AGREEMENT OF LEASE
CONFIDENTIAL
TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN
REDACTED AND FILED SEPARATELY WITH THE COMMISSION.***
Appendix
B
AGREEMENT
OF LEASE
This
Agreement of Lease (hereinafter
"Lease") is made this 27th day of February, 2008, by and between 0000 XXXXXXXXXX
XXXX, LLC, having an address of 0000 Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxx
00000 (“Landlord”) and GSE SYSTEMS, INC., having an address at 0000 Xxxxxxxxxx
Xxxx, Xxxxxxxxx, XX 00000 (hereinafter “Tenant”).
WITNESSETH
1. PREMISES. Landlord,
in consideration of the covenants upon the part of Tenant, hereby leases to
Tenant approximately 31,583 square feet of space (hereinafter the “Premises”) on
the first and second floors of the building located at 0000 Xxxxxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx (hereinafter the "Building"), being part of the business
park known as the Londontown Business Center. The Building, the
parcel of land on which the Building is situated (the “Land”), and any other
improvements thereon are referred to collectively as "the
Property"). The Premises are shown in more particular detail on
Exhibit A attached hereto and made a part hereof.
2. TERMS.
(a) Term,
Termination and Delivery. This Lease shall have an original term
(the "Term") (i) commencing on the earlier to occur of April 15, 2008 or the
date upon which Landlord delivers the first floor portion of the Premises (the
“Priority Space”) to Tenant after completing the applicable portion of
Landlord’s Work therein, as defined in Exhibit B attached hereto and made a part
hereof (the “Commencement Date”), and (ii) terminating at 11:59 o'clock p.m.,
local time, on June 30, 2018 (the "Termination
Date"). Notwithstanding the foregoing, Tenant shall have the right to
terminate the Lease at the end of the sixth (6th) year if
Tenant is
not then in default of the Lease, provided that Tenant shall provide Landlord
a
minimum of six (6) months written notice and pay a termination penalty equal
to
Landlord’s unamortized costs associated with the Lease. Landlord shall use
reasonably diligent efforts to complete the remainder of Landlord’s Work and to
deliver the remainder of the Premises to Tenant by August 1, 2008;
however Landlord shall have no liability to Tenant if Landlord is delayed in
doing so, and Tenant’s lease obligations shall not be limited except as provided
in Section 3 hereof. Landlord acknowledges that time is of the
essence and that Tenant may be harmed and incur certain costs, expenses and
fees
in the event of delay including but not limited to payment of rent and related
leasing penalties should Landlord’s delay result in Tenant holding over in its
existing premises or finding interim or alternate premises until such time
as
Landlord is able to tender the Premises in accordance with the provisions of
the
delivery schedule set forth therein and herein. Landlord further
acknowledges and expressly agrees that, in the event Landlord is unable to
perform and tender the Premises in accordance with the provisions of the
delivery schedule set forth therein and herein, Landlord shall be, and be deemed
to be, in breach of the terms of this Lease and shall reimburse Tenant for
any
and all fees, costs, expenses and penalties incurred without demand and without
offset, deduction or withholding of any sums within thirty (30) calendars days
after it receives notice thereof.
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TREATMENT
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(b) Surrender. Tenant
shall, at its expense, at the expiration of the Term or any earlier termination
of this Lease, (i) promptly surrender to Landlord possession of the Premises
(including any fixtures or other improvements which, under the provisions of
Section 5, are owned by Landlord) in the condition in which the Premises
existed on the Commencement Date, ordinary wear and tear excepted, and broom
clean, (ii) remove therefrom Tenant's signs, goods and effects and any
machinery, trade fixtures and equipment which are used in conducting Tenant's
trade or business and are not owned by Landlord, and (iii) repair any damage
to
the Premises caused by such removal.
(c) Holding
Over. If Tenant continues to occupy the Premises after the
expiration of the Lease or any earlier termination without obtaining Landlord's
written consent thereto, such occupancy shall be deemed to be under a
month-to-month tenancy. The rental payable for the first four (4)
months shall equal the aggregate of (i) the Base Rent for the Lease Year during
which such expiration of the Lease, or earlier termination occurs, and (ii)
the
Additional Rent payable under the provisions of this Lease. The
rental payable for each such monthly period after the fourth (4th) month
shall equal
the aggregate of (x) one and one half (1 ½) times the monthly installment of
Base Rent for the Lease Year during which such expiration of the Lease, or
earlier termination thereof, occurs and (y) the Additional Rent payable under
the provisions of this Lease; however, Tenant shall nevertheless remain liable
to Landlord for damages relating to Tenant’s failure to vacate the Premises in a
timely manner.
(d) Right
of First Offer. In the event the office space adjacent to the
Premises (the “Expansion Premises”) becomes available for lease, Landlord agrees
to offer such space to Tenant prior to entering into a written lease with a
third party for the lease of such space. Notwithstanding the
foregoing, Landlord shall have no obligation to offer the Expansion Premises
to
Tenant and Tenant shall have no right to lease the Expansion Premises if Tenant
is in default hereunder at the time the Expansion Premises becomes
available. Tenant shall have ten (10) days in which to irrevocably
agree in writing to lease the Expansion Premises from Landlord, on the terms
mutually agreed by Landlord and Tenant, which shall be for a Base Rent and
for a
tenant improvement allowance for the Expansion Premises (the “Basic Expansion
Terms”) that are no less favorable that the terms that Landlord is then offering
for the Expansion Premises to third parties. If Tenant does not so notify
Landlord of its intention to lease the Expansion Premises within such ten (10)
day period, then Landlord shall be free to lease the Expansion Premises to
any
third party on terms which are no less favorable than the Basic Expansion
Terms.
3. RENT. Commencing
on the later of August 1, 2008 or that date which is thirty (30) days after
the
delivery of the Premises by Landlord to Tenant with Landlord’s Work (exclusive
of the elevator installation) substantially complete condition (the “Rent
Commencement Date”), as rent for the Premises (all of which is hereinafter
referred to collectively as "Rent"), Tenant shall pay to Landlord the
following:
(a) Base
Rent. During the first Lease Year of this Lease, Tenant shall pay
an annual base rent (the "Base Rent") in the amount of Three Hundred
Twenty-Three Thousand, Seven Hundred Twenty-Five Dollars and Seventy-Five Cents
($323,725.75), payable in twelve (12) equal monthly installments of Twenty-Six
Thousand, Nine Hundred Seventy-Seven Dollars and Fifteen Cents ($26,977.15)
each. Said Base Rent shall increase on each anniversary of the Rent
Commencement Date by three percent (3%) over the previous Lease Year’s amount of
Base Rent. Upon execution of the Lease, Tenant shall pay in advance
the Base Rent due on August 1, 2008.
CONFIDENTIAL
TREATMENT
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(b) Tenant
is eligible to participate in a relocation incentive program (the “County
Incentive”) offered by Xxxxxxx County (the “County”)
[***]
(c) Additional
Rent. During the Term of this Lease, Tenant shall pay to Landlord additional
rent in the amount of any payment in any provision of this Lease that accrues
while this Lease is in effect other than the Base Rent (collectively,
“Additional Rent”). If
Tenant fails to pay any Additional Rent after the expiration of any applicable
grace, notice and cure period, Landlord shall have the same rights as in the
case of Tenant's nonpayment of Base Rent.
(d) Late
Payment. Each payment of Rent shall be made in advance on the
first day of each month of the Term promptly when due, without any deduction
or
set off whatsoever, and without demand, failing which Tenant shall pay to
Landlord as Additional Rent, a late charge equal to one hundred
dollars ($100.00) if any payment of the monthly Rent is more than ten (10)
business days late for any given month and increasing to five hundred dollars
($500.00) if any payment of the monthly Rent is more than thirty (30) calendar
days late for any given month. In addition, any payment that is not
paid by the tenth (10th) business
day
after such payment is due shall bear interest at an annual floating rate of
interest equal to two (2) percentage points in excess of the prime rate of
interest as announced from time to time by Bank of America or its successor
(the
“Default Rate”).
(e) Place
of Payment. All Rent payable hereunder, together with all
statements, notices, and other written communication from Tenant, shall be
sent
or delivered to Landlord at Landlord’s address specified in Section 25
hereof.
(f) Lease
Year. As used in the provisions of this Lease, the term "Lease
Year" means (i) the period commencing on the Commencement Date and terminating
on the day immediately preceding the first (1st) anniversary of the first (1st)
day of the first (1st) full calendar month during the Term, and (ii) each
successive period of twelve (12) calendar months thereafter during the
Term.
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TREATMENT
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4. USE
AND ENVIRONMENTAL REQUIREMENTS.
(a) Tenant
shall use and occupy the Premises only as an office for Tenant’s business and
for no other use or purpose. Tenant covenants and agrees to make no
unlawful or offensive use of the Premises and to comply with all statutes,
ordinances, rules, orders, regulations and requirements of Federal, State and
Municipal governments. Specifically, Tenant shall not make, maintain
or store hazardous materials on the Premises or in the
Building. Notwithstanding the foregoing, Landlord agrees that Tenant
may use and store paint and ordinary cleaning and janitorial supplies on the
Premises or in an area(s) designated by Landlord for that purpose. If
Tenant's use as provided for herein is prohibited by Landlord, Tenant may
terminate this Lease and Tenant shall cease to have any obligation to Landlord
and Landlord shall refund any and all sums held as deposit against this Lease
without offset, deduction or reservation. Furthermore, Landlord shall
not prohibit such use except upon a bona fide default notice or notice of
non-compliance duly given from Xxxxxxx County or any other agreement, law,
rule
or ordinance by which the Premises, Landlord or Tenant may be bound and failure
to cure such default within the applicable grace period and cure period as
set
forth herein and hereunder.
(b) The
term "Hazardous Substances" as used in this Lease shall mean pollutants,
petroleum, contaminants, infectious waste, asbestos, radioactive materials,
polychlorinated biphenyls (PCBs), toxic or hazardous wastes or any other
substances, the removal of which is required or the use of which is restricted,
prohibited or penalized by any "Environmental Law", which term shall mean any
federal, state or local law, rule, regulation or ordinance relating to pollution
or protection of the environment. Tenant shall comply with all
Environmental Laws in its use of the Property, including, without limitation,
the obligation to obtain and maintain in effect and comply with all requisite
permits and reporting and notification requirements. Tenant hereby
agrees that (i) no activity will be conducted on the Property that will produce
or cause the release of any Hazardous Substance, except for such activities
that
are part of the ordinary course of Tenant's business activities (the "Permitted
Activities"), provided said Permitted Activities are conducted in accordance
with all Environmental Laws and have been approved in advance in writing by
Landlord; (ii) the Property will not be used in any manner for the storage
of
any Hazardous Substances except for the temporary storage of such materials
that
are used or produced in the ordinary course of Tenant's business (the "Permitted
Materials"), including but not limited to cleaning supplies and copier supplies,
provided such Permitted Materials are properly stored in a manner and location
and are properly disposed of in a manner meeting all Environmental Laws and
approved in advance in writing by Landlord; (iii) upon Landlord's request,
Tenant shall provide Landlord with evidence satisfactory to Landlord that Tenant
is complying with all Environmental Laws regarding the storage, cleanup and
disposal of Permitted Materials; and (iv) Tenant will not permit any Hazardous
Substances to be brought onto the Property (except for the Permitted Materials),
and if so brought or found located thereon, the same shall be immediately
removed, all required cleanup and disposal procedures shall be diligently
undertaken in accordance with all Environmental Laws and Tenant shall provide
Landlord with evidence satisfactory to Landlord of Tenant's compliance with
all
Environmental Laws. If at any time during or after the Term, the
Property is found to be contaminated with Hazardous Substances resulting from
Tenant's use thereof or Tenant's use of the Property results in a violation
or
alleged violation of any Environmental Law, Tenant agrees to indemnify, hold
harmless, protect and (at Landlord's election) defend Landlord from all claims,
demands, actions, liabilities, costs, expenses, damages and obligations of
any
nature arising from or as a result of the use of the Property by
Tenant. The foregoing indemnification shall survive the termination
or expiration of this Lease.
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TREATMENT
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(c) So
long as Tenant pays the Base Rent and Additional Rent and observes and performs
all the terms, covenants and conditions on Tenant's part to be observed and
performed under this Lease, Landlord hereby covenants and agrees that Tenant
shall have the right to peaceably and quietly use and enjoy the Premises without
undue interference by or on behalf of Landlord (or its agents, affiliates,
subsidiaries and assigns), subject, nevertheless, to the terms and conditions
of
this Lease, and subject to causes beyond Landlord’s reasonable
control.
(d) This
Lease and the obligation of Tenant to pay Rent hereunder and perform all of
the
other covenants and agreements hereunder on the part of Tenant to be performed
shall in no wise be affected, impaired or excused because Landlord is unable
to
fulfill any of its obligations under this Lease or to supply or is delayed
in
supplying any service expressly or impliedly to be supplied or is unable to
make
or is delayed in making any repairs, additions, alterations or decorations
required or permitted under this Lease or is unable to supply or is delayed
in
supplying any equipment or fixtures. However, if Landlord is
prevented or delayed from doing any if the foregoing by reason of strike or
labor troubles or any other cause whatsoever beyond the control of Landlord,
including but not limited to, government preemption in connection with a
national emergency, or any rule, order or regulation of any department or
subdivision of any government agency, Landlord agrees to use reasonably diligent
efforts to fulfill its obligations hereunder.
5. SECURITY
DEPOSIT. No Security Deposit is required.
6. ASSIGNMENT
AND SUBLETTING.
(a) For
the purposes of this Lease, an “Assignment” shall mean any assignment, mortgage,
transfer, or encumbrance, whether voluntarily, involuntarily or by operation
of
law, of Tenant’s interest in the Lease, any sublease by Tenant, any license by
Tenant of space in the Premises, or any concession agreement by Tenant with
respect to all or a part of the Premises, or any agreement by Tenant giving
any
other person the right to use all or a part of the Premises. Tenant
shall not make nor permit an Assignment of this Lease or any interest of Tenant
herein without first obtaining the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed by Landlord.
(b) Without
conferring any rights upon Tenant not otherwise provided in this Section, the
parties agree that, should Tenant desire to enter into an Assignment, then,
at
least thirty (30) days before the proposed effective date of the Assignment,
Tenant shall request Landlord's consent and provide the
following: (i) the full particulars of the proposed assignment or
sublet, including its nature, effective date, terms and conditions, and copies
of all offers, draft agreements, subleases, letters of commitment or intent,
and
other documents pertaining to the proposed transfer; and (ii) a description
of
the identity, net worth and previous business experience of the proposed
transferee, including without limitation copies of the proposed transferee's
then latest income statement, balance sheet and changes in financial position
statements certified as accurate by the proposed transferee. Tenant
shall pay promptly all reasonable attorneys’ fees Landlord may incur in
reviewing the foregoing materials and in granting or denying its consent
hereunder, including those for drafting or reviewing the documents granting
or
denying such consent.
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TREATMENT
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(c) If
this Lease or any interest of Tenant herein is assigned or if the whole or
any
part of the Premises is sublet or used or occupied by others, after having
obtained Landlord's prior written consent thereto, Tenant shall nevertheless
remain fully liable for the full performance of all obligations under this
Lease
to be performed by Tenant, and Tenant shall not be released therefrom in any
manner.
(d) Notwithstanding
anything contained herein to the contrary, no approval shall be required from
Landlord for an Assignment to any company that is owned by or is a subsidiary
of
Tenant (a “Permitted Assignment”). In the event of such a Permitted Assignment,
Tenant shall provide Landlord reasonable prior written notice of such Assignment
and Tenant shall not be relieved of liability hereunder.
7. MAINTENANCE
AND REPAIR.
(a) By
Landlord. Except for damages arising from the acts or omissions
of Tenant, its agents, servants, employees, visitors or invitees, Landlord
shall
repair the structural elements of the Premises (as set forth in Section 10(a)
as
Operating Costs), including without limitation, but not limited to, the roof
and
exterior walls, load-bearing walls, wiring, plumbing, main electrical service
for the Building, parking areas and access driveways, heating, ventilation
and
air-conditioning equipment and shall make all necessary replacements to same
from time to time during the Term of this Lease, and shall otherwise maintain,
manage, insure, repair and operate the Building and the Property, subject to
(i)
reimbursement of the Operating Costs set forth in Section 10 hereof, (ii)
Tenant’s obligations under Section 7 (b) below, and provided the foregoing shall
be at Tenant’s expense if necessitated by the negligence or wrongful acts of
Tenant or Tenant’s agents, employees or invitees. Any necessary alterations or
repairs done by Landlord shall be performed in such manner so as to minimize
interference with Tenant's quiet use and enjoyment of the
Premises. To the extents such acts, actions, activities, materials,
equipment and personnel shall unduly interfere with such right and
cause Tenant to lose business or disrupt business for a period in excess of
that
period stated in Landlord’s written notice to Tenant, Tenant shall be entitled
to a pro rata rent reduction.
(b) By
Tenant. Except for those items for which Landlord is expressly
responsible hereunder, Tenant shall maintain, repair and keep, at Tenant's
own
cost and expense, the interior of the Premises, and each and every part thereof,
and its equipment, fixtures and appurtenances, including without limitation,
electrical fixtures and bulbs, doors, window and door glass, and jambs in good
condition and repair. In the event Tenant fails, after ten (10) days’
written notice from Landlord, to keep the Premises in good condition and repair,
or commence and continuously prosecute required repairs, Landlord may upon
reasonable advance written notice, enter upon the Premises to make such repair
which Tenant has failed to make. Upon demand, Tenant shall reimburse
Landlord for any expense incurred by Landlord in doing the
foregoing. Any monies expended by Landlord shall be deemed Additional
Rent, and collected as such by Landlord. Without limiting the
generality of the foregoing obligations, Tenant shall be responsible for
repairing all parts or portions of the non-structural elements of the Premises,
its equipment, fixtures and appurtenances. Tenant shall also pay for
all damage to the Premises and its equipment, fixtures and appurtenances caused
by waste, misuse or neglect of the same by Tenant, its agents, servants,
employees or invitees. Landlord shall be responsible for repairing and/or
replacing any elements which Tenant would be responsible for if the need for
such repair or replacement is caused by the act or omission of
Landlord.
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TREATMENT
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8. UTILITIES.
(a) Tenant
shall pay eight point seventy-seven percent (8.77%) (“Pro Rata Share of Property
Utilities”) of all charges for water, sewage, heating oil (subject to conversion
of the system measuring usage thereof for the Building, as described below),
and
other services or utilities (exclusive of electricity charges) which may be
furnished to or used in or about the Property during the Term of this Lease,
and
Tenant shall pay sixty-three percent (63%) (“Pro Rata Share of Building
Utilities”) of the following which may be furnished to or used in or about the
office portion of the Building during the Term of this Lease: (i) all
electricity charges and (ii) and all heating oil, if Landlord installs one
or
more sub-meters for the Building. All utility charges which Tenant is
responsible for which are billed to Landlord shall be payable by Tenant to
Landlord as Additional Rent, upon demand, and shall be collectible as
such.
(b) Landlord
shall not be liable to Tenant, in damages or otherwise, for any interruption
in
the service of water, electricity, gas, heating, air-conditioning or other
utilities or services caused by an unavoidable delay, by the making of any
necessary repairs or improvements or by any cause beyond Landlord's reasonable
control unless Landlord fails to work diligently in the restoration of the
utilities or Landlord is solely responsible for the loss of
utilities. Tenant shall be entitled to a pro rata rent reduction for
any such interruption which is caused by Landlord’s failure to work diligently
in the restoration of the utilities or for which Landlord is solely responsible.
Significant impairment of Tenant’s right to quiet use and enjoyment caused by
Landlord’s negligence, failure to work diligently in the restoration of the
utilities or if Landlord is solely responsible for the loss of utilities shall
be deemed an eviction of Tenant. If Landlord fails to act diligently in the
restoration of any utility or Landlord or any of its agents, employees,
affiliates, assigns or contractors are the cause of the interruption of a
utility, then Tenant shall be entitled to one day of rental abatement for each
day, or portion thereof, that the Premise is without a utility.
9. MISCELLANEOUS
RESTRICTIONS. It is further agreed that:
(a) Storage
outside of the Building is prohibited and Tenant agrees to strictly abide by
this provision.
(b) Tenant
shall not be permitted to attach any of its equipment by welding to, or drilling
of holes in, the structural steel or concrete of the Building.
(c) Tenant
shall not, in any manner, alter the exterior appearance or decoration of the
Premises or Building, including the improvements thereon, except such as may
be
necessary in connection with the performance by Tenant of its obligation to
repair and maintain the Premises, and make necessary replacements thereto as
hereinbefore provided, but in no event shall any color or other decorative
changes be made without the prior written approval of Landlord, said approval
not to be unreasonably withheld.
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(d) Tenant
shall be permitted to fabricate and install an exterior sign on the Building
at
its sole cost and expense at a location approved by Landlord. Any and
all signage shall be in compliance with Xxxxxxx County laws and specifications
and subject to Landlord’s prior written approval, not to be unreasonably
withheld or delayed. At the end of the Term or any prior termination
of the Lease, at Landlord’s option, Tenant shall remove Tenant’s sign and repair
any damage caused by such removal. Tenant shall maintain Tenant’s
sign in a first class condition throughout the Term. Notwithstanding
the foregoing, Landlord shall, at its sole cost and expense, include Tenant’s
name on the Building’s directory and any floor directional signs.
10. OPERATING
COSTS. Tenant shall pay Landlord as Additional Rent, Tenant’s
Pro-Rata Share (as defined hereunder) of the Operating Costs, as
follows:
(a) Operating
Costs are hereby defined as all of the costs and expenses which are incurred
or
accrued by Landlord in maintaining, managing, insuring, repairing or operating
the Building and the remainder of the Property, under generally accepted
accounting principles, including, but not limited to security; common area
maintenance; landscaping; sales or use taxes on supplies or services; management
and administrative fees, the cost of Landlord’s insurance, legal and accounting
fees and expenses; and engineering fees and expenses; and window cleaning and
janitorial expenses.
(b) Operating
Costs do not include Real Estate Taxes (as hereinafter defined), lease payments
made by Landlord on any ground lease(s), interest or other financing costs
of
Landlord, depreciation of improvements which are in existence or under
construction as of March 1, 2009 other than under generally accepted accounting
principle, depreciation of tenant improvements other than under generally
accepted accounting principles, or any costs or expenses incurred or accrued
exclusively for the benefit of specific tenants.
(c) Tenant's
Pro-Rata Share is defined for purposes of this lease, as Tenant’s leasable area,
which is hereby agreed to be approximately 31,583 square feet, divided by the
leasable area of the Building, which is hereby agreed to be approximately
360,000 square feet, Tenant’s Pro-Rata share is therefore 8.77%.
(d) Tenant’s
Operating Costs shall be payable by Tenant within twenty (20) business days
after a reasonably detailed statement of actual expenses is presented to Tenant
by Landlord. At Landlord's option, however, Tenant’s Pro-Rata Share
of annual Operating Costs may be estimated by Landlord from time to time and
the
same shall be payable monthly or quarterly, as Landlord may designate, during
each twelve (12) month period of the Term, on the same day as the monthly Base
Rent is due hereunder. In the event that Tenant pays Landlord's
estimate of Tenant's Pro-Rata Share of Operating Costs as described in the
preceding sentence, Landlord shall deliver to Tenant within ninety (90) calendar
days after the expiration of each calendar year a reasonably detailed statement
showing Tenant's Pro-Rate Share of the actual Operating Costs incurred during
the preceding year. If Tenant's payments under this paragraph during such
preceding year exceed Tenant's Pro-Rata Share as indicated on such statement,
Tenant shall be entitled to the prompt cash reimbursement of such
overpayment. If Tenant's payments under this paragraph during such
preceding year were less than Tenant's Pro-Rata Share as indicated on such
statement, Tenant shall pay to Landlord the amount of the deficiency within
thirty (30) business days after delivery by Landlord to Tenant of such
statement.
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TREATMENT
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11. REAL
ESTATE TAXES. Tenant shall pay Landlord as Additional Rent,
Tenant’s Pro-Rata Share of the “Real Estate Taxes”, as follows:
(a) The
term “Real Estate Taxes” means all taxes, rates and assessments, general and
special, levied or imposed with respect to the Building, the Land and any other
improvements constructed thereon (the “Improvements”) and the
Property.
(b) The
term “Real Estate Tax Year” means each successive twelve (12) month period
following and corresponding to the period in respect of which the Real Estate
Taxes are established, or such other period or periods which may from
time-to-time in the future be established by taxing authority for the purposes
of levying or imposing Real Estate Taxes.
(c) Each
year Tenant shall pay to Landlord within thirty (30) business days after demand
in writing therefore as Additional Rent, Tenant’s Pro-Rata Share of Real Estate
Taxes for or attributable to the then-current Real Estate Tax Year.
(d) Landlord
shall have no obligation to contest, object to, or litigate the levying or
imposition of any Real Estate Taxes and may settle, compromise, consent to,
waive or otherwise determine in its discretion any Real Estate Taxes without
consent or approval of Tenant.
(e) If
the Termination Date of this Lease shall not coincide with the end of a Real
Estate Tax Year, then with respect to Tenant’s obligation under Section 11 for
the period between the commencement of the applicable Real Estate Tax Year
in
question and the Termination Date of this Lease, Landlord, at its option, may
xxxx Tenant for such pro-rata tax (1) at the time of termination, using either
the Real Estate Taxes payable for the current Real Estate Tax Year, if
available, or for the previous Real Estate Tax Year, if taxes for the then
current tax year are not available on the date of termination; or (b) subsequent
to the date of termination, if Landlord wishes to wait for information as to
the
amount of Real Estate Taxes payable for the Real Estate Tax Year during which
this Lease is terminated. Such statement for the final Real Estate
Tax shall be payable by Tenant upon receipt, it being understood that Tenant’s
obligation to pay its pro-rata share of Real Estate Taxes for the final period
of the Lease shall survive the expiration of the Term of this
Lease. In the event that only a portion of Real Estate Tax Year is
included within the first or last Lease Year, Tenant shall be liable only for
the pro-rated portion of the Real Estate Taxes attributable to the period
falling within the Lease Year in question.
12. LANDLORD
WORK. By executing this Lease, Tenant shall be deemed to accept
the Premises in their “As-Is” condition on the Commencement Date, and Tenant
acknowledges that Landlord shall have no obligation to undertake any
improvements at the Premises on behalf of the Tenant, except for those items
of
Landlord’s Work outlined in Exhibit B of this Lease.
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TREATMENT
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13. ALTERATIONS. Tenant
covenants and agrees not to make any alterations, improvements and/or structural
changes to the Premises and/or the Building costing more than Twenty-five
Thousand Dollars ($25,000) without the prior written consent of Landlord, which
consent Landlord agrees not to withhold unreasonably if such proposed changes
are non-structural in nature. Tenant shall have the right to make non-structural
alteration to its Premises costing less than Twenty-five Thousand Dollars
($25,000) at any time during the Lease Term. Any alterations, improvements
and/or structural changes shall, at the option of Landlord, be supervised by
Landlord. Tenant further agrees that such alterations, improvements
which cost in excess of Twenty-five Thousand Dollars ($25,000) and/or structural
changes, which may be approved by Landlord as herein provided, shall not be
begun until Tenant furnishes to Landlord a good and sufficient mechanic's xxxx
xxxx placed with a reliable bonding company authorized to do business in
Maryland in an amount deemed sufficient by Landlord to indemnify Landlord
against any and all claims for mechanic's liens for both labor and material,
which may be made against the Premises or against Landlord, or both, arising
out
of the making of such alterations, improvements and/or structural
changes. Tenant further agrees to indemnify and hold harmless
Landlord from and against all liens, including mechanic's liens claims or
demands of any nature whatsoever arising out of any work performed, materials
furnished or obligations incurred by or for Tenant upon the Premises during
the
Term of this Lease, and agrees not to suffer such lien to be obtained or
created. Should any injury or damage to the Premises result, directly
or indirectly, from such alterations of the Premises to their previous
condition, Tenant at its sole cost and expense shall promptly repair such injury
or damage.
14. FIXTURES
AND EQUIPMENT. All trade fixtures and equipment installed by
Tenant shall remain the property of Tenant and may be removed by Tenant upon
the
expiration or termination of this Lease; provided, however, Tenant shall, at
its
own cost and expense, promptly repair any injury or damage to the Premises
resulting from such removal and shall restore the Premises to their original
condition. All alterations, additions, improvements and changes and
all installation of trade fixtures and equipment made by Tenant shall be made
in
accordance with the rules, regulations and ordinances of the County, its
agencies or departments.
15. INSURANCE;
INDEMNITY.
(a) Landlord's
Insurance. Landlord shall secure and maintain policies of
insurance for the Property (including the Premises) covering loss of or damage
to the Property, including the Premises as delivered to Tenant, but excluding
all subsequent alterations, additions and improvements to the Premises, with
loss payable to Landlord and to any mortgagees of Landlord. Landlord
shall not be obligated to obtain insurance for Tenant's trade fixtures,
equipment, furnishings, machinery or other property. Such policies
shall provide protection against fire and extended coverage perils and such
additional perils as Landlord deems suitable, and with such deductibles(s)
as
Landlord shall deem reasonably appropriate. Landlord shall further
secure and maintain commercial general liability insurance with respect to
the
Property in such amount as Landlord shall determine, such insurance to be in
addition to, and not in lieu of, the liability insurance required to be
maintained by Tenant. In addition, Landlord shall secure and maintain
rental income insurance in such amounts and with such coverage as determined
by
Landlord. If the annual cost to Landlord for any such insurance
exceeds the standard rates because of the nature of Tenant's operations, Tenant
shall, upon receipt of appropriate invoices, reimburse Landlord for such
increases in cost, which amounts shall be deemed Additional Rent
hereunder.
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(b) Tenant's
Liability Insurance. (i) Tenant (with respect to both the
Premises and the Property) shall secure and maintain, at its own expense, at
all
times during the Term, a policy or policies of commercial general liability
insurance with the premiums thereon fully paid in advance, protecting Tenant
and
naming Landlord, the holders of any mortgages on the Property, and Landlord's
representatives as additional insureds against claims for bodily injury,
personal injury and property damage (including reasonable attorneys' fees)
based upon, involving or arising directly or indirectly out of Tenant's
operations, assumed liabilities or Tenant's use, occupancy or maintenance of
the
Premises and the Property. Such insurance shall provide for a minimum
amount of One Million Dollars ($1,000,000) for property damage or injury to
or
death of one or more than one person in any one accident or occurrence, with
an
annual aggregate limit of at least Two Million Dollars ($2,000,000) and One
Million Dollars ($1,000,000) in excess liability coverage. The
coverage required to be carried shall include fire legal liability, blanket
contractual liability, personal injury liability (libel, slander, false arrest
and wrongful eviction), broad form property damage liability, products liability
and completed operations coverage (as well as owned, non-owned and hired
automobile liability if an exposure exists). Such insurance shall be
written on an occurrence basis and contain a separation of insured’s provision
or cross-liability endorsement acceptable to Landlord. Tenant shall
provide Landlord with a certificate evidencing such insurance coverage prior
to
the Commencement Date. The certificate shall indicate that the
insurance provided specifically recognizes the liability assumed by Tenant
under
this Lease and that Tenant's insurance is primary to and not contributory with
any other insurance maintained by Landlord, whose insurance shall be considered
excess insurance only; (ii) Tenant shall, at Tenant's expense, comply with
(i)
all insurance company requirements pertaining to the use of the Premises and
(ii) all rules, orders, regulations or requirements of the American Insurance
Association (formerly the National Board of Fire Underwriters) and any similar
body.
(c) Tenant's
Additional Insurance Requirements. Tenant shall secure and
maintain, at Tenant's expense, at all times during the Term, a policy of
physical damage insurance on all of Tenant's fixtures, furnishings, equipment,
machinery, merchandise and personal property in the Premises and on any
alterations, additions or improvements made by or for Tenant upon the Premises,
all for the full replacement cost thereof without deduction for depreciation
of
the covered items and in amounts that meet any co-insurance clauses of the
policies of insurance. Such insurance shall insure against those
risks customarily covered in an "all risk" policy of insurance covering physical
loss or damage. Tenant shall use the proceeds from such insurance for
the replacement of fixtures, furnishings, equipment and personal property and
for the restoration of the alterations, additions or improvements made by or
for
Tenant to the Premises. Further, Tenant shall secure and maintain at
all times during the Term workers' compensation insurance in such amounts as
are
required by law, employer's liability insurance in the amount of not less than
Five Hundred Thousand Dollars ($500,000.00) per occurrence, plate glass coverage
if required by Landlord, and all such other insurance as may be required by
applicable law or as may be reasonably required by Landlord. Tenant shall
provide Landlord with certificates of all such insurance prior to the
Commencement Date. The property insurance certificate shall confirm
that the waiver of subrogation required to be obtained pursuant to this Lease
is
permitted by the insurer. Tenant shall, at least thirty (30) calendar
days prior to the expiration of any policy of insurance required to be
maintained by Tenant under this Lease, furnish Landlord with an "insurance
binder" or other satisfactory evidence of renewal thereof.
(d) All
policies required to be carried by Tenant under this Lease shall be issued
by
and binding upon a reputable insurance company of good financial standing
licensed to do business in the State of Maryland with a rating of at least
“A”
and a financial size rating of “X” or larger or such other rating as may be
required by a lender having a lien on the Property, as set forth in the most
current issue of "Best's Key Rating Guide and Supplement Service Property,
Casualty” (or comparable insurance rating service). Tenant shall not
do or permit anything to be done that would invalidate the insurance policies
referred to in this Section 15. Evidence of insurance provided to
Landlord shall include an endorsement showing that Landlord, its representatives
and the holders of any mortgages on the Property, are included as additional
insureds on general liability insurance, and an endorsement whereby the insurer
agrees not to cancel, non-renew or alter the policy without at least ten (10)
calendar days prior written notice to Landlord and any mortgagee of
Landlord.
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(e) In
the event that Tenant fails to provide evidence of insurance required to be
provided by Tenant under this Lease, prior to commencement of the Term, and
thereafter during the Term, within ten (10) days following Landlord's request
therefore, and ten (10) days prior to the expiration date of any such coverage,
Landlord shall be authorized (but not required) to procure such coverage in
the
amounts stated with all costs thereof (plus a ten percent (10%) administrative
fee) to be chargeable to Tenant and payable upon written invoice therefor,
which
amounts shall be deemed Additional Rent hereunder.
(f) The
minimum limits of insurance required by this Lease, or as carried by Tenant,
shall not limit the liability of Tenant nor relieve Tenant of any obligation
hereunder.
16. INDEMNITY.
(a) Landlord
and Landlord's representatives shall not be liable for any loss, injury or
damage to person or property of Tenant, Tenant's agents, employees, contractors,
invitees or any other person, whether caused by theft, fire, act of God, acts
of
the public enemy, riot, strike, insurrection, war, court order, requisition
or
order of governmental body or authority or which may arise through repair,
alteration or maintenance of any part of the Property or failure to make any
such repair or from any other cause whatsoever except to the extent caused
by
Landlord's gross negligence or willful misconduct and except as expressly
otherwise provided herein. Landlord shall not be liable for any loss,
injury or damage arising from any act or omission of any other tenant or
occupant of the Property.
(b) Tenant
shall indemnify, protect and hold the Property, Landlord and its
representatives, harmless of and from any and all claims, liability, costs,
penalties, fines, damages, injury, judgments, forfeiture, losses (including
without limitation diminution in the value of the Premises or the Property)
or
expenses (including without limitation attorneys' fees, consultant fees, testing
and investigation fees, expert fees and court costs) arising out of or in any
way related to or resulting directly or indirectly from (i) the use or occupancy
of the Premises by Tenant and Tenant’s employees, agents, contractors and
invitees and the parking spaces leased hereunder, (ii) the activities of Tenant,
its agents, employees, contractors or invitees in, on or about the Premises
(where not covered primarily by Landlord's insurance), (iii) any failure to
comply with any applicable law, and (iv) any default or breach by Tenant in
the
performance of any obligation of Tenant under this Lease; provided, however,
that the foregoing indemnity shall not be applicable to any claims to the extent
arising by reason of the gross negligence or willful misconduct of
Landlord.
(c) Tenant
shall indemnify, protect, defend and hold the Property, Landlord and its
representatives, harmless of and from any and all claims, liability, costs,
penalties, fines, damages, injury, judgments, forfeiture, losses (including
without limitation diminution in the value of the Premises) or expenses
(including without limitation attorneys' fees, consultant fees, testing and
investigation fees, expert fees and court costs) arising out of or in any way
related to or resulting directly or indirectly from work or labor performed,
materials or supplies furnished to or at the request of Tenant or in connection
with obligations incurred by or performance of any work done for the account
of
Tenant in the Premises.
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(d) The
provisions of this Section 16 shall survive the expiration or sooner termination
of this Lease.
(e) Waiver
of Subrogation. Anything in this Lease to the contrary
notwithstanding, Landlord and Tenant each waives all rights of recovery, claim,
action or cause of action against the other, its trustees, officers, directors,
partners, members, managers, agents and employees, for any loss or damage that
may occur to the Premises or the Property, or any improvements thereto, or
the
Property or any personal property of such party therein or thereon, by reason
of
any cause required to be insured against under this Lease, but only to the
extent of the coverage required or provided, whichever is higher, regardless
of
cause or origin, including negligence of the other party hereto, provided that
such party's insurance is not invalidated thereby; and each party covenants
that, to the fullest extent permitted by law, no insurer shall hold any right
of
subrogation against such other party. Tenant shall advise its
insurers of the foregoing and such waiver shall be a part of each policy
maintained by Tenant that applies to the Premises any part of the Property
or
Tenant's use and occupancy of any part thereof, and such waiver shall not be
effective unless and until Tenant provides written evidence to Landlord of
acknowledgement by Tenant’s insurer of such waiver.
17. ESTOPPEL
CERTIFICATE.
Tenant
shall, without charge, at any time and from time to time, within fifteen (15)
business days after receipt of request no more than two (2) times per year
from
Landlord, execute, acknowledge and deliver to Landlord, and to any lender of
Landlord (“Mortgagee”) or other party as may be designated by Landlord, a
written estoppel certificate in form and substance as may be reasonably
requested from time to time by Landlord, the other party or any Mortgagee,
certifying to the other party, any Mortgagee, any purchaser of Landlord's
interest in all or any part of the Property, or any other person or entity
designated by the other party, as of the date of such estoppel certificate,
the
following: (a) whether Tenant is in possession of the Property; (b) whether
this
Lease is in full force and effect; (c) whether there are any amendments to
this
Lease, and if so, specifying such amendments; (d) whether there are any
then-existing setoffs or defenses against the enforcement of any rights
hereunder, and if so, specifying such matters in detail; (e) the dates, if
any,
to which any rent or other sums due hereunder have been paid in advance and
the
amount of any security deposit held by Landlord; (f) that Tenant has no
knowledge of any then-existing defaults of Landlord under this Lease, or if
there are such defaults, specifying them in detail; (g) that Tenant has no
knowledge of any event having occurred that authorized the termination of this
Lease by Tenant, or if such event has occurred, specifying it in detail; (h)
the
address to which notices to Tenant should be sent; and (i) any and all other
matters reasonably requested by Landlord, any Mortgagee and/or any other person
or entity designated by Landlord. Any such estoppel certificate may
be relied upon by the person or entity to whom it is directed or by any other
person or entity that could reasonably be expected to rely on it in the normal
course of business. The failure of Tenant to execute, acknowledge and
deliver such a certificate in accordance with this Section within fifteen (15)
business days after a request therefore by Landlord shall constitute an
acknowledgment by Tenant, which may be relied on by any person or entity who
would be entitled to rely upon any such certificate, that such certificate
as
submitted by the requesting party to the other party is true and correct, and
the requesting party is hereby authorized to so certify. At Tenant's
request, no more than one time per year, Landlord agrees to provide, within
fifteen (15) business days of such request, a written estoppel certificate
in
form and substance as may be reasonably requested by Tenant certifying that,
as
of the date of such estoppel certificate, the following: (a) whether Tenant
is
in possession of the Property; (b) whether this Lease is in full force and
effect; (c) whether there are any amendments to this Lease, and if so,
specifying such amendments; (d) whether there are any then-existing setoffs
or
defenses against the enforcement of any rights hereunder, and if so, specifying
such matters in detail; (e) the dates, if any, to which any rent or other sums
due hereunder have been paid in advance and the amount of any security deposit
held by Landlord; (f) that Landlord has no knowledge of any then-existing
defaults of Tenant under this Lease, or if there are such defaults, specifying
them in detail; (g) that Landlord has no knowledge of any event having occurred
that authorized the termination of this Lease, or if such event has occurred,
specifying it in detail; (h) the address to which notices to Landlord should
be
sent; and (i) any and all other matters reasonably requested by
Tenant.
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18. CONDEMNATION.
(a) If
the whole of the Premises shall be taken by any public or quasi-public authority
under the power of eminent domain, condemnation, or expropriation or in the
event of a conveyance in lieu thereof, then this Lease shall terminate as of
the
date on which possession of the Premises is required to be surrendered to the
condemning authority, and Tenant shall have no claim against Landlord or the
condemning authority for the value of the unexpired Term of this
Lease.
(b) If
any part of the Premises shall be so taken or conveyed, and if such partial
taking or conveyance shall render the Premises unsuitable for the business
of
Tenant in the reasonable opinion of Landlord, then the Term of this Lease shall
cease and terminate as of the date on which possession of the part of the
Premises so taken or conveyed is required to be surrendered to the condemning
authority, and Tenant shall have no claim against Landlord or the condemning
authority for the value of any unexpired Term of this Lease.
(c) If
the whole or any part of the Building or Property shall be so taken or conveyed,
then in such events notwithstanding the fact that the Premises in whole or
in
part is not so taken or conveyed, Landlord shall have the right and power,
at
its option to be exercised by written notice to Tenant, to terminate this Lease
effective either the date title vests in the condemning authority or the date
Landlord is required to deliver possession of the part so taken or conveyed.
In
any event, Tenant shall have no claim against Landlord or the condemning
authority for the value of any unexpired Term of this Lease.
(d) Tenant
may, after securing Landlord, to Landlord's reasonable satisfaction, against
all
damages, interest, penalties and expenses, including, but not limited to,
reasonable attorney's fees, by cash deposit or by surety bond in an amount
and
with a company reasonably satisfactory to Landlord, contest and appeal any
such
laws, ordinances, orders, rules, regulations or requirements provided same
is
done with all reasonable promptness.
(e) In
the event all or a portion of the Building or Premises are so taken or conveyed,
Tenant shall have the right to terminate this Lease if, in Tenant’s reasonable
opinion, the Premises and/or Building is no longer adequate for Tenant’s
needs.
CONFIDENTIAL
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14
(f) Nothing
herein shall preclude either Landlord or Tenant from making a separate claim
for
compensation and damages in the event the Premises and/or Building are
condemned.
19. DAMAGE
OR DESTRUCTION. In the event of a fire or other casualty in the
Premises, Tenant shall immediately give notice thereof to
Landlord. The following provisions shall then apply:
(a) If
the damage is limited solely to the Premises and the Premises can, in Landlord's
opinion, be made tenantable with all damage repaired within three (3) months
from the date of damage (subject to receipt of applicable insurance proceeds),
then Landlord shall be obligated to rebuild the same to substantially their
former condition to the extent that the same is feasible (subject to reasonable
changes which Landlord shall deem desirable and such changes as may be required
by applicable law and subject to Landlord’s receipt of adequate insurance
proceeds) and shall proceed with reasonable diligence to do so and this Lease
shall remain in full force and effect.
(b) If
Section 19(a) does not apply, Landlord shall so notify Tenant within sixty
(60)
calendar days after the date of the damage or destruction and either Tenant
or
Landlord may terminate this Lease within thirty (30) calendar days after the
date of such notice, such termination notice to be effective
immediately.
(c) During
any period when Tenant’s use of the Premises is significantly impaired by damage
or destruction as reasonably determined by Landlord, Rent shall xxxxx in
proportion to the degree to which Tenant’s use of the Premises is impaired until
such time as the Premises are made tenantable, as reasonably determined by
Landlord’s architect; provided that no such rental abatement shall be permitted
if the casualty is a result of the gross negligence or willful misconduct of
Tenant or Tenant’s employees, agents, contractors or invitees.
(d) The
proceeds from any insurance paid by reason of damage to or destruction of the
Property or the Premises or any part thereof insured by Landlord shall belong
to
and be paid to Landlord, subject to the rights of any holder(s) of any mortgage
on the Property or the Premises. Tenant shall be responsible, at its
sole cost and expense, for the repair, restoration and replacement of (i) its
fixtures, furnishings, equipment, machinery, merchandise and personal property
in the Premises, and (ii) its alterations, additions, and improvements;
provided, however, that Landlord shall have the option of requiring Tenant
to
assign to Landlord (or any party designated by Landlord) some or all of the
proceeds payable to Tenant under this Section 19, and upon the receipt of
adequate insurance proceeds to effect such repairs and restoration, Landlord
shall be responsible for the repair and restoration of such insured
property.
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(e) Landlord's
repair and restoration obligations under this Section 19 shall not impair or
otherwise affect the rights and obligations of the parties set forth elsewhere
in this Lease. Subject to Section 19(c), Landlord shall not be liable
for any inconvenience or annoyance to Tenant, its employees, agents, contractors
or invitees, or injury to Tenant's business resulting in any way from such
damage or the repair thereof. Landlord and Tenant agree that the
terms of this Lease shall govern the effect of any damage to or destruction
of
the Premises with respect to the termination of this Lease and hereby waive
the
provisions of any present or future statute or law to the extent inconsistent
therewith.
20. DEFAULT. Any
one or more of the following events shall constitute a default under the terms
of this Lease ("Default"):
(a) the
failure of Tenant to pay any Rent or other sum of money due hereunder to
Landlord or any other person within ten (10) business days after written notice
that the same is due;
(b) the
filing of a petition proposing the adjudication of Tenant as a bankrupt or
insolvent, or the reorganization of Tenant, or an arrangement by Tenant with
its
creditors, whether pursuant to the Federal Bankruptcy Act or any similar federal
or state proceeding, unless such petition is filed by a party other than Tenant
and is withdrawn or dismissed within sixty (60) business days after the date
of
its filing;
(c) the
appointment of a receiver or trustee for the business or property of Tenant,
unless such appointment is vacated within sixty (60) business days of its
entry;
(d) the
making by Tenant of an assignment for the benefit of its creditors;
(e) a
default by Tenant in the performance or observance of any covenant or agreement
of this Leases to be performed or observed by Tenant (other than as set forth
in
clauses (a) through (d) above), which default is not cured within forty (40)
calendar days after the giving of written notice thereof by Landlord; unless
Tenant is working with reasonable diligence to cure such default; provided,
however, that if Tenant defaults in the performance of any such covenant or
agreement more than two (2) times during the Term, then notwithstanding that
such defaults have each been cured by Tenant, any further defaults shall be
deemed a Default without the ability to cure.
21. LANDLORD’S
REMEDIES; DAMAGES.
(a) Upon
the occurrence of a Default which remains uncured for at least ten (10) days,
Landlord, without notice to Tenant in any instance (except where expressly
provided for below), may do any one or more of the following:
(i) perform,
on behalf and at the expense of Tenant, any obligation of Tenant under this
Lease which Tenant has failed to perform beyond any applicable grace or cure
periods and of which Landlord shall have given Tenant notice (except in an
emergency situation in which no notice is required), the cost of which
performance by Landlord, together with interest thereon at the Default Rate
from
the date of such expenditure, shall be deemed Additional Rent and shall be
payable by Tenant to Landlord as otherwise set forth herein;
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(ii) elect
to terminate this Lease and the tenancy created hereby by giving notice of
such
election to Tenant without any right on the part of Tenant to save the
forfeiture by payment of any sum due or by other performance of condition,
term,
agreement or covenant broken, or elect to terminate Tenant's possessory rights
and all other rights of Tenant without terminating this Lease, and in either
event, at any time thereafter without notice or demand and without any liability
whatsoever, re-enter the Premises by force, summary proceedings or otherwise,
and remove Tenant and all other persons and property from the Premises, and
store such property in a public warehouse or elsewhere at the cost and for
the
account of Tenant without resort to legal process and without Landlord being
deemed guilty of trespass or becoming liable for any loss or damage occasioned
thereby; and
(iii) exercise
any other legal and/or equitable right or remedy which it may have at law or
in
equity, including rights of specific performance and/or injunctive relief,
where
appropriate.
(b) If
this Lease, or Tenant's right to possession, is terminated by Landlord as a
result of Tenant’s Default hereunder, Tenant nevertheless shall remain liable
for any Rent and damages which may be due or sustained prior to such
termination, as well as all reasonable costs, fees and expenses incurred by
Landlord in pursuit of its remedies hereunder, and/or in connection with any
bankruptcy proceedings of Tenant, and/or in connection with renting the Premises
to others from time to time plus either:
(i) the
Rent which, but for the termination of this Lease, would have become due during
the remainder of the Term, less the amount or amounts of rent, if any, which
Landlord receives during such period from others to whom the Premises may be
rented (other than any additional rent received by Landlord as a result of
any
failure of such other person to perform any of its obligations to Landlord),
in
which case Landlord's damages shall be computed and payable in monthly
installments, in advance, on the first business day of each calendar month
following the termination of this Lease and shall continue until the date on
which the Term would have expired but for such termination, and any action
or
suit brought to collect any such damages for any month shall not in any manner
prejudice the right of Landlord to collect any damages for any subsequent months
by similar proceeding; or
(ii) limited
damages equal to the present worth (as of the date of such termination) of
the
Rent which, but for the termination of this Lease, would have become due during
the remainder of the Term, less the fair rental value of the Premises, as
determined by an independent real estate appraiser or broker selected by
Landlord, in which case Landlord's damages shall be payable to Landlord in
one
lump sum on demand, and shall bear interest at the Default
Rate. "Present worth" shall be computed by discounting such amount to
present worth at a rate equal to one percentage point above the discount rate
then in effect at the Federal Reserve Bank.
(c) Notwithstanding
anything to the contrary set forth in this Section 21, Tenant shall be
responsible for reasonable attorneys’ fees and related costs incurred by
Landlord in enforcing its rights or collecting damages from Tenant, regardless
of whether Landlord commences litigation against Tenant in connection
therewith. In addition, if either party commences an action against
the other party arising out of or in connection with this Lease, the prevailing
party shall be entitled to have and recover from the losing party reasonable
attorneys' fees, costs of suit, investigation expenses and discovery costs,
including costs of appeal.
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(d) If
this Lease is terminated pursuant to Section 21, then Landlord shall, in good
faith, use commercially reasonable efforts to relet the Premises or any part
thereof, alone or together with other premises, for such term or terms (which
may be greater or less than the period which otherwise would have constituted
the balance of the Term) and on such terms and conditions (which may include
concessions or free rent and alterations of the Premises) as Landlord may
determine in good faith, in its sole discretion, but Landlord shall not be
liable for, nor shall Tenant's obligations hereunder be diminished by reason
of,
any failure by Landlord to relet the Premises or any failure by Landlord to
collect any rent due upon such reletting. In no event shall the
foregoing be deemed an obligation by Landlord to lease the Premises prior to
any
other space to be leased by Landlord.
(e)
EACH PARTY HERETO HEREBY WAIVES ANY RIGHT WHICH IT MAY OTHERWISE HAVE AT LAW
OR
IN EQUITY TO A TRIAL BY JURY (EXCEPT FOR PERSONAL INJURY OR PROPERTY DAMAGE
IN
EXCESS OF TWO MILLION DOLLARS ($2,000,000) IN CONNECTION WITH ANY SUIT OR
PROCEEDING AT LAW OR IN EQUITY BROUGHT BY THE OTHER AGAINST THE WAIVING PARTY
OR
WHICH OTHERWISE RELATES TO THIS LEASE, AS A RESULT OF A DEFAULT OR
OTHERWISE. EACH OF THE PARTIES HERETO HEREBY (I) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT
IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS HEREIN. FURTHERMORE, NOTWITHSTANDING THE
FOREGOING, EACH PARTY SHALL HAVE THE RIGHT AT LAW OR IN EQUITY TO A BENCH TRIAL
IN CONNECTION WITH ANY SUIT OR PROCEEDING AT LAW OR IN EQUITY BROUGHT BY THE
OTHER AGAINST THE WAIVING PARTY OR WHICH OTHERWISE RELATES TO THIS LEASE, AS
A
RESULT OF A DEFAULT OR OTHERWISE. FURTHERMORE, TENANT AGREES THAT IN
THE EVENT LANDLORD COMMENCES ANY SUMMARY PROCEEDING FOR NONPAYMENT OF RENT
OR
POSSESSION OF THE PREMISES, TENANT WILL NOT INTERPOSE ANY UNRELATED CLAIM IN
SUCH PROCEEDING.
22. SUBORDINATION. Tenant
covenants and agrees that all of its rights hereunder are and shall be subject
and subordinate to the lien of any mortgage or mortgages hereafter placed on
the
Premises or any part thereof, except Tenant's property or trade
fixtures. Such subordination shall be automatic, without the
execution of any further subordination agreement by Tenant. If,
however, a written subordination agreement, consistent with this provision,
is
required by a mortgagee, Tenant agrees to execute, acknowledge and deliver
the
same and in the event of failure so to do, Landlord may, in addition to any
other remedies for breach of covenant hereunder, execute, acknowledge and
deliver the same as the agent or attorney in fact of Tenant, and Tenant hereby
irrevocably constitutes Landlord its attorney-in-fact for such
purpose.
CONFIDENTIAL
TREATMENT
18
23. ATTORNMENT
AND NONDISTURBANCE.
(a) If,
at any time during the Term of this Lease, Landlord shall be the holder of
a
leasehold estate covering premises which include the Premises, and if such
leasehold shall terminate or be terminated for any reason, or if, at any time
during the Term a mortgage to which this Lease is subordinate shall be
foreclosed, Tenant agrees at the election and upon written demand of any owner
of any portion of the Property which includes the Premises, or of any mortgagee
in possession thereof, or of any holder of a leasehold thereafter affecting
any
portion of the Premises, or of any purchaser at foreclosure, to attorn, from
time to time, to any such owner, mortgagee, holder or purchaser (“New Landlord”)
upon the terms and conditions set forth herein for the remainder of the Term
provided such New Landlord agrees not to disturb Tenant’s quiet use and
enjoyment and occupancy of the Premises for the Term provided Tenant is not
in
default of its Lease obligations. At Tenant’s written request,
Landlord shall submit a non-disturbance agreement to Landlord’s present or
future lender on such lender’s customary form pursuant to which such lender
shall agree that so long as Tenant performs all the terms, covenants and
conditions of this Lease, on Tenant's part to be performed, Tenant's possession
and quiet use and enjoyment of the Premises under the provisions of this Lease
shall not be disturbed by such lender. Landlord shall have no
responsibility to Tenant hereunder other than to submit a form of
non-disturbance to such lender.
(b) The
foregoing provisions shall inure to the benefit of any such owner, mortgagee,
holder or purchaser (referred to as a “lender” for the purpose of this
Section 23) and shall apply notwithstanding that this Lease may terminate
upon the termination of any such leasehold estate or upon such foreclosure,
and
shall be self-operative upon any such demand, without requiring any further
instrument to give effect to such provisions. Tenant, however, upon
demand of any such owner, mortgagee, holder or purchaser, agrees to execute,
from time to time, an instrument in confirmation of the foregoing provisions,
satisfactory to any such owner, mortgagee, holder or purchaser, in which Tenant
shall acknowledge such attornment and set forth herein and shall apply for
the
remainder of the term originally demised in this Lease. Nothing
contained in this article shall be construed to impair any right otherwise
exercisable by any such owner, mortgagee, holder or purchaser.
24. INSPECTION. Tenant
agrees that Landlord and its agents may enter upon the Premises at all
reasonable times, with twenty-four (24) hours’ written notice (except without
notice in the event of an emergency), to inspect the same, to submit them to
a
prospective purchaser, current or prospective lender, or a prospective tenant,
or to make any changes or alterations or repairs which Landlord shall consider
necessary for the protection, improvement or preservation thereof, or of the
Building or to make changes in the plumbing, wiring, meters or other equipment,
fixtures or appurtenances of the Building, or to post any notice provided for
by
law, or otherwise to protect any and all rights of Landlord.
25. NOTICES. All
notices required or permitted to be given under the provisions herein shall
be
in writing and shall be deemed to be properly given if delivered (a) by hand
with receipt of delivery, or (b) by a nationally recognized delivery service
or
(c) by certified mail, return receipt requested. In addition to the
aforegoing, a copy shall also be sent by U.S. mail, postage pre-paid, to the
address set forth herein. Notice shall be deemed to be given on the
first (1st) business day following such hand delivery or overnight mailing
or on
the third (3rd)
business day following any certified mailing. Notices shall be
delivered to the following:
CONFIDENTIAL
TREATMENT
19
To
Landlord: To
Tenant:
1300
XXXXXXXXXX XXXX,
LLC GSE
SYSTEMS, INC.
c/o
BTR
Capital
Group 7100
Xxxxxxxxxx Xxxx
1300
Xxxx Xxxx, Xxxxx
000 Xxxxxxxxx,
XX 00000
Luxxxxxxxxx,
XX
00000 Phone:
000.000.0000
Phone:
000.000.0000
Either
party may, at any time, or from time to time, designate in writing a substitute
address for that above set forth, and thereafter all notices to such party
shall
be sent in accordance with the above.
26. MISCELLANEOUS.
(a) This
Lease and all of the covenants, conditions and provisions herein contained,
shall inure to the benefit of and be binding upon the successors or successors
and assigns of the respective parties hereto.
(b) This
Lease shall be construed under the laws of the State of Maryland.
(c) Tenant
agrees to be bound by the rules and regulations which Landlord may from time
to
time adopt and promulgate, and thereafter supplement and amend, applicable
to
the Premises, the Building, and the Property. Notice of such rules
and regulations (and any amendments) shall be given to Tenant, and Tenant agrees
thereupon to comply with and observe all rules and regulations. A
breach of said rules and regulations shall be deemed a Default of this
Lease. If there is any conflict between the rules and regulations of
this Lease, this Lease shall govern.
(d) Landlord
and Tenant each represent and warrant to the other that it has not authorized
any broker, agent or finder to act on its behalf, other than BTR/Capital Group,
in cooperation with AGM Commercial Real Estate Advisors, for whom Landlord
shall
pay a brokerage commission in accordance with a separate written
agreement. Except for the foregoing, Landlord and Tenant each
represent and warrant to the other that it does not have knowledge of any other
broker, agent or finder purporting to act on its behalf in respect to this
Lease
transaction. Landlord and Tenant hereby agree to and shall indemnify and hold
harmless the other from and against any cost, expense, claim, liability or
damage resulting from or out of a breach of the representations and warranties
contained in this Section.
(e) If
Tenant is a corporation, each person executing this Lease on behalf of Tenant
hereby covenants, represents and warrants that Tenant is duly qualified to
do
business in the State of Maryland; and (i) that Tenant has full right and
authority to enter into this Lease, and (ii) that each person executing this
Lease on behalf of Tenant is an officer of Tenant and is duly authorized to
execute, acknowledge and deliver this Lease to Landlord.
(f) Headings
contained herein are for convenience and reference only and do not define,
limit
or describe the scope or intent of any provision of this Lease.
CONFIDENTIAL
TREATMENT
20
(g) In
the event any term, covenant or provision of this Lease or the application
thereof to a person or circumstance shall be to any extent illegal, invalid
or
unenforceable, the remainder thereof or the application of such term, covenant
or provision to persons or circumstances other than those as to which it is
held
illegal, invalid or unenforceable shall not be affected thereby and each term,
covenant or provision of this Lease shall be valid and enforceable to the full
extent permitted by law.
(g) This
Lease shall be construed and interpreted according to the Laws of the State
of
Maryland.
(h) The
covenants, conditions and agreements contained in this Lease shall bind and
inure to the benefit of Landlord and Tenant and, except as otherwise provided
in
this Lease, their respective successors and assigns.
(i) This
Lease shall not be binding upon Landlord or Tenant until Landlord shall execute
and deliver to Tenant a fully executed counterpart.
WITNESS
the hand and seal of Landlord, and the hand of Tenant, and their respective
corporate seals hereto affixed the day and year first above
written.
|
WITNESS:
|
1300
XXXXXXXXXX XXXX, LLC
|
||
| /s/ X X Xxxxxxxx |
By:
|
/s/
Xxxxx Xxxxxx
|
(SEAL)
|
|
Xxxxx
Xxxxxx
|
|||
|
Authorized
Signatory
|
[Signatures
continue on following page]
|
WITNESS/ATTEST:
|
GSE
SYSTEMS, INC.
|
||
|
/s/
Xxxxxx X. Xxxxxxxxxx
|
By:
|
/s/
Xxxxxxx X. Xxxxx
|
(SEAL)
|
|
Name: Xxxxxxx
X. Xxxxx
|
|||
|
Title: Sr.
Vice President & CFO
|
CONFIDENTIAL
TREATMENT
21
EXHIBIT
A
PLAT
SHOWING THE PREMISES
CONFIDENTIAL
TREATMENT
22
EXHIBIT
B
LANDLORD’S
WORK
Landlord
will deliver the space on a
turn-key basis based on the existing space plan/drawings attached as Exhibit
B-1
along with any reasonable, mutually agreed upon modifications to those drawings
from this point forward.
In
addition to the improvements
depicted on the drawings, Landlord will:
|
1.
|
Deliver
all building systems in good repair and
operational;
|
|
2.
|
Construct
a parking lot in front of the Building with approximately 163
spaces (Landlord will use diligent effort to finish the construction
of
the expanded parking lot prior to the Lease Commencement Date, however,
the Lease Commencement Date shall not be contingent upon the completion
of
this lot);
|
|
3.
|
Construct
the appropriate ramps, handrails, and other details in order to make
the
front entrance of the building ADA accessible;
and
|
|
4.
|
Increase
the height of the doorways on the first floor to accommodate commercially
reasonable loading requirements of Tenant as notated on the attached
floor
plan
|
|
5.
|
Install
an elevator near the entrance to the office building based on a design
and
standard consistent with other Class A office buildings in the
area.
|
CONFIDENTIAL
TREATMENT
23
EXHIBIT
B-1
PLANS
CONFIDENTIAL
TREATMENT
24
EXHIBIT
B-2
NOTES
CONFIDENTIAL
TREATMENT
25
