of such calendar year; and this provision shall
survive the expiration or earlier termination of the Lease.


 


6.4           TENANT’S PERCENTAGE SHARE.  “Tenant’s Percentage Share” as used in this
Lease shall mean the percentage of the cost of Operating Expenses and Real
Property Taxes (as defined below) for which Tenant is obligated to reimburse
Landlord pursuant to this Lease.


 


See Addendum Paragraph 4


 


6.5           AUDITS. 
If Tenant disputes the amount set forth in the Statement, Tenant shall
have the right, at Tenant’s sole expense except as expressly provided to the
contrary hereinbelow, not later than sixty (60) days following receipt of such
Statement, to cause Landlord’s books and records with respect to the calendar
year which is the subject of the Statement to be audited by a certified public
accountant mutually acceptable to Landlord and Tenant.  The audit shall take place at the offices of
Landlord where its books and records are located at a mutually convenient time
during Landlord’s regular business hours. 
Tenant’s Percentage Share of Operating Expenses shall be appropriately
adjusted based upon the results of such audit, and the results of such audit
shall be final and binding upon Landlord and Tenant.  Tenant shall have no right to conduct an
audit or to give Landlord notice that it desires to conduct an audit at any time
Tenant is in default under the Lease. 
The accountant conducting the audit shall be compensated on an hourly
basis and shall not be compensated based upon a percentage of overcharges it
discovers.  No subtenant shall have any
right to conduct an audit, and no assignee shall conjunct an audit for any
period during 


 


10





















 


which such
assignee was not in possession of the Premises. 
Tenant’s right to undertake an audit with respect to any calendar year
shall expire sixty (60) days after Tenant’s receipt of the Statement for such
calendar year and such Statement shall be final and binding upon Tenant and
shall, as between the parties, be conclusively deemed correct, at the end of
such sixty (60) day period, unless prior thereto Tenant shall have given
Landlord written notice of its intention to audit Operating Expanses for the
calendar year which is the subject of the Statement.  If Tenant gives Landlord notice of its
intention to audit Operating Expenses, it must commence such audit within sixty
(60) days after such notice is delivered to Landlord, and the audit must be
completed within one hundred twenty (120) days altar such notice is delivered
to Landlord.  If Tenant does not commence
and complete the audit within such periods, the Statement which Tenant elected
to audit shall be deemed final and binding upon Tenant and shall, as between
the parties, be conclusively deemed correct. 
Tenant agrees that the results of any Operating Expense audit shall be
kept strictly confidential by Tenant and shall not be disclosed to any other
person or entity, Notwithstanding anything to the contrary contained herein, if
such audit determines that an error has been made in Landlord’s determination
and calculation of Operating Expenses which results in an adjustment to the
amounts determined and calculated by Landlord of five percent (5%) or more,
Landlord shall pay for the fees and expenses of the accounting firm conducting
the audit on Tenant’s behalf (provided such fees shall not exceed the total
amount of Landlord’s refund to Tenant in connection with any adjustment made
pursuant to this Section 8.5), but if such adjustment is less than five
percent (5%), Tenant shall pay for such fees and expenses for such accounting
firm.


 


7.             SECURITY DEPOSIT.
 Tenant shall deliver to Landlord at the
time it executes this Lease the security deposit set forth in Section 1.13
as security for Tenant’s faithful performance of Tenant’s obligations
hereunder. If Tenant fails to pay Base Rent or other charges due hereunder, or
otherwise defaults with respect to any provision of this Lease after expiration
of any applicable cure periods, Landlord may use all or any portion of said
deposit for the payment of any Base Rent or other charge due hereunder, to pay
any other sum to which Landlord may become obligated by reason of Tenant’s
default, or to compensate Landlord for any loss or damage which Landlord may
suffer thereby. If Landlord so uses or applies all or any portion of said
deposit, Tenant shall within ten (10) days after written demand therefor
deposit cash with Landlord in an amount sufficient to restore said deposit to
its full amount. Landlord shall not be required to keep said security deposit
separate from its general accounts. If Tenant performs all of Tenant’s
obligations hereunder, said deposit, or so much thereof as has not heretofore
been applied by Landlord, shall be returned, without payment of interest or
other amount for its use, to Tenant (or, at Landlord’s option, to the last
assignee, if any, of Tenant’s interest hereunder) at the expiration of the Term
hereof, and after Tenant has vacated the Premises. No trust relationship is
created


 


11





















 


herein between
Landlord and Tenant with respect to said security deposit. Tenant acknowledges
that the security deposit is not an advance payment of any kind or a measure of
Landlord’s damages in the event of Tenant’s default. Tenant hereby waives the
provisions of any law which is inconsistent with this Section. The foregoing
notwithstanding, Landlord agrees, at Tenant’s request, to review Tenant’s
financial condition following the expiration of the twenty-fourth calendar
month of the Term and if Tenant’s financial condition is at least as strong as
it was as of the Commencement Date of this Lease (i.e., Tenant’s net worth is
no less than it was on the Commencement Date), then Landlord shall return the
Security Deposit to Tenant.


 


8.             UTILITIES.


 


8.1           PAYMENT. 
Tenant shall pay for all water, gas, electricity, telephone, sewer,
refuse and trash collection and other utilities and services used on the
Premises, together with any taxes, penalties, surcharges or the like pertaining
thereto.  If the Premises are separately
metered, Tenant shall contract directly with the applicable public utility for
such services.  In the event Tenant is
unable to obtain separate utility service, the utility service may be obtained
in Landlord’s name and Tenant shall pay Landlord as additional rent all costs
for Tenant’s usage of such utilities.  In
addition, Tenant shall pay Tenant’s Percentage Share of electricity supplied to
the Common Areas of the Project in accordance with the provisions of Section 6
of the Lease.  Tenant agrees to limit use
of water and sewer for normal restroom use, and nothing herein contained shall
impose upon Landlord any duty to provide sewer or water usage for other than
normal restroom usage.  Notwithstanding
anything to the contrary in the Lease, in the event any such utilities and
services are not separately metered, Tenant shall pay Tenant’s Percentage Share
(based on [***]%) of all of the costs incurred for the utilities and services
referenced in this Section 8.1 with respect to the Premises and such
expenses shall not be subject to the phased in Percentage Shares referenced in
Paragraph 4 of the Addendum.


 


8.2           INTERRUPTIONS.  Unless caused by the gross negligence or
willful misconduct of Landlord, its employees, agents or contractors, Tenant
agrees that Landlord shall not be liable to Tenant for its failure to furnish
water, gas, electricity, telephone, sewer, refuse and trash collection or any
other utility services or building services when such failure is occasioned, in
whole or in part, by repairs, replacements or improvements, by any strike,
lookout or other labor trouble, by inability to secure electricity, gas, water,
telephone service or other utility at the Project, by any accident, casualty or
event arising from any cause whatsoever, including the negligence of Landlord,
its employees, agents and contractors, by act, negligence or default of Tenant
or any other person or entity, or by any other cause, and such failures shall
never be deemed to constitute an eviction or disturbance of Tenant’s use and
possession of the Premises or relieve Tenant from the obligation of paying rent
or performing any of its obligations under this Lease.  


 


12





















 


Furthermore,
Landlord shall not be liable under any circumstances for loss of property or
for injury to, or interference with, Tenant’s business, including, without
limitation, loss of profits, however occurring, through or in connection with
or incidental to a failure to furnish any such services or utilities.  Landlord may comply with voluntary controls
or guidelines promulgated by any governmental entity relating to the use or
conservation of energy, water, gas, light or electricity or the reduction of
automobile or other emissions without creating any liability of Landlord to
Tenant under this Lease.  Notwithstanding
anything contained herein to the contrary, if any interruption of utilities or
services shall continue for more than ten (10) consecutive business days
and shall render all or any portion of the Premises unusable for the normal
conduct of Tenant’s business, and if Tenant does not in fact use such portion
of the Premises, then all Bass Rent and additional rent payable hereunder with
respect to such portion of the Premises which Tenant does not use shall be
abated from and after the eleventh (11th) consecutive business day until full
use of such portion of the Premises is restored to Tenant.


 


8.3           RAILROAD SPURS.  If the Premises is served by a railroad spur,
Tenant shall execute any agreement required by the railroad company serving the
railroad spur, and such agreement shall be satisfactory to Landlord, in
Landlord’s sole discretion.  Tenant shall
pay the cost of maintaining the railroad spur, at Tenant’s sole cost and
expense.


 


8.4           (Intentionally
Omitted).


 


9.             REAL AND PERSONAL PROPERTY TAXES.


 


9.1           PAYMENT OF TAXES.  Tenant shall pay to Landlord during the Term
of this Lease, in addition to Base Rent and Tenant’s Percentage Share of
Operating Expenses, Tenant’s Percentage Share of all Real Property Taxes.  Tenant’s Percentage Share of Real Property
Taxes shall be payable by Tenant at the same time, in the same manner and under
the same terms and conditions as Tenant pays Tenant’s Percentage Share of
Operating Expenses.


 


9.2           DEFINITION OF REAL PROPERTY TAX.  As used herein, the term “Real Property Taxes”
shall include any form of real estate tax or assessment, general, special,
ordinary or extraordinary, improvement bond or bonds imposed on the Project or
any portion thereof by any authority having the direct or indirect power to
tax, including any city, county, state or federal government, or any school,
agricultural, sanitary, lire, street, drainage or other improvement district
thereof, as against any legal or equitable interest of Landlord in the Project
or in any portion thereof.  Real Property
Taxes shall not include income, inheritance and gift taxes.


 


13





















 


9.3           PERSONAL PROPERTY TAXES.  Tenant shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures, furnishings, equipment
and all other personal property of Tenant contained in the Premises or related
to Tenant’s use of the Premises.  If any
of Tenant’s personal property shall be assessed with Landlord’s real or
personal property, Tenant shall pay to Landlord the taxes attributable to
Tenant within ten (10) days after receipt of a written statement from
Landlord setting forth the taxes applicable to Tenant’s property.


 


9.4           REASSESSMENTS.  From time to time Landlord may challenge the
assessed value of the Project as determined by applicable taxing authorities
and/or Landlord may attempt to cause the Real Property Taxes to be reduced on
other grounds.  If Landlord is successful
in causing the Real Property Taxes to be reduced or in obtaining a refund,
rebate, credit or similar benefit (hereinafter collectively referred to as a “reduction”),
Landlord shall, credit the reduction(s) to Real Property Taxes for the calendar
year to which a reduction applies and to recalculate the Real Property Taxes
owed by Tenant for years in which the reduction applies based on the reduced
Real Property Taxes.  All costs incurred
by Landlord in obtaining the Real Property Tax reductions shall be considered
an Operating Expense, and Landlord shall determine, in its sole discretion, to
which years any reductions will be applied. 
In addition, all accounting and related costs incurred by Landlord in
making the adjustments shall be an Operating Expense.  Landlord shall have the right to compensate a
person or entity it employs to obtain a reduction in Real Property Taxes by
giving such person or entity a market-rate percentage of any reduction or
credit obtained, and in this event the reduction or credit obtained by Landlord
shall be deemed to be the reduction or credit given by the taxing authority less
the compensation paid to such person or entity.


 


10.           INSURANCE.


 


10.1         INSURANCE-TENANT.


 


(a)           Tenant
shall obtain and keep in force during the Term of this Lease a commercial
general liability policy of insurance with coverages acceptable to Landlord, in
Landlord’s sole discretion, which, by way of example and not limitation,
protects Tenant and Landlord (as an additional insured) against claims for
bodily injury, personal injury and property damage based upon, involving or
arising out of the ownership, use, occupancy or maintenance of the Premises and
all areas appurtenant thereto.  Such
insurance shall be on an occurrence basis providing single-limit coverage in an
amount not less than $2,000,000 per occurrence with an “Additional
Insured-Managers and Landlords of Premises Endorsement” and contain the “Amendment
of the Pollution Exclusion” for damage caused by heat, smoke or fumes from a
hostile fire.  The policy shall not
contain any intra-insured exclusions as between insured persons or
organizations, but shall 


 


14





















 


include coverage
for liability assumed under this Lease as an “insured contract” for the
performance of Tenant’s indemnity obligations under this Lease.


 


(b)           Tenant
shall obtain and keep in force during the Term of this Lease “all-risk”
extended coverage property insurance with coverages acceptable to Landlord, in
Landlord’s sole discretion.  Said
insurance shall be written on a one hundred percent (100%) replacement cost
basis on Tenant’s personal property, all Tenant improvements installed at the
Premises by Landlord or Tenant, Tenant’s trade fixtures and other
property.  By way of example, and not
limitation, such policies shall provide protection against any peril included
within the classification “fire and extended coverage,” against vandalism and
malicious mischief, theft, sprinkler leakage, earthquake damage and flood
damage.


 


(c)           Tenant
shall, at all times during the Term hereof, maintain in effect workers’
compensation insurance as required by applicable law and business interruption
and extra expense insurance satisfactory to Landlord.


 


10.2         INSURANCE-LANDLORD.


 


(a)           Landlord
shall obtain and keep in force a policy of general liability insurance with
coverage against such risks and in such amounts as Landlord deems advisable
insuring Landlord against liability arising out of the ownership, operation and
management of the Project.


 


(b)           Landlord
shall also obtain and keep in force during the Term of this Lease a policy or
policies of insurance covering loss or damage to the Project in the amount of
not less than the full replacement cost thereof (less foundations and
footings), as reasonably determined by Landlord from time to time.  The terms and conditions of said policies and
the perils and risks covered thereby shall be determined by Landlord, from time
to time, in Landlord’s reasonable discretion, provided Landlord shall carry
insurance which is comparable to insurance carried by similar Landlords of
similar properties in the same geographic area. 
In addition, at Landlord’s option, Landlord shall obtain and keep in
force, during the Term of this Lease, a policy of rental interruption
insurance, with loss payable to Landlord, which insurance shall, at Landlord’s
option, also cover all Operating Expenses and Real Property Taxes.  Tenant will not be named as an additional
insured in any insurance policies carried by Landlord and shall have no right
to any proceeds therefrom.  The policies
purchased by Landlord shall contain such deductibles as Landlord may
determine.  Tenant shall pay at Tenant’s
sole expense any increase in the property insurance premiums for the Project
over what was payable 


 


15





















 


immediately prior
to the increase to the extent the increase is specified by Landlord’s insurance
carrier as being caused by the nature of Tenant’s occupancy or any act or
omission of Tenant.


 


10.3         INSURANCE POLICIES.  Tenant shall deliver to Landlord copies of
the insurance policies required under Section 10.1 within fifteen (15)
days prior to the Commencement Date of this Lease, and Landlord shall have the
right to approve the terms and conditions of said policies.  Tenant’s insurance policies shall not be
cancelable or subject to reduction of coverage or other modification except
after thirty (30) days prior written notice to Landlord.  Tenant shall, at least thirty (30) days prior
to the expiration of such policies, furnish Landlord with renewals thereof.  Tenant’s insurance policies shall be issued
by insurance companies authorized to do business in the state in which the
Project is located, and said companies shall maintain during the policy term a “General
Policyholder’s Rating” of at least A and a financial rating of at least “Class X”
(or such other rating as may be required by any lender having a lien on the
Project) as set forth in the most recent edition of “Best Insurance Reports.”  All insurance obtained by Tenant shall be
primary to and not contributory with any similar insurance carried by Landlord,
whose insurance shall be considered excess insurance only.  Landlord and, at Landlord’s option, the
holder of any mortgage or deed of trust encumbering the Project and any parson
or entity managing the Project on behalf of Landlord, shall be named as an
additional insured on all insurance policies Tenant is obligated to obtain by Section 10.1
above.  Tenant’s insurance policies shall
not include deductibles in excess of Five Thousand Dollars ($5,000).


 


10.4         WAIVER OF SUBROGATION.  Landlord waives any and all rights of
recovery against Tenant for or arising out of damage to, or destruction of, the
Project to the extent that Landlord’s insurance policies then in force insure
against such damage or destruction and permit such waiver, and only to the extent
of the insurance proceeds actually received by Landlord for such damage or
destruction.  Landlord’s waiver shall not
relieve Tenant from liability under Section 19 below except to the extent
Landlord’s insurance company actually satisfies Tenant’s obligations under Section 19
in accordance with the requirements of Section 19.  Tenant waives any and all rights of recovery
against Landlord, Landlord’s employees, agents and contractors for liability or
damages if such liability or damage is covered by Tenant’s insurance policies
then in force or the insurance policies Tenant is required to obtain by Section 10.1
(whether or not the insurance Tenant is required to obtain by Section 10.1
is then in force and effect), whichever is broader.  Tenant’s waiver shall not be limited by the
amount of insurance then carried by Tenant or the deductibles applicable
thereto.  Tenant shall cause the
insurance policies it obtains In accordance with this Section 10 to
provide that the insurance company waives all right of recovery by subrogation
against Landlord in connection with any liability or damage covered by Tenant’s
insurance policies.


 


16





















 


10.5         COVERAGE. 
Landlord makes no representation to Tenant that the limits or forms of
coverage specified above or approved by Landlord are adequate to insure Tenant’s
property or Tenant’s obligations under this Lease, and the limits of any
insurance carried by Tenant shall not limit Tenant’s obligations or liability
under any indemnity provision included in this Lease or under any other
provision of this Lease.


 


11.           LANDLORD’S
REPAIRS.  Landlord shall keep and maintain the Project
(excluding the interior of the Premises and space leased to other occupants of
the Project) in good condition and repair, ordinary wear and tear and damage by
casualty excepted. The structural elements of the roof of the Building
(excluding the roof membrane), the structural soundness of the foundation of
the Building, and the structural elements of the exterior walls of the Building
and external utility lines (collectively, “Structural Elements”) shall be
maintained and repaired at Landlord’s expense, and as more fully set forth in Section 12.2
below, the cost of all of the other maintenance and repair obligations of the
Landlord (“Landlord Maintenance Items”) shall be passed through to Tenant as an
Operating Expense. Tenant shall reimburse Landlord for the cost of any
maintenance, repair or replacement of the foregoing necessitated by Tenant’s
misuse, negligence, alterations to the Premises or any breach of its
obligations under this Lease. By way of example, and not limitation, the term “exterior
walls” as used in this Section shall not include windows, glass or plate
glass, doors or overhead doors, special store fronts, dock bumpers, dock plates
or levelers, or office entries. Upon obtaining knowledge thereof, Tenant shall
immediately give Landlord written notice of any Structural Element repair
required to be performed by Landlord pursuant to this Section, after which
Landlord shall have a reasonable time (under the circumstances) in which to
complete the repair. Nothing contained in this Section shall be construed
to obligate Landlord to seal or otherwise maintain the surface of any
foundation, floor or slab. Except as expressly provided hereinafter, Tenant
expressly waives the benefits or any statute now or hereafter in effect which
would otherwise afford Tenant the right to make repairs at Landlord’s expense
or to terminate this Lease because of Landlord’s failure to keep the Premises
in good order, condition and repair. Notwithstanding anything to the contrary
contained in the Lease, in the event Landlord fails to undertake and diligently
pursue any repair to the Premises required to be made by Landlord pursuant to
this Section 11 or Section 12.2 below within thirty (30) days
following Landlord’s receipt of Tenant’s written notice, then Tenant shall have
the right to make any such repair in accordance with Section 13 of the
Lease, provided Landlord has failed to commence to make such repair during such
thirty (30) day period. Landlord shall reimburse Tenant for the reasonable cost
of making any such repair in accordance with the provisions hereof within
thirty (30) days following Landlord’s receipt of an invoice therefor. Tenant
shall have no right to set-off any sums incurred by Tenant pursuant to this
provision nor shall


 


17





















 


Tenant be entitled
to any abatement of rent except as specifically provided otherwise in this
Lease.


 


12.           TENANT’S REPAIRS.


 


12.1         OBLIGATIONS OF TENANT.  Tenant shall, at its sole cost and expense,
keep and maintain all interior parts of the Premises in good and sanitary
condition, promptly making all necessary repairs and replacements, including
but not limited to, windows, glass and plate glass, doors, any special store
front or office entry, walls and finish work, floors and floor coverings, dock
boards, bumpers, plates, seals, levelers and lights, plumbing work and
fixtures, lighting facilities and bulbs, termite and pest extermination, Tenant
signage and regular removal of trash and debris.  Tenant shall notify Landlord in writing prior
to making any repair or performing any maintenance pursuant to this Section,
and Landlord shall have the right to designate the contractor Tenant shall use
to make any repair or to perform any maintenance on the plumbing systems,
located at the Premises.  Tenant shall
not paint or otherwise change the exterior appearance of the Premises without
Landlord’s prior written consent, which may be given or withheld in Landlord’s
sole discretion.  The cost of maintenance
and repair of any common party wall (any wall, divider, partition or any other
structure separating the Premises from any adjacent Premises occupied by other
tenants) shall be shared equally by Tenant and the tenant occupying the
adjacent Premises; provided, however, if Tenant damages a party wall the entire
cost of the repair shall be paid by Tenant, at Tenant’s sole expense.  Tenant shall not damage any party wall or
disturb the integrity and support provided by any party wall.  If Tenant fails to keep the Premises in good
condition and repair, Landlord may following ten (10) days prior written
notice to Tenant (unless the nature of the repair requires Landlord to act
sooner), but shall not be obligated to, make any necessary repairs.  If Landlord makes such repairs, Landlord may
bill Tenant for the cost of the repairs as additional rent, and said additional
rent shall be payable by Tenant within ten (10) days after demand by
Landlord.


 


See
Addendum Paragraph 5


 


12.2         PERFORMANCE OF WORK BY LANDLORD. 
Landlord Maintenance Items shall include, without limitation,
the roof membranes, HVAC units, sprinkler systems, fire alarm systems, fire
detection systems and exterior walls of the Premises, and shall include
entering into preventative maintenance/service contracts for some or all of the
foregoing items.  Except in cases of
emergency, Landlord shall determine in its sole discretion the scope and timing
of the performance of such Landlord Maintenance Items, and subject to the last
three sentences of Section 11 above Tenant shall not perform such Landlord
Maintenance Items.  Landlord’s
maintenance of the exterior wails of the Premises shall include the right, but
not the obligation, of Landlord to paint from time to 


 


18





















 


time all or some
of the exterior wails, canopies, doors, windows, gutters, handrails and other
exterior parts of the Premises with colors selected by Landlord.  If the Premises contains landscaped areas,
maintenance and repair of the same shall be Landlord Maintenance Items.  Upon obtaining knowledge thereof, Tenant
shall immediately give Landlord written notice of any repair or maintenance required
by Landlord pursuant to this Section, after which Landlord shall have a
reasonable time (under the circumstances) in which to complete such repair or
maintenance.  Landlord shall include the
cost of Landlord Maintenance Items in Operating Expenses, and Tenant shall then
pay Tenant’s Percentage Share of such costs as determined by Landlord in
accordance with Section 6.3 above. 
Except as expressly provided to the contrary elsewhere in the Lease,
there shall be no abatement of rent or liability to Tenant on account of any
injury or interference with Tenant’s business with respect to any improvements,
alterations or repairs made by Landlord to the Project or any part thereof in
connection with this Section 12.2.


 


12.3         Intentionally
Omitted.


 


13.           ALTERATIONS AND SURRENDER.


 


13.1         CONSENT OF LANDLORD.  Tenant shall not, without Landlord’s prior
written consent, which may be given or withheld in Landlord’s sole discretion,
make any alterations, improvements, additions, utility installations or repairs
(hereinafter collectively referred to as “Alterations”) in, on or about the
Premises or the Project.  Alterations
shall include, but shall not be limited to, the installation or alteration of
security or fire protection systems, communication systems, millwork, shelving,
retrieval or storage systems, carpeting or other floor covering, painting,
window and wall coverings, electrical distribution systems, lighting fixtures,
telephone or computer system wiring, HVAC and plumbing.  At the expiration of the term, Landlord may
require the removal of any Alterations installed by Tenant and the restoration
of the Premises and the Project to their prior condition, at Tenant’s
expense.  To the extent Landlord’s
consent is required pursuant to this Section, at the written request of Tenant,
Landlord agrees to notify Tenant concurrently with Landlord’s consent to such
Alteration whether Landlord will require Tenant to remove such Alteration at
the end of the Term.  If, as a result of
any Alteration made by Tenant, Landlord is obligated to comply with the
Americans With Disabilities Act or any other law or regulation, and such
compliance requires Landlord to make any improvement or Alteration to any
portion of the Project, as a condition to Landlord’s consent, Landlord shall
have the right to require Tenant to pay to Landlord prior to the construction
of any Alteration by Tenant the entire cost of any improvement or alteration
Landlord is obligated to complete by such law or regulation.  Should Landlord permit Tenant to make its own
Alterations, Tenant shall use only such architect and contractor as has been
expressly approved by Landlord (exercising reasonable discretion), and, 


 


19





















 


with respect to
any Alterations costing more than Fifty Thousand Dollars ($50,000.00) in any
one instance, Landlord may require Tenant to provide to Landlord, at Tenant’s
sole cost and expense, a lien and completion bond in an amount equal to one and
one-half times the estimated cost of such Alterations, to insure Landlord
against any liability for mechanic’s and materialmen’s liens and to insure
completion of the work.  In addition,
except with respect to (i) Alterations not requiring Landlord’s consent
pursuant to this provision and other non-structural Alterations not requiring
plans or permits, or (ii) Alteration made in connection with Tenant’s
initial buildout of the retail space, or (iii) the installation of Tenant’s
trade fixtures and equipment, Tenant shall pay to Landlord a fee equal to three
percent (3%) of the cost of the Alterations to compensate Landlord for the
overhead and other costs it incurs in reviewing the plans for the Alterations
and in monitoring the construction of the Alterations.  Should Tenant make any Alterations without
the prior approval of Landlord, or use a contractor not expressly approved by
Landlord, Landlord may, at any time during the Term of this Lease, require that
Tenant remove all or part of the Alterations and return the Premises to the
condition it was in prior to the making of the Alternations.  In the event Tenant makes any Alterations,
Tenant agrees to obtain or cause its contractor to obtain, prior to the
commencement of any work, “builders all risk” insurance in an amount approved
by Landlord, workers compensation insurance and any other insurance requested
by Landlord, in Landlord’s sole discretion. 
Notwithstanding anything to the contrary in the Lease, Tenant shall have
the right to make non-structural Alterations to the Premises without obtaining
Landlord’s prior written consent, provided that (i) such Alterations do
not exceed One Hundred Thousand Dollars ($100,000,00) in cost in any twelve
(12) month period; (ii) Tenant provides Landlord with prior written notice
of its intention to make such Alterations together with the plans and
specifications for the same; (iii) Tenant provides Landlord a reasonable
period of time to review Tenant’s plan of such Alteration; (iv) any such
Alteration to the Premises does not affect any of the base Building systems; (v) any
such Alterations are not visible from the exterior of the Building; (vi) any
such Alterations do not affect the structural integrity of the Building; (vii) Tenant
adheres to all applicable government regulations, including the Americans with
Disabilities Act, and obtains any necessary permits in making such Alterations;
and (viii) all work is otherwise performed in compliance with this Section 13.  For purposes of the Lease, it shall be deemed
reasonable for Landlord to require Tenant to perform Alterations during
non-business hours if such Alterations will create unreasonable noise, noxious
fumes or otherwise interfere with the quiet enjoyment of the other tenants in
the Building.


 


13.2         PERMITS. 
Any Alterations in or about the Premises that Tenant shall desire to
make shall be presented to Landlord in written form, with plans and
specifications which are sufficiently detailed to obtain a building
permit.  If Landlord consents to an
Alteration, the consent shall be deemed conditioned upon Tenant acquiring a 


 


20





















 


building permit
from the applicable governmental agencies, furnishing a copy thereof to
Landlord prior to the commencement of the work, and compliance by Tenant with
all conditions of said permit in a prompt and expeditious manner.  Tenant shall provide Landlord with as-built
plans and specifications for any Alterations made to the Premises.


 


13.3         MECHANICS LIENS.  Tenant shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished to or for Tenant
at or for use in the Premises, which claims are or may be secured by any
mechanic’s or materialmen’s lien against the Premises or the Project, or any
interest therein.  If Tenant shall, in
good faith, contest the validity of any such lien, Tenant shall furnish to
Landlord a surety bond or other financial arrangements satisfactory to Landlord
in an amount equal to not less than one and one-half times the amount of such
contested lien claim indemnifying Landlord against liability arising out of
such lien or claim.  Such bond shall be
sufficient in form and amount to free the Project from the effect of such
lien.  In addition, Landlord may require
Tenant to pay Landlord’s reasonable attorneys’ fees and costs in participating
in such action.


 


13.4         NOTICE. 
Tenant shall give Landlord not less than ten (10) days’ advance
written notice prior to the commencement of any work in the Premises by Tenant,
and Landlord shall have the right to post notices or non-responsibility in or
on the Premises or the Project.


 


13.5         SURRENDER. 
Subject to Landlord’s right to require removal or to elect ownership as
hereinafter provided, all Alterations made by Tenant to the Premises shall be
the property of Tenant, but shall be considered to be a part of the
Premises.  Unless Landlord gives Tenant
written notice of its election not to become the owner of the Alterations at
the end of the Term of this Lease, the Alterations shall become the property of
Landlord at the end of the Term of this Lease. 
Landlord may require, on notice to Tenant (at the end of the Term unless
required to do so at the time of Landlord’s consent to such Alteration in
accordance with Section 13.1 above), that some or all Alterations be
removed prior to the end of the Term of this Lease and that any damages caused
by such removal be repaired at Tenant’s sole expense.  On the last day of the Term hereof, or on any
sooner termination, Tenant shall surrender the Premises (including, but not
limited to, all doors, windows, floors and floor coverings, skylights, heating
and air conditioning systems, dock boards, truck doors, dock bumpers, plumbing
work and fixtures, electrical systems, lighting facilities, sprinkler systems,
fire detection systems and nonstructural elements of the exterior walls,
foundation and roof (collectively the “Elements of the Premises”)) to Landlord
in the same condition as received, ordinary wear and tear and casualty damage
excepted, clean and free of debris and Tenant’s personal property, trade
fixtures and equipment.  Tenant’s
personal property shall include all computer wiring and 


 


21





















 


cabling installed
by Tenant.  Provided, however, if
Landlord has not elected to have Tenant remove the Alterations, Tenant shall
leave the Alterations at the Premises in good condition and repair, ordinary
wear and tear excepted.  Tenant shall
repair any damage to the Premises occasioned by the installation or removal of
Tenant’s trade fixtures, furnishings and equipment.  Damage to or deterioration of any Element of
the Premises or any other item Tenant is required to repair or maintain at the
Premises shall not be deemed ordinary wear and tear if the same could have been
prevented by good maintenance practices. 
If the Premises are not surrendered at the expiration of the term or
earlier termination of this Lease in accordance with the provisions of this
Section, at Landlord’s option, Tenant shall continue to be responsible for the
payment of Base Rent and all other amounts due under this Lease until the
Premises are so surrendered in accordance with said provisions.  Except as otherwise modified in Section 33
herein, Tenant shall indemnify, defend and hold Landlord harmless from and
against any and all damages, expenses, costs, losses or liabilities arising
from any delay by Tenant in so surrendering the Premises, including, without
limitation, any damages, expenses, costs, losses or liabilities arising from
any claim against Landlord made by any succeeding tenant or prospective tenant
founded on or resulting from such delay and losses and damages suffered by
Landlord due to lost opportunities to Lease any portion of the Premises to any
such succeeding Tenant or prospective Tenant, together with, in each case,
actual attorneys’ fees and costs.


 


13.6         FAILURE OF TENANT TO REMOVE PROPERTY.  If this Lease is terminated due to the
expiration of its term or otherwise, and Tenant fails to timely remove its
property, in addition to any other remedies available to Landlord under this
Lease, and subject to any other right or remedy Landlord may have under
applicable law, Landlord may remove any property of Tenant from the Premises
and store the same elsewhere at the expense and risk of Tenant.


 


14.           DAMAGE AND DESTRUCTION.


 


14.1         EFFECT OF DAMAGE OR DESTRUCTION.  If all or part of the Project is damaged by
fire, earthquake, flood, explosion, the elements, riot, the release or
existence of Hazardous Materials (as defined below) or by any other cause
whatsoever (hereinafter collectively referred to as “damages”), but the damages
are not material (as defined in Section 14.2 below), Landlord shall repair
the damages to the Project as soon as is reasonably possible, and this Lease
shall remain in full force and effect. 
If all or part of the Project is destroyed or materially damaged (as
defined in Section 14.2 below), Landlord shall have the right, in its sole
and complete discretion, to repair or to rebuild the Project or to terminate
this Lease.  Landlord shall use
commercially reasonable efforts to, within sixty (60) days but in no event
later than ninety (90) days after the discovery of such material damage or
destruction notify Tenant in writing of Landlord’s intention to repair or to
rebuild or to terminate this Lease. 
Tenant 


 


22





















 


shall in no event
be entitled to compensation or damages on account of annoyance or inconvenience
in making any repairs, or on account of construction, or on account of Landlord’s
election to terminate this Lease. 
Notwithstanding the foregoing, if Landlord shall elect to rebuild or
repair the Project after material damage or destruction, but in good faith
determines that the Premises cannot be substantially repaired within two
hundred seventy (270) days after the data of the discovery of the material
damage or destruction, without payment of overtime or other premiums, and the
damage to the Project will render the entire Premises unusable during said two
hundred seventy (270) day period, Landlord shall notify Tenant thereof in
writing at the time of Landlord’s election to rebuild or repair, and Tenant
shall thereafter have a period of thirty (30) days within which Tenant may
elect to terminate this Lease, upon thirty (30) days’ advance written notice to
Landlord.  Tenant’s termination right
described in the preceding sentence shall not apply if the damage was caused by
the negligent or intentional acts of Tenant or its employees, agents,
contractors or invitees.  Failure of
Tenant to exercise said election within said thirty (30) day period shall
constitute Tenant’s agreement to accept delivery of the Premises under this
Lease whenever tendered by Landlord, provided Landlord thereafter pursues
reconstruction or restoration diligently to completion, subject to delays
caused by Force Majeure Events.  Subject
to Section 14.3 below, if Landlord or Tenant terminates this Lease in
accordance with this Section 14.1, Tenant shall continue to pay all Base
Rent, Operating Expenses and other amounts due hereunder which arise prior to
the date of termination.


 


14.2         DEFINITION OF MATERIAL DAMAGE.  Damage to the Project shall be deemed
material if more than thirty-five percent (35%) of the Premises is damaged or
destroyed.  Damage to the Project shall
also be deemed material if (a) the Project cannot be rebuilt or repaired
to substantially the same condition it was in prior to the damage due to laws
or regulations in effect at the time the repairs will be made, (b) the
holder of any mortgage or deed of trust encumbering the Project requires that
insurance proceeds available to repair the damage in excess of One Hundred
Thousand Dollars ($100,000) be applied to the repayment of the indebtedness
secured by the mortgage or the deed of trust, or (c) the damage occurs
during the last twelve (12) months of the Lease Term.  Notwithstanding the foregoing, in accordance
with Section 28.1 of this Lease, Landlord agrees to use commercially
reasonable efforts to require any future holder of any mortgage or deed of
trust to release such insurance proceeds to Landlord for repair of the damage
to the Project.


 


14.3         ABATEMENT OF RENT.  If Landlord elects to repair damage to the
Project and all or part of the Premises will be unusable or inaccessible to
Tenant in the ordinary conduct of its business until the damage is repaired,
and the damage was not caused by the negligence or intentional acts of Tenant
or its employees, agents, contractors or invitees, Tenant’s Base Rent and
Tenant’s Share of 


 


23





















 


Operating Expenses
shall be abated until the repairs are completed in proportion to the amount of
the Premises which is unusable or inaccessible to Tenant in the ordinary
conduct of its business.  Notwithstanding
the foregoing, there shall be no abatement of Base Rent or Tenant’s Share of
Operating Expenses by reason of any portion of the Premises being unusable or
inaccessible for a period equal to five (5) consecutive business days or
less.


 


14.4         TENANT’S ACTS.  If such damage or destruction occurs as a
result of the negligence or the intentional acts of Tenant or Tenant’s
employees, agents, contractors or invitees, and the proceeds of insurance which
are actually received by Landlord are not sufficient to pay for the repair of
all of the damage, Tenant shall pay, at Tenant’s sole cost and expense, to
Landlord upon demand, the difference between the cost of repairing the damage
and the insurance proceeds received by Landlord.


 


14.5         TENANT’S PROPERTY.  Landlord shall not be liable to Tenant or its
employees, agents, contractors, invitees or customers for loss or damage to
merchandise, Tenant improvements, fixtures, automobiles, furniture, equipment,
computers, files or other property (hereinafter collectively “Tenant’s property”)
located at the Project.  Tenant shall
repair or replace all of Tenant’s property at Tenant’s sole cost and
expense.  Tenant acknowledges that it is
Tenant’s sole responsibility to obtain adequate insurance coverage to
compensate Tenant for damage to Tenant’s property.


 


14.6         WAIVER. 
Landlord and Tenant hereby waive the provisions of any present or future
statutes which relate to the termination of leases when leased property is
damaged or destroyed and agree that such event shall be governed by the terms
of this Lease.


 


15.           CONDEMNATION.
 If any portion of the Premises or the Project
are taken under the power of eminent domain, or sold under the threat of the
exercise of said power (all of which are herein called “condemnation”), this
Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs; provided that if
so much of the Premises or Project are taken by such condemnation as would
substantially and adversely affect the operation and profitability of Tenant’s
business conducted from the Premises, and said taking is reasonably expected to
lasts for ninety (90) days or more, Tenant shall have the option, to be
exercised only in writing within forty-five (45) days after Landlord shall have
given Tenant written notice of such taking (or in the absence of such notice,
within forty-five (45) days after the condemning authority shall have taken
possession), to terminate this Lease as of the date the condemning authority
takes such possession. If a taking is reasonably expected to last for less than
ninety (90) days, Tenant’s rent shall be abated during said period but Tenant
shall not have the right to terminate this Lease. If Tenant


 


24





















 


does not terminate
this Lease in accordance with the foregoing, this Lease shall remain in full
force and effect as to the portion of the Premises remaining, except that the
Base Rent and Operating Expenses shall be reduced in the proportion that the
usable floor area of the Premises taken bears to the total usable floor area of
the Premises. Common Areas taken shall be excluded from the Common Areas usable
by Tenant and no reduction of rent shall occur with respect thereto or by
reason thereof. Landlord shall have the option in its sole discretion to terminate
this Lease as of the taking of possession by the condemning authority, by
giving written notice to Tenant of such election within thirty (30) days after
receipt of notice of a taking by condemnation of any part of the Premises or
the Project provided that all leases for spaces similarly affected are also
terminated. Any award for the taking of all or any part of the Premises or the
Project under the power of eminent domain or any payment made under threat of
the exercise of such power shall be the property of Landlord, whether such
award shall be made as compensation for diminution in value of the leasehold,
for good will, for the taking of the fee, as severance damages, or as damages
for tenant improvements; provided, however, that Tenant shall be entitled to
any separate award for loss of or damage to Tenant’s removable personal
property and for moving expenses. In the event that this Lease is not
terminated by reason of such condemnation, and subject to the requirements of
any lender that has made a loan to Landlord encumbering the Project, Landlord
shall to the extent of severance damages received by Landlord in connection
with such condemnation, repair any damage to the Project caused by such
condemnation except to the extent that Tenant has been reimbursed therefor by
the condemning authority. This Section, not general principles of law, shall
govern the rights and obligations of Landlord and Tenant with respect to the
condemnation of all or any portion of the Project.


 


16.           ASSIGNMENT AND SUBLETTING.


 


16.1         LANDLORD’S CONSENT REQUIRED.  Tenant shall not voluntarily or by operation
of law assign, transfer, hypothecate, mortgage, sublet, or otherwise transfer
or encumber all or any part of Tenant’s interest in this Lease or in the
Premises (hereinafter collectively a “Transfer”, without Landlord’s prior
written consent, which shall not be unreasonably withheld.  Landlord shall respond to Tenant’s written
request for consent hereunder within thirty (30) days after Landlord’s receipt
of the written request from Tenant.  Any
attempted Transfer without such consent shall be void and shall constitute a
material default and breach of this Lease. 
Tenant’s written request for Landlord’s consent shall include, and
Landlord’s thirty (30) day response period referred to above shall not
commence, unless and until Landlord has received from Tenant, all of the
following information:  (a) financial
statements for the proposed assignee for the past three (3) years prepared
in accordance with generally accepted accounting principles (to the extent
available), (b) federal tax returns for the proposed assignee for the past
three (3) years (to the extent available), (c) a TRW credit 


 


25





















 


report or similar
report on the proposed assignee or subtenant, (d) a detailed description
of the business the assignee or subtenant intends to operate at the Premises, (e) the
proposed effective date of the assignment or sublease, (f) a copy of the
proposed sublease or assignment agreement which includes all of the terms and
conditions of the proposed assignment or sublease, (g) a detailed
description of any ownership or commercial relationship between Tenant and the
proposed assignee or subtenant, (h) a detailed description of any
Alterations the proposed assignee or subtenant desires to make to the Premises,
and (i) [omitted].  If the
obligations of the proposed assignee or subtenant will be guaranteed by any
person or entity, Tenant’s written request shall not be considered complete
until the Information described in (a), (b) and (c) of the previous
sentence has been provided with respect to each proposed guarantor.  “Transfer” shall also include the transfer (a) if
Tenant is a corporation, and Tenant’s stock is not publicly traded over a
recognized securities exchange, by shareholders of record as of the
Commencement Date, of more than fifty-one percent (51%) of the shares held by
them at the Commencement Date, which transfer results in a reduction of the Net
Worth of Tenant (as defined in Section 16.2), by an amount equal to or
greater than twenty-five percent (25%) of such Net Worth of Tenant as it is
represented to Landlord at the time of the execution by Landlord of this Lease,
or as it exists immediately prior to said transaction or transactions
constituting such a reduction, at whichever time said Net Worth of Tenant was
or is greater or the dissolution, merger or liquidation of the corporation, or (b) if
Tenant is a partnership, limited liability company, limited liability
partnership or other entity, of more than forty-nine percent (49%) of the
profit and loss participation in such partnership or entity during the Term of
this Lease (whether or not in one or more transfers) or the dissolution, merger
or liquidation of the partnership, limited liability company, limited liability
partnership or other entity.  If Tenant
is a limited or general partnership (or is comprised of two or more parsons,
individually or as co-partners), Tenant shall not be entitled to change or
convert to (i) a limited liability company, (ii) a limited liability
partnership or (iii) any other entity which possesses the characteristics
of limited liability without the prior written consent of Landlord, which
consent may be given or withheld in Landlord’s sole discretion.  Tenant’s sole remedy in the event that
Landlord shall wrongfully withhold consent to or disapprove any assignment or
sublease shall be to obtain an order by a court of competent jurisdiction that
Landlord grant such consent; in no event shall Landlord be liable for damages
with respect to its granting or withholding consent to any proposed assignment
or sublease.  If Landlord shall exercise
any option to recapture the Premises, or shall deny a request for consent to a
proposed assignment or sublease, Tenant shall indemnify, defend and hold
Landlord harmless from and against any and all losses, liabilities, damages,
costs and claims that may be made against Landlord by the proposed assignee or
subtenant, or by any brokers or other persons claiming a commission or similar
compensation in connection with the proposed assignment or sublease unless a
court of competent jurisdiction determines that such denial was made in bad
faith.


 


26





















 


See Addendum Paragraph 6


 


16.2         [Intentionally
Omitted].


 


16.3         STANDARD FOR APPROVAL.  Landlord shall not unreasonably withhold its
consent to a Transfer provided that Tenant has compiled with each and every
requirement, term and condition of this Section 16.  It shall be deemed reasonable for Landlord to
withhold its consent to a Transfer if any requirement, term or condition of
this Section 16 is not complied with or: 
(a) [intentionally omitted]; (b) in Landlord’s reasonable
judgment, a proposed assignee or subtenant has a smaller net worth than Tenant
had on the date this Lease was entered into with Tenant or is less able
financially to pay the rents due under this Lease as and when they are due and
payable; (c) a proposed assignee’s or subtenant’s business will impose a
burden on the Project’s parking facilities, Common Areas or utilities that is
greater than the burden imposed by Tenant, in Landlord’s reasonable judgment; (d) the
terms of a proposed assignment or subletting will allow the proposed assignee
or subtenant to exercise a right of renewal, right of expansion, right of first
offer, right of first refusal or similar right held by Tenant; (e) a
proposed assignee or subtenant refuses to enter into a written assignment
agreement or sublease, reasonably satisfactory to Landlord, which provides that
it will abide by and assume all of the terms and conditions of this Lease for
the term of any assignment or sublease and containing such other terms and
conditions as Landlord reasonably deems necessary; (f) the use of the
Premises by the proposed assignee or subtenant will not be a use permitted by
this Lease; (g) any guarantor of this Lease refuses to consent to the
Transfer or to execute a written agreement reaffirming the guaranty; (h) Tenant
is in default as defined in Section 17 at the time of the request; (i) if
requested by Landlord, the assignee or subtenant refuses to sign a
non-disturbance and attornment agreement in favor of Landlord’s lender; (j)
Landlord has sued or been sued by the proposed assignee or subtenant or has otherwise
been involved in a legal dispute with the proposed assignee or subtenant; (k)
the assignee or subtenant is involved in a business which is not in keeping
with the then-current standards of the Project; (l) the proposed assignee or
subtenant is an existing Tenant of the Project or is a person or entity then
negotiating with Landlord for the lease of space in the Project; (m)
[intentionally omitted]; (n) the assignee or subtenant is a governmental or
quasi-governmental entity or an agency, department or instrumentality of a
governmental or quasi-governmental agency; (o) the assignee or subtenant will
use, store or handle Hazardous Materials in or about the Premises of a type,
nature, quantity not acceptable to Landlord, in Landlord’s sole discretion; or
(p) the assignee or subtenant will use, store or handle Hazardous Materials in
or about the Premises of a type, nature, quantity not permitted by this Lease.


 


16.4         ADDITIONAL TERMS AND CONDITIONS.  The following terms and conditions shall be
applicable to any Transfer:


 


27





















 


(a)           Regardless
of Landlord’s consent, no Transfer shall release Tenant from Tenant’s
obligations hereunder or after the primary liability of Tenant to pay the rent
and other sums due Landlord hereunder and to perform all other obligations to
be performed by Tenant hereunder or release any guarantor from its obligations
under its guaranty.


 


(b)           Landlord
may accept rent from any person other than Tenant pending approval or
disapproval of an assignment or subletting.


 


(c)           Neither
a delay in the approval or disapproval of a Transfer, nor the acceptance of
rent, shall constitute a waiver or estoppel of Landlord’s right to exercise its
rights and remedies for the breach of any of the terms or conditions of this Section 16.


 


(d)           The
consent by Landlord to any Transfer shall not constitute a consent to any
subsequent Transfer by Tenant or to any subsequent or successive Transfer by an
assignee or subtenant.  However, Landlord
may consent to subsequent Transfers or any amendments or modifications thereto
which do not increase Tenant’s obligations hereunder without notifying Tenant
or anyone else liable on the Lease and without obtaining their consent, and
such action shall not relieve such persons from liability under this Lease,
although Landlord agrees to use commercially reasonable efforts to provide
notice to Tenant of Landlord’s consent to any subsequent Transfer at the
address last provided in writing to Landlord for Tenant’s notice address.


 


(e)           In
the event of any default under this Lease, Landlord may proceed directly
against Tenant, any guarantors or anyone else responsible for the performance
of this Lease, Including any subtenant or assignee, without first exhausting
Landlord’s remedies against any other person or entity responsible therefor to
Landlord, or any security held by Landlord.


 


(f)            Landlord’s
written consent to any Transfer by Tenant shall not constitute an
acknowledgment that no default then exists under this Lease nor shall such consent
be deemed a waiver of any then-existing default.


 


(g)           The
discovery of the fact that any financial statement relied upon by Landlord in
giving its consent to an assignment or subletting was materially false shall,
at Landlord’s election, render Landlord’s consent null and void.


 


(h)           Landlord
shall not be liable under this Lease or under any sublease to any subtenant.


 


28





















 


(i)            No
assignment or sublease may be modified or amended without Landlord’s prior
written consent.


 


(j)            [Intentionally
Omitted]


 


(k)           Any
assignee of, or subtenant under, this Lease shall, by reason of accepting such
assignment or entering into such sublease, be deemed, for the benefit of
Landlord, to have assumed and agreed to conform and comply with each and every
term, covenant, condition and obligation herein to be observed or performed by
Tenant during the term of said assignment or sublease, other than such
obligations as are contrary or inconsistent with provisions of an assignment or
sublease to which Landlord has specifically consented in writing.


 


(l)            At
Landlord’s request, Tenant shall deliver to Landlord, Landlord’s standard
consent to assignment or consent to sublease agreement, as applicable, executed
by Tenant, the assignee and the subtenant, as applicable.


 


16.5         ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO
SUBLETTING.  The following
terms and conditions shall apply to any subletting by Tenant of all or any part
of the Premises and shall be deemed included in all subleases under this Lease
whether or not expressly incorporated therein:


 


(a)           Tenant
hereby absolutely and unconditionally assigns and transfers to Landlord all of
Tenant’s Interest in all rentals and income arising from any sublease entered
into by Tenant, and Landlord may collect such rent and income and apply same
toward Tenant’s obligations under this Lease; provided, however, that until a
default shall occur in the performance of Tenant’s obligations under this
Lease, Tenant may receive, collect and enjoy the rents accruing under such
sublease.  Landlord shall not, by reason
of this or any other assignment of such rents to Landlord nor by reason of the
collection of the rents from a subtenant, be deemed to have assumed or recognized
any sublease or to be liable to the subtenant for any failure of Tenant to
perform and comply with any of Tenant’s obligations to such subtenant under
such sublease, including, but not limited to, Tenant’s obligation to return any
security deposit.  Tenant hereby
irrevocably authorizes and directs any such subtenant, upon receipt of a
written notice from Landlord stating that a default exists in the performance
of Tenant’s obligations under this Lease, to pay to Landlord the rents due as
they become due under the sublease, Tenant agrees that such subtenant shall
have the right to rely upon any such statement and request from Landlord, and
that such subtenant shall pay such rents to Landlord without any obligation or
right to inquire as to whether such 


 


29





















 


default exists and
notwithstanding any notice or claim from Tenant to the contrary.


 


(b)           In
the event Tenant shall default in the performance of its obligations under this
Lease, Landlord, at its option and without any obligation to do so, may require
any subtenant to attorn to Landlord, in which event Landlord shall undertake
the obligations of Tenant under such sublease from the time of the exercise of
said option to the termination of such sublease; provided, however, Landlord
shall not be liable for any prepaid rents or security deposit paid by such
subtenant to Tenant or for any other prior defaults of Tenant under such
sublease.


 


16.6         TRANSFER PREMIUM FROM ASSIGNMENT OR SUBLETTING.  Landlord shall be entitled to receive from
Tenant (as and when received by Tenant) as an item of additional rent one-half
of all amounts received by Tenant from the subtenant or assignee in excess of
the amounts payable by Tenant to Landlord hereunder (hereinafter the Transfer
Premium).  The Transfer Premium shall be
reduced by the reasonable brokerage commissions and legal fees actually paid by
Tenant in order to assign the Lease or to sublet a portion of the
Premises.  “Transfer Premium” shall mean
all Base Rent, additional rent or other consideration of any type whatsoever
payable by the assignee or subtenant in excess of the Base Rent and additional
rent payable by Tenant under this Lease. 
If less than all of the Premises is transferred, the Base Rent and the
additional rent shall be determined on a per-leasable-square-foot basis.  The provisions of this Section 16.6
shall not apply with respect to any Permitted Transfer (as that term is defined
in Paragraph 6 of the Addendum).


 


16.7         LANDLORD’S OPTION TO RECAPTURE SPACE.  Notwithstanding anything to the contrary
contained in this Section 16, Landlord shall have the option, by giving
written notice to Tenant within thirty (30) days after receipt of any request
by Tenant (i) to assign this Lease, or (ii) to sublease space in the
Premises if the term of such sublease is scheduled to expire during the last
twelve (12) months of the Term of the Lease, to terminate this Lease with
respect to said space as of the date thirty (30) days after Landlord’s
election.  In the event of a recapture by
Landlord, if this Lease shall be canceled with respect to less than the entire
Premises, the Base Rent, Operating Expenses and the number of parking spaces
Tenant may use shall be adjusted on the basis of the number of rentable square
feet retained by Tenant in proportion to the number of rentable square feet
contained in the original Premises, and this Lease as so amended shall continue
thereafter in full force and effect, and upon request of either party, the
parties shall execute written confirmation of same.  If Landlord recaptures only a portion of the
Premises, it shall construct and erect at its sole cost such partitions as may
be required to sever the space to be retained by Tenant from the space
recaptured by Landlord.  Landlord may, at
its option, Lease any recaptured portion of the 


 


30





















 


Premises to the
proposed subtenant or assignee or to any other person or entity without
liability to Tenant.  Tenant shall not be
entitled to any portion of the profit, if any, Landlord may realize on account
of such termination and reletting. 
Tenant acknowledges that the purpose of this Section is to enable
Landlord to receive profit in the form of higher rent or other consideration to
be received from an assignee or subtenant, to give Landlord the ability to meet
additional space requirements of other Tenants of the Project and to permit
Landlord to control the leasing of space in the Project.  Tenant acknowledges and agrees that the
requirements of this Section are commercially reasonable and are
consistent with the intentions of Landlord and Tenant.  The provisions of this Section 16.7
shall not apply with respect to any Permitted Transfer (as that term Is defined
in Paragraph 6 of the Addendum).


 


16.8         LANDLORD’S EXPENSES.  In the event Tenant shall assign this Lease
or sublet the Premises or request the consent of Landlord to any Transfer, then
Tenant shall pay Landlord’s reasonable costs and expenses incurred in
connection therewith, including, but not limited to, attorneys’, architects’,
accountants’, engineers’ or other consultants’ fees.


 


17.           DEFAULT; REMEDIES.


 


17.1         DEPAULT BY TENANT.  Landlord and Tenant hereby agree that the
occurrence of any one or more of the following events is a material default by
Tenant under this Lease and that said default shall give Landlord the rights
described in Section 17.2.  Landlord
or Landlord’s authorized agent shall have the right to execute and to deliver
any notice of default, notice to pay rent or quit or any other notice Landlord
gives Tenant.


 


(a)           Tenant’s
failure to make any payment of Base Rent, Tenant’s Percentage Share of
Operating Expenses, Tenant’s Percentage Share of Real Property Taxes or any
other payment required to be made by Tenant hereunder, as and when due, where
such failure shall continue for a period of three (3) days after written
notice thereof from Landlord to Tenant. 
In the event that Landlord serves Tenant with a notice to pay rent or
quit pursuant to applicable unlawful detainer statutes, such notice shall also
constitute the notice required by this Section 17.1(a).


 


(b)           The
abandonment of the Premises by Tenant, in which event Landlord shall not be
obligated to give any notice of default to Tenant.  For purposes of this Lease, the Premises
shall not be deemed abandoned so long as Tenant (i) has provided Landlord
with prior written notice, (ii) pays rent and all other charges due under
this Lease as and when due, and (iii) maintains the physical appearance of
the Premises.


 


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(c)           The
failure of Tenant to comply with any of its obligations under Sections 4, 10,
12, 13, 16, 19, 23, 25, 26, 27 and 28 where Tenant fails to comply with its
obligations or fails to cure any earlier breach of such obligation within ten (10) days
following written notice from Landlord to Tenant.  In the event Landlord serves Tenant with a
notice to quit or any other notice pursuant to applicable unlawful detainer
statutes, said notice shall also constitute the notice required by this Section 17.1(c).


 


(d)           The
failure by Tenant to observe or perform any of the covenants, conditions or
provisions of this Lease to be observed or performed by Tenant (other than
those referenced in Sections 17.1(a), (b) and (c), above), where such
failure shall continue for a period of thirty (30) days after written notice
thereof from Landlord to Tenant; provided, however, that if the nature of
Tenant’s nonperformance is such that more than thirty (30) days are reasonably
required for its cure, then Tenant shall not be deemed to be in default if
Tenant commences such cure within said thirty (30) day period and thereafter
diligently pursues such cure to completion. 
In the event that Landlord serves Tenant with a notice to quit or any other
notice pursuant to applicable unlawful detainer statutes, said notice shall
also constitute the notice required by this Section 17.1(d).


 


(e)           (i) The
making by Tenant or any guarantor of Tenant’s obligations hereunder of any
general arrangement or general assignment for the benefit of creditors; (ii) Tenant
or any guarantor becoming a “debtor” as defined in 11 U.S.C. 101 or any
successor statute thereto (unless, in the case of a petition filed against
Tenant or guarantor, the same is dismissed within sixty (60) days); (iii) the
appointment of a trustee or receiver to take possession of substantially alt of
Tenant’s assets located at the Premises or of Tenant’s interest in this Lease,
where possession is not restored to Tenant within thirty (30) days; (iv) the
attachment, execution or other judicial seizure of substantially all of Tenant’s
assets located at the Premises or of Tenant’s interest in this Lease, where
such seizure is not discharged within thirty (30) days; or (v) the
insolvency of Tenant.  In the event that
any provision of this Section 17.1(e) is unenforceable under
applicable law, such provision shall be of no force or effect.


 


(f)            The
discovery by Landlord that any financial statement, representation or warranty
given to Landlord by Tenant, or by any guarantor of Tenant’s obligations
hereunder, was materially false at the time given.  Tenant acknowledges that Landlord has entered
into this Lease in material reliance on such information.


 


(g)           If
Tenant is a corporation, partnership, limited liability company or similar
entity, the dissolution or liquidation of Tenant.


 


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(h)           If
Tenant’s obligations under this Lease are guaranteed:  (i) the death of a guarantor, (ii) the
termination of a guarantor’s liability with respect to this Lease other than in
accordance with the terms of such guaranty, (iii) a guarantor’s becoming
insolvent or the subject of a bankruptcy filing, (iv) a guarantor’s
refusal to honor the guaranty, or (v) a guarantor’s breach of its guaranty
obligation on an anticipatory breach basis.


 


17.2         REMEDIES.


 


(a)           In
the event of any material default or breach of this Lease by Tenant, Landlord
may, at any time thereafter, with or without notice or demand, and without
limiting Landlord in the exercise of any right or remedy which Landlord may
have by reason of such default:


 


(i)            terminate
Tenant’s right to possession of the Premises. 
Upon any such termination, Tenant shall immediately surrender possession
of the Premises to Landlord.  Landlord
reserves all rights and remedies available to it pursuant to the terms and
conditions of this Lease as well as under applicable law.  Tenant hereby grants Landlord the full and
free right to enter the Premises with or without process of law.  Tenant releases Landlord of any liability for
any damage resulting therefrom and waives any right to claim damage for such
re-entry.  Tenant also agrees that
Landlord’s right to re-Lease or any other right given to Landlord as a
consequence of Tenant’s default hereunder or by operation of law is not relinquished.  On termination of Tenant’s right of
possession, Landlord shall be entitled to recover from Tenant:  (i) the unpaid rent which had been
earned at the time of the termination; (ii) the amount by which the unpaid
rent which would have been earned after termination until the time of the award
exceeds the amount of any rental, if any, received for the Premises during such
time period; (iii) the amount by which the unpaid rent for the balance of
the Term of the Lease after the time of award exceeds the amount of any rent to
be received (net of re-letting expenses as described below) from any
replacement Tenant occupying the Premises at the time of the award, or, if the
Premises are not occupied at the time of the award by a rent-paying replacement
Tenant, the full amount of the rent to be earned hereunder for the balance of
the Term of the Lease discounted to net present value assuming a discount rate
of one percent (1%) above the discount rate of the Federal Reserve Bank of
Richmond in effect at the time of the award; and provided further, however,
that Landlord shall repay to Tenant the excess of the foregoing amount over any
rent received for the Premises during the balance of the Term of the Lease (net



 


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of reletting
expenses as described below) similarly discounted; and (iv) at the time of
the award any other amount necessary to compensate Landlord for all the damage
proximately caused by Tenant’s failure to perform its obligations under this
Lease or which in the ordinary course of events would likely result therefrom,
including but not limited to, all costs and expenses attributable to recovering
possession of the Premises, re-letting expenses (including the costs and
expenses of any necessary repairs, renovations and alterations to the
Premises), costs of carrying the Premises (including but not limited to,
Landlord’s payment of real property taxes and insurance premiums), actual legal
fees and associated costs and expenses, the unamortized portion of all
brokerage commissions paid in connection with this Lease and all costs of
Tenant improvements (amortized without interest on a straight line basis over
the initial Term of the Lease), and reimbursement of any deferred rent or other
Lease execution inducement.


 


(ii)           maintain
Tenant’s right of possession in which event Landlord shall have the remedy
which permits Landlord to continue this Lease in effect after Tenant’s breach
and abandonment and recover rent as it becomes due.  Acts of maintenance or preservation, efforts
to relet the Premises, or removal or storage of Tenant’s personal property,
shall not constitute a termination of Tenant’s right to possession or act as an
acceptance of any surrender of the Premises. 
Landlord shall not be required to relet any or all of the Premises prior
to leasing other vacant space at the Project, nor shall Landlord be required to
accept a Tenant: (i) that does not otherwise meet Landlord’s financial and
other criteria, nor (ii) a Tenant who intends to make a use other than the
use permitted by the Lease.  Landlord
shall use commercially reasonable efforts to relet the Premises.  The phrase “reasonable efforts” as it relates
to Landlord’s duty to attempt to relet the Premises, shall require Landlord to
do only the following: (i) notify Landlord’s leasing agent in writing of
the availability or the Premises for reletting, (ii) post Landlord’s
leasing contact telephone number in the Project management office, (iii) show
the Premises to any prospective tenant who requests to see the Premises and to
any prospective Tenant specifically referred to Landlord by Tenant, and (iv) show
the “vacant” status of the Premises in posters and information brochures used
at leasing trade meetings and conventions. 
Landlord shall not be required to relet the Premises before reletting
any space in the Project not producing any income to Landlord and Landlord
shall be entitled to consider tenant quality, tenant-mix, 


 


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and the nature of
the Project and office center in making any leasing decision.  If Landlord shall substantially perform the
foregoing then, anything in this Lease, or any statute or common law rule to
the contrary notwithstanding, Landlord shall be deemed to have met its duty to
mitigate its damages hereunder.


 


(iii)          collect
sublease rents (or appoint a receiver to collect such rent) and otherwise
perform Tenant’s obligations at the Premises, it being agreed, however, that
the appointment of a receiver for Tenant shall not constitute an election by
Landlord to terminate this Lease.


 


(iv)          pursue
any other remedy now or hereafter available to Landlord under the laws or
judicial decisions of the state in which the Premises are located.


 


(b)           No
remedy or election hereunder shall be deemed exclusive, but shall, wherever
possible, be cumulative with all other remedies at law or in equity.  The expiration or termination of this Lease
and/or the termination of Tenant’s right to possession of the Promises shall
not relieve Tenant of liability under any indemnity provisions of this Lease as
to matters occurring or accruing during the Term hereof or by reason of Tenant’s
occupancy of the Premises.


 


(c)           If
Tenant abandons or vacates the Premises, Landlord may re-enter the Premises and
such re-entry shall not be deemed to constitute Landlord’s election to accept a
surrender of the Premises or to otherwise relieve Tenant from liability for its
breach of this Lease.  No surrender of
the Premises shall be effective against Landlord unless Landlord has entered
into a written agreement with Tenant in which Landlord expressly agrees to (i) accept
a surrender of the Premises and (ii) relieve Tenant of liability under the
Lease.  The delivery by Tenant to
Landlord of possession of the Premises shall not constitute the termination of
the Lease or the surrender of the Premises.


 


17.3         DEFAULT BY LANDLORD.  Landlord shall not be in default under this
Lease unless Landlord fails to perform obligations required of Landlord within
thirty (30) days after written notice by Tenant to Landlord and to the holder
of any mortgage or deed of trust encumbering the Project whose name and address
shall have theretofore been furnished to Tenant in writing, specifying wherein
Landlord has failed to perform such obligation; provided, however, that if the
nature of Landlord’s obligation is such that more than thirty (30) days are
required for its cure, then Landlord shall not be in default if Landlord
commences performance within such thirty (30) day period and thereafter diligently
pursues the same to 


 


35





















 


completion and
provided further that, if the nature of the default is such that it presents a
danger to the health or safety of Tenant or any of Tenant’s employees, agents
or invitees, or adversely affects the operation and profitability of Tenant’s
business conducted from the Premises, then in such events, Landlord shall
commence and complete cure as soon as reasonably practicable.  In no event shall Tenant have the right to
terminate this Lease as a result of Landlord’s default, and Tenant’s remedies
shall be limited to damages and/or an injunction.


 


17.4         LATE CHARGES.  Tenant hereby acknowledges that late payment
by Tenant to Landlord of Bass Rent, Tenant’s Percentage Share of Operating
Expenses, Tenant’s Percentage Share of Real Property Taxes or other sums due
hereunder will cause Landlord to incur costs not contemplated by this Lease,
the exact amount of which will be extremely difficult to ascertain.  Such costs include, but are not limited to,
processing and accounting charges and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed encumbering the
Project.  Accordingly, if any installment
of Base Rent, Tenant’s Percentage Share of Operating Expenses, Tenant’s
Percentage Share of Real Property Taxes or any other sum due from Tenant shall
not be received by Landlord when such amount shall be due, then, without any
requirement for notice or demand to Tenant, Tenant shall immediately pay to
Landlord a late charge equal to five percent (5%) of such overdue amount.  The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. 
Acceptance of such late charge by Landlord shall in no event constitute
a waiver of Tenant’s default with respect to such overdue amount, nor prevent
Landlord from exercising any of the other rights and remedies granted
hereunder, including the assessment of interest under Section 17.5.


 


17.5         INTEREST ON PAST-DUE OBLIGATIONS.  Except as expressly herein provided, any
amount due to Landlord that is not paid within ten (10) days after the
date when due shall bear interest at the lesser of ten percent (10%) per annum
or the maximum rats permitted by applicable law.  Payment of such interest shall not excuse or
cure any default by Tenant under this Lease; provided, however, that interest
shall not be payable on late charges Incurred by Tenant nor on any amounts upon
which late charges are paid by Tenant.


 


17.6         PAYMENT OF RENT AND SECURITY DEPOSIT AFTER DEFAULT.  If Tenant fails to pay Base Rent, Tenant’s
Percentage Share of Operating Expenses, Tenant’s Percentage Share of Real
Property Taxes, parking charges or any other monetary obligation due hereunder
on the date it is due, after Tenant’s third failure to pay any monetary
obligation on the date it is due, at Landlord’s option, all monetary
obligations of Tenant hereunder shall thereafter be paid by cashier’s check,
and Tenant shall, upon demand, provide Landlord with an additional security
deposit equal to three (3) months’ Base Rent.  If Landlord has required 


 


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Tenant to make
said payments by cashier’s check or to provide an additional security deposit,
Tenant’s failure to make a payment by cashier’s check or to provide the
additional security deposit shall be a material default hereunder.


 


18.           LANDLORD’S
RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT.  All covenants and agreements to
be kept or performed by Tenant under this Lease shall be performed by Tenant at
Tenant’s sole cost and expense and without any reduction of rent. If Tenant
shall fail to perform any of its obligations under this Lease after the
expiration of any applicable notice and cure period, Landlord may, but shall
not be obligated to, after three (3) days’ prior written notice to Tenant,
make any such payment or perform any such act on Tenant’s behalf without
waiving its rights based upon any default of Tenant and without releasing
Tenant from any obligations hereunder. Tenant shall pay to Landlord, within ten
(10) days after delivery by Landlord to Tenant of statements therefore, an
amount equal to the expenditures reasonably made by Landlord in connection with
the remedying by Landlord of Tenant’s defaults pursuant to the provisions of
this Section.


 


19.           INDEMNITY.  Except as set forth in Section 10.4 of the Lease, Tenant hereby
agrees to indemnify, defend and hold harmless Landlord and its employees,
partners, agents, lenders and ground lessors (said persons and entities are
hereinafter collectively referred to as the “Landlord Indemnified Parties”)
from and against any and all liability, loss, cost, damage, claims, less of
rents, liens, judgments, penalties, fines, settlement costs, investigation
costs, the cost of consultants and experts, attorneys’ fees, court costs and
other legal expenses, the effect of environmental contamination, the removal,
remediation and/or abatement of Hazardous Substances (as said term is defined
in Section 27 of the Lease) and other expenses (hereinafter collectively
referred to as “Damages”) arising out of or related to a “Landlord Indemnified
Matter,” as defined below. For purposes of this Section 19, a “Landlord
Indemnified Matter” shall mean any matter for which one or more of the Landlord
Indemnified Parties incurs liability or Damages if the liability or Damages
arise out of or involve, (i) Tenant or its employees, agents, contractors,
invitees, subtenants, assignees or licensees, (all of said persons or entities
are hereinafter collectively referred to as “Tenant Parties”) negligent use of
the Premises or the Project; (ii) any negligent act or omission of a
Tenant Party; (iii) Tenant’s failure to perform any of its obligations
under the Lease; (iv) the existence, use or disposal of any Hazardous
Substance brought on to the Project by a Tenant Party; or (v) any other
matter for which Tenant has agreed to indemnify Landlord pursuant to any other
provision of this Lease. Except as set forth in Section 10.4 of the Lease,
Landlord hereby agrees to indemnify, defend and hold harmless Tenant and its
shareholders, affiliated entities, employees, partners, agents, and lenders
(said persons and entities are hereinafter collectively referred to as the “Tenant
Indemnified Parties”) from and against any and all Damages arising out of or
related to “Tenant Indemnified


 


37





















 


Matters,” as
defined below. For purposes of this Section 19, a “Tenant Indemnified
Matter” shall mean any matter for which one or more of the Tenant Indemnified
Parties incurs liability or Damages if the liability or Damages arise out of or
involve, (i) Landlord or its employees, partners agents, lenders and
ground lessors (said persons are hereinafter collectively referred to as “Landlord
Parties”) negligent use, occupancy or operation of the Project; (ii) any
negligent act or omission of a Landlord Party; (iii) Landlord’s failure to
perform any of its obligations under the Lease; (iv) the existence, use or
disposal of any Hazardous Substances brought on to the Project by a Landlord
Party; or (v) any other matters for which Landlord has agreed to indemnify
Tenant pursuant to any other provisions of this Lease. Landlord’s and Tenant’s obligations
hereunder shall include, but shall not be limited to (a) compensating the
Landlord Indemnified Parties or the Tenant Indemnified Parties, as the case may
be, for damages arising out of Landlord Indemnified Matters or Tenant
Indemnified Matters, as applicable, and (ii) providing defense, with
counsel reasonably satisfactory to such indemnified party, at the other party’s
sole expense, of any claims, actions or proceedings arising out of or relating
to a Landlord Indemnified Matter or a Tenant Indemnified Matter, as the case
may be, whether or not litigated or reduced to judgment and whether or not well
founded. The indemnified parties need not first pay any damages to be
indemnified hereunder. This indemnity is intended to apply to the fullest extent
permitted by applicable law, the parties’ obligations under this Section shall
survive the expiration or termination of the Lease.


 


20.           EXEMPTION OF LANDLORD FROM
LIABILITY.  Tenant hereby
agrees that Landlord shall not be liable for injury to Tenant’s business or any
loss of income therefrom or for loss of or damage to the merchandise, tenant
improvements, fixtures, furniture, equipment, computers, files, automobiles, or
other property of Tenant, Tenant’s employees, agents, contractors or invitees,
or any other person in or about the Project, nor shall Landlord be liable for
injury to the person of Tenant, Tenant’s employees, agents, contractors or
invitees, whether such damage or injury is caused by or results from any cause
whatsoever including, but not limited to, theft, criminal activity at the
Project, negligent security measures, bombings or bomb scares, Hazardous
Materials, fire, steam, electricity, gas, water or rain, flooding, breakage of
pipes, sprinklers, plumbing, air conditioning or lighting fixtures, or from any
other cause, whether said damage or injury results from conditions arising upon
the Premises or upon other portions of the Project, or from other sources or
places, or from new construction or the repair, alteration or improvement of
any part of the Project, unless the cause of the damage or injury arises out of
Landlord’s or its employees’, agents’ or contractors’ grossly negligent or
intentional acts. Landlord shall not be liable for any damages arising from any
act or neglect of any employees, agents, contractors or invitees of any other
Tenant, occupant or user of the Project, nor from the failure of Landlord to
enforce the provisions of the Lease of any other Tenant of the Project. Tenant,
as


 


38





















 


a material part of
the consideration to Landlord hereunder, hereby assumes all risk of damage to
Tenant’s property or business or injury to persons, in, upon or about the
Project arising from any cause, excluding Landlord’s gross negligence or
willful misconduct or the gross negligence or willful misconduct of its
employees, agents or contractors, and Tenant hereby waives all claims in
respect thereof against Landlord, its employees, agents and contractors.


 


21.           LANDLORD’S LIABILITY. Tenant acknowledges that Landlord shall
have the right to transfer all or any portion of its interest in the Project
and to assign this Lease to the transferee. Tenant agrees that in the event of
such a transfer Landlord shall automatically be released from all liability
under this Lease accruing after the date of such transfer; and Tenant hereby
agrees to look solely to Landlord’s transferee for the performance of Landlord’s
obligations hereunder after the date of the transfer. Upon such a transfer,
Landlord shall, at its opinion, return Tenant’s security deposit to Tenant or
transfer Tenant’s security deposit to Landlord’s transferee and, in either
event, Landlord shall have no further liability to Tenant for the return of its
security deposit. Subject to the rights of any lender holding a mortgage or
deed of trust encumbering all or part of the Project, Tenant agrees to took
solely to Landlord’s equity interest in the Project for the collection of any
judgment requiring the payment of money by Landlord arising out of (a) Landlord’s
failure to perform its obligations under this Lease or (b) the negligence
or willful misconduct to Landlord, its partners, employees and agents. No other
property or assets of Landlord shall be subject to levy, execution or other
enforcement procedure for the satisfaction of any judgment or writ obtained by
Tenant against Landlord. No partner, employee or agent of Landlord shall be
personally liable for the performance of Landlord’s obligations hereunder or be
named as a party in any lawsuit arising out of or related to, directly or
indirectly, this Lease and the obligations of Landlord hereunder. The
obligations under this Lease do not constitute personal obligations of the
individual partners of Landlord, if any, and Tenant shall not seek recourse
against the individual partners of Landlord or their assets.


 


22.           SIGNS.  Tenant shall not make any changes to the
exterior of the Premises, install any exterior lights, decorations, balloons,
flags, pennants, banners or painting, or erect or install any signs, windows or
door lettering, placards, decorations or advertising media of any type which
can be viewed from the exterior of the Premises, without Landlord’s prior
written consent, which may be given or withheld in Landlord’s sole discretion. Upon
vacation of the Premises, Tenant shall remove all signs and repair, paint
and/or replace the building facia surface to which its signs are attached. Tenant
shall obtain all applicable governmental permits and approvals for signs and
exterior treatments. All signs, decorations, advertising media, blinds,
draperies and other window treatment or bars or other security installations
visible from outside the Premises shall be subject to Landlord’s approval and
conform in all respects to Landlord’s requirements.


 


39





















 


See Addendum
Paragraph 7


 


23.           PARKING.  During the term and subject to the rules and
regulations attached hereto as Exhibit “C,” as modified by Landlord from
time to time (the “Rules”), Tenant shall be entitled to use the number of
parking spaces set forth in Section 1.14 in the Common Area parking lot of
the Project. Tenant’s parking rights are in common with the parking rights of
any other Tenants of the Project, and all of Tenant’s parking spaces are
unreserved parking spaces. Landlord reserves the right at any time to
reasonably designate areas in the Common Areas where Tenant may or may not
park. If Tenant commits or allows in the parking lot any of the activities
prohibited by the Lease or the Rules, then Landlord shall have the right,
without notice, in addition to such other rights and remedies that it may have,
to remove or tow away the vehicle involved and charge the cost to Tenant, which
cost shall be immediately payable by Tenant upon demand by Landlord. Tenant’s
parking rights are the personal rights of Tenant, and Tenant shall not
transfer, assign or otherwise convey its parking rights separate and apart from
this Lease. Landlord, in addition to its other remedies, shall have the right to
remove or tow away any other vehicles. Landlord shall not be responsible for
enforcing Tenant’s parking rights against any third parties. Tenant shall not
permit or allow any vehicles that belong to or are controlled by Tenant or
Tenant’s employees, suppliers, shippers, customers or invitees to be loaded,
unloaded or parked in areas other than those designated by Landlord for such
activities.


 


24.           BROKER’S FEE.  Tenant and Landlord each represent and warrant
to the other that neither has had any dealings or entered into any agreements
with any person, entity, broker or finder other than the persons, if any,
listed in Section 1.15 (collectively, the “Brokers”), in connection with
the negotiation of this Lease, and no other broker, person, or entity is entitled
to any commission or finder’s fee in connection with the negotiation of this
Lease, and Tenant and Landlord each agree to indemnify, defend and hold the
other harmless from and against any claims, damages, costs, expenses, attorneys’
fees or liability for compensation or charges which may be claimed by any such
unnamed broker, finder or other similar party by reason of any dealings,
actions or agreements of the indemnifying party. The commission payable to the
Brokers with respect to this Lease shall be pursuant to the terms of the
separate commission agreement in effect between Landlord and the Brokers. Nothing
in this Lease shall impose any obligation on Landlord to pay a commission or
fee to any party other than Brokers. Tenant shall have no obligation to pay any
commission or fees to the Brokers in connection with this Lease unless Tenant
has entered into a separate commission agreement with any of the Brokers.


 


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25.           ESTOPPEL CERTIFICATE.


 


25.1         DELIVERY OF CERTIFICATE.  Tenant shall from time to time, upon not less
than twenty (20) days’ prior written notice from Landlord, execute, acknowledge
and deliver to Landlord a statement in writing certifying such information as
Landlord may reasonably request relating to the Lease including, but not
limited to, the following:  (a) that
this Lease is unmodified and in full force and effect (or, if modified, stating
the nature of such modification and certifying that this Lease, as so modified,
is in full force and effect), (b) the date to which the Base Rent and
other charges are paid in advance and the amounts so payable, (c) that
there are not, to Tenant’s knowledge, any uncured defaults or unfulfilled
obligations on the part of Landlord, or specifying such defaults or unfulfilled
obligations, if any are claimed, (d) that whether or not all Tenant
improvements to be constructed by Landlord, if any, have bean completed in
accordance with Landlord’s obligations, and (e) that Tenant has taken
possession of the Premises.  Any such
statement may be conclusively relied upon by any prospective purchaser or
encumbrances of the Project.


 


25.2         FAILURE TO DELIVER CERTIFICATE.  At Landlord’s option, the failure of Tenant
to deliver such statement within such time shall constitute a material default
of Tenant hereunder, or it shall be conclusive upon Tenant that (a) this
Lease is in full force and effect, without modification except as may be
represented by Landlord, (b) there are no uncured defaults in Landlord’s
performance, (c) not more than one month’s Base Rent has been paid in
advance, (d) all Tenant improvements to be constructed by Landlord, if
any, have been completed in accordance with Landlord’s obligations, and (e) Tenant
has taken possession of the Premises.


 


26.           FINANCIAL INFORMAITON. From time to time, at Landlord’s
request, but only if Landlord is selling or refinancing the Building or if
Tenant is in default under the Lease, Tenant shall cause the following
financial information to be delivered to Landlord, at Tenant’s sole cost and
expense, upon not less than twenty (20) days’ advance written notice from
Landlord: (a) Tenant’s most recent audited financial statement for Tenant (b) such
other financial information pertaining to Tenant as Landlord or any Lender or
purchaser of Landlord may reasonably request. All financial statements shall be
prepared in accordance with generally accepted accounting principals
consistently applied (or any other recognized accounting method if such is the
normal practice of Tenant) and, if such is the normal practice of Tenant, shall
be audited by an independent certified public accountant. Tenant hereby
authorizes Landlord, from time to time, without notice to Tenant, to obtain a
credit report or credit history on Tenant from any credit reporting company. Landlord
agrees that it shall keep such financial information confidential and it and
its partners, officers, directors, employees, brokers, and attorneys, if any,
shall not disclose the information contained in such financial


 


41





















 


statements to any
other person or entity, other than Landlord’s mortgagees, brokers, agents,
accountants, prospective purchasers and attorneys on an as needed basis or as
required by law, without the prior written consent of Tenant, which such
consent shall not be unreasonably withheld.


 


27.           ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS.


 


27.1         HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE.  [Intentionally omitted]


 


27.2         DEFINITION OF HAZARDOUS MATERIALS.  As used in this Lease, the term Hazardous
Materials shall mean and include (a) any hazardous or toxic wastes,
materials or substances, and other pollutants or contaminants, which are or
become regulated by any Environmental Laws (defined below); (b) petroleum,
petroleum by-products, gasoline, diesel fuel, crude oil or any fraction
thereof; (c) asbestos and asbestos-containing material, in any form,
whether friable or non-friable; (d) polychlorinatad biphenyls; (e) radioactive
materials; (f) lead and lead-containing materials; (g) any other
material, waste or substance displaying toxic, reactive, ignitable or corrosive
characteristics, as all such terms are used in their broadest sense, and are
defined or become defined by any Environmental Law; or (h) any materials which
cause or threatens to cause a nuisance upon or waste to any portion of the
Premises or any surrounding property; or poses or threatens to pose a hazard to
the health and safety of persons on the Premises, any other surrounding
property.  For purposes of this Lease,
the term “Hazardous Materials” shall not include nominal amounts of ordinary
household cleaners, office supplies and janitorial supplies and any other items
obtained lawfully by Tenant and used by Tenant in the conduct of its business
which are not actionable under any Environmental Laws.


 


27.3         PROHIBITION; ENVIRONMENTAL LAWS.  Tenant shall not be entitled to use or store
any Hazardous Materials on, in, or about any portion of the Premises without,
in each instance, obtaining Landlord’s prior written consent thereto.  If Landlord, in its sole discretion, consents
to any such usage or storage, then Tenant shall be permitted to use and/or
store only those Hazardous Materials in such amounts that are necessary for
Tenant’s business and to the extent disclosed to Landlord.  In all events such usage and storage must at
all times be in full compliance with any and all local, state and federal
environmental, health and/or safety-related laws, statutes, orders, standards,
courts’ decisions, ordinances, rules and regulations (as interpreted by
judicial and administrative decisions), decrees, directives, guidelines,
permits or permit conditions, currently existing and as amended, enacted,
issued or adopted in the future which are or become applicable to Tenant or all
or any portion of the Premises (collectively, the “Environmental Laws”) and in
compliance with the recommendations of Landlord’s consultants.  Tenant agrees that any changes to the type
and/or quantities of Hazardous 


 


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Materials may be
implemented only with the prior written consent of Landlord, which consent may
be given or withheld in Landlord’s sole discretion.  Tenant shall not be entitled nor permitted to
install any tanks under, on or about the Premises for the storage of Hazardous
Materials without the express written consent of Landlord, which may be given
or withheld in Landlord’s sole discretion. 
Landlord shall have the right, in Landlord’s sole discretion, at all
times during the Term of this Lease to (i) inspect the Premises, (ii) conduct
tests and investigations to determine whether Tenant is in compliance with the
provisions of this Section 27 or to determine if Hazardous Materials are
present in, on or about the Premises, (iii) request lists of all Hazardous
Materials used, stored or otherwise located on, under or about any portion of
the Premises, and (iv) to require Tenant to complete a survey of its use,
storage and handling of Hazardous Materials in the Premises, using a form and
following procedures designated by Landlord, in Landlord’s sole discretion (the
“Survey”).  The costs and expenses of any
such Survey, tests, investigations or inspections shall be paid by the party
requesting same, unless a contamination, caused or materially contributed to by
Tenant, is found to exist or be imminent, or unless the inspection is requested
or ordered by governmental authority as the result of any such existing or
imminent violation or contamination, in which case Tenant shall reimburse Landlord
for the cost of all such inspections, tests and investigations, and all costs
associated with any Survey.  If as a
result of an inspection, test or Survey Landlord determines, in Landlord’s sole
discretion, that Tenant should implement or perform safety, security or
compliance measures, Tenant shall within thirty (30) days after written request
by Landlord perform such measures, at Tenant’s sole cost and expense; provided,
however, that if the nature of Tenant’s non-performance is such that more than
thirty (30) days are required for such measures to be completed, then Tenant
shall not be in default if Tenant commences performance within such thirty (30)
day period and thereafter diligently pursues the same to completion (such
period not to exceed sixty (60) days following Landlord’s original written
request).  The aforementioned rights
granted herein to Landlord and its representatives shall not create (a) a
duty on Landlord’s part to inspect, test, investigate, monitor or otherwise
observe the Premises or the activities of Tenant and Tenant Parties with
respect to Hazardous Materials, including without limitation, Tenant’s
operation, use and any remediation relating thereto, or (b) liability on
the part of Landlord and its representatives for Tenant’s use, storage,
disposal or remediation of Hazardous Materials, it being understood that Tenant
shall be solely responsible for all liability in connection therewith.


 


27.4         TENANT’S ENVIRONMENTAL OBLIGATIONS.  Tenant shall give to Landlord immediate verbal
and follow-up written notice of any spills, releases, discharges, disposals,
emissions, migrations, removals or transportation of Hazardous Materials on,
under or about any portion of the Premises; provided that Tenant has actual,
implied or constructive knowledge of such event(s), Tenant, at its sole 


 


43





















 


cost and expense,
covenants and warrants to promptly investigate, clean up, remove, restore and
otherwise remediate (including, without limitation, preparation of any
feasibility studies or reports and the performance of any and all closures) any
spill, release, discharge, disposal, emission, migration or transportation of
Hazardous Materials arising from or related to the intentional or negligent
acts or omissions of Tenant or Tenant Parties such that the affected portions
of the Premises and any adjacent property are returned to the condition
existing prior to the appearance of such Hazardous Materials.  Any such investigation, clean up, removal,
restoration and other remediation shall only be performed after Tenant has
obtained Landlord’s prior written consent, which consent shall not be
unreasonably withheld so long as such actions would not potentially have a
material adverse long-term or short-term effect on any portion of the
Premises.  Notwithstanding the foregoing,
Tenant shall be entitled to respond immediately to an emergency without first
obtaining Landlord’s prior written consent. 
Tenant, at its sole cost and expense, shall conduct and perform, or
cause to be conducted and performed, all closures as required by any
Environmental Laws or any agencies or other governmental authorities having
jurisdiction thereof.  If Tenant fails to
so promptly investigate, clean up, remove, restore, provide closure or
otherwise so remediate, Landlord may, but without obligation to do so, take any
and all steps necessary to rectify the same, and Tenant shall promptly
reimburse Landlord, upon demand, for all costs and expenses to Landlord of
performing investigation, cleanup, removal, restoration, closure and
remediation work.  All such work
undertaken by Tenant, as required herein, shall be performed in such a manner
so as to enable Landlord to make full economic use of the Premises after the
satisfactory completion of such work.


 


27.5         ENVIRONMENTAL INDEMNITY.  In addition to Tenant’s other indemnity
obligations under this Lease, Tenant agrees to, and shall, protect, indemnify,
defend (with counsel acceptable to Landlord) and hold Landlord and the other
indemnities harmless from and against any and all loss, cost, damage, liability
or expense (including, without limitation, diminution in value of any portion
of the Premises, damages for the loss of or restriction on the use of rentable
or usable space, and from any adverse impact of Landlord’s marketing of any
space within the Premises) arising at any time during or after the term of this
Lease in connection with or related to, directly or indirectly, the use,
presence, transportation, storage, disposal, migration, removal, spill, release
or discharge of Hazardous Materials on, in or about any portion of the Premises
as a result (directly or indirectly) of the intentional or negligent acts or
omissions of Tenant or Tenant Parties. 
Neither the written consent of Landlord to the presence, use or storage
of Hazardous Materials in, on, under or about any portion of the Premises nor
the strict compliance by Tenant with all Environmental Laws shall excuse Tenant
from its obligations of indemnification pursuant hereto.  Tenant shall not be relieved of its
indemnification obligations under the provisions of this Section 27.5 due
to Landlord’s status as either an “owner or “operator” under any 


 


44





















 


Environmental
Laws.  Landlord represents and warrants
that, as of the date of this Lease, to the best of its knowledge and belief
there are no Hazardous Materials on, in or under the Premises or the Building
in violation of any Environmental Laws.


 


27.6         SURVIVAL. 
Tenant’s obligations and liabilities pursuant to the provisions of this Section 27
shall survive the expiration or earlier termination of this Lease.


 


28.           SUBORDINATION.


 


28.1         EFFECT OF SUBORDINATION.  This Lease, and any Option (as defined below)
granted hereby, upon Landlord’s written election, shall be subject and
subordinate to any ground Lease, mortgage, deed of trust or any other
hypothecation or security now or hereafter placed upon the Project and to any
and all advances made on the security thereof and to all renewals, modifications,
consolidations, replacements and extensions thereof.  Notwithstanding such subordination, Tenant’s
right to quiet possession of the Premises shall not be disturbed if Tenant is
not in default and so long as Tenant shall pay the rent and observe and perform
all of the provisions of this Lease, unless this Lease is otherwise terminated
pursuant to its terms.  At the request of
any mortgagee, trustee or ground lessor, Tenant shall attorn to such person or
entity.  If any mortgagee, trustee or
ground lessor shall elect to have this Lease and any Options granted hereby
prior to the lien of its mortgage, deed of trust or ground Lease, and shall
give written notice thereof to Tenant, this Lease and such Options shall be
deemed prior to such mortgage, dead of trust or ground lease, whether this
Lease or such Options are dated prior or subsequent to the date of said
mortgage, deed of trust or ground lease or the date of recording thereof.  In the event of the foreclosure of a security
device, the new owner shall not (a) be liable for any act or emission of
any prior landlord or with respect to events occurring prior to its acquisition
of title, (b) be liable for the breach of this Lease by any prior
Landlord, (c) be subject to any offsets or defenses which Tenant may have
against the prior Landlord or (d) be liable to Tenant for the return of
its security deposit.  In the event that
the Project shall become subject to any lien of any ground lease, mortgage,
deed of trust or any other hypothecation or security after the Commencement
Date, Landlord shall, at Tenant’s request, obtain a subordination,
non-disturbance and attornment agreement on such mortgagee’s, trustee’s or
ground lessor’s standard form on behalf of Tenant.  Landlord agrees to endeavor to have such
lender agree to add language to such subordination, non-disturbance and
attornment agreement requiring the lender to release the insurance proceeds for
restoration of any damage.


 


28.2         EXECUTION OF DOCUMENTS.  Tenant agrees to execute and acknowledge any
documents Landlord reasonably requests Tenant execute to effectuate an
attornment, a subordination, or to make this Lease or any Option granted herein



 


45





















 


prior to the lien
of any mortgage, deed of trust or ground Lease, as the case may be.  Tenant’s failure to execute such documents
within ten (10) days after written demand shall constitute a material
default by Tenant hereunder or, at Landlord’s option, Landlord shall have the
right to execute such documents on behalf of Tenant as Tenant’s
attorney-in-fact.  Tenant does hereby
make, constitute and irrevocably appoint Landlord as Tenant’s attorney-in-fact
and in Tenant’s name, place and stead to execute such documents in accordance
with this Section.


 


29.           OPTIONS.


 


29.1         DEFINITION.  As used in this Lease, the word “Option” has
the following meaning:  (1) the
right or option to extend the Term of this Lease or to renew this Lease, (2) the
option or right of first refusal to Lease the Premises or the right of first
offer to Lease the Premises or the right of first refusal to Lease other space
within the Project or the right of first offer to Lease other space within the
Project, and (3) the right or option to terminate this Lease prior to its
expiration date or to reduce the size of the Premises.  Any Option granted to Tenant by Landlord must
be evidenced by a written option agreement attached to this Lease as a rider or
addendum or said option shall be of no force or effect.


 


29.2         OPTIONS PERSONAL.  Each Option granted to Tenant in this Lease,
if any, is personal to the original Tenant and may be exercised only by the
original Tenant while occupying the entire Premises and may not be exercised or
be assigned, voluntarily or involuntarily, by or to any person or entity other
than Tenant, including, without limitation, any permitted transferee as defined
in Section 16.  The Options, if any,
herein granted to Tenant are not assignable separate and apart from this Lease,
nor may any Option be separated from this Lease in any manner, either by
reservation or otherwise.  If at any time
an Option is exercisable by Tenant, the Lease has been assigned or a sublease
exists as to any portion of the Premises, the Option shall be deemed null and
void and neither Tenant nor any assignee or subtenant shall have the right to
exercise the Option.


 


29.3         MULTIPLE OPTIONS.  In the event that Tenant has multiple Options
to extend or renew this Lease, a later Option cannot be exercised unless the
prior Option to extend or renew this Lease has been so exercised,


 


29.4         EFFECT OF DEFAUILT ON OPTIONS.  Tenant shall have no right to exercise an
Option (i) during the time commencing from the date Landlord gives to
Tenant a notice of default pursuant to Section 17.1 and continuing until
the noncompliance alleged in said notice of default is cured, or (ii) if
Tenant is in default of any of the terms, covenants or conditions of this
Lease.  The period of time within which
an Option may be exercised shall not be extended or enlarged by reason of Tenant’s
inability to exercise an Option because of the provisions of this Section.


 


46





















 


29.5         LIMITATIONS ON OPTIONS.  [Intentionally omitted]


 


29.6         GUARANTEES.  [Intentionally omitted]


 


30.           LANDLORD RESERVATIONS.  Landlord shall have the
right:  (a) to change the name and
address of the Project or building upon not less than one hundred eighty (180)
days prior written notice; (b) to permit any Tenant the exclusive right to
conduct any business as long as such exclusive right does not conflict with any
rights expressly given herein; and (c) subject to the rights granted to
Tenant in this Lease (but only to the extent contrary to this provision), to
place signs, notices or displays upon the roof, interior or exterior of the
Building or Common Areas of the Project. 
Landlord reserves the right to use the exterior walls of the Premises,
and the area beneath, adjacent to and above the Premises together with the
right to install, use, maintain and replace equipment, machinery, pipes,
conduits and wiring through the Premises, which serve other parts of the
Project provided that Landlord’s use does not unreasonably interfere with
Tenant’s use of the Premises.


 


31.           CHANGES TO PROJECT. 
Landlord shall have the right, in Landlord’s sole discretion, from time
to time, to make changes to the size, shape, location, number and extent of the
improvements comprising the Project (hereinafter referred to as “Changes”)
including, but not limited to, the interior and exterior of buildings, the
Common Areas, HVAC, electrical systems, communication systems, fire protection
and detection systems, plumbing systems, security systems, parking control
systems, driveways, entrances, parking spaces, parking areas and landscaped
areas so long as such Changes do not have a material adverse effect on Tenant’s
access to or use and enjoyment of the Premises. 
In connection with the Changes, Landlord may, among other things, erect
scaffolding or other necessary structures at the Project, limit or eliminate
access to portions of the Project, including portions of the Common Areas, or
perform work in the building, which work may create noise, dust or leave debris
in the Building.  Tenant hereby agrees
that such Changes and Landlord’s actions in connection with such Changes shall
in no way constitute a constructive eviction of Tenant or entitle Tenant to any
abatement of rent.  Landlord shall have
no responsibility or for any reason be liable to Tenant for any direct or
indirect injury to or interference with Tenant’s business arising from the
Changes, nor shall Tenant be entitled to any compensation or damages from
Landlord for any inconvenience or annoyance occasioned by such changes or
Landlord’s actions in connection with such Changes.  Landlord shall use commercially reasonable
efforts to minimize unreasonable interference with Tenant’s use and occupancy
of the Premises during Landlord’s actions in connection with such changes.


 


32.           SUBSTITUTION OF OTHER PREMISES.  [Intentionally
omitted]


 


47


















 


33.           HOLDING OVER. 
If Tenant remains in possession of the Premises or any part thereof
after the expiration or earlier termination of the Term hereof with Landlord’s
consent, such occupancy shall be a tenancy from month to month upon all the
Terms and conditions of this Lease pertaining to the obligations of Tenant,
except that the Base Rent payable shall be one hundred fifty percent (150%) of
the Base Rent payable immediately preceding the termination date of this Lease,
and all Options, if any, shall be deemed terminated and be of no further
effect.  If Tenant remains in possession
of the Premises or any part thereof, after the expiration of the Term hereof
without Landlord’s consent, Tenant shall, at Landlord’s option, be treated as a
Tenant at sufferance or a trespasser. 
Nothing contained herein shall be construed to constitute Landlord’s
consent to Tenant holding over at the expiration or earlier termination of the
Lease Term or to give Tenant the right to hold over after the expiration or
earlier termination of the Lease Term. 
In the event Tenant holds over at the Premises for longer than sixty
(60) days following the date of the expiration or earlier termination of the
Lease, then, in addition to the other provisions of this Section, including the
requirement to pay Base Rent at a higher rate following the expiration of the
Term of the Lease, commencing on the sixty-first (61st) day
following the date of the expiration or earlier termination of the Lease,
Tenant hereby agrees to indemnify, hold harmless and defend Landlord from any
cost, loss, claim or liability (including attorneys’ fees) Landlord may incur
as a result of Tenant’s failure to surrender possession of the Premises to
Landlord upon the termination of this Lease.


 


34.           LANDLORD’S ACCESS.


 


34.1         ACCESS. 
Landlord and Landlord’s agents, contractors and employees shall have the
right to enter the Premises at reasonable times upon reasonable notice (except
in the event of an emergency in which case no such notice shall be required)
for the purpose of inspecting the Premises, performing any services required of
Landlord, showing the Premises to prospective purchasers, lenders or, during
the last one hundred eighty (180) days of the Term of the Lease only (such
limit to be applicable only In the event Tenant is not in default hereunder) to
prospective Tenants, undertaking safety measures and making alterations,
repairs, improvements or additions to the Premises or to the Project.  In the event of an emergency, Landlord may
gain access to the Premises by any reasonable means without notice, and
Landlord shall not be liable to Tenant for damage to the Premises or to Tenant’s
property resulting from such access. 
Landlord may at any time place on or about the Building “for sale” or “for
Lease” signs and Landlord may at any time during the last one hundred twenty
(120) days of the Term hereof place on or about the Premises “for Lease” signs.


 


34.2         KEYS. 
Landlord shall have the right to retain keys to the locks on the entry
doors to the Premises and all interior doors at the Premises.


 


48





















 


35.           SECURITY MEASURES. 
Tenant hereby acknowledges that Landlord shall have no obligation
whatsoever to provide guard service or other security measures for the benefit of
the Premises or the Project, and Landlord shall have no liability to Tenant due
to its failure to provide such services. 
Tenant assumes all responsibility for the protection of Tenant, its
agents, employees, contractors and invitees and the property of Tenant and of
Tenant’s agents, employees, contractors and invitees from acts of third
parties.  Nothing herein contained shall
prevent Landlord, at Landlord’s sole option, from implementing security
measures for the Project or any part thereof, in which event Tenant shall
participate in such security measures and the cost thereof shall be included
within the definition of Operating Expenses, and Landlord shall have no
liability to Tenant and its agents, employees, contractors and invitees arising
out of Landlord’s negligent provision of security measures.  Landlord shall have the right, but not the
obligation, to require all persons entering or leaving the Project to identify
themselves to a security guard and to reasonably establish that such person
should be permitted access to the Project.


 


36.           EASEMENTS.  Landlord
reserves to itself the right, from time to time, to grant such easements,
rights and dedications that Landlord deems necessary or desirable, and to cause
the recordation of parcel maps and restrictions, so long as such easements,
rights, dedications, maps and restrictions do not unreasonably Interfere with
the use of the Premises by Tenant. 
Tenant shall sign any of the aforementioned documents within twenty (20)
days after Landlord’s written request, and Tenant’s failure to do so shall
constitute a material default by Tenant. 
The obstruction of Tenant’s view, air or light by any structure erected
in the vicinity of the Project, whether by Landlord or third parties, shall in
no way affect this Lease or impose any liability upon Landlord.


 


37.           TRANSPORTATION MANAGEMENT.  Tenant shall fully comply at its
sole expense with all present or future programs implemented or required by any
governmental or quasi-governmental entity or Landlord to manage parking,
transportation, air pollution or traffic in and around the Project or the
metropolitan area in which the Project is located.


 


38.           SEVERABILITY. 
The invalidity of any provision of this Lease as determined by a court
of competent jurisdiction shall in no way affect the validity of any other
provision hereof.


 


39.           TIME OF ESSENCE. 
Time is of the essence with respect to each of the obligations to be
performed by Tenant and Landlord under this Lease.


 


40.           DEFINITION OF ADDITIONAL RENT.  All monetary obligations of
Tenant to Landlord under the terms of this Lease, including, but not limited
to, Base Rent,


 


49





















 


Tenant’s Percentage Share of
Operating Expenses, Tenant’s Percentage Share of Real Property Taxes and late
charges shall be deemed to be rent.


 


41.           INCORPORATION OF PRIOR AGREEMENTS.  This Lease and the attachments
listed in Section l.16 contain all agreements of the parties with respect
to the lease of the Premises and any other matter mentioned herein.  No prior or contemporaneous agreement or
understanding pertaining to any such matter shall be effective.  Except as otherwise stated in this Lease,
Tenant hereby acknowledges that no real estate broker nor Landlord nor any
employee or agents of any of said persons has made any oral or written
warranties or representations to Tenant concerning the condition or use by
Tenant of the Premises or the Project or concerning any other matter addressed
by this Lease.


 


42.           AMENDMENTS.  This
Lease may be modified in writing only, signed by the parties in interest at the
time of the modification.


 


43.           NOTICES.  All
notices required or permitted by this Lease shall be in writing and may be
delivered (a) in person (by hand, by messenger or by courier service), (b) by
U.S. Postal Service regular mail, (c) by U.S. Postal Service certified
mail, return receipt requested, (d) by U.S. Postal Service Express Mail,
Federal Express or other overnight courier, or (e) by facsimile
transmission, and shall be deemed sufficiently given if served in a manner
specified in this Section.  The addresses
set forth in Section 1.17 of this Lease shall be the address of each party
for notice purposes.  Landlord or Tenant
may by written notice to the other specify a different address for notice
purposes.  A copy of all notices required
or permitted to be given to Landlord hereunder shall be concurrently
transmitted to such party or parties at such addresses as Landlord may from
time to time hereinafter designate by written notice to Tenant.  Any notice sent by regular mall or by
certified mail, return receipt requested, shall be deemed given three (3) days
after deposited with the U.S. Postal Service. 
Notices delivered by U.S. Express Mail, Federal Express or other courier
shall be deemed given on the date delivered by the carrier to the appropriate
party’s address for notice purposes.  If
any notice is transmitted by facsimile transmission, the notice shall be deemed
delivered upon telephone confirmation of receipt of the transmission thereof at
the appropriate party’s address for notice purposes.  A copy of all notices delivered to a party by
facsimile transmission shall also be mailed to the party on the date the
facsimile transmission is completed.  If
notice is received on Saturday, Sunday or a legal holiday, it shall be deemed
received on the next business day. 
Nothing contained herein shall be construed to limit Landlord’s right to
serve any notice to pay rent or quit or similar notice by any method permitted
by applicable law, and any such notice shall be effective if served in
accordance with any method permitted by applicable law whether or not the
requirements of this Section have been met.


 


50





















 


44.           WAIVERS.  No
waiver by Landlord or Tenant of any provision hereof shall be deemed a waiver
of any other provision hereof or of any subsequent breach by Landlord or Tenant
of the same or any other provision. 
Landlord’s consent to, or approval of, any act shall not be deemed to
render unnecessary the obtaining of Landlord’s consent to or approval of any
subsequent act by Tenant.  The acceptance
of rent hereunder by Landlord shall not be a waiver of any preceding breach by
Tenant of any provision hereof, other than the failure of Tenant to pay the particular
rent so accepted, regardless of Landlord’s knowledge of such preceding breach
at the time of acceptance of such rent. 
No acceptance by Landlord of partial payment of any sum due from Tenant
shall be deemed a waiver by Landlord of its right to receive the full amount
due, nor shall any endorsement or statement on any check or accompanying letter
from Tenant be deemed an accord and satisfaction.


 


45.           COVENANTS.  This
Lease shall be construed as though Landlord’s covenants contained herein are
independent and not dependent and Tenant hereby waives the benefit of any
statute to the contrary.  All provisions
of this Lease to be observed or performed by Tenant are both covenants and
conditions.


 


46.           BINDING EFFECT; CHOICE OF LAW.  Subject to any provision hereof
restricting assignment or subletting by Tenant, this Lease shall bind the
parties, their heirs, personal representatives, successors and assigns.  This Lease shall be governed by the laws of
the state in which the Project is located, and any litigation concerning this
Lease between the parties hereto shall be initiated in the county in which the
Project is located.


 


47.           ATTORNEYS’ FEES. 
If Landlord or Tenant brings an action to enforce the terms hereof or
declare rights hereunder, the prevailing party in any such action, or appeal
thereon, shall be entitled to its reasonable attorneys’ fees and court costs to
be paid by the losing party as fixed by the court in the same or separate suit,
and whether or not such action is pursued to decision or judgment.  The attorneys’ fee award shall net be
computed in accordance with any court fee schedule, but shall be such as to
fully reimburse all attorneys’ fees and court costs reasonably incurred in good
faith.  Landlord shall be entitled to
reasonable attorneys’ fees and all other costs and expenses incurred in the
preparation and service of notices of default and consultations in connection
therewith, whether or not a legal action is subsequently commenced In
connection with such default.  Landlord
and Tenant agree that attorneys’ fees incurred with respect to defaults and
bankruptcy are actual pecuniary losses within the meaning of Section 365(b)(1)(B) of
the Bankruptcy Code or any successor statute.


 


48.           AUCTIONS.  Tenant
shall not conduct, nor permit to be conducted, either voluntarily or
Involuntarily, any auction or going-out-of-business sale upon the Premises or
the Common Areas.


 


51





















 


49.           MERGER.  The
voluntary or other surrender of this Lease by Tenant, or a mutual cancellation
thereof, or a termination by Landlord, shall not result in the merger of
Landlord’s and Tenant’s estates and shall, at the option of Landlord, terminate
all or any existing subtenancies or may, at the option of Landlord, operate as
an assignment to Landlord of any or all of such subtenancies.


 


50.           QUIET POSSESSION. 
Subject to the other terms and conditions of this Lease, and the rights
of any lender, and provided Tenant is not in default hereunder, Tenant shall
have quiet possession of the Premises for the entire Term hereof subject to all
of the provisions of this Lease.


 


51.           AUTHORITY.  If
Tenant is a corporation, trust, limited liability company, limited liability
partnership or general or limited partnership, Tenant, and each individual
executing this Lease on behalf of such entity, represents and warrants that
such individual is duly authorized to execute and deliver this Lease on behalf
of said entity, that said entity is duly authorized to enter into this Lease,
and that this Lease is enforceable against said entity in accordance with its
terms.  If Tenant is a corporation,
trust, limited liability company, limited liability partnership or other
partnership, Tenant shall deliver to Landlord upon demand evidence of such
authority satisfactory to Landlord.


 


52.           CONFLICT.  Except
as otherwise provided herein to the contrary, any conflict between the printed
provisions, exhibits, addenda or riders of this Lease and the typewritten or
handwritten provisions, If any, shall be controlled by the typewritten or
handwritten provisions.


 


53.           MULTIPLE PARTIES. 
If more than one person or entity is named as Tenant herein, the
obligations of Tenant shall be the joint and several responsibility of all
persons or entitles named herein as Tenant. 
Service of a notice in accordance with Section 43 on one Tenant
shall be deemed service of notice on all Tenants.


 


54.           INTERPRETATION. 
This Lease shall be interpreted as if it was prepared by both parties,
and ambiguities shall not be resolved in favor of Tenant because all or a
portion of this Lease was prepared by Landlord. 
The captions contained in this Lease are for convenience only and shall
not be deemed to limit or alter the meaning of this Lease. As used in this
Lease, the words tenant and landlord include the plural as well as the
singular.  Words used in the neuter
gender include the masculine and feminine gender.


 


55.           PROHIBITION AGAINST RECORDING.  Neither this Lease, nor any
memorandum, affidavit or other writing with respect thereto, shall be recorded
by Tenant or by anyone acting through, under or on behalf of Tenant.  Landlord shall have the right to record a
memorandum of this Lease, and Tenant shall execute,


 


52





















 


acknowledge and deliver to Landlord
for recording any memorandum prepared by Landlord.


 


56.           RELATIONSHIP OF PARTIES.  Nothing contained in this Lease
shall be deemed or construed by the parties hereto or by any third party to
create the relationship of principal and agent, partnership, joint venturer or
any association between Landlord and Tenant.


 


57.           SECURITY INTEREST. 
In consideration of the covenants and agreements contained herein, and
as a material consideration to Landlord for entering into this Lease, Tenant
hereby unconditionally grants to Landlord a continuing security interest in and
to all personal property of Tenant located or left at the Premises and the
Security Deposit, if any, and any advance rent payment or other deposit, now in
or hereafter delivered to or coming into the possession, custody or control of
Landlord, by or for the account of Tenant, together with any increase in
profits or proceeds from such property. 
The security interest granted to Landlord hereunder secures payment and
performance of all obligations of Tenant under this Lease now or hereafter
arising or existing, whether direct or indirect, absolute or contingent, or due
or to become due.  In the event of a
default under this Lease which is not cured within the applicable grace period,
if any, Landlord is and shall be entitled to all the rights, powers and
remedies granted a secured party under the State of Maryland Commercial Code
and otherwise available at law or in equity, including, but not limited to, the
right to retain as damages the personal property, Security Deposit and other
funds held by Landlord, without additional notice or demand regarding this
security interest.  Tenant agrees that it
will execute such other documents or instruments as may be reasonably necessary
to carry out and effectuate the purpose and terms of this Section, or as
otherwise reasonably requested by Landlord, including without limitation,
execution of a UCC-1 financing statement. 
Tenant’s failure to execute such documents within ten (10) days
after written demand shall constitute a material default by Tenant hereunder
and, at Landlord’s option, Landlord shall have the right to execute such
documents on behalf of Tenant as Tenant’s attorney-in-fact.  Tenant does hereby make, constitute and
irrevocably appoint Landlord as Tenant’s attorney-in-fact, and Landlord shall
have the right to execute such documents in Tenant’s name.  Tenant hereby waives any rights it may have
under the State of Maryland Civil Code which are inconsistent with Landlord’s
rights under this Section.  Landlord’s
rights under this Section are in addition to Landlord’s rights under
Sections 7 and 17.  Notwithstanding
anything to the contrary contained in this Section 57, the security
interest granted by Tenant to Landlord shall be automatically subordinated to
the security interest, if any, granted to Tenant’s lenders in the ordinary
course of Tenant’s business.  At Tenant’s
request, Landlord shall execute a lien waiver, the form of which shall be
reasonably satisfactory to Landlord, waiving Landlord’s security interest in
the collateral


 


53





















 


described in any such lien
waiver (which collateral shall exclude any Tenant improvements and any fixtures
installed in the Premises).


 


58.           SIGNAGE.  [Intentionally
omitted]


 


59.           RULES AND REGULATIONS.  Tenant agrees to abide by and
conform to the Rules and to cause its employees, suppliers, customers and
invitees to so abide and conform. 
Landlord shall have the right, from time to time, to modify, amend and
enforce the rules in a nondiscriminatory manner.  Landlord shall not be responsible to Tenant
for the failure of other persons, including, but not limited to, other tenants,
their agents, employees and invitees, to comply with the Rules.


 


60.           RIGHT TO LEASE. 
Landlord reserves the absolute right to effect such other tenancies in
the Project as Landlord in its sole discretion shall determine, and Tenant is
not relying on any representation that any specific tenant or number of tenants
will occupy the Project.


 


61.           CONFIDENTIALITY. 
Tenant acknowledges and agrees that the terms of this Lease are
confidential and constitute proprietary information of Landlord.  Disclosure of the terms hereof could
adversely affect the ability of Landlord to negotiate other Leases with respect
to the Project and may impair Landlord’s relationship with other Tenants of the
Project.  Tenant agrees that it and its
partners, officers, directors, employees, brokers, and attorneys, if any, shall
not disclose the terms and conditions of this Lease to any other person or
entity except as required by law or by a court order from a court of competent
jurisdiction without the prior written consent of Landlord, which may be given
or withheld by Landlord, in Landlord’s sole discretion.  It is understood and agreed that damages
alone would be an inadequate remedy for the breach of this provision by Tenant,
and Landlord shall also have the right to seek specific performance of this
provision and to seek injunctive relief to prevent its breach or continued
breach.


 


62.           WAIVER OF JURY TRIAL.  LANDLORD AND TENANT HEREBY WAIVE
THEIR RESPECTIVE RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM,
COUNTERCLAIM OR CROSS-COMPLAINT IN ANY ACTION, PROCEEDING AND HEARING BROUGHT
BY EITHER LANDLORD AGAINST TENANT OR TENANT AGAINST LANDLORD ON ANY MATTER
WHATSOEVER ARISING OUT OF, OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY OF THE PREMISES,
OR ANY CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY
LAW, STATUTE, OR REGULATION, EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN
EFFECT.


 


54





















 


See Addendum
Paragraphs 10, 11, 12 and 13


 


[SIGNATURES APPEAR ON
NEXT PAGE]


 


55





















 


LANDLORD AND TENANT ACKNOWLEDGE THAT THEY HAVE
CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED
HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY
CONSENT THERETO.  THE PARTIES HEREBY AGREE
THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND
TENANT WITH RESPECT TO THE PREMISES. 
TENANT ACKNOWLEDGES THAT IT HAS BEEN GIVEN THE OPPORTUNITY TO HAVE THIS
LEASE REVIEWED BY ITS LEGAL COUNSEL PRIOR TO ITS EXECUTION.  PREPARATION OF TH1S LEASE BY LANDLORD OR
LANDLORD’S AGENT AND SUBMISSION OF SAME TO TENANT SHALL NOT BE DEEMED AN OFFER
BY LANDLORD TO LEASE THE PREMISES TO TENANT OR THE GRANT OF AN OPTION TO TENANT
TO LEASE THE PREMISES.  THIS LEASE SHALL
BECOME BINDING UPON LANDLORD ONLY WHEN FULLY EXECUTED BY BOTH PARTIES AND WHEN
LANDLORD HAS DELIVERED A FULLY EXECUTED ORIGINAL OF THIS LEASE TO TENANT.


 


 


	
  LANDLORD:

  	
  TENANT*

  
	
   

  	
   

  
	
  THE REALTY ASSOCIATES FUND V, L.P.,

  a Delaware limited partnership

  	
  K.R SPORTS, INC.,

  a Maryland corporation

  
	
   

  	
   

  
	
  By: Realty Associates Fund V LLC, a
  Massachusetts

  	
   

  
	
  limited
  liability company, general partner

  	
  By:

  	
  /s/ J. S. Plank

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Realty Associates Advisors LLC, a Delaware 

  	
   

  	
  J. S. Plank 

  	
   

  
	
   

  	
   

  	
  limited liability company, Manager 

  	
   

  	
  (Print Name)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Realty Associates Advisors Trust, a 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Massachusetts business trust, sole 

  	
  lts:

  	
  VP Finance

  	
   

  
	
   

  	
   

  	
   

  	
  member.

  	
   

  	
  (Print
  Title)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Henry G. Grauer 

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: Realty Associates Fund V Texas
  Corporation,

  	
   

  	
   

  	
   

  	
   

  
	
  A Texas corporation

  	
   

  	
  (Print Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Henry G. Bauer

  	
   

  	
  lts:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (Print
  Title)

  	
   

  
														



 










*If Tenant is a corporation, the authorized officers must sign on
behalf of the corporation and indicate the capacity in which they are
signing.  The Lease must be executed by
the president or vice president and the secretary or assistant
secretary, unless the bylaws or a resolution of the board of directors
shall otherwise provide, in which event, the bylaws or a certified copy of the
resolution, as the case may be, must be attached to this Lease.


 


56





















 


Addendum


 


Addendum to Standard
Industrial Lease (the “Lease”)

dated December, 2003 Between

The Realty Associates Fund V, L.P.  (“Landlord”)
and

K.P.  SPORTS, INC., trading as Under
Armour Performance Apparel (“Tenant”)


 


It is hereby agreed by Landlord and Tenant that the
provisions of this Addendum are a part of the Lease.  If there is a conflict between the terms and
conditions of this Addendum and the terms and conditions of the Lease, the
terms and conditions of this Addendum shall control.  Capitalized terms in this Addendum shall have
the same meaning as capitalized terms in the Lease, and, if a Work Letter Agreement
is attached to this Lease, as those terms have been defined in the Work Letter
Agreement.


 


1.             Tenant
Improvements.


 


(a)           Tenant
hereby agrees to accept the Premises in its “as-is” condition existing on the
date hereof, subject to (i) Landlord’s completion of the “Office Work”
defined in subparagraph (b) below, and (ii) Landlord’s completion of
the “Code Compliance Work” defined in subparagraph (c) below.  For purposes hereof, “as-is” shall mean that
the Premises shall be delivered broom-clean free of debris and the personal
property and equipment of any previous Tenants of the Premises and that all
systems, including without limitation, the plumbing, electrical, lighting and
mechanical systems, shall be delivered in good working order.  Except as expressly provided in subparagraphs
(b) and (c) and Paragraph 10 below, Landlord shall not be obligated
to make any Tenant improvements to the Premises on behalf of Tenant during the
Term hereof.


 


(b)           Landlord,
at Landlord’s sole cost and expense, shall make the cosmetic improvements (the “Office
Work”) to that portion of the Premises consisting of office space that is on
two stories of the Premises containing approximately Twenty Thousand (20,000)
square feet (the “Office Space”).  The
Office Work is more fully described in Schedule 2 attached hereto.


 


(c)           Landlord,
at Landlord’s sole cost and expanse, shall make the Improvements described in Schedule 3
attached hereto (the “Code Compliance Work”).


 


2.             Delay
In Delivery.  Notwithstanding
anything to the contrary contained in the Lease, in the event Landlord fails to
deliver the Premises to Tenant on or before March 1, 2004 with the Office
Work substantially completed and the Code Compliance Work complete (the “Targeted
Delivery Date”), except as expressly


 


57





















 


provided below, Landlord
shall not be subject to any liability therefor, nor shall such failure affect
the validity of this Lease or the obligations of Tenant hereunder; provided,
however, Tenant shall be entitled to occupy the Premises rent free after the
Commencement Date one (1) day for each day from the Targeted Delivery Date
until Landlord delivers the Premises to Tenant. 
If, for any reason except as expressly provided herein, Landlord is
unable to deliver possession of the Premises to Tenant as provided herein on or
before July 1, 2004 (the “Outside Delivery Date”), then Tenant shall have
the right, by notice in writing to Landlord within ten (10) days after the
Outside Delivery Date, to terminate this Lease. 
If Tenant terminates this Lease as provided in the preceding sentence,
the parties shall be discharged from all obligations hereunder, provided, that
if such written notice by Tenant is not received by Landlord within said ten (10) day
period, Tenant shall not have the right to terminate this Lease as provided
above.  If Landlord is unable to deliver
the Premises to Tenant on or before the Targeted Delivery Date or the Outside
Delivery Date due to a Force Majeure Event, the Targeted Delivery Date or the Outside
Delivery Date, as applicable, shall be extended by the period of the delay
caused by the Force Majeure Event.  In
the event Tenant terminates the Lease in according with the foregoing sentence,
Tenant shall have up to ninety (90) days following such notice of termination
to remove all of Tenant’s equipment and fixtures from the Premises and to
repair any damage caused by such removal.


 


3.             Base
Rent Increase.  The Base
Rent set forth in Section 1.9 hereinabove shall be adjusted during the
Term of the Lease as follows:


 


 


	
  Lease Period In Months

  	
   

  	
  Rate Per Square

  Foot/Square Footage

  Used

  	
   

  	
  Annual Base Rent

  	
   

  	
  Monthly Base Rent

  	
   

  
	
  04/01/04 —
  09/30/04

  	
   

  	
  $

  	
  [***]/[***]

  	
   

  	
  $

  	
  [***]

  	
  * 

  	
  $

  	
  [***]

  	
   

  
	
  10/01/04 —
  03/31/05

  	
   

  	
  $

  	
  [***]/[***]

  	
   

  	
  $

  	
  [***]

  	
  * 

  	
  $

  	
  [***]

  	
   

  
	
  04/01/05 —
  09/30/05

  	
   

  	
  $

  	
  [***]/[***]

  	
   

  	
  $

  	
  [***]

  	
  * 

  	
  $

  	
  [***]

  	
   

  
	
  10/01/05 —
  03/31/06

  	
   

  	
  $

  	
  [***]/[***]

  	
   

  	
  $

  	
  [***]

  	
  * 

  	
  $

  	
  [***]

  	
   

  
	
  04/01/06 —
  09/30/06

  	
   

  	
  $

  	
  [***]/[***]

  	
   

  	
  $

  	
  [***]

  	
  * 

  	
  $

  	
  [***]

  	
   

  
	
  10/01/06 —
  03/31/07

  	
   

  	
  $

  	
  [***]/[***]

  	
   

  	
  $

  	
  [***]

  	
  * 

  	
  $

  	
  [***]

  	
   

  
	
  04/01/07 —
  03/31/08

  	
   

  	
  $

  	
  [***]/[***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  04/01/08 —
  03/31/09

  	
   

  	
  $

  	
  [***]/[***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  



 










*annualized amount


 


The amounts set forth herein as Tenant’s Base Rent are
subject to adjustment In the event Tenant exercises Its Expansion Option
pursuant to Paragraph 9 below or in the event Landlord reasonably determines
that (i) during the period from the Commencement Date through September 30,
2004, Tenant is occupying more than 150,000 rentable square feet for the
operation of Tenant’s business, which includes the storage of product, and/or (ii) during
the period from October 1, 2004 through September 30, 2006, Tenant is
occupying more of the Premises than the square footage referenced in the chart


 


58





















 


hereinabove during the
applicable period.  In the event any of
the foregoing events shall occur, Base Rent shall be adjusted by multiplying
the amount of square feet being utilized by Tenant in excess of the square
footage referenced in the chart hereinabove during the applicable period by the
Rate per Square Foot referenced for such period.  The foregoing notwithstanding, Tenant shall
not have to pay any additional Base Rent (above the Base Rent stated in the
chart above during such period) if Tenant occupies more than 125,000 rentable
square feet but less than 150,000 rentable square feet during the period
commencing on the Commencement Date through September 30, 2004.


 


4.             Tenant’s
Percentage Share. 
Notwithstanding anything to the contrary contained in Sections 1.12 or 6.4
of the Lease, Tenant’s Percentage Share shall be adjusted during the Term of
the Lease according to the following schedule:


 


	
  Leased Period

  	
   

  	
  Tenant’s Percentage Share*

  	
   

  
	
  04/01/04 —
  09/30/04

  	
   

  	
  [***]%
  (based on 125,000 sq.ft)

  	
   

  
	
  10/01/04 —
  03/31/05

  	
   

  	
  [***]% (based
  on 150,000 sq.ft)

  	
   

  
	
  04/01/05 —
  09/30/05

  	
   

  	
  [***]%
  (based on 175,000 sq.ft)

  	
   

  
	
  10/01/05 —
  03/31/06

  	
   

  	
  [***]%
  (based on 200,000 sq.ft)

  	
   

  
	
  04/01/06 —
  09/30/06

  	
   

  	
  [***]%
  (based on 225,000 sq.ft)

  	
   

  
	
  10/01/06 — end of the Term of the Lease

  	
   

  	
  [***]%
  (based on 264,676 sq.ft)

  	
   

  



 










*The amounts set forth herein as Tenant’s Percentage
Share are subject to adjustment in the event Tenant exercises its Expansion
Option pursuant to Paragraph 9 below or in the event Landlord reasonably
determines that Tenant is occupying more of the Premises than the square
footage referenced in the chart hereinabove during the applicable Lease period
for the operation of Tenant’s business, including the storage of product.


 


5.             Building
Systems.  To the
best of Landlord’s knowledge, the base building systems serving the Premises,
including without limitation, the electrical system, plumbing system, HVAC
system and other mechanical systems and components of the Premises
(collectively, the “Base Building Systems”) are in good working order as of the
date this Lease is executed by Landlord and Tenant.  Notwithstanding anything to the contrary set
forth in Section 12 of the Lease, Landlord hereby agrees that, for the
period commencing on the Commencement Date and continuing for a period of
twelve (12) calendar months thereafter (inclusively, the “Warranty Period”),
Landlord shall be responsible for the cost of any necessary repairs to the Base
Building Systems in or relating to the Premises during the Warranty Period,
except to the extent that any such repairs, replacements or maintenance costs
result from the negligence or willful misconduct of Tenant, its employees,
agents, contractors or invitees.  From
and after the expiration of the Warranty Period, Tenant shall be responsible
for the cost of any such repairs in accordance with Section 12 of the
Lease.


 


59





















 


6.             Assignment
And Subletting.  Notwithstanding
anything to the contrary contained in Section 16 of the Lease, provided
Tenant is not in default after expiration of any applicable notice and cure
periods, Tenant shall have the right, without Landlord’s consent, upon thirty
(30) days advance written notice to Landlord, to assign the Lease or sublet the
whole or any part of the Premises (a) to any entity or entities which are
owned or controlled by Tenant, or which owns or controls Tenant (for purposes
of the preceding subparagraph, control shall be deemed to be ownership of more
than fifty percent (50%) of the stock or other voting interest of the controlled
corporation or other business entity), (b) in connection with the sale or
transfer of substantially all of the assets of the Tenant or the sale or
transfer of substantially all of the outstanding ownership interests in Tenant,
or (c) in connection with a merger, consolidation or other corporate
reorganization of Tenant (each of the transactions referenced in the above
subparagraphs (a), (b), and (c) are hereinafter referred to as a “Permitted
Transfer,” and each surviving entity shall hereinafter be referred to as a “Permitted
Transferee”); provided, that such assignment or sublease is subject to the
following conditions:


 


(i)            Tenant
shall remain fully liable under the terms of the Lease;


 


(ii)           such
Permitted Transfer shall be subject to all of the terms, covenants and
conditions of the Lease;


 


(iii)          such
Permitted Transferee has a net worth at least equal to the net worth of Tenant
as of the date of this Lease; and


 


(iv)          such
Permitted Transferee shall expressly assume the obligations of Tenant under the
Lease by a document reasonably satisfactory to Landlord.


 


7.             Signage.  Notwithstanding anything to the contrary
contained in Section 22 of the Lease, Tenant, at Tenant’s sole cost and
expense, shall have the non-exclusive right to place signage on the exterior of
the Building, which such signage shall be subject to all applicable laws, codes
and regulations (including any zoning requirements), as well as any
restrictions or covenants of record, Landlord’s signage and design criteria,
and otherwise subject to Landlord’s prior approval, including but not limited
to, Landlord’s approval of the size, location and Installation of such signage,
provided Tenant is not in default under the Lease beyond the expiration of any
applicable notice and cure period at any time during the Term of the
Lease.  In addition, Tenant shall have
the exclusive right to place signage on the exterior of its Premises and the
exterior façade of the Building façade of the retail space of its Premises
only.  Nothing herein shall prevent
Landlord from allowing another Tenant of the Building to have exterior signage
on the exterior Building façade of such Tenant’s Premises.  Landlord shall have the right, (x) at anytime
during the Term of the Lease if the foregoing condition is


 


60





















 


not met, or (y) at the
expiration or earlier termination of the Lease, to require Tenant to remove any
such signage at Tenant’s sole cost and expense and to repair any damage caused
by such removal at Tenant’s sole cost and expense.  Tenant will be required to have an annual
maintenance contract providing for the ongoing maintenance of such sign.  In addition, provided Tenant is not in default
under the Lease beyond the expiration of any applicable notice and cure period
and otherwise subject to the requirements of Section 22 of the Lease,
Tenant shall have the right to place its flag on one of the existing flag poles
located in front of the Building, along with the flags of the United States of
America and the State of Maryland.  If
Tenant is in default under the Lease beyond the expiration of any applicable
notice and cure period, then Landlord shall have the right to require Tenant to
remove its flag.  The signage rights
granted to Tenant in this Paragraph are personal to the original Tenant and any
Permitted Transferee and may not be assigned by or to any person or entity
other than the original Tenant and any Permitted Transferee, including in
connection with any transfer permitted pursuant to Section 16 of the Lease.


 


8.             Options
to Renew.  Subject to
the provisions of Section 29 of the Lease, and provided that Tenant is not
in default beyond any applicable cure period, at the time of Tenant’s exercise
of the Option, or at the commencement of the Option term, Tenant shall have
three (3) two (2) year Options to renew this Lease.  Tenant shall provide to Landlord on a date
which is prior to the date that the applicable Option period would commence (if
exercised) by at least two hundred forty (240) days, a written notice of the
exercise of the applicable Option to extend the Lease for the additional Option
term, time being of the essence.  Such
notice shall be given in accordance with Section 43 of the Lease.  If notification of the exercise of the
applicable Option is not so given and received, all options granted hereunder
shall automatically expire.  Base Rent
applicable to the Premises for the applicable Option term shall be an amount
equal to [***] percent ([***]%) of the then escalated Base Rent applicable to
the Premises immediately prior to the expiration of the applicable Term (which
such amount shall Increase by [***]
percent ([***]%)
annually on each anniversary of the commencement of the applicable Option
term).  All prior terms and conditions of
the Lease shall remain the same, except that Tenant shall not be entitled to
any Tenant improvement allowance nor shall Landlord be obligated to construct
any Tenant improvements for the Premises on behalf of Tenant during the
applicable renewal term.  Upon Tenant’s exercise
of the Option pursuant to this Paragraph, the parties shall promptly execute an
amendment to this Lease reflecting the provisions of this Paragraph.


 


9.             Expansion
Option.  Tenant shall have the Option
(the “Expansion Option”) to Lease the remaining square footage of the Building
containing approximately Ninety-Four Thousand Six Hundred (94,600) rentable
square feet (the “Expansion Space”).  On
or before the earlier to occur of (i) the end of the twenty-fourth


 


61





















 


(24th) full calendar month
following the Commencement Date, and (ii) September 30, 2005 (the “Option
Period”), Tenant shall provide to Landlord written notice of Tenant’s exercise
of the Expansion Option, time being of the essence.  Such notice shall be given in accordance with
Section 43 of the Lease.  If
notification of the exercise of this Expansion Option is not so given, the
Expansion Option granted herein shall automatically expire.  Landlord shall notify Tenant within thirty
(30) days following Tenant’s exercise of the Expansion Option when Landlord
shall deliver the Expansion Space to Tenant, which such delivery shall occur
within ninety (90) days following the date of Tenant’s notice exercising the
Expansion Option (“Expansion Delivery Date”). 
During the Option Period, Landlord shall be obligated to keep the
Expansion Space available for Tenant; provided, however, the parties hereto
agree that Landlord may enter into short term Leases or occupancy agreements
for the Expansion Space (or any portion thereof) with third party Tenants or
occupants, provided that any such agreement includes a provision that provides
Landlord the option to terminate any such agreement upon sixty (60) days notice
to such party.  Landlord shall deliver
the Expansion Space to Tenant in its “as-is” condition except that Landlord
shall, at Landlord’s sole cost and expense, remove all refrigerator and freezer
equipment currently located in the Expansion Space.  Landlord shall not be required to make any
improvements to the Expansion Space on behalf of Tenant.  The Base Rent payable for the Expansion Space
shall be at the same Base Rent rate than in effect for the Premises as of the
Expansion Delivery Date and shall escalate at the same time and at the same
rate as the Base Rent for the Promises. 
The Lease term applicable to the Expansion Space shall be coterminous
with the Term of the Lease for the Premises. 
All other terms and conditions of the Lease shall remain the same.  In the event Tenant exercises the Expansion
Option, the parties shall promptly execute an amendment to the Lease
incorporating the provisions of this Paragraph.


 


10.           Demising
Work.  The Premises is not currently
separately demised from the remaining space in the Building (the “Remaining
Space”). Landlord, at Landlord’s sole cost and expense, shall cause the
Premises to be separately demised from the remaining space in the Building in
accordance with the specifications set forth in Schedule 4;
provided, however, Landlord shall have the option to perform such demising
work, which shall include erecting partitions and separating utilities and
services (the “Demising Work”) at anytime during the Term hereof.  Tenant hereby acknowledges that the Demising
Work shall be performed while Tenant is in occupancy of the Premises, and
Landlord’s actions in connection with such Demising Work shall in no way
constitute a constructive eviction of Tenant or entitle Tenant to any abatement
of rent.  Landlord shall have no
responsibility or for any reason be liable to Tenant for any direct or indirect
injury to or interference with Tenant’s business arising from the performance
of the Demising Work, nor shall Tenant be entitled to any compensation or
damages from Landlord for any inconvenience or annoyance occasioned by such


 


62





















 


construction or Landlord’s
actions in connection with such construction. 
Landlord shall use commercially reasonable efforts to not unreasonably
interfere with Tenant’s use and enjoyment of the Premises during such
construction.  This provision shall no
longer be applicable in the event Tenant exercises the Expansion Option
pursuant to Paragraph 9 above.


 


11.           Roof-top
Access.  Landlord hereby agrees that
Tenant shall have non-exclusive access to and use of a portion of the Building
roof for Tenant’s communication equipment, the location of which shall be
reasonably agreed upon by Landlord free of charge during the Term of this
Lease.  In the event Tenant wishes to
place communication equipment on the roof, it shall be (i) screened in a
manner and design acceptable to Landlord in its sole but reasonable discretion,
(ii) installed and maintained in compliance in all aspects with all
applicable codes, (iii) subject to Landlord’s approval on use and method
of attachment, and the use of Landlord’s roof license management company, and (v) at
Tenant’s sole cost and expense, including all reasonable consulting and
administrative fees associated with the use of Landlord’s roof license
management company.  In the event Tenant
wishes to place communication equipment on the roof, Tenant shall execute a
license agreement substantially in the form attached to this Lease as Exhibit F.


 


12.           Force
Majeure.  Landlord’s
and Tenant’s time to perform their respective obligations under this Lease
because of, from or through acts of God, strikes, lockouts, labor difficulties,
explosions, sabotage, accidents, riots, civil commotions, acts of war, results
of any warfare or warlike conditions in this or any foreign country, fire and
casualty, Legal Requirements or other similar causes beyond the reasonable
control of Landlord or Tenant, as the case may be (hereinafter a “Force Majeure
Event”), shall be extended by the period of such delay or such prevention which
shall be deemed added to the time herein provided for the performance of any
such obligation.  Notwithstanding the
foregoing, Tenant’s failure to pay Base Rent or any other sums due under the
Lease shall not be excused by any Force Majeure Event.


 


13.           Damages.  Notwithstanding anything to the contrary
contained in the Lease, in no event shall either party be liable under the
Lease for any indirect, incidental, consequential, special, reliance or
punitive damages, including without limitation damages for lost profits, whether
or not said party has been advised of the possibility of such damages, except
that no such limitation shall be applicable to damages caused by Tenant, its
employees, agents, contractors, licensees, subtenants, invitees, affiliates,
successors or assigns in connection with Tenant’s obligations pursuant to
Sections 27 and 33 of the Lease.


 


63





















 


EXHIBIT A


 


PREMISES


 


[to be attached]


 


64





















 


EXHIBIT A-1


 


TENANT’S ADDITIONAL
PARKING


 


[to be attached]


 


A-1





















EXHIBIT B


 


VERIFICATION LETTER


 


K.P. Sports, Inc.,
a Maryland corporation, trading as Under
Armour Performance Apparel (“Tenant”), hereby certifies that it has
entered into a Lease with THE REALTY
ASSOCIATES FUND V, L.P., a Delaware limited partnership (“Landlord”)
and verifies the following information as of the
        day of
                  ,
20   :


 


	
  Address of
  Premises:

  	
   

  	
  1010 Swan Creek Drive

  
	
   

  	
   

  	
  Baltimore, MD 21226

  
	
  Leasable Area of
  Premises:

  	
   

  	
  176,035

  
	
  Commencement
  Date:

  	
   

  	
  June 1, 2004

  
	
  Lease
  Termination Date:

  	
   

  	
  May 31, 2009

  
	
  Initial Base
  Rent:

  	
   

  	
  $57,944.85 (Monthly)

  
	
  Billing Address
  for Tenant:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  	
   

  
	
  Telephone
  Number:

  	
   

  	
   

  	
   

  
	
  Federal Tax ID
  No.:

  	
   

  	
   

  	
   

  



 


Tenant acknowledges and agrees that all tenant
improvements Landlord is obligated to make to the Premises, if any, have been
completed to Tenant’s satisfaction, that Tenant has accepted possession of the
Premises, and that as of the date hereof there exist no offsets or defenses to
the obligations of Tenant under the Lease.


 


	
   

  	
  TENANT

  
	
   

  	
   

  
	
   

  	
  K.P. Sports, Inc.

  
	
   

  	
  A Maryland corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (PRINT
  NAME)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
  (PRINT
  NAME)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (PRINT
  NAME)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
  (PRINT
  NAME)

  	
   

  



 


	
  ACKNOWLEDGED AND AGREED TO:

  	
   

  
	
   

  	
   

  
	
  LANDLORD

  	
   

  
	
   

  	
   

  
	
  THE REALTY ASSOCIATES FUND V, L.P.,

  a Delaware limited partnership

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Realty Associates Fund V LLC, a Massachusetts

  limited liability company, general partner

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Realty Associates Advisors LLC, a Delaware

  limited liability company, Manager

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Realty Associates Advisors Trusts, a

  Massachusetts business trust, sole

  member

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Officer

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Realty Associates Fund V Texas Corporation, a Texas
  corporation, general partner

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Officer

  	
   

  	
   

  
								



 


B-1





















 


EXHIBIT B


 


VERIFICATION LETTER


 


K.P. SPORTS, INC.,
a Maryland corporation, trading as UNDER
ARMOUR PERFORMANCE APPAREL, a                          (“Tenant”),
hereby certifies that it has entered into a Lease with THE REALTY ASSOCIATES FUND V, L.P., a
Delaware limited partnership (“Landlord”) and verifies the following
information as of the         day of
                  ,
20   :


 


	
  Address of
  Premises:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Leasable Area of
  Premises:

  	
   

  	
   

  	
   

  
	
  Commencement
  Date:

  	
   

  	
   

  	
   

  
	
  Lease
  Termination Date:

  	
   

  	
   

  	
   

  
	
  Initial Base
  Rent:

  	
   

  	
   

  	
   

  
	
  Billing Address
  for Tenant:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  	
   

  
	
  Telephone
  Number:

  	
   

  	
   

  	
   

  
	
  Federal Tax ID
  No.:

  	
   

  	
   

  	
   

  



 


Tenant acknowledges and agrees that all tenant
improvements Landlord is obligated to make to the Premises, if any, have been
completed to Tenant’s satisfaction, that Tenant has accepted possession of the
Premises, and that as of the date hereof there exist no offsets or defenses to
the obligations of Tenant under the Lease.


 


	
   

  	
  TENANT

  
	
   

  	
   

  
	
   

  	
  K.P. SPORTS, INC.

  
	
   

  	
  A Maryland corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (PRINT
  NAME)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
  (PRINT
  NAME)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (PRINT
  NAME)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
  (PRINT
  NAME)

  	
   

  



 


[SIGNATURES
CONTINUE ON NEXT PAGE]


 


B-1





















 


	
  ACKNOWLEDGED AND AGREED TO:

  	
   

  
	
   

  	
   

  
	
  LANDLORD

  	
   

  
	
   

  	
   

  
	
  THE REALTY ASSOCIATES FUND V, L.P.,

  a Delaware limited partnership

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Realty Associates Fund V LLC,

  a Massachusetts limited liability company,

  general partner

  	
   

  
	
   

  	
  By:

  	
  Realty Associates Advisors LLC,

  a Delaware limited liability company,

  manager

  	
   

  
	
   

  	
  By:

  	
  Realty Associates Advisors Trusts,

  a Massachusetts business trust,

  sole member

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Officer

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Realty Associates Fund V Texas Corporation,

  a Texas corporation,

  general partner

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Officer

  	
   

  	
   

  
									



 


B-2





















 


RULES AND REGULATIONS


 


GENERAL RULES


 


Tenant shall faithfully observe and comply with the
following Rules and Regulations:


 


1.             Tenant
shall not alter any locks or install any new or additional locks or bolts on
any doors or windows of the Premises without obtaining Landlord’s prior written
consent.  Tenant shall bear the cost of
any lock changes or repairs required by Tenant.


 


2.             Access
to the Project may be refused unless the person seeking access has proper
identification or has a previously received authorization for access to the
Project.  Landlord and its agents shall
in no case be liable for damages for any error with regarding to the admission
to or exclusion from the Project of any person. 
In case of invasion, mob, riot, public excitement or other commotion,
Landlord reserves the right to prevent access to the Project during the
continuance thereof by any means it deems appropriate for the safety and
protection of life and property.


 


3.             No
cooking shall be done or permitted on the Premises, nor shall the Premises be
used for any improper, objectionable or immoral purposes.  Notwithstanding the foregoing, Underwriters’
Laboratory-approved equipment and microwave ovens may be used in the Premises
for heating food and brewing coffee, tea, hot chocolate and similar beverages
for employees and visitors of Tenant, provided that such use is in accordance
with all applicable federal, state and city laws, codes, ordinances, rules and
regulations; and provided further that such cooking does not result in odors
escaping from the Premises.


 


4.             No
boring or cutting for wires shall be allowed without the consent of
Landlord.  Tenant shall not install any
radio or television antenna, satellite dish, loudspeaker or other device on the
roof or exterior walls of the Building. 
Tenant shall not interfere with broadcasting or reception from or in the
Project or elsewhere.


 


5.             Landlord
reserves the right to exclude or expel from the Project any person who, in the
judgment of Landlord, is intoxicated or under the influence of liquor or drugs,
or who shall in any manner do any act in violation of any of these Rules and
Regulations.


 


6.             Tenant
shall store all its trash and garbage within the interior of the Premises or in
other locations approved by Landlord, in Landlord’s sole discretion.  No material shall be placed in the trash
boxes or receptacles if such material is of such nature that it may not be
disposed of in the ordinary and customary manner of removing and disposing of
trash in the vicinity of the Project without violation of any law or ordinance
governing such disposal.


 


7.             Tenant
shall comply with all safety, fire protection and evacuation procedures and
regulations established by Landlord or any governmental agency.


 


C-1





















 


PARKING RULES


 


1.             Tenant
shall not permit or allow any vehicles that belong to or are controlled by
Tenant or Tenant’s employees, suppliers, shippers, customers or invitees to be
loaded, unloaded or parked in areas other than those designated by Landlord for
such activities and at times approved by Landlord.  Users of the parking area will obey all
posted signs and park only in the areas designated for vehicle parking.  Tenant and its customers, employees, shippers
and invitees shall comply with all rules and regulations adopted by
Landlord from time to time relating to truck parking and/or truck loading and
unloading.


 


2.             Landlord
reserves the right to relocate all or a part of parking spaces within the
parking area.


 


3.             Landlord
will not be responsible for any damage to vehicles, injury to persons or loss
of property, all of which risks are assumed by the party using the parking
area.


 


4.             The
maintenance, washing, waxing or cleaning of vehicles in the parking area or
Common Areas is prohibited.


 


5.             Tenant
shall be responsible for seeing that all of its employees, agents, contractors
and invitees comply with the applicable parking rules, regulations, laws and
agreements.


 


6.             At
Landlord’s request, Tenant shall provide Landlord with a list which includes
the name of each person using the parking facilities based on Tenant’s parking
rights under this Lease and the license plate number of the vehicle being used
by that person.  Tenant shall provide
Landlord with an updated list within five (5) days after any part of the
list becomes inaccurate.


 


Landlord reserves the right at any time to change or
rescind any one or more of these Rules and Regulations, or to make such other
and further reasonable Rules and Regulations as in Landlord’s judgment may
from time to time be necessary for the management, safety, care and cleanliness
of the Project, and for the preservation of good order therein, as well as for
the convenience of other occupants and Tenants therein.  Landlord may waive any one or more of these Rules and
Regulations for the benefit of any particular Tenant, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations in
favor of any other Tenant, nor prevent Landlord from thereafter enforcing any
such Rules or Regulations against any or all Tenants of the Project.  Tenant shall be deemed to have read these Rules and
Regulations and to have agreed to abide by them as a condition of its occupancy
of the Premises.


 


C-2





















 


EXHIBIT D


 


[INTENTIONALLY OMITTED]


 


D-1





















 


 


EXHIBIT E


 


LETTER REGARDING RETAIL
SALES USE


 


(TO BE ATTACHED)


 


E-1





















 


EXHIBIT F


 


LICENSE AGREEMENT FOR
SATELLITE DISH


 


THIS LICENSE AGREEMENT FOR SATELLITE DISH (the “Agreement”)
is made as of this       day of          
20  , by and between                 
limited partnership (the “Licensor”), and                     
(the “Licensee”), a                        .


 


RECITALS


 


A.            This
Agreement is attached to and made a part of that certain Lease Agreement dated           
(“Lease”) by and between Licensee, as Tenant, and Licensor, as Landlord, for
the Lease by Licensee of approximately             
rentable square feet of space (the “demised Premises”) in the building located
at             (the “Building”),
all as more particularly described in the Lease.


 


B.            Under the
terms of the Lease, Licensor has the exclusive right to use or permit the use
of all or any portion of the roof of the Building for any purpose; Licensee
desires to use a portion of the roof space to maintain and operate thereon a
satellite dish and/or related microwave facilities, antennae and related
equipment, all as more particularly described in Exhibit A and Exhibit B
attached hereto and incorporated herein by this reference (the “Equipment
Location and Specifications”).


 


C.            Licensor
and Licensee desire to provide the terms and conditions for Licensee’s use of
the roof space as a location for an antenna and the equipment required for the
operation thereof.


 


NOW, THEREFORE, in consideration of the foregoing, the
sum of Ten Dollars ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Licensor and
Licensee, intending legally to be bound, hereby agree as follows:


 


1.             The
foregoing recitals are hereby incorporated herein and made a part hereof by
this reference.


 


2.             Satellite
Dish Equipment:  Permitted Uses.  Provided Licensee is not in default under the
terms and conditions of the Lease, Licensee’s agent, as approved by Licensor,
in Licensor’s sole discretion, will install and maintain, at the sole cost of
Licensee and Licensee may, at its own expense, operate on the roof of the
Building, a satellite dish and/or related microwave facilities and antenna as
specified in Exhibit A attached hereto, to be located as designated on Exhibit B
attached hereto (said equipment Is collectively referred to hereinafter as the “Satellite
Dish”).  The Satellite Dish shall be
deemed to be the Licensee’s Personal Property (as defined in the Lease) and to
the extent not inconsistent with this Agreement, the ownership, installation,
use and removal thereof shall be governed by the terms of the Lease applicable
to Licensee’s Personal Property.


 


3.             Licensor’s
Prior Approval.  Licensor may approve or
reject the installation and operation of the Satellite Dish within a reasonable
time after Licensee submits (i) plans and specifications for the Satellite
Dish (including size, location, height, weight and color); 


 


F-1





















 


(ii) copies of all
required governmental and quasi-governmental permits, licenses, special zoning
variances, and authorizations, all of which Licensee shall obtain at its own
cost and expense; and (iii) a policy or certificate of insurance
evidencing such insurance coverage as may reasonably be required by Licensor
for the installation, operation and maintenance of the Satellite Dish and
sufficient to cover, among other things, the Indemnities from Licensee to
Licensor as hereinafter provided. 
Licensor may withhold approval if the installation, operation or removal
of the Satellite Dish may (a) damage the structural integrity of the
Building; (b) unreasonably interfere with any service provided by
Licensor; (c) interfere with any zoning ordinances or other governmental
regulation applicable to the Building; or (d) reduce the amount of
leasable space (other than the Premises)
in the Building.  Licensee shall not be
entitled to rely on any such approval as being a representation by Licensor
that such installation and operation is permitted by or in accordance with any
governmental or quasi-governmental entity, authority or regulation.


 


4.             Installation.


 


(a)           Installation
and maintenance of the Satellite Dish shall be performed solely by Licensee’s
agent or its contractors, as approved by Licensor, in Licensor’s reasonable
discretion.  The Satellite Dish shall not
be located on top of any existing structure on the roof of the building.


 


(b)           Licensee
shall bear all costs and expenses incurred In connection with the installation,
operation and maintenance of the Satellite Dish.  If operation of the Satellite Dish shall
require electrical power Licensor may, at its sole option, install a separate
meter, at Licensee’s sole expense. 
Licensee shall pay the actual cost of all electricity used in the
operation of the Satellite Dish, all as determined by Licensor.


 


5.             Intentionally Omitted.


 


6.             Indemnification.  Licensee covenants and agrees that the
installation, operation, maintenance and removal of the Satellite Dish, or the
demised Premises with respect thereto, shall be solely at its own risk.  Licensee covenants and agrees absolutely and
unconditionally to indemnify, defend and hold Licensor harmless against all
claims, actions, damages, judgments, settlements, liability, costs and expenses
(including reasonable attorneys’ fees and expenses) in connection with death,
bodily or personal injury, damage to property or business or any other loss or
injury arising out of or related to the installation, operation, maintenance or
removal of the Satellite Dish.


 


7.             Termination
Rights.  Licensor may require Licensee,
at any time prior to the expiration of the Lease, to terminate the operation of
the Satellite Dish if it is causing physical damage to the structural integrity
of the Building, unreasonably interfering with any other service provided by
the Building, unreasonably interfering with any prior licensee of the roof, or
causing the violation of any condition or provision of the Lease or any law,
regulation or ordinance promulgated by any governmental or quasi-governmental
authority now or hereafter permitted to continue any similar use or
operation.  If, however, Licensee can
correct the damage or prevent said interference caused by the Satellite Dish to
Licensor’s satisfaction within thirty (30) days, Licensee may restore its
operation so long as Licensee promptly commences to cure such damage and
diligently pursues such cure to completion. 
If the Satellite Dish is not completely


 


F-2





















 


corrected and restored to
operation within thirty (30) days, Licensor, at its sole option, may require
that the Satellite Dish be removed at Licensee’s expense.  If Licensor or any other tenant in the
Building shall require that the Satellite Dish be moved to another location on
the roof, either to accommodate Licensor or to provide other tenants in the
Building with access to the roof for placement of other antennas, other
electrical equipment or other Licensor-approved uses or installations, Licensor
shall have the right, at its sole expense, to relocate the Satellite Dish to
another place on the roof.


 


8.             Removal
of the Satellite Dish, At the expiration or earlier termination of the Lease or
upon termination of the operation of the Satellite Dish as provided hereinabove
in Section 7, the Satellite Dish and all cabling and other equipment
relating thereto shall be removed from the Building at Licensee’s sole
cost.  Provided
Licensee is not in default under the terms and conditions of the Lease,
Licensee’s agent, as approved by Licensor, in Licensor’s sole discretion, will
remove and dispose of the Satellite Dish otherwise.  Licensee hereby authorizes
Licensor to remove and dispose of the Satellite Dish and charge Licensee for
all costs and expenses incurred. 
Licensee agrees that Licensor shall not be liable for any property
disposed of or removed by Licensor. 
Licensee’s obligation to perform and observe this covenant shall survive
the expiration or earlier termination of the Term of this Agreement,


 


9.             Time of
the Essence.  Time shall be of the
essence of the Licensee’s obligations hereunder.


 


10.           Entire
Agreement.  This Agreement contains the
entire agreement of the parties hereto and neither Licensor nor any agent or
representative of Licensor has made or is making, and Licensee, in executing
and delivering this Agreement, is not relying upon any warranties,
representations, promises or statements whatsoever.  No waiver or modification of any provision of
this Agreement shall be effective unless expressed in writing and signed by all
parties hereto.


 


11.           Successors
and Assigns.  The obligations of this
Agreement shall bind and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.


 


12.           Notices.  All notices hereunder shall be given by hand
delivery or by certified mail, return receipt requested, and shall be deemed
delivered upon receipt or refusal to accept delivery, if addressed as noted in
the Lease.


 


13.           Governing
Law.  This Agreement shall be construed
and enforced in accordance with the laws of the State of Maryland.


 


F-3





















 


IN WITNESS WHEREOF, Licensor and Licensee have duly
executed this Agreement under seal as of the day and year first above written.


 


	
   

  	
  LICENSOR:

  
	
  WITNESS/ATTEST:

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LICENSEE:

  
	
  WITNESS/ATTEST:

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
										



 


F-4





















 


SCHEDULE 1


 


INTENTIONALLY OMITTED


 


1





















 


SCHEDULE 2


 


OFFICE WORK


 


[TO BE ATTACHED]


 


1





















 


SCHEDULE 3


 


CODE COMPLIANCE WORK


 


[TO BE ATTACHED]


 


1





















 


SCHEDULE 4


 


DEMISING WORK


 


[TO BE ATTACHED]


 


1





















 


 


EXHIBIT A


 


PREMISES


 





 





















 


SCHEDULE 2


 


OFFICE WORK


 


In accordance with the provisions of the Standard
Industrial Lease between The Realty Associates, Fund V, L.P.  and K.P. 
Sports, A Maryland Corporation, trading as Under Armour Performance
Apparel, specifically set forth in Paragraphs 1(a) and 1(b) of The
Addendum, the Landlord hereby agrees to perform the following Landlord’s “Cosmetic
Repairs and Office Work” at its sole cost and expense, prior to Tenant’s
occupancy of the Premises:


 


1)             Clean
where needed, repair and/or replace stained or damaged carpeting and tile, as
necessary, with equivalent weight/grade material.


2)             Repair
and refinish any damaged GWB wall surfaces.


3)             Repaint
any repaired wall surfaces as determined by Landlord and Tenant.


4)             Replace
any stained, damaged or missing ceiling tiles as necessary.


5)             Replace/repair
any non-functional lighting fixtures and tubes to match existing.


6)             Modify
all exit and emergency lighting to conform to appropriate codes (further
detailed in Schedule 3 “Code Compliance Work”).


7)             Service,
test and certify existing passenger elevator is in working condition in
accordance with appropriate codes.


8)             Deliver
all heating, ventilating and air conditioning systems (HVAC) in good working
order.


 





















 


Exhibit E, Schedule 3


CODE COMPLIANCE WORK


 


In accordance with the provisions of the Standard
Industrial Lease between The Realty Associates Fund V, L.P.  and K.P. Sports, a Maryland Corporation,
trading as Under Armour Performance Apparel, specifically set forth in
Paragraphs 1(a) and 10 of the Addendum, the Landlord hereby agrees to
perform the following Landlord’s “Code Compliance Work” as its sole cost and
expense, prior to Tenant’s occupancy of the Premises:


 


I)             Fire
Protection Systems.     Per NFPA and local code –
Installation of supplemental fire protection and modifications to the existing
system as follows:


 


A)           Compliance
with the NFDA/FM Guidelines for suspended conduit racks, to include heat
barriers as needed.


 


B)            Modifications
to the existing ESFR Roof Level System to code.


 


C)            Testing,
as required in compliance with appropriate codes and Anne Arundel County.


 


D)            All work
to be based on current fire pump test (within 6 month period).


 


E)            Upgrade
and modifications to existing fire alarm annunciation systems to incorporate
alterations detailed above.


 


II)            Mechanical/Plumbing
Systems.        Per local code – Modifications and/or additions
to the existing HVAC and plumbing systems as follows:


 


A)           Miscellaneous
heating, venting and air conditioning (HVAC) equipment repairs to gas-fired,
roof and floor mounted equipment serving the proposed warehouse and office
Premises, to maintain heating and ventilation standards detailed in the
Spears/Votta calculations dated November 18, 2003 and confirmed by Smith
Mechanical in correspondence dated 11/21/03. 
All systems to be tested and balanced and include automatic controls.


 


B)            All
existing exhaust fans serving the office and warehouse toilet rooms, electric
rooms and elevator machine room will be serviced or replaced to make 100%
operational.


 





















 


C)            Domestic
water systems to be flushed and cleaned per requirements of Anne Arundel County
Health Dept.


 


D)            Testing
as required in compliance with appropriate codes and Anne Arundel County.


 


III)           Electrical
and Lighting Systems.  Modifications
and/or additions to the existing electrical and lighting systems as follows:


 


A)           Warehouse
lighting fixtures must be added or relocated to meet the required intensity and
distribution in areas where walls and ceilings are to be removed.  New fixtures shall be equal to existing
fixtures on site.


 


B)            Lighting
intensities shall conform to the levels currently in the existing warehouse
area.


 


C)            Modifications
to the existing electrical system, as necessary, to accommodate upgrades to the
existing fire alarm annunciation system.


 


D)            Re-wiring
or supplemental battery systems, as necessary, to exit and emergency lighting
as required by code.


 


Note:      Fire
pump is already on a separately metered direct power feed from the transformer.


 





















 


SCHEDULE 4


 


DEMISING WORK


 


In accordance with the provisions of the Standard
Industrial Lease between The Realty Associates, Fund V, L.P. and K.P. Sports, A
Maryland Corporation, trading as Under Armour Performance Apparel, specifically
set forth in Paragraph 10 of The Addendum, the Landlord hereby agrees to
perform the following demising and demolition work at its sole cost and
expense, prior to Tenant’s occupancy of the Premises:


 


Demolition.


 


1)             Landlord
shall remove all existing freezer/cooler units, walls and partitions, including
suspended ceilings and any structural supports noted on the attached plan.


 


2)             Landlord
shall remove any concrete curbs associated with the above freezer/cooler
partitions and repair any associated floor damage to a standard consistent with
existing warehouse floors.  In addition,
Landlord will grind down or remove any existing bolts and repair damage to
existing warehouse floor.


 


3)             Any
existing lighting and sprinkler systems shall be replaced and/or relocated to
provide fire protection and lighting consistent with the appropriate codes and
existing warehouse space.


 


4)             Landlord
shall clear walls off mezzanine deck but leave the deck and mechanicals (i.e.,
sprinkler, electric, lights, etc).  If at
some future date Tenant wishes to move or remove structure, Landlord shall
disassemble, make floor repairs, and remove at Tenant’s option with 90 days’
notice.


 


Demising.


 


1)             Landlord
shall create a one hour rated demising wall in compliance with appropriate
local codes in the area noted on the attached plan.  By using the existing freezer/cooler partition,
and additional wall construction, as necessary.


 


2)             All
utilities serving the Premises shall be separately metered or metered so as to
permit accurate billing for such services as set forth in Paragraph 8 of the
Lease Agreement.


 


3)             All
necessary plans and permits shall be the responsibility of the Landlord, in
compliance with all appropriate codes.


 





















 


SCHEDULE 4-1