Exhibit 10.17
NET LEASE AGREEMENT
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THIS NET LEASE AGREEMENT (this "Lease") is made and entered
into as of this 17 day of April, 1998, by and between THE JOSEPH A. BANK
MFG. CO., INC., a New Jersey corporation ("Landlord"), and SOURCEONE,
L.L.C. a New York limited liability company ("Tenant").
ARTICLE 1
LEASE OF FACILITY
1.1. Lease of Facility.
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Landlord does lease to Tenant, and Tenant leases from
Landlord, all of the following (collectively the "Facility"):
(a) That certain tract or parcel of land consisting of
approximately 43,386 square feet, more or less, located in
Baltimore City, Maryland, as more particularly described in
Exhibit A (the "Land");
(b) All buildings, structures and other improvement of every
kind including, but not limited to, sidewalks, utility pipes,
conduits and lines, parking areas and roadways appurtenant to such
buildings, structures and improvements presently situated on the
Land (collectively, the "Building");
(c) All easements, rights and appurtenances relating to the
Land and the Building;
(d) All Building systems, including all components thereof,
now permanently affixed to or incorporated into the Building; and
This Lease Agreement is subject to the terms, covenants and
conditions set forth herein. Tenant covenants as a material part of the
consideration for this Lease Agreement to keep and perform each and all of
the terms, covenants and conditions by it to be kept and performed, and
this Lease Agreement is made upon the condition of such performance.
Landlord covenants as a material part of the consideration for this Lease
Agreement to keep and perform each and all of the terms and covenants by it
to be kept and performed.
1.2. Governmental Approvals.
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The Facility is leased to Tenant from Landlord in an "AS-IS"
condition with respect to compliance with applicable statutes, ordinances,
rules, regulations, zoning variances and special exceptions. Tenant hereby
undertakes, at its sole cost and expense, the responsibility to obtain all
appropriate governmental approvals, certificates, licenses and permits in
order to operate the Facility for uses described herein. In no event shall
Landlord be liable for any limitation on the use of the Facility which may
be imposed by statute, ordinance, rule, regulation, zoning variance or
special exception, economic
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condition or otherwise.
1.3 Space Reserved.
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Notwithstanding the terms of Section 1.1. there is
specifically and exclusively reserved to Landlord, and the Facility shall
not include, the vault and other area presently used by Landlord for
record storage (the "Storage Areas").
In addition, Tenant shall have the right at all times, in
common with others, for ingress and egress to the Storage Areas
including, but not limited to, loading and unloading facilities in the
Facility used in conjunction therewith.
1.4 Condition to Lease.
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The effectiveness of this Lease and the delivery of the
Facility to Tenant is a condition to the effectiveness of that certain
Primary Supply Agreement dated as of April 16, 1997 (the "Supply
Agreement") between Landlord and M.S. Pietrafesa, L.P. ("Pietrafesa"). This
shall not be a continuing condition and Tenant's acceptance of the Facility
shall satisfy it.
ARTICLE 2
LEASE TERM
2.1. Initial Term.
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The initial term of this Lease Agreement (the "Initial Lease
Term") shall commence on April 17, 1998 (the "Commencement Date") and shall
terminate on February 29, 2000, or on such earlier date on which the
Initial Lease Term may expire or be terminated pursuant to this provisions
of the Lease. Tenant shall be entitled to, and its obligations hereunder
shall be conditioned on, possession of the Facility as of the Commencement
Date.
2.2. Renewal Term.
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The Initial Lease Term may be renewed at the option of Tenant.
If renewed, the renewal shall be for one additional twelve-month term (the
"Renewal Lease Term"; the Initial Lease Term and the Renewal Lease Term are
collectively referred to as the "Lease Term").
2.2.1 If Tenant elects to renew, it shall be a
condition to renewal that (i) Tenant not be in default under any of the
terms hereof and (ii) Tenant give Landlord at least four (4) months written
notice of its desire to renew.
2.2.2 If Tenant elects to renew all terms, this
Lease shall continue to apply except Base Rent which shall be calculated in
the manner set forth in Section 2.2.3 hereof.
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2.2.3 The Base Rent for the Renewal Lease Term
shall be equal to the fair rental value (the "FRV") of the Facility. For
the purposes of this Lease, the FRV shall be determined as follows:
(a) By agreement between Landlord and Tenant;
or,
(b) If Landlord and Tenant have not or are
unable to agree on the FRV within thirty (30) days after the date on which
Tenant exercises such option for the Renewal Lease Term then the FRV shall
be determined by an independent and qualified MAI appraiser with at least
ten (10) years' commercial real estate appraisal experience in the vicinity
of the Facility (a "Qualified Appraiser"). Landlord and Tenant shall agree
on the appointment of a Qualified Appraiser within seven (7) days after the
expiration of the foregoing thirty (30) day period, and each party shall
bear one-half (1/2) of the costs and expenses of the Qualified Appraiser.
If Landlord and Tenant fail or are unable to agree on the appointment of a
Qualified Appraiser within such seven (7) day period, the FRV shall be
determined by three (3) Qualified Appraisers, one selected by Landlord and
one selected by Tenant (such Qualified Appraisers to be selected within
seven (7) days after the expiration of the immediately preceding seven (7)
day period specified in this sentence), and the third Qualified Appraiser
shall be selected by the appointed Qualified Appraisers. If either Landlord
or Tenant shall fail to appoint a Qualified Appraiser, the Qualified
Appraiser appointed by the other of them shall select the second Qualified
Appraiser within seven (7) days after such failure to appoint. If the two
Qualified Appraisers so determined shall be unable to agree on the
selection of a third Qualified Appraiser within seven (7) days after the
two Qualified Appraisers are determined, then either Qualified Appraiser,
on behalf of both, may request such appointment by the American Institute
of Real Estate Appraisers (or any successor association or body of
comparable standing if such institute is not then in existence). The FRV
shall be the average of the two closest valuations of the Premises as
determined by the Qualified Appraisers. The costs, fees, and expenses of
each Qualified Appraiser appointed separately by Landlord and Tenant,
respectively, shall be borne by the party who appointed the Qualified
Appraiser. The costs, fees, and expenses of the third Qualified Appraiser
shall be shared equally between Landlord and Tenant. The FRV determined by
such Qualified Appraisers in accordance with this Section, together with
copies of their appraisal reports, shall be submitted to Landlord and
Tenant within thirty (30) days after the panel of three Qualified
Appraisers is constituted. The FRV of the Premises determined in accordance
with the provisions of this Section shall be binding and conclusive on
Landlord and Tenant.
2.3. Lease Year.
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As used herein during the Initial Lease Term and the Renewal
Lease Term, the term "Lease Year" means (i) with respect to the first Lease
Year, the period from the Commencement Date through February 28, 1999, (ii)
thereafter, the twelve (12) month period commencing on the day after the
last day of the preceding Lease Year and ending on the first anniversary of
the last day of the preceding Lease Year.
ARTICLE 3
RENT
3.1. Base Rent.
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Tenant covenants and agrees to pay to Landlord throughout the
Initial Lease Term and, if applicable, the Renewal Lease Term, base rent
(the "Base Rent"), equal to $1.00 per Lease Year.
3.1.1. Base Rental. Base Rent for the
Initial Term has been paid to Landlord, and Landlord acknowledges
receipt of the same.
3.2. Triple Net Lease.
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It is the intention of Landlord and Tenant that this Lease
Agreement be a "triple net lease," with Tenant paying during the Lease Term
the Base Rent described in Section 3.1 without notice or demand and free of
any recoupment, counterclaim, offset, abatement or other deduction
whatsoever. Not in limitation of the foregoing sentence but by way of
example, Tenant shall be obligated to pay, as additional rent, any and all
costs and expenses relating to the Facility, including but not limited to
taxes (in the manner and at the times set forth in Section 4.1.2),
maintenance, repair, replacement, utilities, capital expenditures and
operational expenses, but excepting however insurance as set forth in
Article 10. This Lease shall always be construed to effectuate the
foregoing declared intent of the parties.
3.3 Late Payments.
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Any installment of additional rent or any other payment
required to be made by Tenant hereunder that is due to, or paid by,
Landlord and which is not paid when due shall bear simple interest of
eighteen percent (18%) per annum (the "Default Rate") from the date each
installment shall have fallen due.
3.4. Additional Rent.
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Whenever under the terms of this Lease Agreement any sum of
money is required to be paid by Tenant to Landlord in addition to the Base
Rent reserved herein, such sum shall be deemed to be additional rent,
regardless of whether designated as such, and shall be collectible as rent.
3.5. Payment of Rental.
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All additional rent shall be paid without any set off or
deduction whatsoever. Any payment by Tenant or acceptance by Landlord of
additional rent of a lesser amount than shall be due from Tenant to
Landlord shall be treated as a payment on account. The acceptance by
Landlord of a check for a lesser amount with an endorsement or statement
thereon, or upon any letter accompanying such check, that such lesser
amount is payment in full, shall be given no effect, and Landlord may
accept such check without prejudice to any other rights or remedies which
Landlord may have against Tenant.
ARTICLE 4
TAXES AND ASSESSMENTS
4.1. Taxes.
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4.1.1. As additional rent hereunder, Tenant
hereby agrees to pay all real and personal property taxes (including,
without limitation, rental taxes, if any), assessments, impositions and
other charges of every description and character levied on or assessed
against all or any portion of the Facility, improvements located on or
affixed to the Facility, and personal property located on or affixed to the
Facility, to the extent that such taxes, assessments, impositions, and
other charges relate to the Lease Term.
4.1.2. Payment of Taxes. Taxes shall be paid by
Tenant in arrears in equal monthly installments in such amounts as are
estimated and billed for each tax year by Landlord at the commencement of
the Term and at the beginning of each successive tax year during the Lease
Term, each such installment being due on the first day of each calendar
month (commencing May 1, 1998). At any time during a tax year, Landlord may
revise its estimate of Tenant's Taxes and adjust Tenant's equal monthly
installments payable thereafter during the Tax Year to reflect such revised
estimate. Within twenty (20) days after Landlord's receipt of tax bills for
each tax year, Landlord will certify to Tenant the amount of Taxes for the
tax year in question. The failure of Landlord to provide such certification
within the time prescribed above shall not relieve Tenant of its
obligations generally or for the specific Tax Year in which any such
failure occurs unless the Landlord fails promptly thereafter to provide
such certification.
4.2. Right to Seek Reduction.
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Tenant, at its own cost and expense, shall have the right to
seek a reduction in the assessed valuation of the Facility.
4.3. Substitute Taxes.
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If at any time during the Lease Term the laws concerning the
methods of real property taxation prevailing at the Commencement Date are
changed so that a tax or excise on rent or any other such tax, however
described, is levied or assessed against Landlord as a direct substitution
in whole or in part for any real property taxes, or in addition thereto,
Tenant shall pay as additional rent before delinquency (subject to timely
invoicing to Tenant for the same) the substitute or additional tax or
excise on rents; provided, however, that Tenant shall not be required to
pay any municipal, county, state or federal income taxes of Landlord.
ARTICLE 5
ARTICLE 5 IS INTENTIONALLY OMITTED
ARTICLE 6
USE OF FACILITY/ ENVIRONMENTAL COMPLIANCE
6.1. Permitted Use.
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Tenant hereby agrees to use the Facility for the operation of
a manufacturing facility for clothing and related apparel products, and for
no other use without Landlord's
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prior written consent, which consent will not be unreasonably withheld.
6.2. Compliance with Environmental Laws.
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Without limiting the provisions of Article 14 hereof, Tenant
shall comply in all respects with all "Environmental Laws" (as hereinafter
defined) now in force or which may hereafter be enacted or promulgated
applicable to the Facility and the conduct of Tenant's business at the
Facility.
Landlord represents that it has complied in all respects with
all "Environmental Laws" applicable to the Facility for the period from
August 28, 1984 to the date hereof (the "Environmental Indemnification
Period").
Further, Tenant shall bear all Environmental Liabilities and
Costs (as hereinafter defined) to the extent that such Environmental
Liabilities and Costs arise from the operation of the Facility during the
Lease Term or any condition of the Land that arises from activities by
Tenant or its agents during the Lease Term; provided, however, that Tenant
shall have no obligation, expense, cost or liability under any provision of
this Lease Agreement as a result of, and Landlord shall indemnify and hold
Tenant and its affiliates harmless against, (i) Environmental Liabilities
and Costs arising from the operation of the Facility prior to the
Commencement Date, (ii) any Release that occurred prior to the Commencement
Date, or (iii) any noncompliance with any Environmental Laws prior to the
Commencement Date, except that Tenant shall be responsible to the extent of
any aggravation of or contribution to any such Release is caused by Tenant
noncompliance of any Existing Environmental Condition during the Lease
Term.
6.3. Definitions.
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For purposes of this Article, the following definitions shall
apply:
"Environment" means navigable waters, waters of the contiguous
zone, ocean waters, natural resources, surface waters, ground water,
drinking water supply, land surface, subsurface strata, and ambient air,
both inside and outside of buildings and structures.
"Environmental Laws" means federal, state, local and foreign
laws, common law, regulations and codes, as well as orders, decrees,
judgments or injunctions issued, promulgated, approved or entered
thereunder relating to pollution, protection of the environmental or public
health and safety, including, but not limited to the Release or threatened
Release of Hazardous Substances into the Environment or otherwise relating
to the presence, manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Substances.
"Environmental Liabilities and Costs" means all liabilities,
losses, fines, penalties, charges, damages (including damages to persons,
property or the Environment), costs, or expenses (including legal,
engineering, and other consultant and expert witness fees and expenses)
arising under Environmental Laws, or related to Remedial Actions, or
otherwise arising out of or in respect of:
(a) the operation of the Facility or any real property,
assets, equipment
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or facilities related to it; or
(b) the environmental conditions on, under, above, or
about the Facility or any real property, assets, equipment or
facilities related to it; or
(c) expenditures necessary to cause alter, maintain, or
restore the Facility so as to be or remain in compliance with any
and all requirements of Environmental Laws including, without
limitation, all permits, licenses or other authorization issued
under or pursuant to such Environmental Laws.
"Existing Environmental Condition" means any environmental
condition on, under, above, or about the Facility or any real property,
assets, equipment or facilities related to it existing prior to the
Commencement Date.
"Governmental Authority" means any government or political
subdivision thereof, whether federal, state, local or foreign, or any
agency or instrumentality of any such government or political subdivision.
"Hazardous Substance" means any waste, pollutant, hazardous
substance, toxic substance, hazardous waste, special waste, industrial
substance or waste, petroleum or petroleum-derived substance or waste, or
any constituent of any such substance or waste, including without
limitation any such substance regulated under or defined by any
Environmental Law.
"Losses" means all liabilities, losses, fines, penalties,
changes, damages, costs (including, without limitation, court costs) or
expenses (including, without limitation, reasonable attorneys fees).
"Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the Environmental or into or out of any property, including
the movement of Hazardous Substances through or in the air, soil, surface
water, ground water or property.
"Remedial Action" means all actions reasonably necessary,
whether voluntary or involuntary, to (i) clean up, remove, treat or in any
other way adjust Hazardous Substances in the Environment; (ii) prevent the
Release or further movement of Hazardous Substances so that they do not
migrate or endanger or threaten to endanger public health or welfare or the
Environment; or (iii) perform remedial studies, investigations, restoration
and post-remedial studies, investigations and monitoring at, on, under or
about the Facility.
6.4. Environmental Compliance.
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(a) Tenant agrees that promptly after the Commencement
Date, it will, at no expense to Landlord, apply for the transfer
into Tenant's name of all permits, licenses and approvals required
under the Environmental Laws for the operation and use of the
Facility, and if any of the same are not transferable, promptly
apply for new permits, licenses and approvals to replace any that
are not transferable. Tenant will diligently pursue such
applications and use its best efforts to cause the transfers or
issuances of new licenses to be approved. Tenant represents and
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warrants that it will at no expense to Landlord, maintain
compliance with the terms and conditions of all such permits and
will obtain any other such permits necessary for the operation and
use of the Facility.
(b) Tenant agrees to notify Landlord, and Landlord agrees
to notify Tenant, promptly in writing, upon the party or any of
its representatives learning of any of the following with respect
to the Facility:
(i) notice or claim to the effect that
Landlord or Tenant is or may be liable
to any person as a result of the Release
or threatened Release of any Hazardous
Substance into the Environment;
(ii) notice that Landlord or Tenant is
subject to investigation by any
Governmental Authority evaluating
whether any Remedial Action is needed to
respond to the Release or threatened
Release of any Hazardous Substance into
the Environment;
(iii) notice of a condition which might
reasonably be expected to result in a
notice of violation of any Environmental
Law; or
(iv) notice of the commencement of any
judicial or administrative proceeding
alleging a violation of any
Environmental Law.
(c) Without limiting the generality of the foregoing,
Tenant shall identify and dispose of hazardous wastes, as defined
by any Environmental Laws, generated by Tenant during the Lease
Term in the manner required by any and all applicable federal,
state and local laws, rules and regulations. Upon the expiration
or earlier termination of the Lease Agreement, Tenant shall,
unless otherwise agreed by the parties, identify and dispose of
all containers of Hazardous Substances that have been placed on
the site by the Tenant during the Lease, in accordance with all
applicable federal, state, and local laws, rules and regulations.
6.5. Waste; Nuisance.
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Tenant shall not use the Facility nor permit any use of the
Facility which in any manner will cause or constitute waste, nuisance or
unreasonable annoyance to owners or occupants of adjacent or neighboring
properties. Tenant shall not do, bring, keep or permit anything in or about
the Facility that will cause a cancellation of any insurance or any
increase in the cost of insurance covering the Facility unless, in the case
of any increase in the cost, Tenant agrees to pay the increased cost.
Tenant shall, at its expense, comply with any and all requirements
pertaining to the Facility of any insurance company necessary for the
maintenance of reasonable property and public liability insurance for the
Facility. Tenant shall, at its expense, keep the Facility, including
walkways and landscaping adjacent to the Facility, clean and free from
rubbish and dirt at all times, and shall arrange for the regular pick up
and cartage of trash and garbage at Tenant's expense.
6.6. Covenant of Continuous Use.
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Except as provided in the following paragraph, Tenant shall
(subject to any right to terminate this Lease) continuously and diligently
use the Facility for the use specified in this Lease Agreement. If the
Facility is partially destroyed or condemned and this Lease Agreement
remains in full force and effect, Tenant shall continue operation of the
Facility to the extent reasonably practical from the standpoint of good
business judgment during any period of reconstruction or restoration.
Tenant may temporarily close the Facility, for a period not to
exceed an aggregate of thirty (30) days, in order to perform repairs,
alterations, improvements or renovations which are required by this Lease
Agreement or approved by Landlord, if closing the Facility, in the Tenant's
reasonable opinion, is the most cost-effective way to accomplish such
repairs, alterations, improvements or renovations and does not violate any
applicable laws.
ARTICLE 7
IMPROVEMENTS, ALTERATIONS AND ADDITIONS
7.1. Additions.
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Tenant shall not make any alterations, improvements and/or
additions (collectively "Additions") to the Facility without first
obtaining the prior written consent of Landlord, which consent may not be
unreasonably withheld. When making such determination, Landlord may
consider all relevant factors, including, but not limited to, the other
provisions of this Agreement.
7.2. Removal.
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If approved by Landlord in accordance with Section 7.1 herein,
any and all Additions shall become a part of the Facility, and except for
personal property and trade fixtures owned by Tenant (including equipment
owned by Tenant and affixed to the Premises), shall remain on and be
surrendered with the Facility on expiration or sooner termination of this
Lease Agreement.
7.3. Mechanics' and Materialmen's Liens.
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Tenant shall pay all costs and expenses for any construction
done on the Facility, and shall keep the Facility free and clear of all
mechanics' or materialmen's liens resulting from construction done by or
for the Tenant or with the permission of Tenant. Any mechanic's or
materialmen's lien filed against the Facility shall be discharged by
Tenant, by bond or otherwise, within ten (10) days after Tenant's receipt
of notice of the filing thereof, at the sole cost and expense of Tenant.
Tenant shall have the right to contest the correctness or validity of any
such lien if Tenant procures and posts a lien release bond in recordable
form issued by a corporation authorized to issue surety bonds in the State
of Maryland in an amount equal to one and one-half (1-1/2) times the amount
of the claim of lien. The bond shall meet all requirements of Maryland law
and shall provide for the payment of any sum that claimant may recover on
the claim together with costs of suit if it recovers in the action.
ARTICLE 8
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MAINTENANCE AND REPAIRS
8.1. Maintenance and Repairs.
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Tenant, at its sole cost and expense, shall maintain the
Facility in good condition and shall deliver the same and surrender the
Facility to Landlord at the expiration or earlier termination of the Lease
Term in the same condition as received at the Commencement Date less the
effects of normal wear-and-tear. In addition, on or before _________ of
each year during the Lease Term, Tenant shall, at its sole cost, cause a
boiler inspection to be performed on the boiler included in the Facility by
an inspector mutually selected by Tenant and Landlord. Tenant shall deliver
to Landlord a copy of the inspection report prepared by such inspector
promptly upon Tenant's receipt thereof. Also, Tenant shall, at its sole
cost, have the boiler properly serviced and maintained on a regular basis
in accordance with accepted standards and practices in the boiler industry,
including, without limitation, appropriate feed water testing and
conditioning.
8.2. Condition of Facility.
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Tenant accepts the Facility from the Landlord on an "As
Is/Where Is" basis and each party acknowledges that Landlord has made,
makes and shall make no representations or warranties (except under Article
(6)) with respect to the Facility, express or implied. Without limiting the
generality of the foregoing, each party acknowledges and agrees that
Landlord has made, makes and shall make (i) no representation or warranty
of tenantability or habitability with respect to the Facility, (ii) no
representation or warranty of fitness with respect to any fixtures
contained therein, and (iii) no representation or warranty with respect to
the physical condition of the Facility or the operating order or condition
of any fixtures; and Tenant agrees that, except for the express
representation and warranty set forth in Section 14.3 hereof, Tenant is not
relying upon any representations or warranties of Landlord with respect to
the tenantability, habitability, fitness, physical condition, or operating
order of the Facility or any of the fixtures contained therein.
8.3. Tenant's Responsibility.
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Tenant agrees that during the Lease Term, it will at its own
cost and expense keep (i) the Facility and fixtures in a clean and sightly
condition consistent with the Facility's current condition less the effects
of normal wear-and-tear and in compliance with all applicable legal
requirements and (ii) all components and systems thereof (including, but
not limited to, boilers, air conditioning, heating and ventilation systems,
and all other electrical and mechanical systems), and the grounds and paved
and impervious areas surrounding the Facility, in good order and repair and
in good operating condition less the effects of normal wear-and tear.
Tenant, except as may be otherwise expressly provided in this Lease
Agreement, shall promptly, at its sole cost and expense, make all necessary
repairs, restorations, renewals and replacements to the Facility whether
interior or exterior, structural or nonstructural, ordinary or
extraordinary, foreseen or unforeseen. Such repairs, restorations, renewals
and replacements shall, to the extent practicable, be comparable in quality
to the original work or property replaced.
8.4. Landlord's Responsibility.
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Landlord shall have no responsibility or obligation whatsoever
to maintain, repair, replace, restore, or keep safe the Facility or
fixtures and Landlord shall not be required to make any repairs,
replacements, alterations, or renewals of any nature or description to the
Facility, whether interior or exterior, ordinary or extraordinary,
structural or nonstructural, foreseen or unforeseen, or to make any
expenditure whatsoever in connection with this Lease Agreement or to impact
or maintain the Facility in any way. Landlord and its agents shall have the
right, but not the obligation, without additional notice to Tenant and at
Tenant's expense (which expense shall constitute additional rent and shall
be payable upon written demand therefor), to enter onto and make any
repairs to the Facility that Landlord reasonably believes are necessary to
maintain the Facility if Tenant fails to make such repairs within twenty
(20) days after Landlord delivers written notice to Tenant requesting
Tenant to complete the necessary repairs. No such twenty (20) day notice
period shall be required prior to Landlord's entry and repair in the event
that the failure to immediately make such repair could cause a substantial
amount of damage to the Facility.
ARTICLE 9
UTILITIES AND SERVICES
Tenant shall, at its sole cost and expense, make all
arrangements for and pay for all charges for utilities and services
furnished to it or used by it, including, without limitation, gas,
electricity, water, sanitary sewer, telephone service, trash collection and
for all connection charges for such services. Landlord shall have no
obligation whatsoever to provide or pay for any utilities now available or
which may in the future become available at the Facility pursuant to
appropriate utilities easements, including but not limited to: gas,
electricity, water, telephone, storm and sanitary sewer, provided that
Landlord shall reasonably cooperate with Tenant (but without any
out-of-pocket expense to Landlord) in the securing thereof.
ARTICLE 10
INSURANCE
10.1. Facility. During the Lease Term, Landlord, at its
sole cost and expense, shall keep the Facility and fixtures insured against
loss or damage by, flood, fire and such other risks as are now or hereafter
are included in an extended coverage endorsement in common use for
commercial property in the geographic location of the Facility, including
vandalism and malicious mischief in an amount equal to the full replacement
value of the Facility.
10.2. Public Liability and Automobile Insurance.
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During the Lease Term, Tenant, at its sole cost and expense,
shall keep or cause to be kept in force, for the mutual benefit of Landlord
and Tenant, the following types of insurance coverage:
(a) comprehensive general bodily injury liability
insurance and property damage liability insurance, including
contractual and products and completed
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operations, with a combined single limit of liability of Ten
Million Dollars ($10,000,000.00) for personal injuries or deaths
of persons or for property damage occurring in or about the
Facility.
(b) comprehensive automobile property damage liability
insurance, providing protection of at least $10,000,000.00 per
accident.
10.3. Workers' Compensation, Unusual Hazards, and Other
Insurance.
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During the Lease Term, Tenant, at its sole cost and expense,
shall keep in force in form and coverage reasonably satisfactory to
Landlord:
(a) Workmen's compensation (or equivalent)
insurance, including employer's liability insurance, in an amount
necessary to meet all legally required limits.
(b) Boiler and machinery insurance.
(c) If Tenant commits, permits, or causes the
conduct of any activity or the bringing or operation of any
equipment (other than the equipment currently located at the
Facility and similar equipment) on or about the Facility creating,
in Landlord's reasonable judgment, unusual hazards, Tenant shall
procure and maintain in force during such activity or operation
insurance sufficient to cover the risks represented thereby.
Landlord's demand for unusual hazard insurance hereunder shall not
constitute a waiver of any right Landlord may have to demand the
removal, cessation, or abatement of such activity or operation.
(d) Tenant may procure and maintain any insurance
not required by this Lease Agreement, but all such insurance shall
be subject to all other provisions of this Lease Agreement
pertaining to insurance and shall be for the mutual benefit of
Landlord and Tenant.
10.4. General Insurance Matters.
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All insurance required under Sections 10.4 and 10.5 of this
Lease Agreement shall be carried only with responsible insurance companies
having a rating by A.M. Best Company of A- or better, and shall:
(a) Name Landlord as an additional insured or
additional loss payee, as applicable, and contain
cross-liability endorsements;
(b) Contain a waiver of subrogation by the
insurance company in favor of the landlord;
(c) Be primary as to Landlord and noncontributing
with any insurance that may be carried by Landlord;
(d) Not provide for a deductible of more than Ten
Thousand Dollars ($10,000.00);
-12-
(e) Be provided by insurance companies duly
licensed in the State of Maryland and reasonably acceptable to
Landlord; and
(f) Provide that they cannot be canceled or
materially changed except after thirty (30) days' written notice
by the insurer to Landlord.
10.5. Proof of Compliance; Failure to Maintain Insurance.
--------------------------------------------------
Tenant shall deliver to Landlord, in the manner required for
notices herein, copies of policies and certificates of all insurance
policies required by this Lease Agreement, together with evidence
satisfactory to Landlord of payment required for procurement and
maintenance of the policy, within the following time limits:
(a) For insurance required at the commencement of
this Lease Agreement, upon the Commencement Date.
(b) For insurance becoming required at a later
date, at least ten (10) days before the requirement takes effect.
(c) For any renewal or replacement of a policy
already in existence, Tenant will provide evidence at least ten
(10) days before expiration or other termination of the existing
policy.
If Tenant fails or refused to procure or to maintain insurance
as required by this Lease Agreement or fails or refuses to furnish Landlord
with required proof that the insurance has been procured and is in force
and paid for, Landlord shall have the right, but not the obligation, at
Landlord's election, to procure and maintain such insurance. The premiums
paid by Landlord shall be treated as additional rent due from Tenant with
interest at the Default Rate, to be paid on the first day of the month
following the date on which the premiums were paid. Landlord shall give
Tenant prompt notice of the payment of such premiums, stating the amounts
paid and the name of the insurer or insurers, and interest at the Default
Rate shall run from the date of payment by Landlord.
ARTICLE 11
DESTRUCTION
11.1. Destruction of Facility.
-----------------------
If during the Lease Term the Facility is totally or partially
destroyed from any cause whatsoever, whether or not such cause is covered
by insurance maintained by Landlord, rendering the Facility totally or
partially inaccessible or unusable, Landlord, at its sole option, may
either (i) cancel and terminate this Lease or (ii) with due diligence and
dispatch, restore the Facility to substantially the same condition as it
was in immediately before destruction. There shall be no abatement of Base
Rent or any other payment to be made by Tenant hereunder, except that
Landlord will credit against any additional rent (i) any business
interruption insurance proceeds actually received by Landlord and (ii) any
credit actually received by Landlord for items prepaid by Tenant but which
were reduced as a result of such destruction. Upon cancellation of this
Lease by Landlord, Landlord shall be then entitled to all insurance
proceeds payable by reason of the destruction.
-13-
ARTICLE 12
CONDEMNATION
12.1. Certain Definitions.
-------------------
The following terms shall have the following meanings: (i)
"Taking" shall mean the transfer of the use, occupancy or title of the
Facility or any portion thereof to an entity exercising the power of
eminent domain in any actual or threatened action or proceeding pursuant to
any law, general or special, and shall include such transfer made in
settlement or in lieu of any such threatened action or proceeding; (ii) the
"Date of Taking" shall mean the earlier of the date upon which the use,
occupancy or title of the Facility or any portion thereof is vested in, or
possession thereof is taken by, such entity; and (iii) "Award" shall mean
the amounts recovered as compensation or damages on account of a Taking,
including all amounts paid pursuant to any agreement with such entity which
has been made in settlement or under threat or in lieu of any such action
or proceeding, less the reasonable costs and expenses incurred in
collecting such amounts (including any such amounts held or received by or
on behalf of Landlord by the holder of any mortgage and any attorneys'
fees).
12.2. Taking.
------
If there shall occur any Taking of all or any part of the
Facility, then this Lease Agreement shall terminate effective as of the
Date of Taking provided, however, that such termination shall be without
prejudice to the rights of Landlord to recover and retain the Award in its
own name.
12.3 Claims of Landlord and Tenant.
-----------------------------
Landlord shall be entitled to receive the entire Award in any
proceeding with respect to such Taking without deduction therefrom for any
estate vested in Tenant by this Lease Agreement, and Tenant shall receive
no part of such Award, except as herein expressly provided. Tenant shall
have the right to make a separate claim with the condemning authority for
(i) any moving or relocation expenses incurred by Tenant as a result of
such condemnation; and (ii) any costs incurred and paid by Tenant in
connection with any alteration or improvement made by Tenant to the
Facility, provided, however, that such separate claim shall not reduce or
adversely affect the amount of Landlord's Award.
ARTICLE 13
DEFAULT AND REMEDIES
13.1. Default by Tenant.
-----------------
The occurrence of any one or more of the following events
shall constitute a default and breach of this Lease Agreement by Tenant:
(a) Failure by Tenant to make any payment of additional rent,
or any other payment required to be made by Tenant hereunder as and when
due.
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(b) The occurrence of a Pietrafesa Event of Default (as
defined in the Supply Agreement).
(c) Any default under Sublease of even date herewith between
Jos. A Bank Clothiers, Inc., Sublandlord and Tenant, as Subtenant.
13.2 Notices of Default to Tenant.
----------------------------
Landlord shall give Tenant written notice of default and
Tenant shall have the right to cure defaults hereunder and be relieved from
the effects thereof if, in the case of a monetary default, Tenant remedies
such default by making the required payment(s) within five (5) days after
the giving of notice by Landlord or, in the case of nonmonetary defaults,
Tenant remedies such default within thirty (30) days after the giving of
notice by Landlord; provided, however, if such nonmonetary default cannot
reasonably be cured within such thirty (30) days period, Tenant shall have
up to an additional thirty (30) days to remedy such default so long as
Tenant is diligently pursuing such remedy. No further notices shall be
required to pursue any remedy of Landlord, including the commencement of an
unlawful detainer proceeding, and to the extent the law may be construed to
require additional notices, such notices are specifically waived by Tenant.
13.3 Remedies of Landlord.
--------------------
(a) Cumulative Remedies. If, and only if, any
default by Tenant is not cured within the cure period after notice provided
in the foregoing Section 13.2, Landlord shall have the following remedies
set forth in this Section 13.3.
(b) Performance of Tenant's Obligations.
Landlord, with or without terminating this Lease Agreement, may
immediately or at any time thereafter reenter the Facility and correct or
repair any condition which shall constitute a failure on Tenant's part to
keep, observe, perform, satisfy, or abide by any term, condition, covenant,
agreement, or obligation of this Lease Agreement or of any notice given
Tenant by Landlord pursuant to the terms of this Lease Agreement, and
Tenant shall fully reimburse and compensate Landlord on demand (which sums
shall constitute additional rent).
(c) Vacation of Facility. Landlord, with or
without terminating this Lease Agreement, may immediately or at any time
thereafter demand in writing that Tenant vacate the Facility and thereupon
Tenant shall vacate the Facility and remove therefrom all property thereon
belonging to or placed on the Facility by, at the direction of, or with
consent of Tenant within thirty (30) days of receipt by Tenant of such
notice from Landlord, whereupon Landlord shall have the right to reenter
and take possession of the Facility. Any such demand, reentry and taking
possession of the Facility by Landlord shall not of itself constitute an
acceptance by Landlord of a surrender of this Lease Agreement or of the
Facility by Tenant and shall not of itself constitute a termination of this
Lease Agreement by Landlord.
(d) Reentry. Landlord, with or without
terminating this Lease Agreement, may immediately or at any time
thereafter reenter the Facility and remove therefrom Tenant and all
property belonging to or placed on the Facility by, at the direction
-15-
of, or with consent of Tenant. Any such reentry and removal by Landlord
shall not of itself constitute an acceptance by Landlord of a surrender of
this Lease Agreement or of the Facility by Tenant and shall not of itself
constitute a termination of this Lease Agreement by Landlord.
(e) Reletting. Landlord, with or without
terminating this Lease Agreement, may immediately or at any time
thereafter relet the Facility or any part thereof for such time or times,
at such rental or rentals and upon such other terms and conditions as
Landlord may deem advisable in its sole and absolute subjective discretion,
and Landlord may make any alterations or repairs to the Facility which it
may deem necessary or proper to facilitate such reletting; and Tenant shall
pay as additional rent all costs of such reletting including but not
limited to the cost of any such alterations and repairs to the Facility,
attorneys' fees, advertising costs, and brokerage commissions; and if this
Lease Agreement shall not have been terminated, Tenant shall continue to
pay all Base Rent, and all other forms of rent and all other charges due
under this Lease Agreement up to and including the date of beginning of
payment of such rent by any subsequent tenant of part or all of the
Facility, and thereafter Tenant shall pay monthly during the remainder of
the Lease Term the difference, if any, between the rent and other charges
collected from any such subsequent tenant or tenants and the Base Rent, and
all other liabilities of Tenant hereunder arising and other charges
reserved in this Lease Agreement, but Tenant shall not be entitled to
receive any excess of any such rents collected over the rents reserved
herein.
(f) Termination. Landlord may immediately
or at any time thereafter terminate this Lease Agreement, and this
Lease Agreement shall be deemed to have been terminated upon receipt by
Tenant of written notice of such termination; upon such termination
Landlord shall recover from Tenant all damages Landlord may suffer by
reason of such termination, all arrearages in and all other forms of rent,
costs, charges, and reimbursements, the cost (including court costs and
attorneys' fees) of recovering possession of the Facility, the cost of any
alteration of or repair to the Facility which is necessary or proper to
prepare the same for re-letting. Such election shall be made by Landlord by
serving written notice upon Tenant of its choice of one of the two said
alternatives within thirty (30) days of the notice of termination.
(g) Waiver and Indemnity. If Landlord
reenters the Facility or terminates this Lease Agreement pursuant to any
of the provisions of this Lease Agreement, Tenant hereby waives all claims
for damages which may be caused by such reentry or termination by Landlord.
Tenant shall and does hereby indemnify and hold Landlord harmless from any
loss, cost (including court costs and attorneys' fees), or damage suffered
by Landlord by reason of such reentry or termination. No such reentry or
termination shall be considered or construed to be a forcible entry.
13.4 Non-Waiver; Forbearance.
-----------------------
Landlord's pursuit of any one or more of its stated remedies
shall not preclude pursuit of any other remedy or remedies provided for in
this Lease Agreement or any other remedy or remedies provided for or
allowed by law or in equity, separately or concurrently, or in any
combination. Pursuit of any one or more of the remedies provided in this
Lease Agreement shall not constitute an election of remedies excluding the
election of another remedy or other remedies, or a forfeiture or waiver of
any damages or other sums accruing to Landlord by reason of Tenant's
default. Landlord's forbearance in
-16-
pursuing or exercising one or more of its remedies shall not be deemed or
construed to constitute a waiver of any future default or remedy. No waiver
by Landlord of any right or remedy on one occasion shall be construed as a
waiver of that right or remedy on any subsequent occasion or as a waiver of
any right or remedy then or thereafter existing. No failure of Landlord to
pursue or exercise any of its powers rights or remedies or to insist upon
compliance by Tenant with any agreement, term, covenant, condition,
requirement, provision or restriction of this Lease Agreement, and no
custom or practice at variance with the terms of this Lease Agreement,
shall constitute a waiver by Landlord of the right to demand compliance
with the terms and conditions of this Lease Agreement.
13.5 Default by Landlord.
-------------------
(a) Landlord covenants and agrees that it
shall constitute a default by Landlord hereunder if any "Bank Event of
Default" (as defined in the Supply Agreement) shall have occurred and be
continuing.
(b) Upon and during the continuation of a
default described in clause (a) above, Tenant shall be entitled to
terminate this Lease and all its obligations hereunder on notice to
Landlord, which notice and termination shall be effective as of the date
sent by Tenant (unless provided otherwise in the relevant notice.)
ARTICLE 14
COMPLIANCE WITH LAW
14.1. Tenant's Compliance with Laws.
-----------------------------
Tenant, at its expense, shall comply with all applicable laws,
rules, orders, ordinances, conditional use permits, zoning variances,
regulations and other requirements, present or future, including all
Environmental Laws defined in Section 6.3 herein (collectively, "Legal
Requirements"), affecting the Facility that are promulgated by any
governmental authority or agency having jurisdiction, including, without
limitation, all Legal Requirements affecting the design, construction, use,
condition, occupancy, and/or operation of the Facility, or relating to the
performance by Tenant of any duties or obligations to be performed by it
hereunder; provided, however, that Tenant shall have no obligation,
expense, cost or liability under any provision of this Lease Agreement as a
result of (i) Environmental Liabilities and Costs arising from the
operation of the Facility prior to the Commencement Date, (ii) any Release
that occurred prior to the Commencement Date, or (iii) any noncompliance
with any Environmental Laws prior to the Commencement Date, except that
Tenant shall be responsible for any aggravation of or contribution to any
such Release, noncompliance or any Existing Environmental Condition during
the Lease Term.
14.2. Contest of Legal Requirements.
-----------------------------
Tenant, at its expense and by appropriate proceedings
diligently prosecuted, may contest the validity or applicability of any
Legal Requirement, and may postpone its compliance therewith until such
contest shall be decided, provided such postponement does not subject the
Landlord or the Facility to penalty or material loss, damage or reduction
in value.
-17-
ARTICLE 15
ASSIGNMENT AND SUBLETTING
15.1. Prohibition Against Lease Agreement Transfers.
---------------------------------------------
Tenant may not sell, assign, encumber or otherwise transfer
this lease Agreement, or any portion of Tenant's interest in this Lease
Agreement, or sublease or grant any license or concession for all or any
part of the Facility, or allow any other person or entity to occupy all or
any part of the Facility, whether voluntarily or involuntarily (hereinafter
collectively referred to as "Transfer") without Landlord's prior written
consent, which consent may be granted or withheld in the sole and absolute
subjective discretion of Landlord. Any Transfer shall be subject to and
governed by the terms of this Lease Agreement, and Tenant shall thereafter
remain primarily liable for the full performance of all terms and
conditions of this Lease Agreement, including the payment of all additional
rent and all other forms of rent and other payments required hereunder. Any
Transfer without Landlord's prior consent shall be voidable at the Option
of Landlord and shall be a material breach of this Lease Agreement. The
approval of one Transfer shall not be deemed approval of or consent to any
subsequent Transfer. As a condition to Landlord's consent to any Transfer,
Landlord may require a fee to reimburse Landlord for reasonable attorneys'
fees and costs incurred in reviewing the proposed Transfer, and that the
transferee assume Tenant's obligations hereunder in writing in a form
approved by Landlord. Such fee shall constitute additional rent hereunder.
Notwithstanding the foregoing, Landlord will not unreasonably
withhold its consent to a subletting of a portion of the Facility provided
that:
(a) the space to be sublet shall be subject to Landlord
approval as being unneeded space for the purpose set forth in the Supply
Agreement.
(b) the subletting shall in no way affect the Reserved Space
provided in Section 1.3.
(c) all proceeds of any nature whatsoever to the extent
exceeding applicable Base Rent and additional rent from said subletting
shall be promptly paid to Landlord.
15.2. Transfer of Limited Liability Company Member
Interests.
--------------------------------------------
If at any time after execution of this Lease, any part or all
of the member interests of Tenant shall be transferred by sale, assignment,
bequest, inheritance, operation of law, or other disposition (including
such a transfer to or by a receiver or trustee in Federal or state
bankruptcy, insolvency, or other proceedings) so as to result in a change
in the present control of the limited liability company by the person or
persons now owning a majority of such interests (or any affiliate of such
persons), Tenant shall give Landlord notice of such event within five (5)
days from the date of such transfer. In such event and regardless of
whether Tenant has given such notice, Landlord may elect to terminate this
Lease at any time thereafter by giving Tenant notice of such election, in
which event this Lease and the rights and obligations of the parties
hereunder shall cease as of a date set
-18-
forth in such notice which date shall not be less than ten (10) days after
the date of such notice. In the event of any such termination, all
additional rent due Landlord resulting from Tenant's failure to perform any
of its obligations hereunder) shall be adjusted as of the date of such
termination.
15.3. Landlord's Right to Assign Agreement and Mortgage the
Facility.
-----------------------------------------------------
Landlord shall have the right to assign its rights and
obligations under this Lease Agreement and, in such event, Landlord shall
provide written notice thereof to Tenant. Landlord shall also have the
right to mortgage or otherwise encumber the Facility at any time during the
Lease Term and Landlord shall provide Tenant written notice thereof.
ARTICLE 16
ENTRY BY LANDLORD DURING THE LEASE TERM
Landlord and its authorized representatives shall have the
right to enter the Facility either (i) at all times for purposes of
entering the Reserved Space as set forth in Section 1.3 or (ii) on prior
notice during normal business hours, for any reason or purpose in
accordance with the Primary Supply Agreement. Landlord may post "for sale,"
"for rent" or "for lease" signs during the last six (6) months of the Lease
Term, or at any time after Tenant has failed to cure a default under the
terms of this Lease Agreement within the cure period, if any, specified in
Section 13.2 hereof and, in addition show the Facility to prospective
brokers, agents, buyers, tenants, lenders or persons interested in the
Facility at any time during the last six (6) months of the Lease Term, or
at any time after Tenant has failed to cure a default under the terms of
this Lease Agreement within the cure period specified in Section 13.2
hereof. Tenant shall not be entitled to an abatement or reduction in Base
Rent, or any other form of rent if Landlord exercises any rights reserved
in this Article. Nothing in this Article shall be construed to require
Landlord to make any repairs to the Facility whatsoever, it being
acknowledged by the parties that such responsibility is the sole
responsibility of Tenant hereunder.
ARTICLE 17
SUBORDINATION AND ATTORNMENT
17.1. Subordination
-------------
Tenant shall from time to time, upon request from Landlord,
execute and deliver all documents that may be required by a lender to
effectuate a subordination of this Lease Agreement to any encumbrance
recorded before or after the date of this Lease Agreement which constitutes
a lien against the Facility.
17.2. Attornment
----------
It is acknowledged and agreed that Landlord has the right to
transfer Landlord's interest in the Facility, in whole or in part, to
encumber Landlord's fee title, and to assign any or all rent due hereunder.
Tenant shall attorn to any purchaser at any foreclosure sale, or to any
grantee or transferee designated in any deed given in lieu of foreclosure,
and any grantee in an outright sale or exchange of the Facility or any part
-19-
thereof from Landlord. In the event of such attornment, this Lease
Agreement shall remain in full force and effect so long as Tenant is not in
default hereunder.
17.3 In the event that Tenant loses possession of the Facility
as a result of foreclosure of a mortgage encumbering the Facility, this
shall constitute a "Bank Event of Default" under the Supply Agreement.
17.4. Further Documents.
-----------------
Tenant hereby agrees to execute any documents reasonably
required by a lender or grantee from Landlord hereunder to accomplish the
purposes of this Article. If Tenant fails to execute such documents within
ten (l0) days of a request therefor, Tenant hereby grants to Landlord a
power of attorney, coupled with an interest, to execute and deliver such
documents on behalf of Tenant; provided, however, Landlord shall not be
authorized to so execute such documents in the event that during such
ten-day period Tenant reasonably objects on the basis that such documents
are unreasonable in light of the purposes of this Article.
-20-
ARTICLE 18
NOTICES
-------
Any notice, demand or request, consent, approval or other
communication that either Landlord or Tenant desires or is required to give
hereunder shall be in writing and shall be deemed to have been duly given
and received if delivered by hand or mailed by registered or certified mail
(return receipt requested), postage prepaid, or if given by facsimile or
telecopy (followed by a mailed copy), transmitted to the parties at the
following addresses:
If to Landlord: The Joseph A. Bank Mfg. Co., Inc.
500 Hanover Road
Hampstead, Maryland 21074
Attn: Chief Financial Officer
Copy to: Newton B. Fowler III, Esquire
Venable, Baetjer and Howard, LLP
1800 Mercantile Bank & Trust Building
2 Hopkins Plaza
Baltimore, Maryland 21201
If to Tenant: SourceOne, LLC
4241 Brookhill Road
Baltimore, MD 21215
Attention: President
Copy to: L. Kevin Sheridan, Esquire
Roberts, Sheridan & Kotel
Towers 49
12 E. 49th Street
New York, NY 10017
or at such other address as may be substituted by notice given as herein
provided. Every notice, demand, request, consent, approval or other
communication hereunder shall be deemed to have been duly given on the date
on which personally delivered, with receipt acknowledged, on the date of
telecopier transmission, on the date of delivery by overnight courier or
three (3) business days after the same shall have been deposited with the
United States mail. For purposes of this Section, a "business day" means
any day other than Saturday, Sunday or other day on which the commercial
banks of the State of Maryland are authorized to close.
ARTICLE 19
REPRESENTATIONS AND COVENANTS OF THE PARTIES
--------------------------------------------
19.1. Landlord's Representations and Covenants.
----------------------------------------
-21-
Landlord hereby makes the following representations:
(a) Landlord is a corporation, organized,
validly existing and in good standing under the laws of the State of
New Jersey and is authorized to transact business as a foreign corporation
under the laws of the State of Maryland.
(b) Landlord is the record owner of the
Facility, and has the corporate power and authority to execute and deliver
this Lease Agreement and the other agreements to be delivered pursuant
thereto (collectively, the "Transaction Documents") and to perform its
obligations hereunder and thereunder.
(c) The execution and delivery by Landlord of
the Transaction Documents and the performance of its obligations
thereunder have been duly authorized by all action (corporate or otherwise)
that is necessary to authorize Landlord to enter into the Transaction
Documents or to perform its obligations thereunder. Each of the Transaction
Documents is the legal, valid and binding obligation of Landlord,
enforceable against Landlord in accordance with its terms.
(d) None of the Transaction Documents
conflicts with, violates or will cause a default under any existing
agreements to which Landlord is a party and all consents and approvals
necessary for Landlord to enter into each of the Transaction Documents have
been obtained.
19.2. Representations and Covenants of Tenant.
---------------------------------------
Tenant hereby makes the following representations:
(a) Tenant is a limited liability Company
organized, validly existing and in good standing under the laws of the
State of New York and is authorized to transact business as a foreign
limited liability Company under the laws of the State of Maryland.
(b) Tenant has the limited liability company
power and authority to execute and deliver each of the Transaction
Documents and to perform its obligations thereunder.
-22-
(c) The execution and delivery by Tenant of the
Transaction Documents and the performance of its obligations thereunder
have been duly authorized by all action that is necessary to authorize
Tenant to enter into the Transaction Documents or to perform its
obligations thereunder. Each of the Transaction Documents is the legal,
valid and binding obligation of Tenant, enforceable against Tenant in
accordance with its terms.
(d) None of the Transaction Documents conflicts
with, violates or will cause a default under any existing agreements to
which Tenant is a party, and all consents and approvals necessary for
Tenant to enter into each of the Transaction Documents have been obtained.
ARTICLE 20
SUCCESSORS
Subject to the provisions of this Lease Agreement regarding
Transfers, each and all of the covenants and conditions of this Lease
Agreement shall be binding upon and shall inure to the benefit of the
heirs, successors, executors, administrators, assigns and personal
representatives of the respective parties.
ARTICLE 21
EXPIRATION, TERMINATION AND HOLDER OVER
21.1. Surrender of the Facility.
-------------------------
At the expiration or earlier termination of the Lease Term,
Tenant shall surrender to Landlord the possession of the Facility,
Fixtures, improvements, alterations and/or additions to or of the Facility
(excepting only movable fixtures and trade fixtures, including all
manufacturing equipment installed by Tenant), which shall, upon the
expiration or earlier termination of the Lease Term, become a part of the
Facility and the property of the Landlord, subject to Landlord's right to
require removal in accordance with Section 7.2 hereof. Tenant shall leave
the surrendered Facility and any other property in good and broom-clean
condition and, except as provided to the contrary in provisions of this
Lease Agreement on maintenance and repair, in the same condition as
delivered to Tenant or as improved during the Lease Term, normal wear and
tear excepted. All property that Tenant is not required to surrender but
that Tenant does not remove from the Facility on or before the date of
termination of this Lease Agreement shall, at Landlord's election,
automatically become Landlord's property at termination without the
necessity of any further act by Landlord or Tenant.
21.2. Holding Over.
------------
If Tenant fails to surrender the Facility at the expiration or
sooner termination of this Lease Agreement, Tenant shall defend and
indemnify Landlord from all liability and expense including, without
limitation, attorneys' fees resulting from Tenant's failure to surrender.
This Lease Agreement shall terminate without further notice at the
expiration of the Lease Term. Any holding over by Tenant after expiration
with the consent of Landlord shall not constitute a renewal or extension or
give Tenant any right in or to the Facility, but will be deemed to be a
tenancy on a month-to-month basis, subject to the
-23-
covenants and conditions of this Lease Agreement, including without
limitation, the obligation to pay the rent reserved to Landlord, except
that Base Rent shall be increased to an amount equal to two (2) times the
then current Base Rent.
ARTICLE 22
NO RECOURSE TO AFFILIATES
Landlord and Tenant each agree that its obligations hereunder
are primary in nature and that neither party hereto shall have any recourse
to any officer, director, partners, member or affiliate (including in the
case of SourceOne, Pietrafesa), and that no such person or entity shall
have any liability, in respect of the payment and performance obligations
of Landlord and Tenant hereunder.
ARTICLE 23
MISCELLANEOUS PROVISIONS
23.1. Counterparts.
------------
This Lease Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.
23.2. Time of the Essence.
-------------------
In the performance of all of the covenants and conditions of
this Lease Agreement, time shall be of the essence.
23.3. Brokers.
-------
Tenant and Landlord each warrants that it has had no dealings
with any real estate broker or agent in connection with the negotiation of
this Lease Agreement and it knows of no real estate commissions and/or fee
in connection with the making and entering into of this Lease Agreement.
Further, the parties each hereby indemnify and hold harmless the other
party from the payment of any such claims for commissions or fees arising
from the indemnifying party's contacts with a claiming broker or agent.
23.4. Estoppel Certificates.
---------------------
Tenant shall, at any time and from time to time upon not less
than ten (10) business days' prior written notice from Landlord, execute a
statement in writing which shall set forth the following: (a) an
unequivocal certification that this Lease Agreement is unmodified and in
full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease Agreement, as so modified, is
in full force and effect), and the amount of and date to which the rental
or other charges have been paid in advance, if any; and (b) an
acknowledgment that there are not any defenses, offsets or to Tenant's
knowledge and belief, outstanding uncured defaults on the part of Landlord
hereunder or specifying such defenses, offsets or defaults if any. Failure
to deliver the
-24-
certificate within ten (l0) business days shall be conclusive upon Tenant
for the benefit of Landlord and third parties relying on the certificate
that this Lease Agreement is in full force and effect, has not been
modified, and there is no default on the part of Landlord, except as may be
represented by Landlord. Tenant hereby agrees that any statement delivered
pursuant to this paragraph may be relied upon by the person to whom it is
addressed at Landlord's request. Landlord agrees to deliver to Tenant upon
request, a statement similar to the foregoing, except with the parties
reversed, upon the same terms and conditions as required of Tenant herein.
23.5. Applicable Law.
--------------
This Lease Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland (without regard to its
conflicts of law doctrines).
23.6. Prior Agreements and Modifications.
----------------------------------
No provision of this Lease Agreement may be amended or added
to except by a subsequent contract in writing signed by the parties hereto
or their respective successors in interest. Further, the Transaction
Documents take the place of all other oral and written agreements between
Landlord and Tenant made prior to the date hereof and contain the entire
agreement of Landlord and Tenant.
23.7. Captions and Headings.
---------------------
The captions and headings used throughout this Lease Agreement
have been provided for the convenience of the parties and for reference
only. Such are not to be deemed a part of this Lease Agreement nor to be
considered in the construction or interpretation of any part hereof.
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23.8. Provisions are Covenants and Conditions.
---------------------------------------
All provisions, whether covenants or conditions on the part of
Tenant, shall be deemed as both covenants and conditions hereunder.
23.9. Severability.
------------
The unenforceability, invalidity or illegality of any
provision of this Lease Agreement shall not render any other provision
unenforceable, invalid or illegal.
23.10. Exhibits and Schedules Incorporated.
-----------------------------------
All Exhibits to which reference is made are deemed
incorporated in this Lease Agreement.
23.11. Relationship of Parties.
-----------------------
The relationship between the parties shall at all times be
deemed to be that of Landlord and Tenant. The parties do not intend, nor
shall this Lease Agreement be deemed to create, a partnership or joint
venture.
23.12. Modifications.
-------------
The parties agree to modify this Lease Agreement in order to
accommodate any reasonable requirements of Landlord's lenders so long as
such modifications do not affect the rent or other financial
responsibilities of the parties, do not alter significantly the
non-financial responsibilities of the parties, or otherwise have a material
and adverse economic effect on the parties hereunder.
23.13. Covenant of Quiet Enjoyment.
---------------------------
So long as Tenant is not in default hereunder, and subject to
all of the other provisions of this Lease Agreement, Tenant shall be
entitled to quiet enjoyment of the Facility during the Lease Term without
molestation or hindrance by Landlord or any party claiming by, through, or
under Landlord.
23.14. Recordation. A short form of this Lease, in the form
prescribed by statute, suitable for recordation, shall be executed by the
parties hereto upon the request of either Landlord or Tenant. Recordation
shall not be required. If either party desires to record the short form
lease, all costs of recordation shall be at the expense of that party.
23.15. Landlord Exculpation. The term "Landlord" as used in
this Lease, shall be limited to mean and include only the then lawful owner
(at the time in question) of the Facility; in the event of any transfer or
transfers of said estate, the Landlord, herein named (and in case of any
subsequent transfers or conveyances, the then grantor) shall be
automatically freed and relieved, from and after the date of such transfer
and conveyance, of all liability with respect to the performance of any
covenants and agreements on the part of Landlord contained in this Lease
thereafter to be performed. It is understood and agreed that if any
Landlord or grantor shall have committed default prior to such transfer,
the Landlord or grantor committing such default shall not be exempt from
such liability
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attaching thereto; it being intended that the covenants and agreements
contained in this Lease on the part of the Landlord to be performed,
subject to that which is hereafter set forth, be binding on Landlord and
its successors and assigns, only during and in respect to their successive
periods of ownership.
Tenant agrees that the Facility is within the exclusive
control of Tenant.
23.16. No Option. The submission of this Lease for examination
does not constitute a reservation of or option for the leased premises and
this Lease become effective as a Lease only upon execution and delivery
thereof by Landlord and Tenant.
IN WITNESS WHEREOF, the parties hereto have executed this
Lease Agreement as of the date first written above with the intention of
creating a document under seal.
LANDLORD:
Witness: THE JOSEPH A. BANK MFG. CO., INC.
By: /s/ Timothy F. Finley (SEAL)
________________________ _______________________
Name: Timothy F. Finley
____________________
Title: CEO
____________________
[CORPORATE SEAL)
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TENANT:
SOURCEONE, L.L.C.
By: /s/ David McDonough (SEAL)
________________________ _______________________
Name: David McDonough
____________________
Title: VP-Finance Member
____________________
By: (SEAL)
________________________ _______________________
Name:
____________________
Title: Member
____________________
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EXHIBITS AND SCHEDULES
----------------------
EXHIBIT A - Land
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