Document:

EXHIBIT 10.48

 

INDUSTRIAL WAREHOUSE

LEASE AGREEMENT

 

 

between

 

 

CENTERPOINT II LLC,

a Michigan limited liability company,

 

as Landlord,

 

 

and

 

 

 

BARE ESCENTUALS BEAUTY, INC.,

a Delaware corporation,

 

as Tenant

 

 

	
  ARTICLE
  I - FUNDAMENTAL
  LEASE PROVISIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Fundamental
  Lease Provisions.

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II - PREMISES

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Grant.

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.02

  	
  Early
  Occupancy.

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III - TERM

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Term.

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 3.02

  	
  Renewal
  Options.

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV - USE AND
  OCCUPANCY

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Use.

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 4.02

  	
  Rules
  and Regulations.

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 4.03

  	
  Taxes
  and Assessments.

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 4.04

  	
  Laws
  and Ordinances.

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 4.05

  	
  Environmental
  Compliance.

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 4.06

  	
  Licenses
  and Permits.

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 4.07

  	
  Quiet
  Enjoyment.

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 4.08

  	
  Prohibitions.

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V - RENT

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Base
  Rent.

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 5.02

  	
  Additional
  Rent.

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 5.03

  	
  Payment
  of Additional Rent.

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 5.04

  	
  Service
  Charge and Late Penalty.

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 5.05

  	
  Triple
  Net Lease.

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI - UTILITIES AND
  SERVICES

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII - MAINTENANCE
  AND REPAIR; ALTERATIONS

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Maintenance
  and Repair.

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 7.02

  	
  Alterations;
  Mechanics’ Liens.

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII - SEVERABLE
  PROPERTY

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Severable
  Property.

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 8.02

  	
  Removal.

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX - ASSIGNMENT AND
  SUBLETTING

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Tenant’s
  Assignment and Subletting.

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 9.02

  	
  Tenant’s
  Transfer Rights.

  	
  20

  

 

i

 

	
  Section 9.03

  	
  Transfer
  or Pledge by Landlord.

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X - CASUALTY AND
  CONDEMNATION

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Casualty,
  Damage or Destruction.

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 10.02

  	
  Eminent
  Domain.

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XI - INSURANCE AND
  INDEMNIFICATION

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 11.01

  	
  Insurance.

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 11.02

  	
  Indemnification.

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XII - DEFAULT AND
  REMEDIES

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 12.01

  	
  Default
  Provisions.

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 12.02

  	
  Bankruptcy
  or Insolvency.

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 12.03

  	
  Additional
  Rights of Landlord.

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XIII - ESTOPPEL
  CERTIFICATES

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XIV -
  SUBORDINATION; ATTORNMENT;TITLE

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XV - TERMINATION
  AND HOLDING OVER

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XVI - DECLARATION
  OF CENTERPOINT BUSINESS PARK

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XVII - RIGHT OF
  FIRST OFFER

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XVIII - SIGNS

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XIX - WAIVER OF
  SUBROGATION

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XX - PARKING

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XXI - LANDLORD’S
  WORK/TENANT IMPROVEMENTS

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XXII -
  MISCELLANEOUS

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 22.01

  	
  No
  Merger.

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 22.02

  	
  Notices
  and Other Instruments.

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 22.03

  	
  Surrender.

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 22.04

  	
  Separability;
  Binding Effect; Governing Law; Time of the Essence.

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 22.05

  	
  Submission
  of Lease.

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 22.06

  	
  Waiver
  of Jury Trial.

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 22.07

  	
  Interpretation.

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 22.08

  	
  Counterparts.

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 22.09

  	
  Landlord’s
  and Tenant’s Liability.

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 22.10

  	
  Brokerage
  Commission.

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 22.11

  	
  Amendments
  and Modifications.

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 22.12

  	
  Additional
  Rent.

  	
  35

  

 

ii

 

	
  Section 22.13

  	
  Options.

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 22.14

  	
  Memorandum
  of Lease.

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 22.15

  	
  Tenant
  Authority.

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 22.16

  	
  Currency.

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 22.17

  	
  Exhibits.

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XXIII - RIGHT OF
  PURCHASE

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XXIV - CONTINGENCY

  	
  36

  

 

iii

THIS
INDUSTRIAL WAREHOUSE LEASE AGREEMENT, dated as of January 31, 2007 (this “Lease”), is made between
CENTERPOINT II LLC, a Michigan limited liability company (“Landlord”),
and BARE ESCENTUALS BEAUTY, INC., a Delaware corporation (“Tenant”).

 

ARTICLE I - FUNDAMENTAL LEASE PROVISIONS

 

Section
1.01         Fundamental Lease Provisions.   This
lease contains the following fundamental provisions and definitions:

 

	
  (a)

  	
  ADDRESS
  OF LANDLORD:

  	
   

  	
  c/o
  KIRCO

  
	
   

  	
   

  	
   

  	
  4200
  Regent Street, Suite #200

  
	
   

  	
   

  	
   

  	
  Columbus,
  Ohio 43219

  
	
   

  	
   

  	
   

  	
  Attn:
  Cliff Aiken

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  with
  a copy to:

  	
   

  	
  c/o
  KIRCO

  
	
   

  	
   

  	
   

  	
  101
  West Big Beaver Road, Suite 200

  
	
   

  	
   

  	
   

  	
  Troy,
  Michigan 48084-5255

  
	
   

  	
   

  	
   

  	
  Attn:
  Steve Szymansky, CFO

  
	
   

  	
   

  	
   

  	
   

  

 

or
such other address as may from time to time be designated by Landlord in
writing.

 

	
  (b)

  	
  ADDRESS
  OF TENANT:

  	
   

  	
  Bare
  Escentuals Beauty, Inc

  
	
   

  	
   

  	
   

  	
  71
  Stevenson Street, 22nd Floor

  
	
   

  	
   

  	
   

  	
  San
  Francisco, California 94105

  
	
   

  	
   

  	
   

  	
  Attn:
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
  with
  a copy to:

  	
   

  	
  Bare
  Escentuals Beauty, Inc.

  
	
   

  	
   

  	
   

  	
  71
  Stevenson Street, 22nd Floor

  
	
   

  	
   

  	
   

  	
  San
  Francisco, California 94105

  
	
   

  	
   

  	
   

  	
  Attn:
  Vice President of Operations

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  And
  to  

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Drinker
  Biddle & Reath, LLP

  
	
   

  	
   

  	
   

  	
  191
  North Wacker Drive, Suite 3700

  
	
   

  	
   

  	
   

  	
  Chicago,
  Illinois 60606-1698

  
	
   

  	
   

  	
   

  	
  Attn:
  Barnett P. Ruttenberg, Esq.

  

 

or
such other address as may from time to time be designated by Tenant in writing.

 

(c)           PREMISES:  Approximately 301,180 square feet, as
depicted on Exhibit “A” attached hereto, of the total 512,133 square feet of
the Building commonly known as Centerpoint Building #2.

 

(d)           BUILDING:  The Building in which the Premises is
located, the common address of which is 5271 Centerpoint Parkway, Obetz, Ohio
43125, and which is generally

 

1

 

known
as Centerpoint Building #2. The legal description of the parcel on which the
Building is situated is set forth on Exhibit “B” attached hereto.

 

(e)           PROPERTY:  The land, improvements and appurtenances, of
which the Premises and Building are a part, generally known as Centerpoint
Business Park.

 

(f)            TERM:  The period of time consisting of ten (10)
years, commencing June 1, 2007 (the “Commencement Date”) and expiring May 31,
2017, plus the period of time between April 1, 2007 (the “Delivery Date”) and
the Commencement Date, unless extended or sooner terminated as set forth
elsewhere herein.

 

(g)           RENEWAL TERM OPTIONS:  Provided Tenant shall not be in default
hereunder beyond any applicable notice and cure period, Tenant shall have the
right to extend the Term of this Lease by two (2) consecutive five (5) year
periods.

 

(h)           RENT: 
All sums, moneys or payments required to be paid by Tenant to Landlord
pursuant to this Lease, including, without limitation, Base Rent and Additional
Rent.

 

(i)            BASE RENT:  Tenant shall pay to Landlord as Base Rent
under this Lease the Annual Base Rent set forth below, which shall be payable
in equal monthly installments in the amounts set forth below, in advance,
without notice, demand, setoff or deduction.

 

Term:

 

	
  Months

  	
   

  	
  Square Footage

  	
   

  	
  $/Sq. Ft.

  	
   

  	
  Monthly

  Installments

  	
   

  	
  Annual

  Base Rent

  	
   

  
	
  1-12

  	
   

  	
  *301,180

  	
   

  	
  $

  	
  3.10 (NNN)

  	
   

  	
  $

  	
  64,583.33

  	
   

  	
  $

  	
  775,000.00

  	
   

  
	
  13-60

  	
   

  	
  301,180

  	
   

  	
  $

  	
  3.10 (NNN)

  	
   

  	
  $

  	
  77,804.83

  	
   

  	
  $

  	
  933,658.00

  	
   

  
	
  61-120

  	
   

  	
  301,180

  	
   

  	
  $

  	
  3.30 (NNN)

  	
   

  	
  $

  	
  82,824.50

  	
   

  	
  $

  	
  993,894.00

  	
   

  

 

*Base rent for the initial year of the Term is based upon square footage
of 250,000.

 

	
  Renewal
  Options:

  	
  Base
  Rent during the Renewal Terms, as hereinafter defined, shall be at
  ninety-five (95%) of the then-current fair market rate for property similar
  in use to the Premises, determined pursuant to Section 3.02 hereof; provided,
  that in no event shall Base Rent for any Renewal Term be less than Base Rent
  due under the final year of the immediately preceding Term; and provided,
  further, that in no event shall Base Rent for any Renewal Term increase by
  more than ten percent (10%) over the Base Rent due under the final year of
  the immediately preceding Term.

   

   

  

 

(j)            ADDITIONAL RENT:  Tenant’s Proportionate Share of Landlord’s
expenses related to owning and operating the Property, all as more fully
described in ARTICLE V.

 

(k)           RENT COMMENCEMENT DATE:  June 1, 2007.

 

(l)            SECURITY DEPOSIT:  None.

 

2

 

(m)          FINANCIAL STATEMENTS: Upon Landlord’s
written request therefore and upon Landlord’s execution of any reasonable
confidentiality agreement required by Tenant, Tenant shall provide Landlord
with a copy of Tenant’s then current audited financial statements; provided,
however, that if Tenant or its parent entity is a publicly traded company, the
provisions of this Section 1.01(m) shall not apply.

 

(n)           TENANT’S PROPORTIONATE SHARE:  58.8%

 

(o)           PERMITTED USES:  Warehousing/Distribution/Office

 

(p)           BROKERS:  Landlord and Tenant represent that Colliers
Turley Martin Tucker is the only broker representing the parties hereto. Landlord
shall be responsible for all commissions due such broker hereunder.

 

(q)           GUARANTOR:  Bare Escentuals, Inc., a Delaware
corporation, pursuant the terms of the form of Guaranty attached hereto as
Exhibit “K” and incorporated herein by reference.

 

	
   

  	
  (r)

  	
  EXHIBITS:

  	
  A.
  Depiction of Premises

  
	
   

  	
   

  	
  B.
  Legal Description of Property

  
	
   

  	
   

  	
  C.
  Declaration of Centerpoint Business Park (Rules and Regs)

  
	
   

  	
   

  	
  D.
  Confirmation of Lease Commencement and Termination Dates

  
	
   

  	
   

  	
  E.
  List of Severable Property

  
	
   

  	
   

  	
  F.
  Form of Memorandum of Lease

  
	
   

  	
   

  	
  G.
  Tenant Improvements

  
	
   

  	
   

  	
  H.
  Form of Nondisturbance Agreement

  
	
   

  	
   

  	
  I  Title Insurance Commitment

  
	
   

  	
   

  	
  J  Property Management Services

  
	
   

  	
   

  	
  K
   Form of Guaranty

  

 

(s)           PARKING SPACES:  The Premises shall include one hundred
ninety-five (195) automobile parking spaces and approximately fifty-six (56)
trailer parking spaces adjacent to the Premises, as depicted on Exhibit “A”
hereto; provided, that twenty (20) of such trailer parking shall be contained
in a fenced-in area, as depicted on Exhibit “A” hereto.

 

(t)            LANDLORD’S WORK:  The work to be performed by Landlord pursuant
to and in accordance with Exhibit H to prepare the Premises for occupancy by
Tenant.

 

Each
reference in this Lease to any of the basic terms and definitions contained in
this Section 1.01 shall be construed to incorporate into such reference all of
the terms and definitions set forth above.

 

ARTICLE II - PREMISES

 

Section
2.01         Grant.  In
consideration of the rents, covenants, agreements and conditions hereinafter
provided to be paid, kept, performed and observed, Landlord leases to Tenant
and Tenant hereby leases from Landlord the Premises described in Section
1.01(c). Tenant shall have

 

3

 

and
hold the Premises for and during the Term described in Section 1.01(f), subject
to the payment of the Rent and to the full and timely performance by Tenant of
the covenants and conditions hereinafter set forth; provided, that if Landlord
fails to complete the Tenant Improvements, as hereinafter defined, in
accordance with Article XXI hereof and deliver the Premises by the Delivery
Date, Tenant’s responsibility to pay Base Rent shall abate on a day for day
basis beginning on the date Tenant opens for business in the Premises;
provided, further, that in the event Landlord fails to deliver the Premises on
or before October 1, 2007, Tenant shall have the right to terminate this lease
by delivering written notice of such election to Landlord within five (5)
business days of such date. Notwithstanding the foregoing, if Landlord’s
delivery of the Premises is delayed, hindered or prevented by reason of
governmental restrictions, strikes, fire or any other reason beyond its control
other than such as can be satisfied by substitution of materials or payment of
money, its performance under this Section 2.01 and the delivery of the Premises
shall be excused for the period of delay, and the period for Landlord’s
delivery of the Premises shall be extended on a day for day basis after the end
of the period of such delay.

 

Section
2.02         Early Occupancy.  Landlord
consents to and grants Tenant’s occupancy of the Premises at no cost to Tenant
as of the day immediately following the granting of the Approval, as defined in
Article XXIV hereof, for the purposes of setting up, racking, material handling
equipment and performing other improvements to the Premises required by Tenant;
provided, that Tenant shall be bound by all terms of this Lease during such
early occupancy except for the payment of Base Rent which shall not commence
until the Rent Commencement Date; and provided, further, that such early
occupancy by Tenant shall in no way interfere with or impede Landlord’s Work.

 

ARTICLE III - TERM

 

Section
3.01         Term.  The
provisions of this Lease shall be effective as of the date of this Lease. However,
Tenant’s (a) right to the use and occupancy of the Premises shall begin on the
Commencement Date and shall continue for the remainder of the Term, and (b)
obligation to pay Rent shall begin on the Rent Commencement Date, as set forth
in Section 1.01(k), and shall continue for the remainder of the Term. Promptly
upon determination of the Commencement Date by Landlord, Landlord and Tenant
shall execute a memorandum setting forth the commencement and expiration dates
of this Lease in the form and substance attached hereto as Exhibit “D”.

 

Section
3.02         Renewal Options.  Provided
Tenant has paid Landlord all Rent and other amounts owed under this Lease and
is not otherwise in default of any obligation of Tenant hereunder, Tenant shall
have the Renewal Options set forth in Section 1.01(g) (the periods set forth
therein being referred to as “Renewal Term(s)”). Each Renewal Option shall be
exercised, if at all, by Tenant giving written notice thereof to Landlord not
less than one hundred eighty (180) days prior to the end of the Term or then
current Renewal Term (e.g., the First Renewal Option shall be exercised by
Tenant delivering notice to Landlord on or before November 1, 2016 and the
Second Renewal Option shall be exercised by Tenant delivering notice to Landlord
on or before November 1, 2021). In the event Tenant fails to deliver a notice
of renewal by such date(s), Tenant’s right to renew for each Renewal Term shall
continue for a period of ten (10) business days after Tenant’s receipt of
written notice from Landlord advising Tenant of its failure to exercise the
then applicable Renewal Option. In the event Tenant continues to fail to

 

4

 

exercise
such Renewal Option within the additional time period, such Renewal Option and
all successive Renewal Options, if any, shall terminate and be of no further
force or effect.

 

In
the event Tenant exercises either or both of its Renewal Options, the
respective duties of Landlord and Tenant shall be the same as provided in this
lease for the initial Term, except that Base Rent during the Renewal Term(s)
shall be as provided in Section 1.01(i), and nothing contained in this Lease
shall be construed as providing Tenant with any additional Renewal Options
beyond the periods provided for herein. In the event Tenant exercises either or
both of its Renewal Options, the definition of “Term” shall automatically be
amended to include such Renewal Terms. Tenant’s failure to exercise any Renewal
Option shall cause all successive Renewal Options, if any, to be forfeited. Further,
it is expressly acknowledged and agreed that all Renewal Options granted under
this Lease are personal to the person or entity named as Tenant hereunder and
that such Renewal Options shall terminate upon any assignment or subletting of
Tenant’s interest hereunder and shall not inure to the benefit of any
successor, assignee or subtenant of Tenant, except those approved in writing by
Landlord and those expressly permitted pursuant to Section 9.01 below. In the
event Tenant exercises the First Renewal Option, Tenant shall be entitled to a
renovation allowance of $2.00 per square foot for Landlord-approved
improvements to the Premises made in the first two (2) years of the First
Renewal Term; provided, that such renovation allowance shall be taken into
consideration when the Fair Market Rent determination is made with such
amortized over the length of the First Renewal Term and passed through to
Tenant on a yearly basis in the same amount that is capitalized or amortized in
such year by Landlord.

 

Landlord
shall provide notice to Tenant of its determination of the Fair Market Rental
within sixty (60) days after Tenant exercises its right to extend the Term. Within
ten (10) days after receiving such determination (“Tenant’s Review Period”),
Tenant shall irrevocably elect, in writing, to do one of the following: (i)
accept Landlord’s determination, or (ii) object to Landlord’s determination and
with such objection set forth Tenant’s determination of the Fair Market Rental.
If Tenant so objects, Landlord and Tenant shall use good faith to agree upon
such Fair Market Rental.

 

A.            If Landlord and Tenant are unable to
agree on the Annual Base Rent for the Renewal Term and Tenant requests
arbitration, then within ten (10) days thereafter, each of Landlord and Tenant
shall designate an independent real estate broker duly licensed in the state in
which the Premises are located and having not less than ten (10) years
experience leasing commercial properties in the market area (i.e., within a
radius of five (5) miles of the Premises) and shall notify each other in
writing of such designation. Within the next ten (10) days, such brokers shall
designate a third independent real estate broker with the same credentials and
reasonably acceptable to both Landlord and Tenant and shall notify Landlord and
Tenant of such designation. After their appointment, all three such brokers
shall be directed to determine, independently, the Fair Market Rent in
accordance with this Section. Within sixty (60) days after the designation of
the third broker, each of the three brokers shall submit its written
determination of the Fair Market Rent in accordance with this Section to both
Landlord and Tenant. If the

 

5

 

Annual
Base Rent determined by any two or all three of such brokers is identical, then
the Annual Base Rent for purposes of this Renewal Term shall be such identical
amount; provided, that in no event shall Annual Base Rent be less than that
which was due under the final year of the immediately preceding Term; and
provided, further, that in no event shall Annual Base Rent for any Renewal Term
increase by more than ten percent (10%) over the Base Rent due under the final
year of the immediately preceding Term. If the Annual Base Rent as determined
by each such broker is different from the others, but two of such
determinations are within five percent (5%) of each other, then the Annual Base
Rent shall be the arithmetic mean of such two amounts; provided, that in no
event shall Annual Base Rent be less than that which was due under the final
year of the immediately preceding Term. In all other cases, the highest and
lowest of such determination shall be disregarded and the Annual Rent shall be
equal to the middle, or remaining, determination; provided, that in no event
shall Annual Base Rent be less than that which was due under the final year of
the immediately preceding Term; and provided, further, that in no event shall
Annual Base Rent for any Renewal Term increase by more than ten percent (10%)
over the Base Rent due under the final year of the immediately preceding Term.

 

B.            Except if the Annual Base Rent so
determined is within five percent (5%) of the Annual Base Rent determined by
Landlord as provided above (the “Threshold Amount”), Landlord shall pay all
costs associated with the broker designated by Landlord, and Tenant shall be
all costs associated with the broker designated by Tenant. Landlord and Tenant
shall share equally all costs associated with the third broker. In the event
the Annual Base Rent determined by the immediately preceding paragraph does not
vary from the Annual Base Rent established by Landlord by more than the
Threshold Amount, then Tenant shall pay all costs associated with all three
brokers or salespersons.

 

As
used herein the term “ Fair Market Rent” shall mean the annual rental rate, or
rates, per square foot of rentable area of the Premises for the leasing of
comparable space in the market (i.e., within a radius of five (5) miles of the
Premises) to comparable tenants, taking into consideration, among other things,
the following:  (a) the then total amount
of space leased under this Lease; (b) the length of the Renewal Term; (c) the
location of the Premises; (d) the credit standing of Tenant; (e) the finish,
quality and condition of the Premises; (f) leasing commissions, (g) all
economic incentives and concessions then being offered by landlords in
connection with leases of such comparable space, (h) the commencement date of the
Renewal Term and (i) all periodic adjustments (e.g., a CPI adjustment).

 

If
Tenant objects to Landlord’s determination of Fair Market Rental in accordance
with the above, during any period of the extension period that the Fair Market
Rental is being determined as per the above, Tenant shall pay annual Base Rent
equal to 125% of the annual Base Rent at the highest rate during the preceding
Term and, after the Fair Market Rental is determined, if

 

6

 

Tenant
has underpaid Rent for said period, Tenant shall pay Landlord the amount due
within thirty (30) days after demand, and if Tenant overpaid Rent, a credit
shall be given Tenant against the next Rent coming due under the Lease.

 

ARTICLE IV - USE AND OCCUPANCY

 

Section
4.01         Use.

 

The Premises shall be used
by Tenant only for the purposes set forth in Section 1.01(o) above or for any
other lawful purpose to which Landlord consents. Tenant shall not use or permit
the use of the Premises in any manner that will tend to create waste or a
nuisance. Tenant shall keep all its mechanical apparatus free of noise and
vibration which may be transmitted beyond the confines of the Property and
shall not cause or permit objectionable odors to emanate or be dispelled from
the Property. Tenant shall have access to the Premises 24 hours per day, 7 days
per week.

 

Landlord
recognizes that Tenant’s use of the Premises will be for the warehousing,
repackaging and distribution of skin care products and that any adverse odor
can be deleterious to the marketability of the products and the ultimate user. Landlord
shall strictly enforce the use of the adjoining space in the Building of which
the Premises are a part to not lease any portion thereof to a tenant whose use
would permit objectionable odors to emanate either directly or indirectly
therefrom. To that end, Tenant will respond to an inquiry by Landlord, if
given, at Landlord’s sole option, within five (5) business days as to whether
or not a proposed user’s use of the adjoining facility would have the potential
of creating a materially adverse situation for Tenant’s use. At the time of
such request, if any, Landlord will provide Tenant with a detailed description
of the proposed user and the products proposed by the user to be present within
the Building. In the event Landlord elects to proceed after being advised of
material concerns by Tenant, Landlord shall assume the risk of actual damages
that Tenant may incur as the proximate result thereof, and the indemnification
provisions of this Lease shall specifically be applicable to the provisions of
this paragraph. Landlord further covenants that it will strictly enforce the
terms of this section against any adjoining space within the Building.

 

Section
4.02         Rules and Regulations.

 

Tenant shall observe and
comply, and shall cause its subtenants, assignees, invitees, employees,
contractors, and agents to observe and comply, with all rules and regulations
and other restrictive covenants set forth in the Declaration of Covenants,
Conditions and Restrictions for Centerpoint Business Park, a copy of which is
attached hereto as Exhibit “C” (the “Rules and Regulations”), including,
without limitation, the obligation to pay assessments, as set forth therein,
and with such reasonable modifications and additions thereto as Landlord may
make from time to time, Landlord shall not be liable for failure of any person
to obey the Rules and Regulations. Landlord shall enforce the Rules and
Regulations uniformly against all tenants of the Building, but the failure of
Landlord to enforce any such Rules and Regulations shall not constitute a
waiver thereof or relieve Tenant from compliance therewith, provided, however,
that

 

7

 

Landlord shall not enforce such Rules and
Regulations in a manner which unreasonably interferes with Tenant’s use of the
Premises.

 

Section
4.03         Taxes and Assessments.   Tenant
shall pay, prior to delinquency, Tenant’s Proportionate Share, as further
provided in Article V of this Lease, of the following:  (i) all taxes, assessments, levies,
fees, water and sewer rents and charges and all other governmental charges,
general and special, ordinary and extraordinary, foreseen and unforeseen, which
are, at any time prior to or during the Initial Term or any Renewal Term hereof
imposed or levied upon or assessed against or which arise with respect to
(A) the Property, (B) the Building and/or Premises, (C) any Base
Rent, additional rent or other sums payable hereunder, (D) this Lease or
the leasehold estate hereby created or (E) the operation, possession or
use of the Premises; (ii) all gross receipts or similar taxes (i.e., taxes
based upon gross income which fail to take into account deductions with respect
to depreciation, interest, taxes or ordinary and necessary business expenses,
in each case relating to the Premises) imposed or levied upon, assessed against
or measured by any Base Rent, additional rent or other sums payable hereunder;
(iii) all sales, value added, ad valorem, use and similar taxes at any
time levied, assessed or payable on account of the acquisition, ownership,
leasing, operation, possession or use of the Premises; and (iv) all
charges of utilities, communications and similar services serving the Premises.
Tenant shall not be required to pay any franchise, estate, inheritance,
transfer, income, capital gains or similar tax of Landlord unless such tax is
imposed, levied or assessed in substitution for any other tax, assessment,
charge or levy which Tenant is required to pay pursuant to this
Section 4.03; provided, however, that if, at any time during the
Lease Term, the method of taxation shall be such that there shall be assessed,
levied, charged or imposed on Landlord a capital levy or other tax directly on
the rents received therefrom, or upon the value of the Premises or any present
or future improvement or improvements on the Premises, then all such levies and
taxes or the part thereof so measured or based shall be payable by Tenant, and
Tenant shall pay and discharge the same as herein provided. Tenant will furnish
to Landlord, promptly after demand therefor, proof of payment of all items
referred to above which are payable by Tenant. If any such assessment may
legally be paid in installments, Tenant may pay such assessment in
installments; in such event, Tenant shall be liable only for installments which
become due and payable with respect to any tax period occurring in whole or in
part during the Lease Term hereof; provided,
however, that all amounts referred to in this Section 4.03 for
the fiscal or tax year in which the Lease Term shall expire shall be
apportioned so that Tenant shall pay those portions thereof which correspond
with the portion of such year as are within the Lease Term hereby demised. Taxes
shall not include any special assessments which are not general with respect to
the Building or any special assessments which benefit either solely the
Landlord or the Building.

 

Any special assessments
shall be amortized over the maximum period of time permitted by law and Tenant
shall pay Tenant’s Share of any special assessment’s as a component of Tenant’s
Share of Taxes through the lesser of (i) the full amortized period of the
special assessment or (ii) the end of the lease Term. In the event that any
special assessment is not payable in installments and there remains less than
five (5) years in the Term, any such special assessment shall be apportioned
between Landlord and Tenant as if such assessments were payable over a five (5)
year period with Tenant only responsible to pay that portion then deemed due
within the remaining Term hereof.

 

8

 

Landlord
and Tenant hereby acknowledge that Property is falls within an area of land
that has been designated by the Village of Obetz, Ohio (“Obetz”), as a
Community Reinvestment Area pursuant to Ohio Revised Code Sections 3735.65
through 3735.70, which designation gives Obetz the authority to grant certain
tax incentives to any property within such area. In order to grant such incentives
to the Property, Obetz and Center Point Capital, LLC, an affiliate of Landlord
(“Center Point”), entered into that certain Toy Road Community Reinvestment
Areas Agreement dated December 15, 2003, a copy of which has been provided to
Tenant (the “CRA Agreement”). The CRA Agreement provides that all improvements
constructed upon the Property shall be entitled a 100% tax exemption for a
period of fifteen (15) years after any such improvements are constructed (the “Tax
Abatement Term”). Consequently, the Building and the Premises shall be exempted
from taxes during the Tax Abatement Term. The Property on which the Building
and Premises are situated, however, will remain taxable during the Tax
Abatement Term, and Tenant shall be responsible for Tenant’s Proportionate
Share thereof during the Term of this Lease.

 

In
lieu of the real property taxes exempted by the CRA Agreement, and pursuant to
the terms and provisions of that certain Payments In Lieu of Exempted Tax
Agreement (the “In Lieu Agreement”) dated December 30, 2003, by and between
Center Point and Groveport-Madison Local School District (the “School District”),
Center Point agreed to make annual payments to the School District of $20,000
(the “In Lieu Payments”) during the Tax Abatement Term. Tenant acknowledges and
agrees that Tenant shall be responsible for Tenant’s Proportionate Share of the
In Lieu Payments during the Term of this Lease in the same manner as all other
taxes not exempted by the CRA Agreement, which amount shall equal approximately
$1,350 per year during the Tax Abatement Term. The CRA Agreement, In Lieu
Agreement and that certain Tax Increment Financing Agreement by and between
Obetz and Center Point dated as of December 15, 2003, copies of each of which
have been provided to Tenant, are the only agreements currently in place or
contemplated regarding real estate taxes applicable to the Premises.

 

Following
the expiration of the Tax Abatement Term, Landlord hereby agrees, upon
reasonable request from Tenant, to contest by appropriate legal proceedings the
amount, validity or application of any taxes or liens thereof. In the event
Landlord reasonably declines to take such action, Landlord hereby authorizes
Tenant to act on its behalf. Any reduction in Taxes shall benefit Tenant in the
form of a reduction of Tenant’s Proportionate Share of Taxes or refund to
Tenant of Taxes paid by it.

 

Section
4.04         Laws and Ordinances.   Tenant
shall, at its own cost, comply with all applicable laws, ordinances, rules and
regulations issued by any governmental authority (hereinafter, collectively or
individually, “Laws”), and all covenants, conditions and restrictions of record
which relate to the condition, use or occupancy of the Premises. Tenant shall
have the right to contest, by appropriate legal proceedings, and by counsel
acceptable to Landlord, without cost or expense to Landlord, the validity of
any such Laws, and if, by the terms of any such Laws, compliance therewith may
legally be held in abeyance without subjecting Tenant or Landlord to any liability
for failure so to comply therewith, Tenant may postpone compliance therewith
until the final determination of any such proceedings, provided that all such
proceedings shall be prosecuted with all due diligence and dispatch.

 

9

 

In addition to any other
terms and conditions hereof requiring Tenant to comply with all present and
future Laws, Tenant shall, and hereby agrees, to (i) comply with the Americans
with Disabilities Act of 1990, as the same may be amended from time to time
hereafter and the regulations and guidelines thereof (collectively, the “ADA”),
as the same relate to the Premises and the use thereof, and any alterations or
improvements to the Premises to be performed by Tenant, and (ii) cause the
Premises and any alterations or improvements to the Premises to comply with the
ADA. Tenant shall bear all the costs and expenses in connection with such
compliance. Any monetary damages and civil penalties imposed and attorney’s
fees recovered because of the Tenant’s failure to comply with the ADA as
required herein shall be paid for by, and shall be the sole responsibility of
Tenant. The failure by Tenant to perform its obligations under this section
shall constitute an event of default under the Lease. Under no circumstances
shall Landlord be liable to Tenant or any third party for any failure or
alleged failure of the Premises to comply in any respect with the ADA. Tenant
shall indemnify, defend and hold harmless Landlord from and against any and all
claims, costs, expenses (including attorneys fees and litigation expenses) and
causes of action arising out of claims for violation of the ADA.

 

Section
4.05         Environmental Compliance.   Tenant
shall comply with all laws relating to the storage, use and disposal of
Hazardous Materials (hereinafter defined). No Hazardous Materials shall be
disposed of in or on the Premises, Building or Property. “Hazardous Materials”
means any hazardous, toxic or dangerous waste, substance or material defined as
such in (or for purposes of) the Comprehensive Environmental Response,
Compensation, and Liability Act, any so-called “Superfund” or Superlien” law,
or any federal, state or local statute, law, ordinance, code, rule, regulation,
order or decree regulating, relating to, or imposing liability or standards of
conduct concerning any hazardous, toxic or dangerous waste, substance or
material, as now or at any time hereafter in effect.

 

Tenant shall be solely
responsible for and shall indemnify, defend and hold Landlord and its
subsidiaries, members, directors, officers, employees, servants and agents
(collectively “Agents”) harmless from any and all claims, judgments, losses,
demands, causes of action, proceedings or hearings (hereinafter collectively
referred to as “Claims”) relating to the storage, placement, release or use of
Hazardous Materials by Tenant, its agents, employees or invitees on or about
the Premises including, without limitation, Claims resulting from the
contamination of subterranean water beneath, adjoining or in the vicinity of
the Premises. Tenant shall reimburse Landlord for: (i) losses in or reductions
to rental income resulting from the use, storage, or disposal of Hazardous
Materials by Tenant, its agents, employees or invitees; (ii) all costs of refitting
or other alterations to the Premises or Building necessitated by the use,
storage, or disposal of Hazardous Materials by Tenant, its agents, employees or
invitees, including, without limitation, alterations required to accommodate an
alternate use of the Premises or Building; and (iii) any diminution in the fair
market value of the Premises or Building caused by the use, storage, release or
disposal of Hazardous Materials.

 

Tenant further agrees to be
solely responsible for and to indemnify and hold Landlord and its Agents
harmless from and against all Claims, arising out of or related to any removal,
clean-up or restoration required by any governmental agency having
jurisdiction. Tenant agrees to defend all such Claims on behalf of Landlord
with counsel acceptable to Landlord, and to pay all fees, costs, damage or
expenses relating to or arising out of any such Claims, including attorneys’
fees and costs.

 

10

 

From
time to time during the Term, Landlord may conduct tests of the Premises to
determine the presence of Hazardous Materials. Landlord will provide test
results to Tenant upon Tenant’s written request. In the event Tenant is in
default under this Section, or such tests indicate the illegal or harmful
presence, use or disposal of Hazardous Materials due to the activities of
Tenant, its agents, employees or invitees, Tenant shall, in addition to its
other obligations hereunder, reimburse Landlord for the cost of such test(s).
Furthermore, Tenant shall immediately commence procedures to remove such
Hazardous Materials from the Premises.

 

Landlord
represents and warrants to Tenant that, (i) 
to the best of its knowledge as of the date of this Lease, no Hazardous
Materials exist on the Premises, except for those matters, if any, disclosed in
that certain Phase I Environmental Site Assessment performed on the Property
for the Landlord, dated November 13, 2003, a copy of which has been provided to
Tenant (the “Existing Environmental Matters”) and (ii) no Hazardous Materials
were used, or will be used, in the construction of the improvements on the
Premises. In addition, Landlord agrees that during the Lease Term it will not
bring upon, store, dispose of or install any Hazardous Materials in or upon the
Premises. Landlord shall indemnify, defend and hold Tenant harmless from and
against any liability, cost, damage or expense incurred or sustained by Tenant
that arise during or after the Term from or in connection with (i) Landlord’s
failure to remediate the Existing Environmental Matters, to the extent required
by applicable environmental laws; (ii) the presence or suspected presence of
any other Hazardous Materials in, on, under or around the Premises in violation
of Landlord’s representations and warranties set forth above; or (iii) any
violation or non-compliance of environmental laws by Landlord, its agents,
contractors or employees, at or relating to the Project; provided, however,
this indemnity shall not apply to any claim, damage, fine, judgment, penalty,
cost, liability or loss which arises solely as a result of the acts of Tenant,
Tenant’s agents, employees, contractors or invitees during the term of the
Lease.

 

This
Section shall survive the expiration or sooner termination of this Lease.

 

Section
4.06         Licenses and Permits.   During
the Term, Tenant shall obtain any necessary licenses or permits to conduct or
operate its business in and upon the Premises which are required by any
applicable governmental body or agency having jurisdiction over the Premises
and shall pay the fee or charge imposed for issuance of such license or permit.
Tenant shall renew any such licenses or permits in accordance with the rules,
codes, statutes or ordinances requiring such licenses or permits. Tenant
covenants during the Term to conduct or operate only the business for which it
is licensed and, in the event of a change in the nature of its business or
operation, to obtain any necessary new or additional licenses or permits.
Tenant shall at its sole cost and expense comply with all requirements and
perform all necessary action required under such rules, codes, statutes or
ordinances for the issuance of such permits or licenses.

 

Section
4.07         Quiet Enjoyment.  Landlord
covenants that Tenant, on paying the Rent herein provided and keeping,
performing and observing the covenants, agreements and conditions herein
required of Tenant, shall peaceably and quietly hold and enjoy the Premises for
the Term aforesaid, subject, however, to the terms of this Lease.

 

Section
4.08         Prohibitions.   Tenant
shall not use any part of the Building exterior to the Premises for outside
storage, including the storage of crates, pallets or racks. Tenant shall place
all trash and garbage in enclosed metal containers to be located as depicted on
Exhibit A. Tenant

 

11

 

shall
cause all automobiles to be parked only in those portions of the parking areas
designated for that purpose by Landlord as depicted on Exhibit A, and Tenant
shall neither park nor permit parking of automobiles or any other vehicles on
any street or driveway without the prior written consent of Landlord.

 

ARTICLE V - RENT

 

Section
5.01         Base Rent.   Tenant
covenants to pay to Landlord, without notice except as provided herein,
deduction, offset or abatement, the Base Rent specified in Section 1.01(i), in
lawful money of the United States, in equal consecutive monthly installments in
advance on the first day of each month during the Lease Term. Rent for any
partial month shall be prorated on a per diem basis. Landlord agrees to give
Tenant not less than thirty (30) days prior notice of (1) any unscheduled
increase or other unscheduled change in the Base Rent or other regular monthly
payment and (2) any payment that is due other than a regularly occurring
monthly payment. Rent shall be payable to Landlord at Landlord’s address
specified in Section 1.01(a) or at such other place as Landlord may designate
from time to time in writing.

 

Section
5.02         Additional Rent.   During
the Term, including any extension or holding over thereof, Tenant shall pay to
Landlord, as additional rent (“Additional Rent”), Tenant’s Proportionate Share
of Landlord’s operating expenses related to the Property. The services Landlord
will perform, or cause to be performed by a property manager appointed in
Landlord’s sole discretion, and other items included in operating expenses are
set forth on Exhibit “J.”  The charge to
Tenant for operating expenses shall be net of rebates, credits and recoveries
under insurance, and the components of which shall include, but not be limited
to, Tenant’s Proportionate Share of the following:

 

(a)           Real Estate Taxes. “Real
Estate Taxes” which shall mean: (i) all real estate taxes, assessments, levies,
impositions or charges on the Building or the Property (adjusted after protest
or litigation, if any) for any part of the Term of this Lease, exclusive of
penalties, provided, it is understood that real estate taxes on the Building
and other improvements on the Property are subject to a 100% exemption from
taxes pursuant to the terms of the CRA Agreement, as further set forth in
Section 4.03 hereof,  (ii) any taxes
which shall be levied in lieu of any such ad valorem real estate taxes, (iii)
any special assessments for benefits on or to the Building or the Property paid
in annual installments by Landlord, (iv) occupational taxes or excise taxes
levied on rentals derived from the operation of the Building or the privilege
of leasing property, and (v) the expense of protesting, negotiating or contesting
the amount or validity of any such taxes, charges or assessments, such expense
to be applicable to the period of the item contested, protested or negotiated;.

 

If
the Term of the Lease shall end during a tax calendar year (“tax calendar year”
shall mean each annual period for which real estate taxes are assessed and
levied) of which part only is included in the Term hereof, the amount of such
Additional Rent shall be prorated on a per diem basis and shall be paid on or
before the last day of the Term. If the Term ends in any tax calendar year
before the amount to be payable by Tenant has been determined under the
provisions of this Section, an amount payable for the portion of the

 

12

 

Term
during the tax calendar year shall be reasonably estimated by Landlord and the
estimated amount shall be promptly paid by Tenant.

 

(b)           The cost of the premium(s) for the
fire and extended coverage insurance on the building and all other insurance
required to be maintained by Landlord’s Lender or otherwise under this Lease,
including, without limitation, commercial general liability insurance, special
form property insurance and umbrella liability coverage. Only such insurance as
is generally required by similar properties in the Columbus, Ohio, metropolitan
area may be charged to Tenant except that Tenant shall not bear any cost for
so-called “Terrorism Insurance” .

 

(c)           Landlord’s costs and expenses for the
maintenance and repair of the roof, foundation, exterior walls and Building
systems.

 

(d)           The amount paid for all labor and/or
wages and other payments including costs of a management fee, worker’s
compensation and disability insurance, payroll taxes, welfare and fringe
benefits made to employees, contractors and subcontractors of Landlord or its
managing agent involved in the operation and maintenance of the Property.

 

(e)           The costs of services not separately
metered or directly billed to Tenant, including without limitation, the costs
of any security monitoring system.

 

(f)            All other taxes identified in
Section 4.03 of this Lease, including, without limitation, the In Lieu
Payments.

 

(g)           The costs of trash and snow removal,
landscaping, irrigation and general ground maintenance.

 

(h)           The costs of membership in the
Centerpoint Business Park Owners Association, Inc., an Ohio not-for-profit
corporation, and all dues and assessments provided for in the Declaration of
Covenants, Conditions and Restrictions for Centerpoint Business Park, a copy of
which is attached hereto as Exhibit “C”, all as further provided for in Article
XVI hereof.

 

Landlord hereby represents
the following good faith, non-binding estimate of expected 2007 operating
expenses as follows:

 

	
  Real
  Estate Taxes

  	
   

  	
  $.05/s.f

  
	
  Insurances

  	
   

  	
  $.10/s.f.

  
	
  Common
  Area Management

  	
   

  	
  $.25/s.f.

  
	
  Total:

  	
   

  	
  $0.40/s.f.

  

 

Landlord warrants that the
operating expenses chargeable to Tenant shall not increase by greater than five
percent (5%) over the foregoing estimates during the initial calendar year of
the Term.

 

The following costs and
expenses shall be specifically excluded from Landlord’s operating expenses and
the calculation of Tenant’s Additional Rent obligation:

 

13

 

1.             costs of alterations of any other
tenant’s premises in the Building or the cost of tenant installations and
decorations incurred in connection with preparing, altering or improving space
for any tenancy or tenant;

 

2.             any payments for (i) loan principal
or interest, together with expenses thereto related in connection with such
financing or refinancing during the term of this Lease, (ii) ground lease rent,
or (iii) similar payments;

 

3.             the cost of electrical energy
furnished directly to tenants to the Property and paid for by such tenants
directly to the provider of such electrical energy;

 

4.             compensation paid to clerks,
attendants or other persons in commercial concessions operated by Landlord,
except to the extent receipts from such concessions are credited against
Operating Expenses;

 

5.             salaries or fringe benefits of
personnel above the grade of Building Manager;

 

6.             the cost of any items to the extent
to which such cost is or should be reimbursed to Landlord by tenants of the
Property (other than by virtue of the pass-throughs of “Operating Expenses” to
other tenants of the Building), insurance or condemnation proceeds, warranties
or third parties;

 

7.             depreciation of the Building and
its equipment, amortization [except as provided in (2) above] and other
non-cash charges;

 

8.             brokerage commissions, fees and
expenses, advertising and promotional expenditures incurred in connection with
selling or leasing of the Building or space therein, including, without
limitation, court costs, attorneys’ fees and disbursements in connection with
any summary proceeding to dispossess any tenant, fees/costs for consulting,
legal vacancies, rent concessions, refurbishment or improvement;

 

9.             costs incurred in connection with
the making of repairs which are the obligation of another tenant of the
Building or cost of correcting defects in the construction, design or materials
of the Building and parking facilities;

 

10.           the cost of clean up or damage due to
the presence or release of any hazardous substance or material, toxic
substances, wastes or materials or related environmental hazards, including
asbestos, radon and PCB’s except to the extent placed on the Premises by Tenant
or Tenant’s employees, agents, customers or invitees;

 

11.           costs incurred by Landlord as a
result of Landlord’s breach of this Lease or any other lease with a tenant of
the Property;

 

12.           costs attributable to enforcing
leases against specific tenants in the Building, such as attorneys’ fees, court
costs, adverse judgments, and similar expenses;

 

13.           acquisition costs of land or
buildings in the Property, any costs incurred in connection with the
construction, reconstruction, development, redevelopment or expansion of the
Property;

 

14

 

14.           any Landlord income, excise or
franchise taxes; and

 

15.           any fines, penalties or additional
costs imposed upon Landlord due to violations of Law by Landlord.

 

Section
5.03         Payment of Additional Rent.   In order to provide for current payments of
Additional Rent, Landlord will give Tenant written notice of Tenant’s
Proportionate Share of estimated operating expenses for each calendar year.
Tenant shall pay to Landlord, as an Additional Rent deposit, in monthly
installments, commencing on the first day of the Term of this Lease, and/or the
first day of the calendar month following that month in which Landlord notifies
Tenant of the estimated Additional Rent, one-twelfth (1/12th) of the
Additional Rent due Landlord for any said calendar year as estimated by
Landlord. If at any time it appears to Landlord that the Additional Rent due
Landlord for any calendar year will vary from its estimate thereof by more than
ten percent (10%), Landlord may, by written notice to Tenant, revise its
estimate for such year. Subsequent Additional Rent deposits by Tenant for such
year shall be based on the revised estimate. Tenant shall pay Landlord the
Additional Rent deposit in the same manner as Base Rent beginning on the first
day of the calendar month following that calendar month in which this Lease
commences.

 

Within
ninety (90) days of the end of the calendar year for which estimates of
Additional Rent were made, actual Additional Rent due for such year shall be
calculated and an annual statement thereof provided to Tenant. If Tenant’s
Proportionate Share of actual Additional Rent exceeds the amounts paid by
Tenant based on Landlord’s estimates, Landlord shall bill Tenant for the excess
amount, and Tenant shall pay to Landlord said amount within thirty (30) days of
billing. If Tenant’s Proportionate Share of actual Additional Rent is less than
the amounts paid by Tenant based on Landlord’s estimate thereof, Tenant shall
receive from Landlord a refund of the excess so paid by Tenant. Tenant shall
have the right, within thirty (30) days from Tenant’s receipt of the annual
statement of Additional Rent contemplated above and at Tenant’s sole cost and
expense, to review and inspect Landlord’s books and records of Additional Rent
for the periods covered by such annual statement.

 

If
the Term commences on any day other than the first day of January, or if the
Term ends on any day other than the last day of December, any Additional Rent
due Landlord shall be prorated, based on a 365-day year. Upon expiration or
termination of this Lease, Tenant shall pay such prorated amount within thirty
(30) days of billing. This covenant shall survive the expiration or termination
of this Lease.

 

Section
5.04         Service Charge and Late
Penalty.   Tenant’s failure to make any monetary payment
required of Tenant under this Lease within five (5) days of the due date
therefor shall result in the imposition of a service charge for such late
payment in the amount of ten percent (10%) of the amount due; provided that
Landlord shall waive such service charge once per calendar year. In addition,
any sum not paid within ten (10) days of the due date therefor shall bear
interest at the then current prime rate of interest as published in the Wall
Street Journal plus two percent (2%) (or such lesser percentage as may be the
maximum amount permitted by law) from the date due until paid.

 

15

 

Section
5.05         Triple Net Lease.   It
is expressly understood and agreed by and between the parties that this Lease
is a triple net lease, and the Base Rent, Additional Rent and all other sums
payable hereunder to or on behalf of Landlord shall be paid without notice or
demand and without setoff, counterclaim, abatement, suspension, deduction or
defense.

 

ARTICLE VI - UTILITIES AND SERVICES

 

Tenant shall conduct in its
own name and timely pay for all charges for electricity, gas, water, fuel,
sewer charges, telephone, trash hauling and any other services or utilities
used in, servicing or assessed against the Premises, unless otherwise herein
expressly provided. Tenant shall pay all costs caused by Tenant introducing excessive
pollutants or solids other than ordinary human waste into the sanitary sewer
system, including’ the cost of any permits and any other fees and charges
levied by any governmental subdivision in connection with any such pollutants
or solids. Tenant shall be responsible for the installation and maintenance of
any dilution tanks, holding tanks, settling tanks, sewer sampling devices, sand
traps, grease traps or similar devices as may be required by any governmental
subdivision for Tenant’s use of the sanitary sewer system. Landlord shall not
be required to pay for any utility services, supplies or upkeep in connection
with the Premises.

 

ARTICLE VII - MAINTENANCE AND REPAIR; ALTERATIONS

 

Section
7.01         Maintenance and Repair.

 

(a)           Tenant’s Maintenance and Repair.
 Tenant shall be responsible for all
maintenance and repair to the Premises of whatsoever kind or nature that is not
hereinafter set forth specifically as the obligation of Landlord. Tenant shall
take good care of the Premises and fixtures, and keep them in good repair and
free from filth, overloading, danger of fire or any pest or nuisance, and
repair any damage or breakage done by Tenant or its agents, employees or
invitees, including damage done to the Building by Tenant’s equipment or
installations; provided, however, that Tenant’s maintenance and repair
obligations with respect to utility lines shall be limited to those which
exclusively serve the Premises from the point of connection with common lines
in the Building. Tenant shall be responsible for the repair and replacement of
all glass and plate glass on the Premises, as well as all overhead doors, man
doors and dock doors. At the end of the Term of this Lease or any extension or
renewal thereof, Tenant shall quit and surrender the Premises broom clean in as
good condition as when received by Tenant, normal wear and tear, loss or damage
by fire or other casualty or act of God or nature excepted. In the event Tenant
fails to maintain the Premises as provided for herein, Landlord shall have the
right, but not the obligation, to perform such maintenance as is required of
Tenant, in which event Tenant shall promptly reimburse Landlord for its costs
in providing such maintenance or repairs together with a ten percent (10%)
charge for Landlord’s overhead. The provisions of this Section 7.01(a) shall
survive the expiration or earlier termination of this Lease.

 

(b)           Landlord’s Maintenance and Repair.
 During the Term, including any extension
or renewal thereof, Landlord shall keep and maintain the roof, structural
soundness of exterior walls (excluding glass doors, plate glass, overhead
doors, man doors and dock

 

16

 

doors),
foundation and other structural components of the Building, the heating,
ventilation and air conditioning equipment for periodic inspection, servicing,
repair and replacement of such, all in good condition and repair. Landlord
shall be under no obligation and shall not be liable for any failure to make
repairs that are Landlord’s responsibility herein until and unless Tenant
notifies Landlord in writing of the necessity therefor, in which event Landlord
shall have a reasonable time thereafter to make such repairs. In the event that
Landlord fails to make any repair required of Landlord hereunder within a
reasonable time after written notice from Tenant, Tenant shall have the right
to perform such repair and to offset the costs thereof against Tenant’s monthly
installments of Base Rent up to a maximum aggregate offset amount of $10,000.

 

Notwithstanding
the foregoing, in the event of an emergency which threatens interference with
Tenant’s business operations and/or the safety of the Premises or Tenant’s
employees, Tenant shall have the right to perform such maintenance and repairs
as are necessary to remedy such emergency and to be reimbursed by Landlord for
all costs associated therewith; provided, that Tenant notify Landlord of such
emergency as promptly as possible. Following performance of any such emergency
obligations set forth in the previous sentence, Landlord shall reimburse Tenant
for Tenant’s actual, reasonable cost in connection therewith with payment to be
made within thirty (30) business days following Landlord’s receipt from Tenant
of a written demand for payment together with evidence of Tenant’s payment
thereof; provided, however, that the amount being sought by Tenant shall in no
event exceed Twenty Five Thousand and No/100 Dollars ($25,000.00) unless Tenant
is acting pursuant to a court order. All repairs by Landlord shall be made in a
manner that attempts to cause the least interference with Tenant’s business. Landlord
reserves the right to the exclusive use of the roof and exterior walls of the
Building which Landlord is so obligated to maintain and repair. If any portion
of the Premises which Landlord is obligated to maintain or repair is damaged by
the negligence of Tenant, its agents, employees or invitees, then the cost of
repairs necessitated by such damage shall be paid by Tenant.

 

Any
structural repairs or improvements undertaken by Landlord that are required for
tax purposes to be capitalized or amortized by Landlord shall be capitalized or
amortized over the remaining useful life of such structural repairs or
improvements and passed through and chargeable to Tenant on a yearly basis in
an amount corresponding to the amount capitalized or amortized in such calendar
year by Landlord; provided that, to the extent such structural repairs and
improvements are necessitated by a defect in the construction of the Premises, such
costs shall not be passed through to Tenant.

 

Notwithstanding the
foregoing, Tenant shall be permitted, at Tenant’s sole cost and expense, and
upon forty-eight (48) hour advance written notice to Landlord, to access the
roof of the Building to install Tenant’s communication equipment (“Tenant’s “Communication
Equipment”); provided, that Tenant shall: 
(a) engage Landlord’s roofing contractor for any installations of
Communication Equipment that requires roof penetrations; (b) provide Landlord
with a specific list of all Communication Equipment to be installed and written
verification from Landlord’s roofing contractor that the installation of such
Communication Equipment will not void the roof warranty; and (c) ensure that
any such equipment shall be in compliance with all applicable federal, state
and local laws and ordinances. Landlord or its agents shall have the

 

17

 

right to be present during the installation
of all Communication Equipment, so long as Landlord complies with Tenant’s work
schedule.

 

Section
7.02         Alterations; Mechanics’
Liens.

 

(a)           Alterations.  Tenant shall not make any alterations,
improvements, or additions to the Premises, including, without limitation, any
roof penetrations, without the prior written consent and approval of plans
therefor by Landlord. Notwithstanding the foregoing sentence, Tenant may make
interior, non-structural alterations and improvements to the Premises that cost
less than $50,000 in the aggregate and do not effect the structural integrity
of the Building without Landlord’s prior consent; provided that Tenant deliver
copies of all final plans for such alterations to Landlord. Landlord agrees
that Tenant may install, remove and/or replace freezers, coolers, cool docks,
racks, battery chargers and other substantial items, trade equipment and
fixtures necessary for the conduct of its business in or to the Premises. Landlord’s
consent to any alterations, improvements, or additions, or its approval of any
plans and specifications therefor, shall create no responsibility or liability
on Landlord’s part for their completeness, design sufficiency or compliance
with applicable laws, rules and regulations now or hereafter in effect. Alterations,
improvements or additions so made upon the Premises, except moveable furniture
and equipment placed in the Premises at the expense of Tenant, shall be and
become the property of Landlord and shall remain upon and be surrendered with
the Premises as a part thereof at the termination of this Lease, without
disturbance, molestation, injury or damage; provided, however, that only with
respect to alterations or improvements made after the initial build out of the
Premises, Landlord shall have the option to require Tenant to (i) remove such alterations
or improvements at Tenant’s sole cost and expense and (ii) restore the Premises
to its prior condition, provided that Landlord so notify Tenant of such
requirement at the time Landlord grants approval for such alterations and
improvements. In the event damage to the Premises or the Building shall be
caused by moving said furniture and equipment in or out of the Premises, said
damage shall be promptly repaired at the cost of Tenant. The provisions of this
Section 7.02(a) shall survive the expiration or earlier termination of this
Lease.

 

Whenever
plans for any Tenant work, whether the initial work at the commencement of the
Term or for subsequent alteration, 
Landlord’s approval must be given within ten (10) business days after
receipt, with partial plan submittals as may be appropriate under the
circumstances, and Landlord shall provide approval or notes of changes which if
made would be deemed approved within the required time. If the Landlord does
not respond, plans will be deemed approved.

 

(b)           Mechanics’ Liens.  Tenant shall not cause nor permit any mechanic’s
liens or other liens, to be placed upon the Premises, the Building or the
Property, and in case of the filing of any such lien or claim therefor, Tenant
shall, within fifteen (15) business days of Tenant’s notice of the filing of
any such lien or claim, discharge same; provided, however, that Tenant shall
have the right to contest the validity or amount of any such

 

18

 

lien
upon its prior posting of security with Landlord, which security, in Landlord’s
sole judgment, must be adequate to pay and discharge any such lien in full plus
Landlord’s reasonable estimate of its legal fees. Tenant agrees to pay all
legal fees and other costs incurred by Landlord because of the placement upon
the Property of any mechanic’s or other liens attributable to Tenant. Tenant
shall file and post all Notices of Commencement and amendments thereof in the
places required under Section 1311.04 of the Ohio Revised Code (“Code”) at any
time when it commences any alteration or improvement to the Premises, and when
any amendment to any such Notice of Commencement is required by Section 1311.04
of the Code. Landlord and Tenant acknowledge and agree that Tenant shall not be
deemed the agent of Landlord for any purpose in connection with any labor or
material furnished to the Premises in furtherance of a contract therefor
entered by Tenant, including Tenant’s Work.

 

ARTICLE VIII - SEVERABLE PROPERTY

 

Section
8.01         Severable Property.  Tenant
may, at its expense, install, assemble or place on the Premises and remove and
substitute any items of machinery, equipment, furniture, furnishings or other
personal property used or useful in Tenant’s business and trade fixtures
described in Exhibit “E”, (collectively, the “Severable Property”), and
title to same shall remain in Tenant.

 

Section
8.02         Removal.   Tenant shall remove the Severable Property at
the expiration or prior termination of this Lease. Any of Tenant’s Severable
Property not removed by Tenant prior to the expiration of this Lease or thirty
(30) days after an earlier termination this Lease shall be considered abandoned
by Tenant and may be appropriated, sold, destroyed or otherwise disposed of by
Landlord without obligation to account therefor. Tenant will repair at its
expense all damage to the Premises necessarily caused by the removal of Tenant’s
Severable Property, whether affected by Tenant or by Landlord. The provisions
of this Section 8.02 shall survive the expiration or earlier termination of
this Lease.

 

ARTICLE IX - ASSIGNMENT AND SUBLETTING

 

Section
9.01         Tenant’s Assignment and
Subletting.  Tenant shall not, without the prior written
consent of Landlord, which consent shall not be unreasonably withheld, delayed
or conditioned:  (i) assign, convey,
mortgage or otherwise transfer this Lease or any interest hereunder, or
sublease the Premises, or any part thereof, whether voluntarily or by operation
of law; or (ii) permit the use of the Premises, or any part thereof, by any
person other than Tenant, its affiliates and their employees. Any such
transfer, sublease or use described in the preceding sentence (a “Transfer”)
occurring without the prior written consent of Landlord shall be void and of no
effect. Landlord’s consent to any Transfer shall not constitute a waiver of
Landlord’s right to withhold its consent to any future Transfer. Landlord’s
consent to any Transfer or acceptance of rent from any party other than Tenant
shall not release Tenant from any covenant or obligation under this Lease. Each
Transfer with Landlord’s consent shall be expressly made subject to the
provisions hereof. No such Transfer shall modify or limit any right or power of
Landlord hereunder or affect or reduce any obligation of Tenant hereunder, and
all such obligations shall be those of Tenant and shall continue in full effect
as obligations of a principal and not of a guarantor or surety, as though no
subletting or assignment had been made, such liability of the Tenant named
herein to continue notwithstanding any subsequent modifications or amendments

 

19

 

of
this Lease. Except with respect to a general pledge or assignment of all or
substantially all of Tenant’s assets, to secure general borrowings or credit
arrangements of Tenant, neither this Lease nor the Lease Term hereby demised
shall be mortgaged by Tenant, nor shall Tenant mortgage or pledge its interest
in any sublease of the Premises. Any sublease or assignment of Tenant’s
interest hereunder made otherwise than as expressly permitted by this Section
shall be void. Tenant shall, within twenty (20) days after the execution of any
Transfer consented to by Landlord, deliver a conformed, fully executed copy
thereof to Landlord. In the event that pursuant to any assignment or sublease,
Tenant receives or has the right to receive any monies, rental payments or any
other consideration in excess of Tenant’s rental obligations hereunder, Tenant
guarantees that fifty percent (50%) of all such excess amounts from any
sublease or assignments shall, when due or payable, be immediately delivered or
paid to the Landlord by Tenant or any such assignee or subtenant. Fifty percent
(50%) of all such monies, rental payments or any other consideration shall be
the sole and exclusive property of Landlord.

 

Notwithstanding anything
contained herein to the contrary, Tenant may, upon prior written notice to
Landlord, sublease to any subsidiary, parent or affiliate of Tenant, provided
that (a) such subtenant shall have a tangible net worth at least equal to or
greater than Tenant’s tangible net worth as of the date of this Lease, (b)
there is no change in the use of the Premises by the subtenant, and the
subtenant’s proposed use and occupancy otherwise fully comply with the terms of
this Lease, and (c) Tenant shall remain primarily liable for all of the terms,
conditions and obligations set forth in this Lease.

 

Section
9.02         Tenant’s Transfer Rights.   Notwithstanding anything in this Lease to the
contrary, (i) a sale of the assets, stock or ownership interests, change of
control of Tenant or arrangements with third parties to operate within the
premises in the form of a space concession, leased or licensed department,
shall not be deemed to be a transfer, assignment or sublease for purposes of
this lease and (ii) Tenant shall have the right to effect a “Permitted Transfer”.
As used herein the term “Permitted Transfer” shall mean the right (a) to sublet
the Premises, or portions thereof, or (b) to assign this Lease in connection
with any of the following: (1) sale of any of the stock or ownership
interests or assets of Tenant, (2) merger or consolidation of Tenant or (3) an
assignment or sublet to an entity which is controlled by, controlling or under
common control with Tenant. Tenant shall have the right to effect a Permitted
Transfer in each case without Landlord’s consent, Landlord shall have no right
to increase the Rent under this Lease, to recapture any or all of the Premises
or terminate the Lease or to seek the payment of any costs of the landlord in
connection with such Permitted Transfer. No Permitted Transfer will release or
discharge Tenant of or from any liability, whether past, present, or future,
under this Lease, and Tenant shall continue fully liable thereunder unless such
assignee or sublessee, has a net worth equal to or in excess of the net worth
of Tenant as of the date hereof. Tenant shall deliver to Landlord promptly
after the effective date of any sublease or assignment, an executed copy of
each such sublease or assignment.

 

Section
9.03         Transfer or Pledge by
Landlord.   Landlord shall be free to transfer its fee
interest in the Premises or any part thereof or interest therein, subject,
however, to the terms of this Lease. Any such transfer of a fee interest shall
relieve the transferor of all liability and obligation hereunder (to the extent
of the interest transferred) accruing after the date of the transfer and any
assignee shall be bound by the terms and provisions of this Lease. Landlord
shall be free to pledge or mortgage its interest in the Premises and this Lease
on the condition

 

20

 

that
either (i) this Lease shall be superior to such pledge or mortgage or
(ii) if Landlord elects to have this Lease be subordinate to the mortgage
of any lender of Landlord, Tenant receives a nondisturbance agreement
reasonably acceptable to Tenant from the holder of such pledge or mortgage.

 

ARTICLE X - CASUALTY AND CONDEMNATION

 

Section
10.01       Casualty, Damage or Destruction.

 

(a)           Landlord’s Rights to Terminate or
Restore. If the Premises or the Building or any part thereof is damaged by
fire or other casualty and such damage exceeds sixty percent (60%) of the
insurable value of the Premises at the time such damage occurs, and Landlord
shall determine not to restore same, Landlord may, by written notice to Tenant,
given within thirty (30) days after such damage, terminate this Lease as of the
date of the damage. If this Lease is not terminated as above provided and if the
Premises are made partially or wholly untenantable as aforesaid, Landlord, at
its expense, shall restore the same, with reasonable promptness, to the
condition in which Landlord furnished the Premises to Tenant at the
commencement of the Term as to those items that were provided at Landlord’s
expense without any reimbursement by Tenant. Landlord shall be under no
obligation to restore any alterations, improvements or additions to the
Premises made by Tenant or paid for by Tenant, including, but not limited to,
any of the initial tenant finish done or paid for by Tenant or any subsequent
changes, alterations or additions made by Tenant. In all cases, due allowance
shall be made for reasonable delay caused by adjustment of insurance loss,
strikes, labor difficulties or any cause beyond Landlord’s reasonable control. For
the purposes of this Lease, the Premises shall be considered tenantable so long
as and to the extent that the Premises are occupied. In any event, Tenant shall
be responsible for the removal, or restoration, when applicable, of all its
damaged property and debris from the Premises, upon request by Landlord or
reimburse Landlord for the cost of removal.

 

(b)           Tenant’s Right to Terminate. If,
as a result of fire or other casualty the Premises are made partially or wholly
untenantable and if Landlord has not terminated this Lease as provided above
and fails, within a reasonable period of time based on the extent of the damage
but in no event for a period in excess of two hundred forty (240) days after
the date of the fire or other casualty, to eliminate substantial interference
with Tenant’s use of the Premises or substantially to restore same, Tenant may
terminate this Lease as of the end of said two hundred forty (240) days by
notice to Landlord given not later than five (5) days after the expiration of
said 240-day period.

 

(c)           Rent Abatement. If the
Premises are rendered totally untenantable but this Lease is not terminated,
Rent shall abate from the date of the fire or other casualty, cause or condition
until one hundred twenty (120) days after Landlord has completed its
restoration work and the Premises are ready for occupancy and reasonably
accessible to Tenant. If a portion of the Premises is untenantable, Rent shall
abate in the proportion which the approximate area of the damaged portion bears
to the total area of the Premises from the date of the fire or other casualty,
cause or condition until the damaged portion is

 

21

 

ready
for occupancy and reasonably accessible to Tenant; and this Lease shall
continue in full force and effect for the balance of the Term

 

Section
10.02       Eminent Domain.

 

(a)           If the whole of the Premises shall be
taken by right of eminent domain by any governmental authority or other body
having the right of condemnation, this Lease shall automatically terminate on
the date of vesting of title pursuant to such proceedings. All rent shall be
adjusted to the date of termination.

 

(b)           If a sufficient part of the Premises
shall be taken under the right of eminent domain so that the remainder cannot,
in the reasonable opinion of Landlord, be used for the same purpose as before
the condemnation or taking, or so as to make the use of the remainder of the
Premises by Tenant physically or economically impracticable, or the
condemnation or taking will prevent the use of the remainder of the Premises
for the purposes contemplated by this Lease, or if a restriction of any kind or
nature, such as the taking of part of all of a street, alley or other means now
available for ingress to or egress from the Premises which would prevent or
substantially interfere with Tenant’s use of the Premises, then Tenant shall
have the option of terminating this Lease. The termination shall be effected by
written notice delivered to Landlord within thirty (30) days from the date of
the taking or restriction, and it will be effective as of the date of the
restriction or taking. In the event of a partial taking which does not result
in a termination of this Lease, rent shall be reduced in proportion to the
reduction in the size of the Building so taken and this Lease shall be modified
accordingly. Promptly after obtaining knowledge thereof, Landlord or Tenant, as
the case may be, shall notify the other of any pending or threatened
condemnation or taking affecting the Premises or the Building.

 

(c)           If any part of the Premises shall be
taken and Tenant does not have an election to cancel the Lease as stated above,
or, having such election does not exercise it, this Lease shall continue in
full force and effect as to that part of the Premises which has not been so
taken; and Landlord shall make such repairs and do such other work as may be
necessary to make the remaining portion of the Premises a complete and sound architectural
and structural unit. In addition to, and without limiting the foregoing, the
parties agree that to the extent, and for the period of time, that the
remaining portion of the Premises are rendered untenantable because of the
aforesaid work and repairs, a reduction in proportion to that part of the
Premises being repaired shall be made in rent.

 

(d)           In the event of any taking, Landlord
shall be entitled to any and all compensation, damages, income, rent, awards,
or any interest therein whatsoever which may be paid or made in connection
therewith, and Tenant shall have no claim against Landlord or the condemning
authority for the value of any unexpired term of this Lease or otherwise;
provided, that nothing contained herein shall preclude Tenant from seeking and
obtaining, at its own cost and expense, an award from the condemning authority
for loss of business, the value of any personal property of Tenant taken by the
condemning authority or moving expenses, so long as such award will not result
in a diminution of the award made to Landlord.

 

22

 

ARTICLE XI - INSURANCE AND INDEMNIFICATION

 

Section
11.01                     Insurance.

 

(a)                                  Tenant will maintain insurance on the
Premises of the following character:

 

(i)                                     Insurance against all risks of direct
physical loss, including loss by fire, lightning and other risks which at the
time are included under “extended coverage” endorsements, in amounts of the
actual replacement value of the Improvements, exclusive of foundations and
excavations;

 

(ii)                                  General public liability insurance and/or
umbrella liability insurance against claims for bodily injury, death or
property damage occurring on, in or about the Premises in the amount of
$5,000,000 combined single limit per occurrence and is the aggregate for bodily
injury or death to any one person and for property damage to others or in such
greater amounts as are then customary for property similar in use to the
Premises;

 

(iii)                               Business interruption insurance sufficient to
cover an interruption of Tenant’s business for a period of one year;

 

(iv)                              Worker’s compensation insurance (including
employers’ liability insurance, if requested by Landlord) to the extent
required by the law of the state in which the Premises are located and to the
extent necessary to protect Landlord and the Premises against Tenant’s workers’
compensation claims (to the extent permitted by applicable law, Tenant may self-insure
with respect to worker’s compensation insurance);

 

(v)                                 To the extent that any boiler or similar
machinery is located on the Premises, boiler and machinery insurance in respect
of any boilers and similar apparatus located on the Premises in the amount
necessary to cover the replacement cost value;

 

(vi)                              During any period of construction on the
Premises by Tenant, builder’s risk insurance on a completed value, basis for
the total cost of such alterations or improvements; and

 

(vii)                           Such other insurance in such amounts and
against such risks, as is commonly obtained in the case of property similar in
use to the Premises and located in the state in which the Premises are located
by prudent owners of such property, including but not limited to, flood
insurance (if the Premises is in a flood plain).

 

Such
insurance shall be written by companies authorized to do business in the state
where the Premises are located and carrying a claims paying ability rating of
at least A;X by A. M. Best Company and, with the exception of workers’
compensation insurance and employer’s liability insurance, shall name Landlord
as an additional insured (loss payee with respect to property hazard insurance)
as its interest may appear. If the Premises or

 

23

 

any
part thereof shall be damaged or destroyed by Casualty, and if the estimated
cost of rebuilding, replacing or repairing the same shall exceed $50,000, Tenant
promptly shall notify Landlord thereof.

 

(b)                                 Every policy referred to in
subsection 11.01(a) shall provide that it will not be cancelled except
after thirty (30) days written notice to Landlord and the Mortgagee and that it
shall not be invalidated by any act or negligence of Landlord, Tenant or any
person or entity having an interest in the Premises, nor by occupancy or use of
the Premises for purposes more hazardous than permitted by such policy, nor by
any foreclosure or other proceedings relating to the Premises, nor by change in
title to or ownership of the Premises.

 

(c)                                  Tenant shall deliver to Landlord and
Mortgagee duplicate certificates of insurance, satisfactory to Landlord and
Mortgagee evidencing the existence of all insurance which is required to be
maintained by Tenant hereunder, such delivery to be made upon the execution and
delivery hereof. Tenant shall not obtain or carry separate insurance concurrent
in form or contributing in the event of loss with that required by this
Section 11.01(c) unless Landlord is named an additional insured therein
and unless there is a mortgagee endorsement in favor of Mortgagee with loss
payable as provided herein. Tenant shall immediately notify Landlord whenever
any such separate insurance is obtained and shall deliver to Landlord and
Mortgagee the policies or certificates evidencing the same. Any insurance
required hereunder may be provided under blanket policies, provided that the
Premises are specified therein.

 

(d)                                 The requirements of this Section 11.01(c)
shall not be construed to negate or modify Tenant’s obligations under
Section 11.02.

 

Section
11.02                     Indemnification.  Except
for the negligence (not including negligence imputed to the Indemnified Parties
(as defined below) by the actions of third parties which are unaffiliated with
or acting for or on behalf of or under any such Indemnified Party) or willful
misconduct of any Indemnified Party (as defined herein), Tenant shall defend
all actions against Landlord, the holder of any mortgage on the Premises and
any partner, officer, director, member, employee or shareholder of the
foregoing (individually, an “Indemnified Party”, and collectively, “Indemnified
Parties”), with respect to, and shall pay, protect, indemnify and save harmless
the Indemnified Parties from and against, any and all liabilities, losses,
damages, costs, expenses (including, without limitation, reasonable attorneys’
fees and expenses), causes of action, suits, claims, demands or judgments of
any nature arising from any occurrence in, upon or at the Premises or any part
thereof, or occasioned wholly or in part by any act or omission of Tenant, its
agents, contractors, employees, servants, licensees, concessionaires or
invitees or by anyone permitted to be on the Premises by Tenant. Tenant assumes
all risks of, and Landlord, its employees and agents shall not be liable for,
injury to person or damage to property resulting from the condition of the
Premises or from the bursting or leaking of any and all pipes, utility lines,
connections, or air conditioning or heating equipment in, on or about the
Premises, or from water, rain or snow which may leak into, issue or flow from
any part of the Building. Tenant agrees, at all times, to indemnify and hold
Landlord, its employees and agents harmless from and against all actions,
claims, demands, costs, damages or expenses of any kind which may be brought or
made against them or which they may pay or incur by reason of Tenant’s
occupancy

 

24

 

of
the Premises or its negligent performance of or failure to perform any of its
obligations under this Lease. In case Landlord or its employees or agents
shall, without fault on their part, be made a party to any litigation commenced
by or against Tenant, then Tenant shall indemnify, defend and hold them
harmless and shall pay all costs, expenses and reasonable attorneys’ fees
incurred or paid by them in connection with such litigation.

 

Landlord shall indemnify,
protect, defend, and hold Tenant harmless from claims, actions, damages,
liabilities and expenses (including reasonable attorneys’ fees and court costs)
in connection with loss of life, bodily or personal injury or property
damage:  (i) arising from or out of any
occurrence in, upon, or at or from the Premises, when the same are a direct
result of any act or omission of Landlord, its agents, contractors, employees,
licensees or concessionaries; or (ii) resulting from a breach of this Lease by
Landlord.

 

ARTICLE XII - DEFAULT AND REMEDIES

 

Section
12.01                     Default Provisions.

 

(a)                                  Any of the following occurrences or acts
shall constitute an Event of Default under this Lease:

 

(i)                                     If Tenant shall:  (1) fail to pay any Base Rent,
Additional Rent or other sum within five (5) business days of the date such
payment is required to be paid by Tenant hereunder, provided that not more than
twice per calendar year, Landlord shall provide Tenant with written notice of
its failure to make such payments and an additional five (5) days to cure; or
(2) fail to observe or perform any other provision hereof and such
nonmonetary failure shall continue for thirty (30) days after written notice to
Tenant of such failure (provided,
that, in the case of any such failure which cannot be cured by the payment of
money and cannot with diligence be cured within such 30-day period, if Tenant
shall promptly commence to cure the same and thereafter prosecute the curing
thereof with diligence, the time within which such failure may be cured shall
be extended for such period not to exceed ninety (90) days as is necessary to
complete the curing thereof with diligence);

 

(ii)                                  If any representation or warranty of Tenant
set forth herein or in any certificate provided by Tenant pursuant to this
Lease, shall prove to be incorrect in any material adverse respect as of the
time when the same shall have been made in a way adverse to Landlord and
Landlord shall suffer a loss or detriment as a result thereof, including,
without limitation, the taking of any action (including, without limitation,
the demise of the Premises to Tenant herein) in reliance upon such
representation or warranty and, in each case, the facts shall not be conformed
to the representation and warranty as soon as practicable in the circumstances
(but in no event to exceed thirty (30) days) after written notice to Tenant
from Landlord of such inaccuracy and Landlord restored to the position it would
have enjoyed had such representation or warranty been accurate at the time it
was made;

 

25

 

(iii)                               If Tenant shall file a petition in bankruptcy
or for reorganization or for an arrangement pursuant to any federal or state
law or shall be adjudicated a bankrupt or become insolvent or shall make an
assignment for the benefit of creditors, or if a petition proposing the
adjudication of Tenant as a bankrupt or its reorganization pursuant to any
federal or state bankruptcy law or any similar federal or state law shall be
filed in any court and Tenant shall consent to or acquiesce in the filing
thereof or such petition shall not be discharged or denied within sixty (60)
days after the filing thereof;

 

(iv)                              If a receiver, trustee or conservator of
Tenant, or of all or substantially all of the assets of Tenant, or of the
Premises or Tenant’s estate therein shall be appointed in any proceeding
brought by or against Tenant, or if any such receiver, trustee or conservator
shall be appointed in any proceeding brought against Tenant and shall not be
discharged within sixty (60) days after such appointment, or if Tenant shall
consent to or acquiesce in such appointment; or

 

(v)                                 If the Premises shall not be maintained or
secured in the manner required hereunder for a period of thirty (30)
consecutive days.

 

(b)                                 If an Event of Default shall have occurred
and be continuing beyond the applicable cure period, if any, Landlord shall
have the right to give Tenant notice of Landlord’s termination of the Lease
Term. Upon the giving of such notice, the Lease Term and the estate hereby
granted shall expire and terminate on such date as fully and completely and
with the same effect as if such date were the date herein fixed for the
expiration of the Lease Term, and all rights of Tenant hereunder shall expire
and terminate, but Tenant shall remain liable as hereinafter provided.

 

(c)                                  If an Event of Default shall have occurred
and be continuing, Landlord shall have the immediate right, whether or not the
Lease Term shall have been terminated pursuant to subsection 12.01(b), to
reenter and repossess the Premises and the right to remove all persons and
property therefrom by summary proceedings, ejectment or any other legal action
or in any lawful manner Landlord determines to be necessary or desirable. Landlord
shall be under no liability by reason of any such reentry, repossession or removal.
No such reentry, repossession or removal shall be construed as an election by
Landlord to terminate the Lease Term unless a notice of such termination is
given to Tenant pursuant to subsection 12.01(b) or unless such termination
is decreed by a court.

 

(d)                                 At any time or from time to time after a
reentry, repossession or removal pursuant to subsection 12.01(c), whether
or not the Lease Term shall have been terminated pursuant to
subsection 12.01(b) Landlord may relet the Premises for the account of Tenant,
in the name of Tenant or Landlord or otherwise, without notice to Tenant, for
such term or terms and on such conditions and for such uses as Landlord, in its
absolute discretion, may determine. Landlord may collect any rents payable by
reason of such reletting. Landlord shall not be liable for any failure to relet
the Premises or for any failure to collect any rent due upon any such
reletting.

 

26

 

(e)                                  No expiration or termination of the Lease
Term pursuant to subsection 12.01(b), by operation of law or otherwise,
and no reentry, repossession or removal pursuant to subsection 12.01(c) or
otherwise, and no reletting of the Premises pursuant to
subsection 12.01(d) or otherwise, shall relieve Tenant of its liabilities
and obligations hereunder, all of which shall survive such expiration,
termination, reentry, repossession, removal or reletting.

 

(f)                                    In the event of any expiration or termination
of the Lease Term or reentry or repossession of the Premises or removal of
persons or property therefrom by reason of the occurrence of an Event of
Default, Tenant shall pay to Landlord all Base Rent, Additional Rent and other
sums required to be paid by Tenant, in each case to and including the date of
such expiration, termination, reentry, repossession or removal, and,
thereafter, Tenant shall, until the end of what would have been the Lease Term
in the absence of such expiration, termination, reentry, repossession or
removal and whether or not the Premises shall have been relet, be liable to
Landlord for, and shall pay to Landlord, as liquidated and agreed current
damages:  (i) all Base Rent, all
additional rent and other sums which would be payable under this Lease by Tenant
in the absence of any such expiration, termination, reentry, repossession or
removal, together with all expenses of Landlord in connection with such
reletting (including, without limitation, all repossession costs, brokerage
commissions, reasonable attorneys’ fees and expenses (including, without
limitation, fees and expenses of appellate proceedings), employee’s expenses,
alteration costs and expenses of necessary preparation for such reletting),
less (ii) the net proceeds, if any, of any reletting effected for the
account of Tenant pursuant to subsection 12.01(d). Tenant shall pay such
liquidated and agreed current damages on the dates on which rent would be
payable under this Lease in the absence of such expiration, termination,
reentry, repossession or removal, and Landlord shall be entitled to recover the
same from Tenant on each such date.

 

(g)                                 At any time after any such expiration or
termination of the Lease Term or reentry or repossession of the Premises or
removal of persons or property therefrom by reason of the occurrence of an
Event of Default, whether or not Landlord shall have collected any liquidated
and agreed current damages pursuant to subsection 12.01(f), Landlord shall
be entitled to recover from Tenant, and Tenant shall pay to Landlord on demand,
as and for liquidated and agreed final damages for Tenant’s default and in lieu
of all liquidated and agreed current damages beyond the date of such demand (it
being agreed that it would be impracticable or extremely difficult to fix the
actual damages), an amount equal to the excess, if any, of (a) the
aggregate of all Base Rent, additional rent and other sums which would be
payable under this Lease, in each case from the date of such demand (or, if it
be earlier, to date to which Tenant shall have satisfied in full its
obligations under subsection 12.01(f) to pay liquidated and agreed current
damages) for what would be the then unexpired Lease Term in the absence of such
expiration, termination, reentry, repossession or removal, discounted at the
rate of 5% per annum, over (b) the then fair rental value of the Premises,
discounted at the rate of 5% per annum for the same period. If any law shall
limit the amount of liquidated final damages to less than the amount above
agreed upon, Landlord shall be entitled to the maximum amount allowable under
such law.

 

27

 

(h)                                 If Landlord terminates this Lease or Tenant’s
right to possession, Landlord shall use its reasonable efforts to mitigate
Landlord’s damages. Such mitigation shall be subject to the following: (a)
reasonable efforts to mitigate shall not exceed such efforts as Landlord
generally uses to lease other space, (b) Landlord will not be deemed to have
failed to mitigate if Landlord leases any other portions of the Building before
reletting all or any portion of the Premises, (c) Landlord may relet the
Premises for a term greater or lesser than that remaining under the Lease Term,
as a part of a larger area, and the right to change the character or use made
of the Premises, and (d) any failure to mitigate as described herein with
respect to any period of time shall only reduce the Rent and other amounts to
which Landlord is entitled hereunder by the reasonable rental value of the
Premises during such period.

 

Section
12.02                     Bankruptcy or Insolvency.

 

(a)                                  If Tenant shall become a debtor in a case
filed under Chapter 7 or Chapter 11 of the Bankruptcy Code and Tenant
or Tenant’s trustee shall fail to elect to assume this Lease within sixty (60)
days after the filing of such petition or such additional time as provided by
the court within such 60-day period, this Lease shall be deemed to have been
rejected. Immediately thereupon, Landlord shall be entitled to possession of
the Premises without further obligation to Tenant or Tenant’s trustee, and this
Lease, upon the election of Landlord, shall terminate, but Landlord’s right to
be compensated for damages (including, without limitation, liquidated damages
pursuant to any provision hereof) or the exercise of any other remedies in any
such proceeding shall survive, whether or not this Lease shall be terminated.

 

(b)                                 Neither the whole nor any portion of Tenant’s
interest in this Lease or its estate in the Premises shall pass to any trustee,
receiver, conservator, assignee for the benefit of creditors or any other
person or entity, by operation of law or otherwise under the laws of any state
having jurisdiction of the person or property of Tenant, unless Landlord shall
have consented to such transfer. No acceptance by Landlord of rent or any other
payments from any such trustee, receiver, assignee, person or other entity
shall be deemed to constitute such consent by Landlord nor shall it be deemed a
waiver of Landlord’s right to terminate this Lease for any transfer of Tenant’s
interest under this Lease without such consent.

 

(c)                                  In the event of an assignment of Tenant’s
interests pursuant to this Section 12.02, the right of any assignee to
extend the Lease Term for an Extended Term beyond the Initial Term or the then
current Extended Term of this Lease shall be extinguished.

 

Section
12.03                     Additional Rights of Landlord.

 

(a)                                  No right or remedy hereunder shall be
exclusive of any other right or remedy, but shall be cumulative and in addition
to any other right or remedy hereunder or now or hereafter existing. Failure to
insist upon the strict performance of any provision hereof or to exercise any
option, right, power or remedy contained herein shall not constitute a waiver
or relinquishment thereof for the future. Receipt by Landlord of any Base Rent,
Additional Rent or other sums payable hereunder with knowledge of the breach of
any

 

28

 

provision
hereof shall not constitute waiver of such breach, and no waiver by Landlord of
any provision hereof shall be deemed to have been made unless made in writing. Landlord
shall be entitled to injunctive relief in case of the violation, or attempted
or threatened violation, of any of the provisions hereof, or to a decree
compelling performance of any of the provisions hereof, or to any other remedy
allowed to Landlord by law or equity.

 

(b)                                 Tenant hereby waives and surrenders for
itself and all those claiming under it, including creditors of all kinds,
(i) any right and privilege which it or any of them may have to redeem the
Premises or to have a continuance of this Lease after termination of Tenant’s
right of occupancy by order or judgment of any court or by any legal process or
writ, or under the terms of this Lease, or after the termination of the Lease
Term as herein provided, (ii) the benefits of any law which exempts
property from liability for debt and (iii) Tenant specifically waives any
rights of redemption or reinstatement available by law or any successor law.

 

(c)                                  If an Event of Default on the part of Tenant
shall have occurred hereunder and be continuing, then, without thereby waiving
such default, Landlord may, but shall be under no obligation to, take all
action, including, without limitation, entry upon the Premises, to perform the
obligation of Tenant hereunder immediately and without notice in the case of
any emergency as may be reasonably determined by Landlord and upon
five business days notice to Tenant in other cases. All reasonable
expenses incurred by Landlord in connection therewith, including, without limitation,
attorneys’ fees and expenses (including, without limitation, those incurred in
connection with any appellate proceedings), shall constitute additional rent
under this Lease and shall be paid by Tenant to Landlord upon demand.

 

(d)                                 If Tenant shall be in default in the
performance of any of its obligations under this Lease beyond any applicable
grace or cure period hereunder, Tenant shall pay to Landlord, on demand, all
expenses incurred by Landlord as a result thereof, including, without
limitation, reasonable attorneys’ fees and expenses (including, without
limitation, those incurred in connection with any appellate proceedings). If
Landlord shall be made a party to any litigation commenced against Tenant for
which Tenant’s indemnification of Landlord under this Lease is applicable and
Tenant shall fail to provide Landlord with counsel approved by Landlord and pay
the expenses thereof, Tenant shall pay all costs and reasonable attorneys’ fees
and expenses in connection with such litigation (including, without limitation,
fees and expenses incurred in connection with any appellate proceedings).

 

ARTICLE XIII - ESTOPPEL CERTIFICATES

 

Tenant and Landlord will,
upon ten (10) days written notice at the request of Landlord or Tenant, as the
case may be, execute, acknowledge and deliver a certificate which states that
this Lease is unmodified and in full force and effect (or, if there have been
modifications, that this Lease is in full force and effect as modified, and
setting forth such modifications) as well as the dates to which Base Rent,
Additional Rent and other sums payable hereunder have been paid and either
stating that to the knowledge of Landlord or Tenant, as the case may be, no
default exists

 

29

 

hereunder or specifying each such default of
which Landlord or Tenant, as the case may be, has knowledge and whether or not
Tenant is still occupying and operating the Premises. Any such certificate may
be relied upon by any actual or prospective mortgagee or purchaser of the
Premises.

 

ARTICLE XIV - SUBORDINATION; ATTORNMENT;TITLE

 

Prior to delivery of the
Premises to Tenant, Landlord shall cause the holder or holders of each and
every mortgage or trust deed affecting the Premises and the lessee under any
ground or underlying lease to deliver a subordination, nondisturbance and
attornment agreement in substantially similar form to that attached as Exhibit
H (the “SNDA”) to Tenant executed by all parties. Landlord may not delay
delivery to Tenant of the SNDA in order to obtain the SNDA. Notwithstanding the
foregoing, at the request of the holder of any of the aforesaid mortgage or
mortgages or the lessor under the aforesaid ground, master or underlying lease,
this Lease may be made prior and superior to such mortgage or mortgages and/or
such ground, master or underlying lease. Tenant shall attorn to the successor
in interest of Landlord following any transfer of such interest which occurs
either voluntarily or by operation of law and to recognize such successor as
the Landlord under this Lease. Such attornment is to be effective only upon
delivery to Tenant of an Subordination, Nondisturbance and Attornment Agreement
substantially in the form of Exhibit H.

 

Attached hereto as Exhibit I
is a current title insurance commitment for the Premises obtained by Landlord
at no cost to Tenant. Landlord warrants to Tenant that Landlord is not aware of
any matters affecting the title to the Premises that are not set forth on
Exhibit I.

 

ARTICLE
XV - TERMINATION AND HOLDING OVER

 

Upon
the expiration or earlier termination of this Lease, Tenant shall surrender to
Landlord the Premises and all Tenant’s improvements and alterations in good,
clean, orderly and undamaged condition, ordinary wear and tear excepted, and
Tenant shall deliver to Landlord all keys to the Premises, remove all its
personal property and make all necessary repairs. Landlord may elect to retain
or dispose of, in any manner, any alterations or personal property that Tenant
does not remove form the Premises on expiration or termination of this Lease. Tenant
waives all claims against Landlord for any damage to Tenant resulting from
Landlord’s retention or disposition of any such alterations or personal
property. Tenant shall be liable to Landlord for Landlord’s costs of storing,
removing and/or disposing of any such alterations or personal property.

 

In
the event of a holding over by Tenant after expiration or termination of this
Lease without the consent in writing of Landlord, Tenant shall be deemed a
tenant at sufferance and shall pay rent for such occupancy at the rate of one
hundred twenty-five percent (125%) of the last current Base Rent and will
continue to pay Additional Rent, prorated for the entire holdover period, plus
all attorneys’ fees and expenses incurred by Landlord in enforcing its rights
hereunder, plus any other damages occasioned by such holding over. Except as
otherwise agreed, any holding over with the written consent of Landlord shall
constitute Tenant a month-to-month tenant. In no event shall Tenant be liable
to Landlord or any third party for any damages, costs or expenses of any nature
as a result of Tenant’s remaining in possession of the Premises after the

 

30

 

expiration
or termination of the Term unless such retention of possession continues for
thirty (30) business days after Tenant’s receipt of written notice from
Landlord advising Tenant that it must vacate the Premises within thirty (30)
business days of such notice or be liable for such damages.

 

ARTICLE XVI - DECLARATION OF CENTERPOINT BUSINESS PARK

 

By execution of this Lease,
Tenant shall automatically become a member of Centerpoint Business Park Owners
Association, Inc., an Ohio not-for-profit corporation, formed for the purpose
of:  (a) administering the Common
Facilities and Common Area Easements throughout the Property, as such terms are
defined in the Declaration of Covenants, Conditions and Restrictions for
Centerpoint Business Park (the “Declaration”), a copy of which is attached
hereto as Exhibit “C”; (b) allocating and imposing financial responsibility for
such tasks among the Owners of the Property; and (c) enforcing the various
covenants, conditions and restrictions set forth in the Declaration. Tenant
agrees to be bound by the terms and conditions contained in the Declaration
throughout the entire Term of this Lease.

 

ARTICLE XVII - RIGHT OF FIRST OFFER

 

Landlord grants to Tenant a
right of first offer with respect to the lease of any available adjacent space
in the Building up to approximately 210,953 additional square feet (the “Adjacent
Space”). If, at any time or from time to time, Landlord determines to lease any
portion of the Adjacent Space to an unrelated third party, Landlord shall
notify Tenant of such determination and the terms and conditions of the leasing
that would be acceptable to Landlord. Tenant shall have five (5) business days
after notice of such determination by Landlord to determine whether it elects
to accept such terms and lease the portion of the Adjacent Space by notifying
Landlord in writing within such five (5) business day period of its election. If
Tenant elects to lease such space, Landlord will prepare a lease amendment to
this Lease. If Tenant declines to lese the space, but if at the time a third
party is prepared to lese such space, or any portion thereof, and the terms
materially differ from those offered to Tenant, Landlord shall so advise Tenant
and Tenant shall have three (3) business days after notice of such terms to
elect to lease the space on such revised terms.

 

ARTICLE XVIII - SIGNS

 

Tenant may place exterior
signage on the front and rear of the Premises and on the pylon or monument, if
any, only after obtaining the prior written consent of Landlord, which consent
shall not be unreasonably withheld, and all necessary governmental approvals,
if any. Any such signs of Tenant shall be in compliance with the Declaration
for Centerpoint Business Park and all local ordinances, and the determination
of such requirements and the prompt compliance therewith shall be the
responsibility of Tenant. Tenant shall, at Tenant’s sole cost and expense,
maintain all such approved signs, advertising or display matter in good
condition and repair and shall pay for all electric current consumed thereby. Upon
the expiration or earlier termination of this Lease, Tenant shall remove any
signs and repair any damage resulting from such removal.

 

ARTICLE XIX - WAIVER OF SUBROGATION

 

Landlord and Tenant hereby
release each other and each other’s employees, agents, customers and invitees
from liability for any loss, damage or destruction of real or personal

 

31

 

property occurring in, on or about the
Premises, the Building or the Property by reason of fire or other casualty to
the extent compensation for such loss is received by the owner of such property
from insurance or would have been insured against if the damaged party had
maintained insurance required by this Lease, even if such loss, damage or
destruction is caused by the negligence of a person hereby released. Each party
shall cause its respective insurance carrier to permit the waiver of
subrogation as set forth herein.

 

ARTICLE XX - PARKING

 

Tenant shall have the
exclusive use of the Parking Spaces set forth in Section 1.01 (s) hereof. With
the prior written consent of Landlord and at Tenant’s sole cost and expense,
Tenant may add additional trailer parking spaces on the north side of the
Building adjacent to the Premises in the area shown on Exhibit A. If the amount
or number of such parking spaces or areas is diminished through no fault of
Landlord, this Lease shall remain in full force and effect, and Landlord shall
not be subject to any liability, nor shall Tenant be entitled to any
compensation or abatement of Rent.

 

ARTICLE XXI - LANDLORD’S WORK/TENANT IMPROVEMENTS

 

Landlord
shall, at its sole cost and expense:  (a)
construct and improve the Building in accordance with applicable zoning and
building laws and ordinances; (b) complete the Building in accordance with the
plans prepared by Landlord’s architect; and (c) complete those improvements to
the Premises detailed on the schedule attached Exhibit “G” (the “Tenant
Improvements”) on a “turn-key” basis. Tenant shall not do anything, nor fail to
do anything, that will cause a delay in the completion of the construction of
the Building or Landlord’s Work or that will increase the costs of such
construction. In the event Tenant fails to cooperate or comply with this
Article XXI and such failure results in a delay of completion of the
construction of the Building or Landlord’s Work, Tenant shall be responsible to
Landlord for all Rent that would have been due from Tenant under this Lease but
for such delay. Tenant acknowledges and agrees that the Building and all improvements
constituting Landlord’s Work and/or Tenant Improvements are the property of
Landlord and, upon the expiration or earlier termination of this Lease for any
reason, all such Tenant Improvements shall remain in the Premises.

 

Tenant,
prior to the commencement of the Term, is being permitted hereunder to enter
upon the Premises to install certain equipment. Any work done by Tenant prior
to Landlord’s completion of the construction of the Building or Landlord’s Work
shall be done in such a manner as will not interfere with the progress of the
completion of the Building or Landlord’s Work, and Landlord shall have no
liability or responsibility for loss of, or any damage to, fixtures, equipment
or other property of Tenant so installed or placed upon the Premises.

 

The
terms of this Lease, including, without limitation, the Tenant Improvements,
shall prevail as to the allocation of costs or responsibilities for the
performance of Landlord’s or Tenant’s work. During the period of Landlord’s
construction of the Tenant Improvements, to the extent Tenant has taken early
occupancy for the purposes of racking and shelving, as permitted herein, Tenant
shall have access to loading docks and the Premises, subject to reasonable
scheduling consistent with the Landlord’s work and Tenant’s obligation to not
interfere therewith.

 

32

 

At
the time of Landlord’s delivery of the Premises on the Delivery Date, Landlord’s
work shall be substantially completed such that only minor work of the type
typically referred to as “punchlist” items remain. Landlord and Tenant shall
agree upon a formal punchlist of such remaining work at such time which will
also include a schedule to complete the punchlist items. If the parties are not
able to agree on the punchlist, they will each ask their respective architects
to select a mutually agreed on third party architect . Landlord shall act
diligently to complete the punchlist items in accordance with the schedule,
failing which Tenant may do so at the cost of landlord.

 

Landlord
shall be responsible to obtain the certificate of occupancy, and Landlord shall
promptly deliver a copy thereof to Tenant.

 

Landlord
shall also deliver to Tenant at the time of Landlord’s delivery of the Premises
copies of all instruction manuals and warranties pertaining to Landlord’s work
and the construction of the Tenant Improvements.

 

ARTICLE XXII - MISCELLANEOUS

 

Section
22.01                     No Merger.  
There shall be no merger of this
Lease or of the leasehold estate hereby created with the fee estate in the
Premises by reason of the fact that the same person acquires or holds, directly
or indirectly, this Lease or the leasehold estate hereby created or any
interest herein or in such leasehold estate, as well as the fee estate in the
Premises or any interest in such fee estate.

 

Section
22.02                     Notices and Other Instruments.   All
notices, offers, consents and other instruments given pursuant to this Lease
shall be in writing, sent by a courier or express service guaranteeing
overnight delivery, and addressed to Landlord and Tenant at the address for
each set forth in Sections 1.01 (a) and (b), respectively, and shall be
effective upon receipt or refusal by the addressee to accept delivery. Landlord
and Tenant each may from time to time specify, by giving fifteen (15) days
notice to each other party, (i) any other address in the
United States as its address for purposes of this Lease and (ii) any
other person or entity in the United States that is to receive copies of
notices, offers, consents and other instruments hereunder. Notices required
under this Lease may be given by an attorney representing the notifying party
or, if from Landlord, by Landlord’s managing agent, if any. Except for property
operating notices, as opposed to notices of default, rent payment and the like,
no notice shall be given at the Premises.

 

Section
22.03                     Surrender.   Upon
the expiration or termination of this Lease, Tenant shall surrender the
Premises to Landlord in good repair and condition except for any damage
resulting from Condemnation or Casualty or normal wear and tear not required to
be repaired by Tenant. The provisions of this Section and Article III
shall survive the expiration or other termination of this Lease.

 

Section
22.04                     Separability; Binding Effect;
Governing Law; Time of the Essence.  
Each provision hereof shall be
separate and independent, and the breach of any provision by Landlord shall not
discharge or relieve Tenant from any of its obligations hereunder. Each
provision hereof shall be valid and shall be enforceable to the extent not
prohibited by law. If any provision hereof or the application thereof to any
person or circumstance shall to any extent be

 

33

 

invalid
or unenforceable, the remaining provisions hereof, or the application of such
provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby. All provisions
contained in this Lease shall be binding upon, inure to the benefit of and be
enforceable by the successors and assigns of Landlord to the same extent as if
each such successor and assign were named as a party hereto. All provisions
contained in this Lease shall be binding upon the successors and assigns of
Tenant and shall inure to the benefit of and be enforceable by the permitted
successors and assigns of Tenant in each case to the same extent as if each
successor and assign were named as a party hereto. This Lease shall be governed
by and interpreted in accordance with the laws of the State of Ohio. Time is of
the essence with respect to all provisions of this Lease.

 

Section
22.05                     Submission of Lease.   Submission
of this instrument for examination constitutes neither a reservation of nor
option for the Premises. This instrument does not become effective as a lease
or otherwise until execution and delivery by both Landlord and Tenant.

 

Section
22.06                     Waiver of Jury Trial.   Landlord
and Tenant agree that, to the extent permitted by law, each shall and hereby
does waive trial by jury in any action, proceeding or counterclaim brought by
either against the other on any matter whatsoever arising out of or in any way
connected with this Lease.

 

Section
22.07                     Interpretation.   The
table of contents and the headings of the various paragraphs and schedules of
this Lease have been inserted for reference only and shall not to any extent
have the effect of modifying the express terms and provisions of this Lease. Unless
stated to the contrary, any references to any Section, subsection, Schedule and
the like contained herein are to the respective Section, subsection, Schedule
and the like of this Lease. References to any specific gender shall be deemed
to include the other gender or neuter, as applicable, and references to the singular
shall include the plural, and vice-versa, all as the context may require. If
Tenant consists of multiple parties, the liability of such parties shall be
joint and several, and the release of any one or more of such parties shall not
affect the liability of any other party not expressly released in writing. This
Lease shall not be construed more strictly against one party or the other, it
being recognized that both Landlord and Tenant have contributed substantially
and materially to the preparation of this Lease.

 

Section
22.08                     Counterparts.   This
Lease may be executed in two or more counterparts and all of such counterparts
together shall be deemed to constitute one and the same instrument.

 

Section
22.09                     Landlord’s and Tenant’s
Liability.   Notwithstanding anything to the contrary
provided in this Lease, it is specifically understood and agreed, such
agreement being a initial consideration for the execution of this Lease by
Landlord and Tenant, that there shall be absolutely no personal liability on
the part of any partner, director, member, officer or shareholder of Landlord
or Tenant, as the case may be, its or their successors or assigns with respect
to any of the terms, covenants and conditions of this Lease. Any liability on
the part of Landlord shall be limited solely to Landlord’s interest in the
Premises. Any judgment against Landlord shall be satisfied solely out of the
proceeds of sale of Landlord’s interest in the Premises. No judgment against
Landlord shall give rise to any right of execution or levy against Landlord’s
other assets, such exculpation of liability to be absolute and without any
exception whatsoever. Furthermore, it is understood and agreed that in each and
every instance in which

 

34

 

Landlord’s
approval or consent is required under this Lease, Landlord shall not be liable
for damages (whether direct, consequential or otherwise) by reason of its
failure to grant such approval or consent, and Tenant’s sole remedy shall be an
action for injunctive relief or specific performance.

 

Section
22.10                     Brokerage Commission.   Tenant
represents that it has dealt with no real estate broker or agent in connection
with this Lease or the Premises other than the Broker or Brokers identified in
Section 1.01(p) hereof. In consideration of Broker’s services in procuring this
Lease, Landlord shall pay Broker a leasing commission pursuant to a separate
written agreement between Landlord and Broker. Tenant shall indemnify and hold
harmless Landlord from any claim to a brokerage commission, fee or compensation
by any other party claiming a commission, fee or compensation based upon its
representation of or relationship with Tenant relative to this Lease or the
Premises.

 

Section
22.11                     Amendments and Modifications.   Except
as expressly provided herein, this Lease may not be modified or terminated
except by a writing signed by Landlord and Tenant.

 

Section
22.12                     Additional Rent.   All
amounts other than Base Rent which Tenant is required to pay or discharge
pursuant to this Lease shall constitute additional rent.

 

Section
22.13                     Options.   The
options to extend the Term created in this Lease, if any, are exercisable only
as long as this Lease is in effect and has not expired or been earlier
terminated.

 

Section
22.14                     Memorandum of Lease.   This
Lease shall not be recorded; however, Landlord and Tenant shall simultaneously
execute and deliver a Memorandum of Lease in the form attached hereto as
Exhibit “F” and either party may record such Memorandum of Lease to give
published notice of the rights and obligation of Landlord and Tenant hereunder.

 

Section
22.15                     Tenant Authority.   (a)
If Tenant is a partnership, each person executing this Lease on behalf of
Tenant warrants that Tenant is a validly existing partnership qualified to do
business under the laws of the State of Ohio, that such partnership has the
full right and authority to enter into this Lease and that no other partners
other than those signing this Lease on behalf of Tenant must join in this
execution; and (b) if Tenant is a corporation or limited liability company,
each person executing this Lease on behalf of Tenant hereby warrants that (i)
Tenant is a duly constituted corporation or limited liability company, as the
case may be, qualified to do business and in good standing in the State of
Ohio; (ii) such corporation or limited liability company, as the case may be,
has the full right and authority to enter into this Lease, and (iii) each
person signing this Lease on behalf of the Tenant has been duly authorized by
Tenant to execute and deliver this Lease on behalf of the corporation or
limited liability company, as the case may be, and that no other signatures are
necessary.

 

Section
22.16                     Currency.   All
references in this Lease to money shall be to the currency of the
United States of America.

 

Section
22.17                     Exhibits.   Reference
is made to the Exhibits set forth in Section 1.01(r) above, which exhibits are
attached hereto and incorporated herein by reference.

 

35

 

Section
22.18 Signage.    No other signs other than tenant’s may be
placed on the exterior of the Premises.

 

ARTICLE XXIII - RIGHT OF PURCHASE

 

If at any time during the
Term, Landlord commences negotiations with any third party for the purchase of
the Building, however denominated, (a “Landlord Transfer”) then Landlord shall
so notify Tenant, which notice shall specify all of the terms of the Landlord
Transfer. Within fifteen (15) days after Tenant’s receipt of such notice,
Tenant shall give written notice to Landlord as to whether or not it desires to
purchase the Building solely upon the terms set forth in said Landlord’s
notice; provided, it is understood that, if the terms of the Landlord Transfer
include the Building as part of a portfolio of buildings or properties, the
Building may not be separated therefrom. If Tenant does not desire to purchase
the Building or Premises or Tenant fails to deliver such written notice to
Landlord within such period, Landlord shall have the right to sell the Building
to any third party free and clear of any rights of Tenant in such space. If
Landlord does not sell the Building to any third party within 240 days after
Tenant’s declination, such space shall again become subject to the rights of
Tenant under this Paragraph. If Tenant so elects to purchase the Building, the
parties shall act in good faith and with all due diligence to enter into a
comprehensive agreement in a form that is in keeping with the practices in the
Columbus Ohio community of sophisticated parties typical for the transaction at
hand.

 

ARTICLE XXIV - CONTINGENCY

 

Landlord acknowledges that
Tenant would not be entering into this Lease without the benefit of the real
estate tax abatement, as described in Section 4.03 of this Lease; the Job
Creation Tax Credit, the Enterprise Zone and Warehouse Inventory Tax Exemption
which is available from the State of Ohio and which are intended
to provide incentives to out-of-state businesses to relocate into the
State of Ohio (collectively referred to as “Tax and Economic Incentives”). The
provision to Tenant of the Tax and Economic Incentives is the material
consideration to Tenant to relocate its operation to the State of Ohio and to
enter into this Lease, with out the Tax and Economic Incentives Tenant would
not be doing so. Landlord, however, has requested that Tenant execute the Lease
although Tenant has not yet received favorable, irrevocable action, approval
for, or the actual the granting of the Tax and Economic Incentives (the “Approval”).
Solely as an accommodation to Landlord to enable Landlord to obtain various
approvals of this Lease, Tenant is executing this Lease prior to the Approval.
Accordingly, Landlord and Tenant both hereby acknowledge and agree that Tenant’s
execution of this Lease is wholly subject to and conditioned upon the Approval
and if Tenant is not granted the Approval that Tenant requires or deems
necessary for Tenant to relocate its operations to the State of Ohio that this
Lease shall, upon written notice to Landlord from Tenant, be null and void, of
no further force or effect, and following such notice neither party shall have
any liability to the other whatsoever whether arising under this Lease, from
their negotiation or actions based upon the Lease or such negotiations; provided,
however, that in the event Tenant is not granted the Approval and Tenant
thereafter elects to terminate this Lease, Tenant shall reimburse Landlord for
all costs and expenses incurred by Landlord in furtherance of the Tenant
Improvements from the date of this Lease until the date of Landlord’s receipt
of Tenant’s written notice of termination pursuant to this Article XXIV,
provided such Tenant Improvements and the cost thereof have been approved in
writing by Tenant. Tenant covenants and agrees to deliver such 

 

36

 

reimbursement amount in full within thirty
(30) days of Tenant’s receipt of written request from Landlord for the same.

 

37

 

IN
WITNESS WHEREOF, the
parties hereto have caused this Lease to be executed as of the date first above
written.

 

 

	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CENTERPOINT
  II LLC, a Michigan limited

  liability company

  	
   

  	
  BARE
  ESCENTUALS BEAUTY, INC.,

  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
  KIRCO
  Centerpoint II, LLC,

  its
  Manager

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Clifford D. Aiken

  	
   

  	
   

  	
  By:

  	
  /s/
  Myles B. McCormick

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Clifford
  D. Aiken, Agent

  	
   

  	
   

  	
  Name:

  	
  Myles
  B. McCormick

  
	
   

  	
   

  	
   

  
	
  Its:

  	
  Agent

  	
   

  	
   

  	
  Its:

  	
  Chief
  Financial Officer

  
										

 

 

ACKNOWLEDGMENTS

 

	
  STATE
  OF

  	
  California

  	
  )

  
	
   

  	
  )
  SS:

  
	
  COUNTY
  OF

  	
  San Francisco

  	
  )

  
				

 

The
foregoing instrument was acknowledged before me this 31st day of January, 2007,
by Myles McCormick the                                        
of Centerpoint II LLC, a Michigan limited liability company, on behalf of the
company.

 

	
   

  	
  Anath Barel

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
  My
  commission expires:

  
	
   

  	
  July 2, 2008

  
	
   

  
	
  State of
  California

  
	
  County of San
  Francisco

  

 

On
January 31, 2007 before me, Myles McCormick, the Chief Financial Officer of
Bare Escentuals Beauty, Inc., a Delaware corporation, personally appeared known
to me (or provided to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he/she executed the same in his/her authorized capacity, and that by his/her
signature on the instrument the person, or the entity upon behalf of which
person acted, executed the instrument.

 

	
  WITNESS
  my hand and official seal

  
	
   

  
	
   

  
	
  Signature

  	
  /s/
  Anath Barel

  	
   

  
	
   

  
	
   

  	
  (Seal)

  
				

 

ACKNOWLEDGMENTS

 

	
  STATE
  OF

  	
  Ohio

  	
  )

  
	
   

  	
  )
  SS:

  
	
  COUNTY
  OF

  	
  Franklin

  	
  )

  
				

 

The
foregoing instrument was acknowledged before me this 13th day of February, 2007,
by Clifford D. Aiken the Agent of Centerpoint II LLC, a Michigan limited
liability company, on behalf of the company.

 

	
   

  	
  /s/ Tina
  Hawk Fuller

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
  My commission
  expires:

  
	
   

  	
                                                       

  
	
   

  
	
  State of
  California

  
	
  County of
                                            

  

 

On
                                           
before me,                                                  ,
the                                                         
of Bare Escentuals Beauty, Inc., a Delaware corporation, personally appeared
known to me (or provided to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he/she executed the same in his/her authorized capacity, and that by
his/her signature on the instrument the person, or the entity upon behalf of
which person acted, executed the instrument.

 

	
  WITNESS
  my hand and official seal

  
	
   

  
	
   

  
	
  Signature

  	
   

  	
   

  

 

38

 

EXHIBIT “A”

 

DEPICTION OF THE PREMISES

 

 

A-1

 

EXHIBIT “B”

 

LEGAL DESCRIPTION OF THE PROPERTY

 

EXHIBIT A

 

Legal Description

 

 

LOT SPLIT

A 26.113 ACRE TRACT OUT OF

A 230.228 ACRE TRACT DEEDED TO

CENTER POINT INVESTMENT LLC

RECORDED IN INSTRUMENT NUMBER 200402200036301

IN SECTION 30 TOWNSHIP 11, NORTH,

RANGE 21 WEST, CONGRESS LANDS

VILLAGE OF OBETZ

COUNTY OF FRANKLIN

STATE OF OHIO

 

 

July 6, 2006

 

Situated in the State of Ohio,
County of Franklin, Village of Obetz, in Section 30, Township 11 North, Range 21
West, Congress Lands, being a 26.113 acre lot split out of a 230.228 acre tract
deeded to Centerpoint Investment LLC recorded in instrument number
203402200036801, fell deed and plan references mode being in Franklin County
Recorder’s Office, unless noted otherwise) and being more particularly
described as follows:

 

Beginning for a POINT OF
COMMENCEMENT (POC) as an Aluminium Disk in concrete numbered FCOS 5207. found
in the existing right-of-way centerline of Toy Road, Township Road 236, width
varies, which point being at the southwest corner of said 230228 acre tract,
and which point also being in the easterly line of Hamilton Township, Section
25, Township 4, Range 22, and also being in the westerly line of Madison
Township, section 30, Township 11 North Range 21, which point also being the
southwest corner of the Northwest Quarter of said Section 30;

 

Thence along the existing
right-of-way centerline of said Toy Road, also along the quarter section line
of said section, also along the southerly line of said Centerpoint Investment
LLC land, and also along the northerly line of land deeded to The Village of
Obez in instrument number 200510310229043, South 86 Degrees 22 Minutes 45
Seconds East, 814.62 feet to a 5/8” rebar set in said the existing right-of-way
centerline of Toy Road, and said southerly and northerly line, which point also
being the TRUE POINT OF BEGINNING (POB) for the 26.113 acre lot split herein
described:

 

Thence perpendicular to said
centerline, North 03 Degrees 37 Minutes 15 Seconds East, 63.27 feet to a 5/6”
rebar set in a proposed northerly line of said Toy Road, which point also being
of the southwest corner of a proposed easement:

 

The following five (5) courses
are along the easterly line of said proposed easement:

 

Thence North 11 Degrees 17
Minutes 52 Seconds West, 56.45 feet to a 5/5” rebar set at an angle point in
said proposed easterly line;

 

Thence North 03 Degrees 37
Minutes 15 Seconds East, 30.06 feet to a 5/8” rebar set at an angle point in
said proposed easterly line;

 

Thence North S6 Degrees 25
Minutes 34 Seconds West 3.46 feet to a 5/8” rebar set at an angle point in said
proposed easterly line;

 

705-F Lakeview Plaza Boulevard Washington, Ohio 43085-4779

Phone: 614-841-9500 Fax: 614-841-0170

Email info@brhgroup.com

 

B-1

 

EXHIBIT A (CONT’D.)

 

Thence North 03 Degrees 49
Minutes 48 Seconds East, 468,72 feet to a 5/8” rebar set at an angle point in
said proposed easterly line;

 

Thence North 43 Degrees 15
Minutes 34 Seconds West, 40.97 feet to a 5/8” rebar set at the northeasterly
corner of said proposed easement;

 

The following four (4) courses
cross said 239.228 acre tract deeded to Centerpoint Investment LLC as it is
recorded in said instrument number 200402200036801:

 

Thence North 46 Degrees 44
Minutes 26 Seconds East, 65.55 feet to a 5/8” rebar set;

 

Thence South 85 Degrees 22
Minutes 45 Seconds East, 64.59 feet to a 5/8” rebar set;

 

Thence North 46 Degrees 44
Minutes 26 Seconds East, 167.89 feet to a 5/8” rebar set;

 

Thence South 85 Degrees 22
Minutes 45 Seconds East, 1140.34 feet to a 5/8” rebar set to the westerly line
of proposed Centerpoint Parkway, 60 feet wide;

 

Thence along the westerly line
of said proposed Centerpoint Parkway, South 83 Degrees 34 Minutes 26 Seconds West,
865.00 feet to a 5/8” rebar set in the existing right-of-way centerline of said
Toy Road, which point also being in the southerly line of said Centerpoint
Investment LLC land, which point also being in the northerly line of land
deeded to Opus North Corporation in instrument number 200605250102491.

 

Thence along the existing
right-of-way centerline of said Toy Road, and also along the Quarter Section
line of said Section 30, and also along the southerly line of said Centerpoint
Investment LLC land, and also along the northerly line of said Opus North
Corporation land, also along the northerly line of said Village of Obetz land,
North 86 Degrees 22 Minutes 45 Seconds West, 1319.02 feet to the TRUE POINT OF
BEGINNING, containing 26.113 acres and subject to all legal easements,
restrictions, and right-of-way of record.

 

Jonathan E. Phelps, Ohio
Surveyor no. 8241, of BRH Group, Inc. Washington Ohio prepared the above
description from actual field surveys performed in April 2006. All iron price
set are 5/8”x30” rebar with a yellow plastic can marked BRH GROUP. Basis of
bearings are based on the same meridian as the existing right-of-way centerline
of Toy Road as shown on the subject property’s record deed. Centerpoint
Investment LLC in instrument number 200402200036801 between FCGS 5207 and fcgs
5208 Centerline bearing: South 86 Degrees 22 Minutes 45 Seconds East.

 

	
  BRH Group,
  Inc.

  	
   

  	
  

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Jonathan
  E. Phelps

  	
   

  	
  7/06/06

  	
   

  
	
  Jonathan E.
  Phelps, P.S. No 8241

  	
  Date

  
	
  Illegible

  	
   

  
					

 

 

0.44.C

Split

26.113

Out of

(186)

246

 

 

B-2

 

EXHIBIT “C”

 

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS

FOR CENTERPOINT BUSINESS
PARK

 

 

C-1

 

EXHIBIT “D”

 

CONFIRMATION OF LEASE COMMENCEMENT,

TERMINATION DATES AND BASE RENT AMOUNT

 

As required by Section 3.01
of that certain Industrial Warehouse Lease Agreement made                                    ,
200  , by and between BARE ESCENTUALS BEAUTY, INC., a Delaware
corporation, and CENTERPOINT II LLC, a Michigan limited liability company (“Lease”),
the parties now confirm that:

 

16.                                 The Commencement Date of the Lease is                                            ,
200  .

 

17.                                 The Termination Date of the Lease is                                            ,
200   .

 

18.                                 The Base Rent in effect during the first five
years of the Initial Term of the Lease is
$               
per square foot.

 

IN
WITNESS WHEREOF, the
parties have caused this Confirmation to be executed by their duly authorized
representatives as of the dates written below.

 

	
  BARE
  ESCENTUALS BEAUTY, INC.,

  a Delaware corporation

  	
  CENTERPOINT
  II LLC,

  a Michigan limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  

 

D-1

 

EXHIBIT “E”

 

SEVERABLE PROPERTY

 

All apparatus, personal
property, trade fixtures, inventory, equipment, machinery, fittings, furniture,
furnishings, chattel, materials and supplies located on and used in, or related
to Tenant’s business, including, but not limited to, inventory storage and
movement equipment, overhead cranes, mainframe computers, kitchen equipment and
telephone and similar systems and articles of personal property of every kind
and nature whatsoever, and any additions, replacements, accessions and
substitutions thereto or therefor, and all proceeds of all of the foregoing, or
any part of the foregoing used or usable in connection with any present or
future operation or letting (or subletting) of the Premises or the activities at
any time conducted thereon and now or hereafter owned by Tenant or by any
subtenant or other person or entity using all or any part of the Premises by,
through, or under (or with the express or implied consent of) Tenant. Lighting
fixtures are not considered Severable Property regardless of the fact that the
lighting is coordinated with the placement of racking systems and other trade
fixtures unless Tenant installs the lights as part of Tenant’s storage and
racking system.

 

E-1

 

EXHIBIT “F”

 

MEMORANDUM OF LEASE

 

This MEMORANDUM OF LEASE is
entered into as of this       day of                           ,
2007 by and between CENTERPOINT II LLC, a Michigan limited liability company,
and BARE ESCENTUALS BEAUTY, INC., a Delaware corporation, to set forth
following information:

 

The parties hereto have
entered into a Lease Agreement of even date herewith under the following terms:

 

	
  a.

  	
   

  	
  Name
  and Address of Landlord:

  	
   

  	
  Centerpoint
  II LLC  c/o KIRKO  4200
  Regent Street, Suite #200  Columbus, Ohio 43219

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
   

  	
  Name
  and Address of Tenant:

  	
   

  	
  Bare
  Escentuals Beauty, Inc.  71 Stevenson Street, 22nd Floor San Francisco, California  94105

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c.

  	
   

  	
  Date
  of Execution of Lease:

  	
   

  	
                             
       , 2007

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  d.

  	
   

  	
  Description
  of Leased Premises Including ORC §5301.011 Reference:

  	
   

  	
  The
  Leased Premises consists of approximately 301,180 sq. ft. of space, as
  depicted on the attached Exhibit A,  of
  the total 512,133 sq. ft. of the building commonly known as Centerpoint
  Building #2 (the “Building”). Landlord acquired title to the real property of
  which the Leased Premises are a part in Deed Volume     ,
  Page                      ,
  Franklin County, Ohio Records. The Building is located on the real estate
  more accurately described in the attached Exhibit B.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  e.

  	
   

  	
  Term
  of Lease:

  	
   

  	
  Ten
  (10) years commencing on the Commencement Date referred to below, and
  expiring May 31, 2017.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  f.

  	
   

  	
  Renewal
  or Extension Rights:

  	
   

  	
  Two
  (2) consecutive five (5) year options to extend

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  g.

  	
   

  	
  Commencement
  Date:

  	
   

  	
  June
  1, 2007.

  

 

Landlord designates Tenant
as the “Owner” of the Premises, and such term is defined in, and solely for the
purposes of the Declaration of Covenants and Conditions and Restriction for
Centerpoint Business Park, of record in Vol.      ,
Pages     , Franklin County, Ohio records.

 

F-1

 

IN WITNESS WHEREOF, the
parties hereto have duly executed this Memorandum of Lease as of the day and
year first above referenced.

 

	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  CENTERPOINT
  II LLC,

  a Michigan limited liability company

  	
  BARE
  ESCENTUALS BEAUTY, INC.,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  

 

ACKNOWLEDGMENTS:

 

	
  STATE OF

  	
   

  	
  )

  
	
   

  	
  ) SS:

  
	
  COUNTY OF

  	
   

  	
  )

  
				

 

The
foregoing instrument was acknowledged before me this       day of
                             ,
200   by                           ,
the                                              
of Centerpoint II LLC, a Michigan limited liability company, on behalf of the
company.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  

 

 

State
of California

County
of                                         

 

On
                                      
before me,
                                                                ,
the                                                            
of Bare Escentuals Beauty, Inc., a Delaware corporation, personally appeared
known to me (or provided to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he/she executed the same in his/her authorized capacity, and that by
his/her signature on the instrument the person, or the entity upon behalf of
which person acted, executed the instrument.

 

	
  WITNESS
  my hand and official seal

  
	
   

  
	
   

  
	
  Signature

  	
   

  	
   

  
	
   

  	
  (Seal)

  
				

 

This
Instrument Prepared By:

Christopher
D. Adkinson, Esq.

Kephart
Fisher LLC

207
North Fourth Street

Columbus,
Ohio  43215

 

F-2

 

EXHIBIT “G”

 

Tenant Improvements

 

 

G-1

 

 

G-2

 

 

G-3

 

 

 

G-4

 

 

G-5

 

 

G-6

 

EXHIBIT H

 

SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT

 

THIS SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT (the “Agreement”) is made as of
the                
day                          ,
2007 by and between ORIX Real Estate Capital, Inc., its successors, assigns and
affiliates, (collectively, “Lender”) having an address at 100 North Riverside
Plaza, Suite 1400, Chicago, Illinois 60606 and BARE ESCENTUALS BEAUTY, INC., a
Delaware corporation having an address at 71 Stevenson Street, San Francisco,
California (“Tenant”).

 

RECITALS:

 

A.            Tenant is the holder of a leasehold
estate in a portion of the property described on Exhibit A (the “Property”)
under and pursuant to the provisions of a certain lease dated
                           ,
2007 between  CENTERPOINT II LLC, a
Michigan limited liability company, (“Landlord”) and Tenant, as tenant
(the “Lease”);

 

B.            The Property is or is to be
encumbered by one or more mortgages, deeds of trust, deeds to secure debt or
similar security agreements (collectively, the “Security Instrument”) in
favor of or to be assigned to Lender; and

 

C.            Tenant has agreed to subordinate the
Lease to the Security Instrument and to the lien thereof and Lender has agreed
to grant non-disturbance to Tenant under the Lease on the terms and conditions
hereinafter set forth.

 

AGREEMENT:

 

NOW,
THEREFORE, the parties hereto mutually agree as follows:

 

(a)           Subordination. The Lease shall
be subject and subordinate in all respects to the lien and terms of the Security
Instrument, to any and all advances to be made thereunder and to all renewals,
modifications, consolidations, replacements and extensions thereof.

 

(b)           Nondisturbance. So long as
Tenant pays all rents and other charges as specified in the Lease and is not
otherwise in default (beyond applicable notice and cure periods) of any of its
obligations and covenants pursuant to the Lease, Lender agrees for itself and
its successors in interest and for any purchaser of the Property upon a
foreclosure of the Security Instrument or other entry by Lender, that: (a)
Tenant’s possession of the premises as described in the Lease will not be
disturbed during the term of the Lease, as said term may be extended pursuant
to the terms of the Lease or as said premises may be expanded as specified in
the Lease, (b) so long as Tenant is not in default under the Lease, Lender and
its successors in interest and  any
purchaser of the Property shall not disturb Tenant’s right of quiet
possession of the Leased Premises under the terms of the Lease, (c) Lender and
its successors in interest and  any
purchaser of the Property shall not join Tenant as a party defendant in
any foreclosure proceeding with respect to the Security Instrument (unless
required by law), and (d) subject to the terms of this Agreement and so
long as Tenant is not in default under the Lease, Lender and its successors in
interest and  any purchaser of the
Property shall recognize the terms of the 

 

H-1

 

Lease.
For purposes of this Agreement, a “foreclosure” shall include (but not be
limited to) a sheriff’s or trustee’s sale under the power of sale contained in
the Security Instrument, the termination of any superior lease of the Property
and any other transfer of Landlord’s interest in the Property under peril of
foreclosure, including, without limitation to the generality of the foregoing,
an assignment or sale in lieu of foreclosure.

 

(c)           Attornment. Tenant agrees to
attorn to, accept and recognize any person or entity which acquires the
Property through a foreclosure (an “Acquiring Party”) as the landlord
under the Lease for the then remaining balance of the term of the Lease, and
any extensions thereof as made pursuant to the Lease. The foregoing provision
shall be self-operative and shall not require the execution of any further
instrument or agreement by Tenant as a condition to its effectiveness. Tenant
agrees, however, to execute and deliver, at any time and from time to time,
upon the request of Lender or any Acquiring Party any reasonable instrument
which may be necessary or appropriate to evidence such attornment.

 

(d)           No Liability. Notwithstanding
anything to the contrary contained herein or in the Lease, it is specifically
understood and agreed that neither Lender, any receiver or any Acquiring Party
shall be:

 

(i)            except
as provided in the last paragraph of this Section 4, liable for any act,
omission, negligence or default of any prior landlord (other than to cure
defaults of a continuing nature with respect to the maintenance or repair of
the demised premises or the Property); provided, however, that Lender and any
Acquiring Party shall be liable and responsible for the performance of all
covenants and obligations of Landlord under the Lease accruing from and after
the date that it takes title to the Property except that Acquiring Party shall
not be responsible for the return of any security deposit which was not
delivered to Acquiring Party; or

 

(ii)           except
as set forth in (a), above, liable for any failure of any prior landlord to
construct any improvements; or

 

(iii)          subject
to any offsets, credits, claims or defenses which Tenant might have against any
prior landlord except as specifically provided for in the Lease; or

 

(iv)          bound
by any rent or additional rent which is payable on a monthly basis and which
Tenant might have paid for more than one (1) month in advance to any prior
landlord, except if paid in accordance with the terms of the Lease (such as
charges for maintenance of common areas which are paid monthly based on
estimates and reconciled annually); or

 

(v)           bound
by any cancellation, surrender, amendment or modification of the Lease or
release of liability thereunder not expressly consented to in writing by Lender
or otherwise permitted by the Security Instrument in each instance; or

 

(vi)          be
liable to Tenant hereunder or under the terms of the Lease beyond its interest
in the Property.

 

H-2

 

Notwithstanding
the foregoing, Tenant reserves its rights to any and all claims or causes of
action against such prior landlord for prior losses or damages and against the
successor landlord for all losses or damages arising from and after the date
that such successor landlord takes title to the Property.

 

(e)           Rent. Tenant is hereby being
given notice and hereby acknowledges that the Lease and the rents and all other
sums due thereunder have been assigned to Lender as security for the loan
secured by the Security Instrument. In the event Lender notifies Tenant of the
occurrence of a default under the Security Instrument and demands that Tenant
pay its rents and all other sums due or to become due under the Lease directly
to Lender, so long as Tenant has at least fifteen (15) days notice thereof,
Tenant shall honor such demand and pay its rent and all other sums due under
the Lease directly to Lender or as otherwise authorized in writing by Lender. Landlord
hereby irrevocably authorizes Tenant to make the foregoing payments to Lender
upon such notice and demand. Tenant shall have no responsibility to ascertain
whether such demand by Lender is permitted under the Security Instrument. Furthermore,
in connection with the aforesaid, and notwithstanding anything to the contrary
contained elsewhere, Landlord hereby agrees to indemnify and hold harmless
Tenant against any expenses, claims, losses, or damages incurred by Tenant
resulting from or arising out of claims by Landlord, its successors or assigns
that such rental payments should not have been, or cannot be, made to Lender or
the like.

 

(f)            Lender to Receive Notices. Tenant
shall notify Lender of any default by Landlord under the Lease which would
entitle Tenant to cancel the Lease. Tenant agrees that, except with respect to
the right of Tenant to terminate the Lease following (i) a fire or other
casualty and the failure of Landlord to restore the Premises in the time
periods allowed under the Lease or (ii) a failure of the Landlord to complete
its work and deliver the Premises to Tenant on or before October 1, 2007 , then,
notwithstanding any provisions of the Lease to the contrary, no notice of
cancellation thereof shall be effective unless Lender shall have received
notice of default giving rise to such cancellation and shall have failed within
sixty (60) days after receipt of such notice to cure such default, or if such
default cannot be cured within sixty (60) days, shall have failed within sixty
(60) days after receipt of such notice to commence and thereafter diligently
pursue any action necessary to cure such default. The forgoing notwithstanding,
if the Landlord’s default is of such a nature as to prevent Tenant from
operating a material portion of the Premises for Tenant’s permitted use, and
Tenant shall have given Lender a notice of default at the same time as the
notice to Landlord, then the cure period for Lender shall be the cure period
provided to Landlord in the Lease and shall run concurrently with the Lender
the cure period provided to Landlord in the Lease.

 

(g)           Notices. All notices or other
written communications hereunder shall be deemed to have been properly given
upon delivery or refusal of the addressee to accept delivery, with delivery to
be by:  (i) in person with receipt
acknowledged by the recipient thereof, (ii) overnight delivery with any reputable
overnight courier service, or (iii) registered or certified mail, postage
prepaid, return receipt requested, addressed to the receiving party at its
address set forth above, and:

 

 

	
  if to
  Tenant, to

  	
   

  	
  Bare
  Escentuals Beauty, Inc.

  
	
   

  	
   

  	
  71 Stevenson
  Street

  
	
   

  	
   

  	
  San
  Francisco, California 94105

  
	
   

  	
   

  	
  Attn:   Chief Financial Officer

  

 

H-3

 

	
   

  	
   

  	
  And to

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Drinker
  Biddle & Reath, LLP

  
	
   

  	
   

  	
  191 North
  Wacker Drive, Suite

  
	
   

  	
   

  	
  3700

  
	
   

  	
   

  	
  Chicago,
  Illinois 60606-1698

  
	
   

  	
   

  	
  Attn:
  Barnett P. Ruttenberg, Esq.

  
	
   

  	
   

  	
   

  
	
   

  
	
  if to
  Lender:

  	
  ORIX Real
  Estate Capital, Inc.

  
	
   

  	
  100 North
  Riverside Plaza

  
	
   

  	
  Suite 1400

  
	
   

  	
  Chicago,
  Illinois 60606

  
	
   

  
	
   

  	
  Attention:
  General Counsel

  
					

 

or
addressed as such party may from time to time designate by written notice to
the other parties.

 

Either
party by notice to the other may designate additional or different addresses
for subsequent notices or communications.

 

(h)           Successors. The obligations
and rights of the parties pursuant to this Agreement shall bind and inure to
the benefit of the successors, assigns, heirs and legal representatives of the
respective parties.

 

(i)            Duplicate Originals; Counterparts.
This Agreement may be executed in any number of duplicate originals and each
duplicate original shall be deemed to be an original. This Agreement may be
executed in several counterparts, each of which counterparts shall be deemed an
original instrument and all of which together shall constitute a single
Agreement. The failure of any party hereto to execute this Agreement, or any
counterpart hereof, shall not relieve the other signatories from their
obligations hereunder.

 

H-4

 

IN WITNESS WHEREOF, Lender
and Tenant have duly executed this Agreement as of the date first above written.

 

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  ORIX
  REAL ESTATE CAPITAL, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  BARE
  ESCENTUALS BEAUTY, INC,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  The
  undersigned accepts and agrees to

  
	
   

  	
  the
  provisions of Paragraph 5 hereof:

  
	
   

  	
   

  
	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  CENTERPOINT
  II LLC, a Michigan limited

  
	
   

  	
  liability
  company,

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

H-5

 

LENDER’S ACKNOWLEDGEMENT

 

 

	
  STATE
  OF ILLINOIS

  	
  )

  
	
   

  	
  )
  SS.

  
	
  COUNTY
  OF
                    

  	
  )

  
			

 

 

I,                                          ,
a Notary Public in and for said County, in the State aforesaid, DO HEREBY
CERTIFY that                                     ,
personally known to me to be the
                                    of
ORIX Real Estate Capital, Inc., a Delaware corporation, whose name is
subscribed to the within instrument, appeared before me this day in person and
acknowledged that, in such capacity, (s)he signed and delivered the said Instrument
of writing as
                  
of said
                                       ,
as his/her free and voluntary act and as the free and voluntary act and deed of
said  entity for the uses and purposes
therein set forth.

 

GIVEN
under my hand and Notarial Seal
this                     
day of
                         ,
2     .

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  
	
   

  
	
  My
  Commission expires:

  	
   

  	
   

  
					

 

H-6

 

TENANT’S ACKNOWLEDGEMENT

 

	
  STATE
  OF California)

  	
   

  
	
   

  
	
   

  	
  )
  SS.

  
	
  COUNTY
  OF                   

  	
  )

  
			

 

I,                                              ,
a Notary Public in and for said County, in the State aforesaid, DO HEREBY
CERTIFY that                                  ,
personally known to me to be the
                                                      
of Bare Escentuals Beauty, Inc. a California 
corporation, whose name is subscribed to the within instrument, appeared
before me this day in person and acknowledged that, in such capacity, (s)he
signed and delivered the said Instrument of writing as his/her free and
voluntary act and as the free and voluntary act and deed of said entity, for
the uses and purposes therein set forth.

 

GIVEN
under my hand and Notarial Seal
this                     
day of                          ,
2     .

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  
	
   

  
	
  My
  Commission expires:

  	
   

  	
   

  
					

 

H-7

 

LANDLORD’S ACKNOWLEDGEMENT

 

	
  STATE
  OF

  	
  )

  
	
   

  	
  )
  SS.

  
	
  COUNTY
  OF                          

  	
  )

  

 

 

I,                                             ,
a Notary Public in and for said County, in the State aforesaid, DO HEREBY
CERTIFY that
                                 ,
personally known to me to be the
                      
of                                   ,
a                                                            ,
whose name is subscribed to the within instrument, appeared before me this day
in person and acknowledged that, in such capacity, (s)he signed and delivered
the said Instrument of writing as his/her free and voluntary act and as the
free and voluntary act and deed of said entity for the uses and purposes
therein set forth.

 

GIVEN
under my hand and Notarial Seal
this                     
day of
                         ,
2     .

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  
	
   

  
	
  My
  Commission expires:

  	
   

  	
   

  
					

 

H-8

 

Exhibit A

 

Legal Description of the Property

 

 

H-9

 

EXHIBIT I

 

TITLE COMMITMENT

 

 

I-1

 

EXHIBIT J

 

MANAGEMENT SPECIFICATIONS

 

PROPERTY MANAGEMENT SERVICES

 

1.                                       The Manager will perform physical management
in order to optimize the appearance and operation of the Property which is
accomplished by, but not limited to, the following:

 

(a)                                  Answer telephones, implement necessary
procedures to satisfy Tenant requests which include logging of said information
and disbursement to either maintenance personnel within 24 hours of the
incoming request or contractor contact as may be required. Provide the necessary
follow up to ensure all requests have been timely and satisfactorily completed
and/or to ensure that administrative paperwork has been issued as may be
required (i.e. written price quotes for billable work requested by Tenant,
ensure quote is executed prior to releasing work for completion, etc.).

 

(b)                                 Issue requests for contract work and complete
review and approval of invoices for vendor payment.

 

(c)                                  Conduct periodic site inspections.
Investigate, troubleshoot, analyze either reported or noted maintenance related
issues throughout the Property and complete all necessary follow up to ensure
timely and adequate repairs are completed.

 

(d)                                 Establish schedules of preventative
maintenance and follow up to ensure schedules are being adhered to. Follow up
on corrective measures needed as the result of any such preventative
maintenance program.

 

(e)                                  Evaluate, hire and supervise qualified
outside contractors affiliated with Property and ground maintenance.

 

(f)                                    Obtain competitive price quotes when
necessary/appropriate for all services required.

 

(g)                                 Complete monthly invoicing which is based
upon completed work orders, completed price quotes, etc.

 

(h)                                 Work orders and outstanding projects will be
tracked/invoiced as needed.

 

(i)                                     Establish and maintain Emergency Phone Lists
for after hour purposes for use by on-site staff.

 

(j)                                     Establish and maintain Tenant Phone Lists.

 

(k)                                  Establish and maintain Contract Books for all
properties.

 

J-1

 

(l)                                     Establish and maintain Emergency Contact
Lists, forward same to Answering Service and all Property monitoring companies.

 

(m)                               Respond to emergency/after hour calls as may be required.

 

(n)                                 Establish and maintain “Incident Reports”,
complete proper execution of same by forwarding to Insurance Company and
follow-up on all insurance claims and inform Tenant’s corporate security
department.

 

(o)                                 Prepare and maintain maintenance logs and
files specific to the Property.

 

(p)                                 Establish and maintain Property key boxes and
log sheets.

 

(q)                                 Inspect, maintain, repair and replace the
surface of the parking areas, curbs and sidewalks, keeping them level, smooth,
and evenly covered with a comparable type of surface material originally
installed thereon.

 

(r)                                    Maintain, replace and repair parking area
entrances, exits and directional signs; markers; and lights to keep same in
good, clean and legible condition, as well as repair and replace striping as
required.

 

(s)                                  Clean parking area lighting fixtures and
re-lamp, repair and replace fixtures, ballasts and standards as needed.

 

(t)                                    Maintain, repair and replace landscaping in
common areas as necessary to keep the same in a first class and thriving
condition.

 

(u)                                 Clean any signs within the common area,
including re-lamping and repairs and replacements being made as required.

 

(v)                                 All papers, debris, filth, and refuse shall
be reasonably removed from paved areas; snow and ice shall be cleared and
reasonably windrowed, if applicable; and paved areas shall be washed or
thoroughly swept as required. All sweeping shall be done before the Property
shall be open for business with the public, using proper motor-driven cleaning
vehicles in the parking area where feasible. No product shall be used for snow
and ice removal, such as, resin-based de-icers, which may be hazardous or which
may increase the likelihood of slip and fall or which may materially damage the
Property.

 

(w)                               All sewer catch basins shall be cleaned on a schedule sufficient to
maintain all sewer lines in a free-flowing condition, and all mechanical
equipment related to storm and sanitary sewer facilities shall be inspected as
needed and kept in proper working order.

 

(x)                                   All ramps and stairways, if any, shall be:
(a) swept and washed at intervals sufficient to maintain the same in a clean
condition; (b) inspected at regular intervals; and (c) promptly repaired upon
the occurrence of any irregularities or worn portions thereof.

 

J-2

 

(y)                                 All surface utility facilities servicing the
common area, including, but not limited to, hose bibbs, standpipes, sprinklers
and domestic water lines, shall be inspected at regular intervals and promptly
repaired or replaced, as the occasion may require, upon the occurrence of any
defect or malfunctioning.

 

(z)                                   All common area amenities, benches, and
institutional, directional, traffic and other signs shall be inspected at
regular intervals; maintained in a clean and attractive surface condition; and
promptly repaired or replaced upon the occurrence of any defects or irregularities
thereto.

 

(aa)                            All lamps in the Common Area and exterior shall be inspected at regular
intervals and shall be promptly replaced when no longer properly functioning,
or at such regularly scheduled times so as to maintain a consistently acceptable
level of illumination.

 

(bb)                          The improvements on and to the common areas shall be repaired or
replaced with materials, apparatus and facilities of a quality at least equal
to the original quality.

 

(cc)                            With respect to all mechanical and electrical facilities and systems,
including, but not by way of limitation, the lighting facilities; heating,
ventilating, cooling and sprinkler systems; and actuated or manually operated
doors; Manager shall:(a) inspect the same at regular intervals; (b) promptly
repair the same upon the occurrence of any failure or malfunctioning; and (c)
as respects to said heating, ventilating and cooling systems, maintain the
same.

 

(dd)                          All surfaces of the Property and any parking which are painted or
otherwise finished shall be cleaned at regular intervals and repainted or
otherwise refinished as necessary. Ceilings shall be cleaned as necessary to
maintain attractive condition and painted or repainted, as necessary, giving
particular attention to the areas surrounding the diffusers.

 

(ee)                            All floor area, including vestibules, entrances and returns, doors,
fixtures, windows and plate glass, shall be maintained in a safe, neat and
clean condition.

 

(ff)                                Periodic inspections of roof, walls, structural elements and parking
lot.

 

(gg)                          Maintain and replace as required structural elements including roof,
walls, steel columns, and parking areas.

 

2.             Maintain Tenant Relations by:

 

(a)                                  Timely responses to Tenant requests including
maintaining contact with outside contractors/vendors such as snow removal,
janitorial, landscaping, etc.

 

(b)                                 Effective communication through periodic
Tenant contact such as minimum quarterly meetings to ensure requirements and
needs of the Tenant are being met and adequately handled.

 

J-3

 

3.             Maintenance Personnel - Outline:

 

(a)                                  Daily contact with Property Management Office
for instruction and to supply information outlining on-going maintenance issues
at the development.

 

(b)                                 Retrieve work orders from the Property Management
Office which have been prepared based upon Tenant requests and complete on a
daily basis, whenever possible.

 

(c)                                  Investigate, troubleshoot, analyze either
reported or noted maintenance related issues throughout the Property and
complete all necessary follow up to ensure timely and adequate repairs are
completed.

 

(d)                                 Maintain property standards established by
Manager and Landlord.

 

(e)                                  Maintenance personnel are equipped with
appropriate means for instant communication with the Property Management Office
at all times to ensure immediate response to all emergencies.

 

(f)                                    Police grounds for trash, broken glass,
debris, etc.

 

(g)                                 Completes additional, supplemental salting
and snow removal services at main Property entrances and walk-ways as may be
necessary during the course of a business day.

 

(h)                                 Regular site inspections.

 

(i)                                     Miscellaneous repairs, such as
adjustment/repair of door closers, lock sets, electrical, plumbing and
carpentry, as may be required.

 

J-4

 

EXHIBIT K

 

GUARANTY

 

THIS
GUARANTY is given by BARE ESCENTUALS, INC, a Delaware corporation,
(“Guarantor”) and is of a certain Lease dated of even date here with (the
“Lease”) between CENTERPOINT II, LLP., (“Landlord”) and BARE ESCENTUALS BEAUTY,
INC., a Delaware  corporation (“Tenant”).

 

WITNESSETH:

 

WHEREAS,
at the instance and request of the Guarantor, Tenant is entering into the Lease
with Landlord for the Premises commonly known as 5271 Centerpoint Parkway,
Obetz, Ohio 43125, consisting of approximately 301,180 square feet
(“Premises”). A copy of the Lease is attached hereto as Exhibit A and
incorporated herein by this reference..

 

WHEREAS,
part of the consideration for the letting of said Premises by Landlord to
Tenant is Guarantor’s covenant to guarantee the payment of Rent and other
charges provided for in said Lease and the performance of all the other
provisions of the Lease through the Term of the Lease subject, however to the
limitation of liability described below; and

 

WHEREAS,
Guarantor will directly or indirectly benefit from the relative success of
Tenant and will therefore personally stand to benefit from the opportunity
provided to Tenant by such Lease.

 

NOW,
THEREFORE, in consideration of the foregoing and of the letting of the Premises
to Tenant, and of the sum of TEN AND NO/100 DOLLARS ($10.00) to Guarantor in
hand paid by Landlord, the receipt and sufficiency of which being hereby
acknowledged, Guarantor hereby covenants and agrees as follows:

 

1.             Terns which are defined in the Lease
shall have the same meaning herein as are therein set forth.

 

2.             (a) Guarantor guarantees to
Landlord, their successors or assigns, the prompt payment by Tenant of the
Rents reserved in the Lease and the performance by Tenant of all provisions and
covenants contained in said Lease through the full Term of the Lease. If any
Event of Default shall be made by Tenant, after all applicable notice and cure
periods, then Guarantor shall pay and hereby agrees to pay to Landlord, their
successors or assigns, such sum or sums of money as will be sufficient to make
up any such deficiency, and shall satisfy the provisions and covenants to be
performed by Tenant under the Lease; provided, however, that the liability of
the Guarantor shall not exceed the lesser of (1) the Rent that would be due for
the sixty (60) months immediately following the Event of Default or (2) the
Rent and other charges that would be due for the then unexpired balance of the
Term.

 

K-1

 

(b)           Notwithstanding anything herein to
the contrary, if at the time Tenant effects a Permitted Transfer under the
Lease (i) there is no Event of Default under the Lease, and (ii) the assignee
or sublessee in the Permitted Transfer has a net worth equal to or in excess of
the net worth of Guarantor as of the date hereof, then Guarantor shall be
released of its obligations and liabilities 
under this Guaranty at such time as Tenant effects the  Permitted Transfer.

 

3.             So long as the Tenant is a
subsidiary or other affiliate of Guarantor, no notice of an Event of Default or
default by Tenant shall be required to be given to Guarantor but if the Tenant
ceases to be a subsidiary or other affiliate of Guarantor, then notice of the
default and an opportunity to cure the default shall be given to Guarantor in
the same manner as notices are given to Tenant under the Lease, addressed as
follows:

 

Bare
Escentuals, Inc.

71
Stevenson Street, 22nd Floor

San
Francisco, California  94105

Attn:  Chief Financial Officer

 

And
to:

 

Bare
Escentuals Beauty, Inc.

71
Stevenson Street, 22nd Floor

San
Francisco, California  94105

Attn:  Vice President  of Operations

 

And
to

 

Drinker
Biddle & Reath, LLP

191
North Wacker Drive, Suite 3700

Chicago,
Illinois  60606-1698

Attn:  Barnett P. Ruttenberg, Esq.

 

Upon
properly given notice from Guarantor, the address for notices to Guarantor may
be revised from time to time.

 

4.             Guarantor does further covenant and
agree to pay all of the expenses of Landlord, their successors or assigns,
including attorneys’ fees, incurred in enforcing this Guaranty.

 

5.             So long as the Tenant is a
subsidiary or other affiliate of Guarantor, Landlord shall not be required to
institute action or otherwise seek recovery from Tenant as a condition
precedent to the performance by Guarantor of its obligations under this
Guaranty.

 

6.             So long as the Tenant is a
subsidiary or other affiliate of Guarantor, Guarantor does further covenant and
agree that the Landlord may, from time to time, during the Term of this Lease,
modify, change or alter any of the terms of the Lease by agreement with Tenant,
any subsidiary, affiliate or other corporation to which Tenant may assign
Tenant’s interest in the

 

K-2

 

Lease,
in accordance with the terms thereof, without notice to Guarantor and that
Guarantor shall not be relieved of its liabilities hereunder as a result of
such action, it being expressly agreed and understood that Guarantor will
recognize and be bound by any such modification, change or alteration as though
it had been part of the Lease as originally drawn.

 

7.             This Guaranty shall be governed and
controlled as to interpretation, enforcement validity, construction, effect and
in all other respects by the Laws, statutes and decisions of the state of Ohio,
without regard to the conflict of laws principles thereof. All actions or
proceedings arising directly, indirectly or otherwise in connection with, out
of, related to or from this Guaranty shall be litigated only in courts having a
situs within the county of Franklin, state of Ohio. The undersigned hereby
consents and submits to the jurisdiction of any local, state or federal court
located within said county and state. The undersigned hereby waives any right
it may have to transfer or change the venue of any litigation brought against
it by Landlord on this Guaranty in accordance with this section. Guarantor
hereby knowingly, voluntarily and intentionally waives the right it may have to
a trial by jury in any litigation based on or arising out of, under or in
connection with this Guaranty and any agreement contemplated to be executed in
conjunction herewith.

 

8.             Notwithstanding anything to the
contrary which may be contained herein and notwithstanding any payment or
performance by Guarantor pursuant to this Guaranty, So long as the Tenant is a
subsidiary or other affiliate of Guarantor, Guarantor hereby unconditionally
and irrevocably agrees that it (a) will not at any time assert against Tenant
any right or claim, at Law or in equity, to indemnification, reimbursement,
contribution, restitution or payment for or with respect to any and all amounts
Guarantor may pay or be obligated to pay to Landlord, and any and all other
obligations which Guarantor may perform, satisfy or discharge, under or with
respect to this Guaranty, (b) waives and releases all such rights and claims,
at Law or in equity, to indemnification, reimbursement, contribution,
restitution or payment which Guarantor may have now or at any time against
Tenant, and (c) will not assign or otherwise transfer any such right or claim
to any other person. Guarantor further unconditionally and irrevocably agrees
that So long as the Tenant is a subsidiary or other affiliate of Guarantor, it
shall not be entitled to be subrogated to any rights of Landlord against Tenant
or any other Guarantor of any amounts being guaranteed and shall have no right
of subrogation whatsoever, and waives any right to enforce any remedy which
Landlord now has or hereafter may have against Tenant and waives any defense
based upon an election of remedies by Landlord, which destroys or otherwise
impairs any subrogation rights of Guarantor and/or the right of Guarantor to
proceed against Tenant for reimbursement. This waiver shall cease and be of no
further force and effect on the date which is three hundred sixty-six (366)
days after the date of the last payment made by Tenant to Landlord under the
Lease.

 

9.             Guarantor hereby agrees that upon
the filing of a petition under any section or chapter of Title 11 of the United
States Code or under any similar federal or state bankruptcy law or statute by
or against Guarantor (said included bankruptcy filing as aforesaid is
hereinafter referred to as the “Bankruptcy Filing”), any automatic stay or
other injunction against Landlord resulting from the Bankruptcy Filing shall be
immediately and automatically modified and terminated with respect to Landlord,
without further notice, hearing or order of court, so that Landlord may proceed
to exercise its rights and remedies against any property pledged to 

 

K-3

 

Landlord
to secure the Lease in accordance with applicable Law as if no such filing had
taken place. Guarantor further agrees that it will not contest (a) any motion
or application of Landlord made in any court of competent jurisdiction seeking
enforcement of this Paragraph or otherwise seeking modification or termination
of such automatic stay or other injunction in a manner consistent herewith or
(b) any motion or application of Landlord made in any court of competent
jurisdiction seeking the appointment of a receiver after the Bankruptcy Filing.
Guarantor acknowledges and agrees that Landlord is specifically relying upon
the covenants and agreements of Guarantor contained in this Paragraph and that
such covenants and agreements constitute a material inducement to Landlord’s
entering into the Lease.

 

IN
WITNESS WHEREOF, Guarantor has this ____ day of ______________, 2007, caused
these presents to be signed in his behalf.

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  BARE
  ESCENTUALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ITS:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NAME:

  	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
									

 

K-4

 

EXHIBIT A

 

LEASE

 

 

K-5EXHIBIT 10.49

 

GUARANTY

 

THIS
GUARANTY is given by BARE ESCENTUALS, INC, a Delaware corporation, (“Guarantor”)
and is of a certain Lease dated of even date here with (the “Lease”) between
CENTERPOINT II, LLP., (“Landlord”) and BARE ESCENTUALS BEAUTY, INC., a
Delaware  corporation (“Tenant”).

 

WITNESSETH:

 

WHEREAS,
at the instance and request of the Guarantor, Tenant is entering into the Lease
with Landlord for the Premises commonly known as 5271 Centerpoint Parkway,
Obetz, Ohio 43125, consisting of approximately 301,180 square feet (“Premises”).
A copy of the Lease is attached hereto as Exhibit A and incorporated herein by
this reference..

 

WHEREAS,
part of the consideration for the letting of said Premises by Landlord to
Tenant is Guarantor’s covenant to guarantee the payment of Rent and other
charges provided for in said Lease and the performance of all the other
provisions of the Lease through the Term of the Lease subject, however to the
limitation of liability described below; and

 

WHEREAS,
Guarantor will directly or indirectly benefit from the relative success of
Tenant and will therefore personally stand to benefit from the opportunity
provided to Tenant by such Lease.

 

NOW,
THEREFORE, in consideration of the foregoing and of the letting of the Premises
to Tenant, and of the sum of TEN AND NO/100 DOLLARS ($10.00) to Guarantor in
hand paid by Landlord, the receipt and sufficiency of which being hereby
acknowledged, Guarantor hereby covenants and agrees as follows:

 

1.             Terns which are defined in the
Lease shall have the same meaning herein as are therein set forth.

 

2.             (a) Guarantor guarantees to
Landlord, their successors or assigns, the prompt payment by Tenant of the
Rents reserved in the Lease and the performance by Tenant of all provisions and
covenants contained in said Lease through the full Term of the Lease. If any
Event of Default shall be made by Tenant, after all applicable notice and cure
periods, then Guarantor shall pay and hereby agrees to pay to Landlord, their
successors or assigns, such sum or sums of money as will be sufficient to make
up any such deficiency, and shall satisfy the provisions and covenants to be
performed by Tenant under the Lease; provided, however, that the liability of
the Guarantor shall not exceed the lesser of (1) the Rent that would be due for
the sixty (60) months immediately following the Event of Default or (2) the
Rent and other charges that would be due for the then unexpired balance of the
Term.

 

1

 

(b)           Notwithstanding anything herein to
the contrary, if at the time Tenant effects a Permitted Transfer under the
Lease (i) there is no Event of Default under the Lease, and (ii) the assignee
or sublessee in the Permitted Transfer has a net worth equal to or in excess of
the net worth of Guarantor as of the date hereof, then Guarantor shall be
released of its obligations and liabilities 
under this Guaranty at such time as Tenant effects the  Permitted Transfer.

 

3.             So long as the Tenant is a
subsidiary or other affiliate of Guarantor, no notice of an Event of Default or
default by Tenant shall be required to be given to Guarantor but if the Tenant
ceases to be a subsidiary or other affiliate of Guarantor, then notice of the
default and an opportunity to cure the default shall be given to Guarantor in
the same manner as notices are given to Tenant under the Lease, addressed as
follows:

 

Bare
Escentuals, Inc.

71
Stevenson Street, 22nd Floor

San
Francisco, California  94105

Attn:  Chief Financial Officer

 

And
to:

 

Bare
Escentuals Beauty, Inc.

71
Stevenson Street, 22nd Floor

San
Francisco, California  94105

Attn:  Vice President  of Operations

 

And
to

 

Drinker
Biddle & Reath, LLP

191
North Wacker Drive, Suite 3700

Chicago,
Illinois  60606-1698

Attn:  Barnett P. Ruttenberg, Esq.

 

Upon
properly given notice from Guarantor, the address for notices to Guarantor may
be revised from time to time.

 

4.             Guarantor does further covenant and
agree to pay all of the expenses of Landlord, their successors or assigns,
including attorneys’ fees, incurred in enforcing this Guaranty.

 

5.             So long as the Tenant is a
subsidiary or other affiliate of Guarantor, Landlord shall not be required to
institute action or otherwise seek recovery from Tenant as a condition
precedent to the performance by Guarantor of its obligations under this
Guaranty.

 

6.             So long as the Tenant is a
subsidiary or other affiliate of Guarantor, Guarantor does further covenant and
agree that the Landlord may, from time to time, during the Term of this Lease,
modify, change or alter any of the terms of the Lease by agreement with Tenant,
any subsidiary, affiliate or other corporation to which Tenant may assign
Tenant’s interest in the

 

2

 

Lease,
in accordance with the terms thereof, without notice to Guarantor and that
Guarantor shall not be relieved of its liabilities hereunder as a result of
such action, it being expressly agreed and understood that Guarantor will
recognize and be bound by any such modification, change or alteration as though
it had been part of the Lease as originally drawn.

 

7.             This Guaranty shall be governed and
controlled as to interpretation, enforcement validity, construction, effect and
in all other respects by the Laws, statutes and decisions of the state of Ohio,
without regard to the conflict of laws principles thereof. All actions or
proceedings arising directly, indirectly or otherwise in connection with, out
of, related to or from this Guaranty shall be litigated only in courts having a
situs within the county of Franklin, state of Ohio. The undersigned hereby
consents and submits to the jurisdiction of any local, state or federal court
located within said county and state. The undersigned hereby waives any right
it may have to transfer or change the venue of any litigation brought against
it by Landlord on this Guaranty in accordance with this section. Guarantor
hereby knowingly, voluntarily and intentionally waives the right it may have to
a trial by jury in any litigation based on or arising out of, under or in
connection with this Guaranty and any agreement contemplated to be executed in
conjunction herewith.

 

8.             Notwithstanding anything to the
contrary which may be contained herein and notwithstanding any payment or
performance by Guarantor pursuant to this Guaranty, So long as the Tenant is a
subsidiary or other affiliate of Guarantor, Guarantor hereby unconditionally
and irrevocably agrees that it (a) will not at any time assert against Tenant
any right or claim, at Law or in equity, to indemnification, reimbursement,
contribution, restitution or payment for or with respect to any and all amounts
Guarantor may pay or be obligated to pay to Landlord, and any and all other
obligations which Guarantor may perform, satisfy or discharge, under or with respect
to this Guaranty, (b) waives and releases all such rights and claims, at Law or
in equity, to indemnification, reimbursement, contribution, restitution or
payment which Guarantor may have now or at any time against Tenant, and (c)
will not assign or otherwise transfer any such right or claim to any other
person. Guarantor further unconditionally and irrevocably agrees that So long
as the Tenant is a subsidiary or other affiliate of Guarantor, it shall not be
entitled to be subrogated to any rights of Landlord against Tenant or any other
Guarantor of any amounts being guaranteed and shall have no right of
subrogation whatsoever, and waives any right to enforce any remedy which
Landlord now has or hereafter may have against Tenant and waives any defense
based upon an election of remedies by Landlord, which destroys or otherwise
impairs any subrogation rights of Guarantor and/or the right of Guarantor to
proceed against Tenant for reimbursement. This waiver shall cease and be of no
further force and effect on the date which is three hundred sixty-six (366)
days after the date of the last payment made by Tenant to Landlord under the
Lease.

 

9.             Guarantor hereby agrees that upon
the filing of a petition under any section or chapter of Title 11 of the United
States Code or under any similar federal or state bankruptcy law or statute by
or against Guarantor (said included bankruptcy filing as aforesaid is
hereinafter referred to as the “Bankruptcy Filing”), any automatic stay or
other injunction against Landlord resulting from the Bankruptcy Filing shall be
immediately and automatically modified and terminated with respect to Landlord,
without further notice, hearing or order of court, so that Landlord may proceed
to exercise its rights and remedies against any property pledged to 

 

3

 

Landlord
to secure the Lease in accordance with applicable Law as if no such filing had
taken place. Guarantor further agrees that it will not contest (a) any motion
or application of Landlord made in any court of competent jurisdiction seeking
enforcement of this Paragraph or otherwise seeking modification or termination
of such automatic stay or other injunction in a manner consistent herewith or
(b) any motion or application of Landlord made in any court of competent
jurisdiction seeking the appointment of a receiver after the Bankruptcy Filing.
Guarantor acknowledges and agrees that Landlord is specifically relying upon
the covenants and agreements of Guarantor contained in this Paragraph and that
such covenants and agreements constitute a material inducement to Landlord’s
entering into the Lease.

 

IN
WITNESS WHEREOF, Guarantor has this 31 day of January, 2007, caused these
presents to be signed in his behalf.

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  BARE ESCENTUALS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  /s/ Myles B.
  McCormick

  	
   

  
	
   

  	
   

  
	
   

  	
  ITS:

  	
  CFO/COO

  	
   

  
	
   

  	
   

  
	
   

  	
  NAME:

  	
  Myles
  McCormick

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
									

 

4

 

EXHIBIT A

 

LEASE

 

 

5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00118-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00118-of-00352.parquet"}]]