Exhibit 10.13
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LEASE BY AND BETWEEN
AMISYS MANAGED CARE SYSTEMS, INC.
and
THE REALTY ASSOCIATES FUND III, L.P.,
doing business in Maryland as
The Realty Associates Fund III, Limited Partnership
of
00 Xxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
DATED
December 4, 1996
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TABLE OF CONTENTS
PAGE
1. Basic Lease Provisions.............................................. 1
2. Premises............................................................ 3
2.1. Lease of Premises........................................... 3
2.2. Calculation of Size of Building and Premises................ 3
2.3. Common Areas-Defined........................................ 3
3. Term................................................................ 3
3.1. Term and Commencement Date.................................. 3
3.2. Delay in Possession......................................... 3
3.3. Delays Caused by Tenant..................................... 4
3.4. Tender of Possession........................................ 4
3.5. Early Possession............................................ 4
4. Rent................................................................ 5
4.1. Base Rent................................................... 5
4.2. Operating Expense Increases................................. 5
4.3. Base Rent Increase.......................................... 7
5. Security Deposit.................................................... 8
6. Use................................................................. 8
6.1. Use......................................................... 8
6.2. Compliance with Law......................................... 8
6.3. Condition of Premises....................................... 9
7. Maintenance, Repairs and Alterations................................ 9
7.1. Landlord's Obligations...................................... 9
7.2. Tenant's Obligations........................................ 9
7.3. Alterations and Additions................................... 10
7.4. Failure of Tenant to Remove Property........................ 11
8. Insurance........................................................... 11
8.1. Insurance-Tenant............................................ 11
8.2. Insurance-Landlord.......................................... 12
8.3. Insurance Policies.......................................... 12
8.4. Waiver of Subrogation....................................... 12
8.5. Coverage.................................................... 13
9. Damage or Destruction............................................... 13
9.1. Effect of Damage or Destruction............................. 13
9.2. Definition of Material Damage............................... 13
9.3. Abatement of Rent........................................... 13
9.4. Tenant's Negligence......................................... 14
9.5. Tenant's Property........................................... 14
9.6. Waiver...................................................... 14
10. Real Property Taxes................................................ 14
10.1. Payment of Taxes........................................... 14
10.2. Definition of "Real Property Tax."......................... 14
10.3. Personal Property Taxes.................................... 14
11. Utilities.......................................................... 15
11.1. Services Provided by Landlord.............................. 15
11.2. Services Exclusive to Tenant............................... 15
11.3. Hours of Service........................................... 15
11.4. Excess Usage by Tenant..................................... 15
11.5. Interruptions.............................................. 15
12. Assignment and Subletting.......................................... 16
12.1. Landlord's Consent Required................................ 16
12.2. Standard For Approval...................................... 16
12.3. Additional Terms and Conditions............................ 17
12.4. Additional Terms and Conditions Applicable to Subletting... 18
12.5. Transfer Premium from Assignment or Subletting............. 18
12.6. Landlord's Option to Recapture Space....................... 19
12.7. Landlord's Expenses........................................ 19
13. Default; Remedies.................................................. 19
13.1. Default by Tenant.......................................... 19
13.2. Remedies................................................... 20
13.3. Default by Landlord........................................ 21
13.4. Late Charges............................................... 21
13.5. Interest on Past-due Obligations........................... 22
13.6. Payment of Rent after Default.............................. 22
14. Landlord's Right to Cure Default; Payments by Tenant............... 22
15. Condemnation....................................................... 22
16. Vehicle Parking.................................................... 23
16.1. Use of Parking Facilities.................................. 23
16.2. Parking Charges............................................ 23
17. Broker's Fee....................................................... 24
18. Estoppel Certificate............................................... 24
18.1. Delivery of Certificate.................................... 24
18.2. Failure to Deliver Certificate............................. 24
18.3. Financial Information...................................... 24
19. Landlord's Liability............................................... 24
20. Indemnity.......................................................... 25
21. Exemption of Landlord from Liability............................... 25
22. Hazardous Material................................................. 26
23. Medical Waste Disposal............................................. 26
24. Tenant Improvements................................................ 26
25. Subordination...................................................... 27
25.1. Effect of Subordination.................................... 27
25.2. Execution of Documents..................................... 27
26. Options............................................................ 27
26.1. Definition................................................. 27
26.2. Options Personal........................................... 27
26.3. Multiple Options........................................... 28
26.4. Effect of Default on Options............................... 28
26.5. Limitations on Options..................................... 28
27. Landlord Reservations.............................................. 28
28. Changes to Project................................................. 29
29. Substitution of Other Premises..................................... 29
30. Holding Over....................................................... 30
31. Landlord's Access.................................................. 30
31.1. Access..................................................... 30
31.2. Keys....................................................... 30
32. Security Measures.................................................. 30
33. Easements.......................................................... 31
34. Transportation Management.......................................... 31
35. Severability....................................................... 31
TABLE OF CONTENTS
(Continued)
PAGE
36. Time of Essence................................................... 31
37. Definition of Additional Rent..................................... 31
38. Incorporation of Prior Agreements................................. 31
39. Amendments........................................................ 31
40. Notices........................................................... 31
41. Waivers........................................................... 32
42. Covenants......................................................... 32
43. Binding Effect; Choice of Law..................................... 32
44. Attorneys' Fees................................................... 32
45. Auctions.......................................................... 32
46. Signs............................................................. 32
47. Merger............................................................ 33
48. Quiet Possession.................................................. 33
49. Authority......................................................... 33
50. Conflict.......................................................... 33
51. Multiple Parties.................................................. 33
52. Interpretation.................................................... 33
53. Prohibition Against Recording..................................... 33
54. Relationship of Parties........................................... 33
55. Rules and Regulations............................................. 33
56. Right to Lease.................................................... 34
57. Security Interest................................................. 34
58. Security for Performance of Tenant's Obligations.................. 34
59. Financial Information............................................. 34
60. Attachments....................................................... 34
61. WAIVER OF JURY TRIAL.............................................. 35
ADDENDUM............................................................... Add-1
EXHIBIT A.............................................................. A-1
EXHIBIT A-1............................................................ A1-1
EXHIBIT A-2............................................................ A2-1
EXHIBIT B.............................................................. B-1
EXHIBIT C.............................................................. C-1
EXHIBIT D.............................................................. D-1
EXHIBIT E.............................................................. E-1
SCHEDULE 1............................................................. Sch 1-1
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WEST XXXX OFFICE PARK
00 XXXX XXXX XXXXX
XXXXXXXXX, XXXXXXXX
STANDARD OFFICE LEASE
1. BASIC LEASE PROVISIONS.
1.1. PARTIES: This Lease, dated for reference purposes only December 4,
1996, is made by and between THE REALTY ASSOCIATES FUND III, L.P., a
Delaware limited partnership, doing business in Maryland as The
Realty Associates Fund III, Limited Partnership ("Landlord") and
AMISYS MANAGED CARE SYSTEMS, INC., a Delaware corporation
("Tenant").
1.2. PREMISES: Suite Numbers 400 and 500 ("Premises A"), Suite Number 100
("Premises B"), Suite Numbers 300 and 460 ("Premises C"), and Suite
Number 350 ("Premises D"), as shown on Exhibit "A" attached hereto.
Premises A, Premises B, Premises C and Premises D shall collectively
be referred to herein as the "Premises".
1.3. RENTABLE AREA OF PREMISES: 85,832 square feet, comprised of Premises
A containing 46,386 rentable square feet, Premises B containing
11,081 rentable square feet, Premises C containing 16,527 rentable
square feet and Premises D containing 11,838 rentable square feet.
RENTABLE AREA OF PREMISES E: 3,864 rentable square feet.
The total rentable area of the Premises and Premises E is 89,696
rentable square feet.
1.4. BUILDING ADDRESS: 00 Xxxx Xxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the
"Building"), which is a part of a four (4) building complex located
at 00-00 Xxxx Xxxx Xxxxx, commonly referred to as West Xxxx Park.
1.5. USE: General office use and a training facility to be located in
Premises B, subject to the requirements and limitations contained in
Section 6.
1.6. TERM: Ten (10) years, commencing January 1, 1997 and terminating on
December 31, 2006, unless sooner terminated pursuant to the terms
and conditions of the Lease.
1.7. COMMENCEMENT DATE FOR PREMISES A: January 1, 1997. SEE ADDENDUM
PARAGRAPH 1
COMMENCEMENT DATE FOR PREMISES B: January 1, 1997, subject to
adjustment in accordance with Section 3 below and Paragraph 1 of the
Addendum attached hereto.
COMMENCEMENT DATE FOR PREMISES C: April 1, 1997, subject to
adjustment in accordance with Section 3 below and Paragraph 1 of the
Addendum attached hereto.
COMMENCEMENT DATE FOR PREMISES D: December 1, 1998, subject to
adjustment in accordance with Section 3 below and Paragraph 1 of the
Addendum attached hereto.
COMMENCEMENT DATE FOR PREMISES E: Apri1 1, 1997. SEE ADDENDUM
PARAGRAPH 21
1.8. BASE RENT: $129,019.57 per month comprised of the following:
(i) $17.50 per rentable square foot for Premises A, B, C and D: Base
Rent for Premises A of $67,646.25 per month, Base Rent for Premises
B of $16,159.79, Base Rent for Premises C of $24,101.88 per month,
and Base
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Rent for Premises D of $17,263.75; and (ii) $11.95 per rentable
square foot for Premises E: Storage Base Rent for Premises E of
$3,874.90.
1.9. BASE RENT PAID UPON EXECUTION: None.
1.10. SECURITY DEPOSIT: $258,039.14
1.11. TENANT'S SHARE: For Premises A: 33.99%; 42.11% including Premises B
(8.12%); 54.22% including Premises C (12.11%); 62.89% including
Premises D (8.67%); and 65.69% including Premises E (2.80%).
1.12. BASE YEAR: The calendar year 1997.
1.13. NUMBER OF PARKING SPACES: Reserved: -0-; Unreserved: Tenant
shall be entitled to 3.4 unreserved spaces for each 1,000 square
feet of space in the Premises (excluding Premises E) from time to
time.
1.14. INITIAL MONTHLY PARKING RATES PER SPACE: Reserved: $ N/A;
Unreserved: $ -0-.
1.15. REAL ESTATE BROKER:
LANDLORD: XxXxxx & Company, Inc.
TENANT: Xxxxxxx and Wakefield of Maryland, Inc.
1.16. ATTACHMENTS TO LEASE: Addendum, Exhibit A - "Premises";
Exhibit A-1 -"Premises E"; Exhibit A-2 - "Expansion Space"; Exhibit
B -"Verification Letter", Exhibit C - "Rules and Regulations",
Exhibit D- "Cleaning Specifications"; Exhibit E - "Form Consent to
Sublease"; and Schedule 1 - "Work Letter Agreement".
1.17. ADDRESS FOR NOTICES:
LANDLORD: THE REALTY ASSOCIATES FUND III, L.P.
c/x XxXxxx & Company, Inc.
Xxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
WITH COPY TO: TA Associates Realty
00 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxx Xxxxxxxx
TENANT: AMISYS Managed Care Systems, Inc.
00 Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
1.18. AGENT FOR SERVICE OF PROCESS: If Tenant is a corporation, the name
and address of Tenant's registered agent for service of process is:
CT Corporation System
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
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2. PREMISES.
2.1. LEASE OF PREMISES. The Building, the Common Areas (as defined
below), the land upon which the same are located, along with all other buildings
IN WEST XXXX PARK and improvements thereon or thereunder, including all parking
facilities, are herein collectively referred to as the "Project." Landlord
hereby leases to Tenant, and Tenant hereby leases from Landlord, upon all of the
conditions set forth herein, the Premises, together with certain rights to the
Common Areas as hereinafter specified. The Premises shall not include an
easement for light, air or view.
2.2. CALCULATION OF SIZE OF BUILDING AND PREMISES. All provisions
included in this Lease relating to the number of rentable square feet in the
Premises, including, but not limited to, Base Rent and Tenant's Share, shall be
adjusted to reflect the actual number of rentable square feet in the Premises.
The calculation of the number of rentable square feet in the Premises shall be
made by Landlord in accordance with the methods of measuring rentable square
feet, as that method is described by the Washington, D.C. Association of
Realtors, Inc. If an adjustment to the rentable square feet in the Premises is
made after this Lease is executed by Landlord and Tenant, the Base Rent and any
advance rent shall be adjusted by multiplying the actual number of rentable
square feet in the Premises by the per square foot rental obtained by dividing
the Base Rent initially set forth in Section 1.8 by the number of rentable
square feet initially set forth in Section 1.3. If the number of rentable square
feet in the Premises is changed, Tenant's Share shall be adjusted as provided in
Section 4.2(a).
2.3. COMMON AREAS-DEFINED. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Project that are designated by Landlord from time to time for the general
non-exclusive use of Landlord, Tenant and the other tenants of the Project and
their respective employees, suppliers, customers and invitees, including, but
not limited to, common entrances, lobbies, corridors, stairwells, public
restrooms, elevators, parking areas, loading and unloading areas, roadways and
sidewalks. Landlord may also designate other land and improvements outside the
boundaries of the Project to be a part of the Common Areas, provided that such
other land and improvements have a reasonable and functional relationship to the
Project.
3. TERM.
3.1. TERM AND COMMENCEMENT DATE. The Term and Commencement Date of this
Lease are as specified in Sections 1.6 and 1.7. The Commencement Dates set forth
in Section 1.7 with the exception of the Premises A Commencement Date are
estimated Commencement Dates. When the actual Commencement Dates are established
by Landlord, Tenant shall, within ten (10) days after Landlord's request,
complete and execute the letter attached hereto as Exhibit "B" and deliver it to
Landlord. Tenant's failure to execute the applicable letter attached hereto as
Exhibit "B" or respond with objections thereto within said ten (10) day period
shall be a material default hereunder and shall constitute Tenant's
acknowledgement of the truth of the facts contained in the letter delivered by
Landlord to Tenant.
SEE ADDENDUM PARAGRAPH 1
3.2. DELAY IN POSSESSION.
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SEE ADDENDUM PARAGRAPH 2
3.3. DELAYS CAUSED BY TENANT. There shall be no abatement of rent, and
the one hundred twenty (120) day period and the subsequent sixty (60) day
period specified in Section 3.2 shall be deemed extended, to the extent of any
delays caused by acts or omissions of Tenant, Tenant's agents, employees and
contractors, or for Tenant delays as defined in the work letter agreement
attached to this Lease, if any (hereinafter "Tenant Delays"). The Commencement
Date shall not be extended due to Tenant Delays.
3.4. TENDER OF POSSESSION.
3.5. EARLY POSSESSION.
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4. RENT.
4.1. BASE RENT. Subject to adjustment as hereinafter provided in Section
4.3, Tenant shall pay to Landlord the Base Rent for the Premises set forth in
Section 1.8, without offset or deduction on the first day of each calendar
month. Base Rent for any period during the Term hereof which is for less than
one month shall be prorated based upon the actual number of days of the calendar
month involved. Base Rent and all other amounts payable to Landlord hereunder
shall be payable to Landlord in lawful money of the United States at the address
stated herein or to such other persons or at such other places as Landlord may
designate in writing.
4.2. OPERATING EXPENSE INCREASES. Tenant shall pay to Landlord during the
Term hereof, in addition to the Base Rent, Tenant's Share of the amount by which
all Operating Expenses for each Comparison Year exceeds the amount of all
Operating Expenses for the Base Year. If less than 95% of the rentable square
feet in the Project is occupied by tenants or Landlord is not supplying services
to 95% of the rentable square feet of the Project at any time during any
calendar year (including the Base Year), Operating Expenses for such calendar
year shall be an amount equal to the Operating Expenses which would normally be
expected to be incurred had 95% of the Project's rentable square feet been
occupied and had Landlord been supplying services to 95% of the Project's
rentable square feet throughout such calendar year. Tenant's Share of Operating
Expense increases shall be determined in accordance with the following
provisions: THE BASE YEAR OPERATING EXPENSES SHALL INCLUDE AN EXPENSE COMPONENT
FOR ELECTRICITY OF ONE AND 65/100 DOLLARS ($1.65) PER SQUARE FOOT. ANY INCREASES
IN ELECTRICITY OVER THE $1.65 PER SQUARE FOOT COMPONENT IN ANY COMPARISON YEAR
SHALL BE PAID BY TENANT REGARDLESS OF THE TOTAL AMOUNT OF INCREASES IN OPERATING
EXPENSES OVER THE BASE YEAR. IN ADDITION, ANY FULL FLOOR OCCUPIED BY TENANT AT
ANY TIME DURING THE TERM HEREOF SHALL HAVE A CORE FACTOR OF EIGHT PERCENT (8%),
AND ANY FLOOR WHICH IS OCCUPIED BY TENANTS IN ADDITION TO TENANT SHALL HAVE A
CORE FACTOR OF FIFTEEN PERCENT (15%).
(a) "TENANT'S SHARE" is defined as the percentage set forth in
Section 1.11, which percentage has been determined by dividing the number of
rentable square feet in the Premises by the total number of rentable square feet
in the Project and multiplying the resulting quotient by one hundred (100). In
the event that the number of rentable square feet in the Project or the Premises
changes, Tenant's Share shall be adjusted in the year the change occurs, and
Tenant's Share for such year shall be determined on the basis of the days during
such year that each Tenant's Share was in effect.
(b) "COMPARISON YEAR" is defined as each calendar year during the
Term of this Lease after the Base Year. Tenant's Share of the Operating Expense
increases for the last Comparison Year of the Lease Term shall be prorated
according to that portion of such Comparison Year as to which Tenant is
responsible for a share of such increase.
(c) "OPERATING EXPENSES" shall include all costs, expenses and fees
incurred by Landlord in connection with or attributable to the Project,
including but not limited to, the following items: (i) all costs, expenses and
fees associated with or attributable to the ownership, management, operation,
repair, maintenance,
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improvement, alteration and replacement of the Project, or any part thereof,
including but not limited to, the following: (A) all surfaces, coverings,
decorative items, carpets, drapes, window coverings, parking areas, loading and
unloading areas, trash areas, roadways, sidewalks, stairways, landscaped areas,
striping, bumpers, irrigation systems, lighting facilities, building exteriors
and roofs, fences and gates; (B) all heating, ventilating and air conditioning
equipment ("HVAC"), plumbing, mechanical, electrical systems, life safety
systems and equipment, telecommunication equipment, elevators, escalators,
tenant directories, fire detection systems including sprinkler system
maintenance and repair; (ii) the cost of trash disposal, janitorial services and
security services and systems; (iii) the cost of all insurance purchased by
Landlord and enumerated in Section 8 of this Lease, including any deductibles;
(iv) the amount of the real property taxes to be paid by Landlord under Section
10.1 hereof; (v) the cost of water, sewer, gas, electricity, and other utilities
available at the Project and paid by Landlord; (vi) the cost of labor, salaries
and applicable fringe benefits incurred by Landlord; (vii) the cost of
materials, supplies and tools used in managing, maintaining and/or cleaning the
Project; (viii) the cost of accounting fees, management fees, legal fees and
consulting fees attributable to the ownership, operation, management,
maintenance and repair of the Project plus the cost of any space occupied by the
property manager and leasing agent (if Landlord is the property manager,
Landlord shall be entitled to receive a fair market management fee); (ix) the
cost of replacing and/or adding improvements mandated by any law, statute,
regulation or directive of any governmental agency and any repairs or removals
necessitated thereby; (x) the costs incurred in implementing and operating any
transportation management program, ride sharing program or similar program
including, but not limited to, the cost of any transportation program fees, mass
transportation fees or similar fees charged or assessed by any governmental or
quasi-governmental entity; (xi) payments made by Landlord under any easement,
license, operating agreement, declaration, restrictive covenant, or instrument
pertaining to the payment or sharing of costs among property owners; (xii)
personal property taxes imposed upon the fixtures, machinery, equipment,
furniture and personal property used in connection with the operation of the
Project; and (xiii) the cost of any other service provided by Landlord or any
cost that is elsewhere stated in this Lease to be an "Operating Expense."
Landlord shall have the right but not the obligation, from time to time, to
equitably allocate some or all of the Operating Expenses among different tenants
of the Project (the "Cost Pools"). Such Cost Pools may include, but shall not be
limited to, the office space tenants of the Project and the retail space tenants
of the Project.
(d) Operating Expenses shall not include any expenses paid by any
tenant directly to third parties, or as to which Landlord is otherwise
reimbursed by any third party or by insurance proceeds.
SEE ADDENDUM PARAGRAPH 3
(e) If the cost incurred in making an improvement or replacing any
equipment is not fully deductible as an expense in the year incurred in
accordance with generally accepted accounting principles, the cost shall be
amortized over the useful life of the improvement or equipment, as reasonably
determined by Landlord, together with an interest factor of twelve percent (12%)
per annum on the unamortized cost of such item.
(f) Tenant's Share of Operating Expense increases shall be payable
by Tenant within thirty (30) days after a reasonably detailed statement of
actual expenses is presented to Tenant by Landlord. At Landlord's option,
however, Landlord may, from time to time, estimate what Tenant's Share of
Operating Expense increases will be provided however, the estimate shall not be
greater than six percent (6%) of Tenant's Share of Operating Expense increases
in the most recent Comparison Year, and the same shall be payable by Tenant
monthly during each Comparison Year of
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the Lease Term, on the same day as the Base Rent is due hereunder. In the event
that Tenant pays Landlord's estimate of Tenant's Share of Operating Expense
increases, Landlord shall use its best efforts to deliver to Tenant within one
hundred eighty (180) days after the expiration of each Comparison Year a
reasonably detailed statement showing Tenant's Share of the actual Operating
Expense increases incurred during such year. Landlord's failure to deliver the
statement to Tenant within said period shall not constitute Landlord's waiver of
its right to collect said amounts or otherwise prejudice Landlord's rights
hereunder. If Tenant's payments under this Section 4.2(f) during said Comparison
Year exceed Tenant's Share as indicated on said statement, Tenant shall be
entitled to credit the amount of such overpayment against Tenant's Share of
Operating Expense increases next falling due. If Tenant's payments under this
Section 4.2(f) during said Comparison Year were less than Tenant's Share as
indicated on said statement, Tenant shall pay to Landlord the amount of the
deficiency within thirty (30) days after delivery by Landlord to Tenant of said
statement. Landlord and Tenant shall forthwith adjust between them by cash
payment any balance determined to exist with respect to that portion of the last
Comparison Year for which Tenant is responsible for Operating Expense increases,
notwithstanding that the Lease Term may have terminated before the end of such
Comparison Year; and this provision shall survive the expiration or earlier
termination of the Lease.
SEE ADDENDUM PARAGRAPH 4
(g) The computation of Tenant's Share of Operating Expense
increases is intended to provide a formula for the sharing of costs by Landlord
and Tenant and will not necessarily result in the reimbursement to Landlord of
the exact costs it has incurred.
SEE ADDENDUM PARAGRAPH 5
4.3. BASE RENT INCREASE.
7
SEE ADDENDUM PARAGRAPH 6
5. SECURITY DEPOSIT. Tenant shall deliver to Landlord at the time it executes
this Lease the security deposit set forth in Section 1.10 as security for
Tenant's faithful performance of Tenant's obligations hereunder. If Tenant fails
to pay Base Rent or other charges due hereunder, or otherwise defaults with
respect to any provision of this Lease, Landlord may use all or any portion of
said deposit for the payment of any Base Rent or other charge due hereunder, to
pay any other sum to which Landlord may become obligated by reason of Tenant's
default, or to compensate Landlord for any loss or damage which Landlord may
suffer thereby. If Landlord so uses or applies all or any portion of said
deposit, Tenant shall within ten (10) days after written demand therefor deposit
cash with Landlord in an amount sufficient to restore said deposit to its full
amount. Landlord shall not be required to keep said security deposit separate
from its general accounts. If Tenant performs all of Tenant's obligations
hereunder, said deposit, or so much thereof as has not heretofore been applied
by Landlord, shall be returned, to Tenant (or, at Landlord's option, to the last
assignee, if any, of Tenant's interest hereunder) at the expiration of the Term
hereof, and after Tenant has vacated the Premises. No trust relationship is
created herein between Landlord and Tenant with respect to said security
deposit. Tenant acknowledges that the security deposit is not an advance payment
of any kind or a measure of Landlord's damages in the event of Tenant's default.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION 5, LANDLORD
HEREBY AGREES TO DEPOSIT THE SECURITY DEPOSIT INTO AN AUTOMATICALLY RENEWING
THIRTY (30) DAY CERTIFICATE OF DEPOSIT, WITH INTEREST ACCRUING THEREON FOR THE
BENEFIT OF TENANT.
SEE ADDENDUM PARAGRAPH 7
6. USE.
6.1. USE. The Premises shall be used and occupied only for the purpose
set forth in Section 1.5 and for no other purpose. If Section 1.5 gives Tenant
the right to use the Premises for general office use, by way of example and not
limitation, general office use shall not include medical office use or any
similar use, laboratory use, any use not characterized by applicable zoning and
land use restrictions as general office use, or any use which would require
Landlord or Tenant to obtain a conditional use permit or variance from any
federal, state or local authority. No exclusive use has been granted to Tenant
hereunder.
6.2. COMPLIANCE WITH LAW. Notwithstanding any permitted use inserted in
Section 1.5, Tenant shall not use the Premises for any purpose which would
violate the Project's certificate of occupancy, any conditional use permit or
variance applicable to the Project or violate any covenants, conditions or other
restrictions applicable to the Project. Tenant shall, at Tenant's expense,
promptly comply with all applicable laws, ordinances, rules, regulations,
orders, certificates of occupancy, conditional use permits, variances, covenants
and restrictions of record, and requirements of any fire insurance underwriters,
rating bureaus or government agencies, now in effect or which may hereafter come
into effect, whether or not they reflect a change in policy from that now
existing, during the Term or any part of the Term hereof, relating in any manner
to the Premises and the occupation and use by Tenant of the Premises. Tenant
shall conduct its business and use the Premises in a lawful manner and shall not
use or permit the use of the Premises or the Common Areas in any manner that
will tend to create waste or a nuisance or shall tend to disturb other occupants
of the
8
Project. Tenant shall obtain, at its sole expense, any permit or other
governmental authorization required to operate its business from the Premises.
Landlord shall not be liable for the failure of any other tenant or person to
abide by the requirements of this Section or to otherwise comply with applicable
laws and regulations, and Tenant shall not be excused from the performance of
its obligations under this Lease due to such a failure.
6.3. CONDITION OF PREMISES. Except for latent defects and except as
otherwise provided in this Lease, Tenant hereby accepts the Premises and the
Project in their condition existing as of the date this Lease is executed by
Landlord and Tenant, subject to all applicable federal, state and local laws,
ordinances, regulations and permits governing the use of the Premises, the
Project's certificate of occupancy, any applicable conditional use permits or
variances, and any easements, covenants or restrictions of record affecting the
use of the Premises or the Project. Tenant shall comply with all federal, state
and local laws and regulations governing occupational safety and health at
Tenant's sole cost and expense. Tenant acknowledges that it has satisfied itself
by its own independent investigation that the Premises and the Project are
suitable for its intended use, and that neither Landlord nor Landlord's agents
has made any representation or warranty as to the present or future suitability
of the Premises, or the Project for the conduct of Tenant's business.
SEE ADDENDUM PARAGRAPH 8
7. MAINTENANCE, REPAIRS AND ALTERATIONS.
7.1. LANDLORD'S OBLIGATIONS. Landlord shall keep the Project (excluding
the interior of the Premises and space leased to other occupants of the Project)
in good condition and repair. Except as provided in Section 9.3, there shall be
no abatement of rent or liability to Tenant on account of any injury or
interference with Tenant's business with respect to any improvements,
alterations or repairs made by Landlord to the Project or any part thereof.
Tenant expressly waives the benefits of any statute now or hereafter in effect
which would otherwise afford Tenant the right to make repairs at Landlord's
expense or to terminate this Lease because of Landlord's failure to keep the
Project in good order, condition and repair. ALL REPAIRS AND MAINTENANCE
REQUIRED OF LANDLORD PURSUANT TO THIS SECTION 7.1 SHALL BE PERFORMED IN
ACCORDANCE WITH STANDARDS APPLICABLE TO COMPARABLE OFFICE BUILDINGS IN THE
ROCKVILLE, MARYLAND AREA
7.2. TENANT'S OBLIGATIONS.
(a) Subject to the requirements of Section 7.3, Tenant shall be
responsible for payment of the cost of keeping the Premises in good condition
and repair, and if Landlord makes any repairs to the Premises, the reasonable
cost thereof shall be paid by Tenant to Landlord. Tenant shall be responsible
for the cost of painting, repairing or replacing wall coverings, and the cost of
repairing or replacing any improvements made to the Premises by Landlord or
Tenant. Landlord may, but shall not be obligated to, enter the Premises at all
reasonable times to make such repairs, alterations, improvements and additions
to the Premises or to any equipment located therein as Landlord deems necessary,
in its sole discretion. NOTWITHSTANDING THE FOREGOING, TENANT SHALL HAVE THIRTY
(30) DAYS TO PERFORM ITS OBLIGATIONS UNDER THIS SECTION 7.3 PRIOR TO LANDLORD
ENTERING THE PREMISES, EXCEPT IN THE EVENT OF AN EMERGENCY OR IF THE REPAIRS ARE
TO BASE-BUILDING SYSTEMS OR STRUCTURE.
(b) On the last day of the Term hereof, as it may be extended or on
any sooner termination, Tenant shall surrender the Premises to Landlord in the
same condition as received, (including the improvements) ordinary wear and tear
excepted, clean and free of debris and Tenant's personal property. Tenant shall
repair any damage to the Premises occasioned by the
9
installation or removal of Tenant's trade fixtures, furnishings and equipment.
Except as otherwise stated in this Lease, Tenant shall leave the power panels,
electrical distribution systems, lighting fixtures, HVAC, window coverings, wall
coverings, carpets, wall panelling, ceilings and plumbing at the Premises and in
good operating condition.
7.3. ALTERATIONS AND ADDITIONS.
(a) Tenant shall not, without Landlord's prior written consent,
which may be given or withheld in Landlord's sole discretion, make any
alterations, improvements, additions, utility installations or repairs
(hereinafter collectively referred to as "Alterations") in, on or about the
Premises or the Project. As used in this Lease, the term "utility installation"
shall mean carpeting or other floor covering, window and wall coverings, power
panels, electrical distribution systems, lighting fixtures, telephone or
computer system wiring, HVAC and plumbing. At the expiration of the Term,
Landlord may require the removal of any Alterations installed by Tenant and the
restoration of the Premises and the Project to their prior condition, at
Tenant's expense. If a work letter agreement is entered into by Landlord and
Tenant, Tenant shall not be obligated to remove the tenant improvements
constructed in accordance with the work letter agreement. Should Landlord permit
Tenant to make its own Alterations, Tenant shall use only such contractor as has
been expressly approved by Landlord, and Landlord may require Tenant to provide
to Landlord, at Tenant's sole cost and expense, a lien and completion bond in an
amount equal to one and one-half times the estimated cost of such Alterations,
to insure Landlord against any liability for mechanic's and materialmen's liens
and to insure completion of the work. Should Tenant make any Alterations without
the prior approval of Landlord, or use a contractor not expressly approved by
Landlord, Landlord may, at any time during the Term of this Lease, require that
Tenant remove all or part of the Alterations and return the Premises to the
condition it was in prior to the making of the Alterations. In the event Tenant
makes any Alterations, Tenant agrees to obtain or cause its contractor to
obtain, prior to the commencement of any work, "builders all risk" insurance in
an amount approved by Landlord and workers compensation insurance.
SEE ADDENDUM PARAGRAPH 9
(b) Any Alterations in or about the Premises that Tenant shall
desire to make shall be presented to Landlord in written form, with plans and
specifications which are sufficiently detailed to obtain a building permit. If
Landlord consents to an Alteration, the consent shall be deemed conditioned upon
Tenant acquiring a building permit from the applicable governmental agencies,
furnishing a copy thereof to Landlord prior to the commencement of the work, and
compliance by Tenant with all conditions of said permit in a prompt and
expeditious manner. Tenant shall provide Landlord with as-built plans and
specifications for any Alterations made to the Premises.
(c) Tenant shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Tenant at or for use in
the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or the Project, or any interest therein.
If Tenant shall, in good faith, contest the validity of any such lien, Tenant
shall furnish to Landlord a surety bond satisfactory to Landlord in an amount
equal to such contested lien claim or demand indemnifying Landlord against
liability arising out of such lien or claim. In addition, Landlord may require
Tenant to pay Landlord's reasonable attorneys' fees and costs in participating
in such action.
(d) Tenant shall give Landlord not less than ten (10) days' advance
written notice prior to the commencement of any work in the Premises by Tenant,
and Landlord shall have the right to post notices of non-responsibility in or on
the Premises or the Project as provided by law.
10
(e) All Alterations (whether or not such Alterations constitute
trade fixtures of Tenant) which may be made to the Premises by Tenant shall be
made and done in a good and workmanlike manner and with new materials
satisfactory to Landlord and shall be the property of Landlord and remain upon
and be surrendered with the Premises at the expiration of the Lease Term, unless
Landlord requires their removal pursuant to Section 7.3(a). Provided Tenant is
not in default, notwithstanding the provisions of this Section 7.3(e), Tenant's
personal property and equipment, other than that which is affixed to the
Premises so that it cannot be removed without material damage to the Premises or
the Project, shall remain the property of Tenant and may be removed by Tenant
subject to the provisions of Section 7.2(b).
7.4. FAILURE OF TENANT TO REMOVE PROPERTY. If this Lease is terminated
due to the expiration of its Term or otherwise, and Tenant fails to remove its
property as required by Section 7.2(b), in addition to any other remedies
available to Landlord under this Lease, and subject to any other right or remedy
Landlord may have under applicable law, Landlord may remove any property of
Tenant from the Premises and store the same elsewhere at the expense and risk of
Tenant and at any time (before or after Landlord stores said property), Landlord
may sell any or all such property at public or private sale, in such a manner
and at such times and places as Landlord, in its sole discretion, may deem
proper, without notice to or demand upon Tenant. Landlord shall apply the
proceeds of such sale: first, to the cost and expenses of the sale, including
reasonable attorneys' fees actually incurred; second, to the payment of the cost
of or charges for storing any such property; third, to the payment of any other
sums of money which may then or thereafter be due to Landlord from Tenant under
this Lease; and fourth, the balance, if any, to Tenant.
8. INSURANCE.
8.1. INSURANCE-TENANT.
(a) During the Term of the Lease and at such other times as Tenant
occupies the Premises, Tenant shall keep in force at its expense "commercial
general liability" insurance including an ISO broad form endorsement or its
equivalent with respect to the Premises with limits of not less than One Million
Dollars ($1,000,000) combined single limit or such higher amount as Landlord may
reasonably require in writing from time to time. The insurance shall cover
liability arising out of Tenant's operations and liability arising out of work
performed at the Premises by other persons on behalf of Tenant, and shall
specifically include the contractual liability assumed by Tenant under this
Lease. Such coverage, if written on a claims-made basis, must provide for a
retroactive date which is prior to the date Tenant occupies the Premises, and
the same retroactive date shall continue during the entire Term of this Lease.
(b) Tenant will also maintain "all risk" extended coverage property
insurance written on a one hundred percent (100%) replacement cost basis on
Tenant's personal property, all tenant improvements installed at the Premises by
Landlord or Tenant, Tenant's trade fixtures and other property. Such policies
shall provide protection against any peril included within the classification
"fire and extended coverage," against vandalism and malicious mischief, theft,
sprinkler leakage and flood damage. If this Lease is terminated as the result
of a casualty in accordance with Section 9, the proceeds of said insurance
attributable to the replacement of all tenant improvements at the Premises shall
be paid to Landlord.
(c) Tenant shall, at all times during the Term hereof, maintain in
effect workers' compensation insurance as required by applicable law and
business interruption insurance satisfactory to Landlord.
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8.2. INSURANCE-LANDLORD.
(a) Landlord shall obtain and keep in force a policy of commercial
general liability insurance with coverage against such risks and in such
commercially reasonable amounts as Landlord deems advisable insuring Landlord
against liability arising out of the ownership, operation and management of the
Project.
(b) Landlord shall also obtain and keep in force during the Term of
this Lease a policy or policies of "all risk" insurance covering loss or damage
to the Project in the amount of not less than ninety percent (90%) of the full
replacement cost thereof, as reasonably determined by Landlord from time to
time. The terms and conditions of said policies and the perils and risks covered
thereby shall be determined by Landlord, from time to time, in Landlord's sole
but reasonable discretion. In addition, at Landlord's option, Landlord shall
obtain and keep in force, during the Term of this Lease, a policy of rental
interruption insurance, with loss payable to Landlord, which insurance shall, at
Landlord's option, also cover all Operating Expenses. Tenant will not be named
as an additional insured in any insurance policies carried by Landlord and shall
have no right to any proceeds therefrom. At Landlord's option, Landlord may
obtain insurance coverages and/or bonds related to the operation of the parking
areas. At Landlord's option, Landlord may obtain coverage for flood and
earthquake damages. In addition, Landlord shall obtain such additional
insurance as is customarily carried by owners or operators of other comparable
office buildings in the geographical area of the Project. The policies purchased
by Landlord shall contain such deductibles as Landlord may reasonably determine.
In addition to amounts payable by Tenant in accordance with Section 4.2, Tenant
shall pay any increase in the property insurance premiums for the Project over
what was payable immediately prior to the Commencement Date to the extent the
increase is specified by Landlord's insurance carrier as being caused by the
nature of Tenant's occupancy or any act or omission of Tenant.
8.3. INSURANCE POLICIES. Tenant shall deliver to Landlord copies of the
insurance policies required under Section 8.1 within fifteen (15) days prior to
the Commencement Date of this Lease. Tenant's insurance policies shall not be
cancelable or subject to reduction of coverage or other modification except
after thirty (30) days prior written notice to Landlord. Tenant shall, at least
thirty (30) days prior to the expiration of such policies, furnish Landlord with
renewals thereof. Tenant's insurance policies shall be issued by insurance
companies authorized to do business in the state in which the Project is
located, with a general policyholders rating of not less than "A" and a
financial rating of not less than "Class X," as rated in the most recent edition
of "Best Insurance Reports." Tenant's insurance policies shall be issued as
primary policies and not contributing with and not in excess of coverage which
Landlord may carry. Landlord, and at Landlord's option the holder of any
mortgage or deed of trust encumbering the Project, shall be named as an
additional insured on all insurance policies Tenant is obligated to obtain by
Section 8.1 above. Tenant's insurance policies shall not include deductibles in
excess of Five Thousand Dollars ($5,000).
8.4. WAIVER OF SUBROGATION. Tenant and Landlord each hereby release and
relieve the other, and waive their entire right of recovery against the other,
for direct or consequential loss or damage arising out of or incident to the
perils covered by insurance carried by such party (or required to be carried by
such party by this Lease) to the extent of the insurance proceeds actually
received, whether due to the negligence of Landlord or Tenant or their agents,
employees, contractors and/or invitees. Landlord and Tenant shall each cause the
insurance policies they obtain in accordance with this Section 8 to provide that
the insurance company waives all right of recovery by subrogation against either
party in connection with any damage covered by any policy.
12
8.5. COVERAGE. Landlord makes no representation to Tenant that the limits
or forms of coverage specified above or approved by Landlord are adequate to
insure Tenant's property or Tenant's obligations under this Lease, and the
limits of any insurance carried by either party shall not, except as otherwise
provided herein, limit its obligations under this Lease.
9. DAMAGE OR DESTRUCTION.
9.1. EFFECT OF DAMAGE OR DESTRUCTION. If all or part of the Project is
materially damaged (as defined in Section 9.2 below) by fire, earthquake, flood,
explosion, the elements, riot or any other casualty, Landlord shall have the
right in its sole and complete discretion to repair or to rebuild the Project or
to terminate this Lease. Landlord shall within ninety (90) days after the
occurrence of such damage notify Tenant in writing of Landlord's intention to
repair or to rebuild or to terminate this Lease provided that Landlord may
terminate this Lease only if it terminates all of the leases in the Building.
Tenant shall in no event be entitled to compensation or damages on account of
annoyance or inconvenience in making any repairs, or on account of construction,
or on account of Landlord's election to terminate this Lease. Notwithstanding
the foregoing, if Landlord shall elect to rebuild or repair the Project, but in
good faith determines that the Project cannot be rebuilt or repaired within one
hundred eighty (180) days after the date of the occurrence of the damage,
without payment of overtime or other premiums, and the damage to the Project has
rendered the Premises unusable, Landlord shall notify Tenant thereof in writing
at the time of Landlord's election to rebuild or repair, and Tenant shall
thereafter have a period of thirty (30) days within which Tenant may elect to
terminate this Lease, upon written notice to Landlord. Tenant's termination
right described in the preceding sentence shall not apply if the damage was
caused by Tenant's negligence or willful misconduct. Failure of Tenant to
exercise said election within said period shall constitute Tenant's agreement to
accept delivery of the Premises under this Lease whenever tendered by Landlord,
provided Landlord thereafter pursues reconstruction or restoration diligently to
completion, subject to delays beyond Landlord's reasonable control.
9.2. DEFINITION OF MATERIAL DAMAGE. The damage shall be deemed material
if, in Landlord's reasonable judgment, the uninsured cost of repairing the
damage will exceed One Hundred Thousand Dollars ($100,000). If insurance
proceeds are available to Landlord in an amount which is sufficient to pay the
entire cost of repairing all of the damage to the Project, the damage shall be
deemed material if the cost of repairing the damage exceeds Two Hundred Fifty
Thousand Dollars ($250,000). Damage to the Project shall also be deemed material
if (a) the Project cannot be repaired to substantially the same condition it was
in prior to the damage due to laws or regulations in effect at the time the
repairs will be made, (b) the holder of any mortgage or deed of trust
encumbering the Project requires that insurance proceeds available to repair the
damage in excess of One Hundred Thousand Dollars ($100,000) be applied to the
repayment of the indebtedness secured by the mortgage or the deed of trust, or
(c) the damage occurs during the last twelve (12) months of the Lease Term.
9.3. ABATEMENT OF RENT. If Landlord elects to repair damage to the
Project and all or part of the Premises will be unusable or inaccessible to
Tenant in the ordinary conduct of its business until the damage is repaired, and
the damage was not caused by the negligence or willful misconduct of Tenant or
its employees, agents, contractors or invitees, Tenant's Base Rent and Tenant's
Share of Operating Expense
13
increases shall be abated in proportion to the amount of the Premises which is
unusable or inaccessible to Tenant in the ordinary conduct of its business until
the repairs are completed.
9.4. TENANT'S NEGLIGENCE. If such damage or destruction occurs as a
result of the negligence or willful misconduct of Tenant or Tenant's employees,
agents, contractors or invitees, and the proceeds of insurance which are
actually received by Landlord are not sufficient to repair all of the damage,
Tenant shall pay, at Tenant's sole cost and expense, to Landlord upon demand,
the difference between the cost of repairing the damage and the insurance
proceeds received by Landlord.
9.5. TENANT'S PROPERTY. Unless caused by Landlord's or its agents'
negligence or willful misconduct, Landlord shall not be required to repair any
injury or damage to, or to make any repairs or replacements of, any fixtures,
furniture, equipment or tenant improvements installed in the Premises, and
Tenant shall repair and restore all such property at Tenant's sole expense.
9.6. WAIVER. Landlord and Tenant hereby waive the provisions of any
statutes which relate to the termination of leases when leased property is
damaged or destroyed and agree that such event shall be governed by the terms of
this Lease.
10. REAL PROPERTY TAXES.
10.1. PAYMENT OF TAXES. Landlord shall pay the real property tax, as
defined in Section 10.2, applicable to the Project subject to reimbursement by
Tenant of Tenant's Share of such taxes in accordance with the provisions of
Section 4.2.
10.2. DEFINITION OF "REAL PROPERTY TAX." As used herein, the term "real
property tax" shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance, personal income
or estate taxes) imposed on the Project or any portion thereof by any authority
having the direct or indirect power to tax, including any city, county, state or
federal government, or any school, agricultural, sanitary, fire, street,
drainage or other improvement district thereof, as against any legal or
equitable interest of Landlord in the Project or in any portion thereof, as
against Landlord's right to rent or other income therefrom, or as against
Landlord's business of leasing the Project. The term "real property tax" shall
also include any tax, fee, levy, assessment or charge (a) in substitution of,
partially or totally, any tax, fee, levy, assessment or charge hereinabove
included within the definition of "real property tax", or (b) the nature of
which was hereinbefore included within the definition of "real property tax", or
(c) which is imposed as a result of a change in ownership, as defined by
applicable local statutes for property tax purposes, of the Project or which is
added to a tax or charge hereinbefore included within the definition of real
property tax by reason of such change of ownership, or (d) which is imposed by
reason of this transaction, any modifications or changes hereto, or any
transfers hereof, or (e) transportation taxes, fees or assessments, including,
but not limited to, mass transportation fees, regional transportation district
fees, metrorail fees, trip fees and similar fees and assessments, or (f) fees
assessed by any air quality management district or other governmental or quasi-
governmental entity regulating pollution, or (g) parking fees or parking taxes
paid by Landlord, or (h) any reasonable expenses incurred by Landlord in
attempting to protest, reduce or minimize real property taxes.
10.3. PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures, furnishings, equipment
and all other personal property of Tenant contained in the Premises or related
to Tenant's use of the Premises. If any of Tenant's personal property shall be
assessed with Landlord's real property, Tenant shall pay to Landlord the taxes
attributable to
14
Tenant within twenty (20) days after receipt of a written statement from
Landlord setting forth the taxes applicable to Tenant's property.
11. UTILITIES.
11.1. SERVICES PROVIDED BY LANDLORD. Subject to all governmental rules,
regulations and guidelines applicable thereto, Landlord shall use its best
efforts to provide HVAC to the Premises for normal office use during the times
described in Section 11.3, reasonable amounts of electricity for normal office
lighting and fractional horsepower office machines, water in the Premises or in
the Common Area for reasonable and normal drinking and lavatory use, replacement
light bulbs and/or fluorescent tubes and ballasts for standard overhead
fixtures, and building standard janitorial services, AS SET FORTH ON EXHIBIT D
ATTACHED HERETO.
11.2. SERVICES EXCLUSIVE TO TENANT. Tenant shall pay for all water, gas,
heat, electricity, telephone and other utilities and services supplied and/or
metered exclusively to the Premises or to Tenant, together with any taxes
thereon. If any such services are not separately metered to the Premises, Tenant
shall pay, at Landlord's option, either Tenant's Share or a reasonable
proportion to be determined by Landlord of all charges jointly metered with
other premises in the Project.
11.3. HOURS OF SERVICE. Building services and utilities shall be provided
Monday through Friday from 8:00 a.m. to 6:00 p.m. and Saturdays from 9:00 a.m.
to 1:00 p.m. Janitorial services shall be provided Monday through Friday. HVAC
and other Building services shall not be provided at other times or on New
Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas. Landlord shall use its best efforts to provide HVAC to Tenant at
times other than those set forth above subject to (a) the payment by Tenant of
Landlord's standard charge equal to the actual utility costs for the Premises
plus a ten percent (10%) administrative fee, for after hours HVAC and (b) Tenant
providing to Landlord at least one (1) business day's advance written notice of
Tenant's need for after hours HVAC. As of the date of this Lease, and subject to
future increases, the standard charge for after hours HVAC is Forty Dollars
($40.00) per hour. Tenant shall pay all after hours HVAC charges to Landlord
within thirty (30) days after Landlord bills Tenant for said charges.
SEE ADDENDUM PARAGRAPH 10
11.4. EXCESS USAGE BY TENANT. Notwithstanding the use set forth in Section
1.5, Tenant shall not use Building utilities or services in excess of those used
by the average office building tenant using its premises for ordinary office
use. Tenant shall not install at the Premises office machines, lighting fixtures
or other equipment which will generate above average heat, noise or vibration at
the Premises or which will adversely effect the temperature maintained by the
HVAC system. If Tenant does use Building utilities or services in excess of
those used by the average office building tenant, Landlord shall have the right,
in addition to any other rights or remedies it may have under this Lease, to (a)
at Tenant's expense, install separate metering devices at the Premises, and to
charge Tenant for its usage or (b) require Tenant to pay to Landlord all costs,
expenses and damages incurred by Landlord as a result of such usage.
11.5. INTERRUPTIONS. Tenant agrees that Landlord shall not be liable to
Tenant for its failure to furnish utilities or other services when such failure
is occasioned, in whole or in part, by repairs, replacements, or improvements,
by any strike, lockout or other labor trouble, by inability to secure
electricity, gas, water, or other fuel at the Project after Landlord's best
effort to do so, by any accident or casualty
15
whatsoever, by act or default of Tenant or other parties, or by any other cause
beyond Landlord's reasonable control, and such failures shall never be deemed to
constitute an eviction or disturbance of Tenant's use and possession of the
Premises or relieve Tenant from paying rent or performing any of its obligations
under this Lease. Furthermore, unless caused by landlord's negligence, Landlord
shall not be liable under any circumstances for loss of property or for injury
to, or interference with, Tenant's business, including, without limitation, loss
of profits, however occurring, through or in connection with or incidental to a
failure to furnish any of the services or utilities as set forth in this Section
11. Landlord may comply with voluntary controls or guidelines promulgated by any
governmental entity relating to the use or conservation of energy, water, gas,
light or electricity or the reduction of automobile or other emissions without
creating any liability of Landlord to Tenant under this Lease.
SEE ADDENDUM PARAGRAPH 10
12. ASSIGNMENT AND SUBLETTING.
12.1 LANDLORD'S CONSENT REQUIRED. Tenant shall not voluntarily or by
operation of law assign, transfer, hypothecate, mortgage, sublet, or otherwise
transfer or encumber all or any part of Tenant's interest in this Lease or in
the Premises (hereinafter collectively a "Transfer"), without Landlord's prior
written consent, which shall not be unreasonably withheld. Landlord shall
respond to Tenant's written request for consent hereunder within thirty (30)
days after Landlord's receipt of the written request from Tenant. Any attempted
Transfer without such consent shall be void and shall constitute a material
default and breach of this Lease. Tenant's written request for Landlord's
consent shall include, and Landlord's thirty (30) day response period referred
to above shall not commence, unless and until Landlord has received from Tenant,
all of the following information: (a) financial statements for the proposed
assignee or subtenant for the past three (3) years prepared in accordance with
generally accepted accounting principles, (b) federal tax returns for the
proposed assignee or subtenant for the past three (3) years, (c) a TRW credit
report or similar report on the proposed assignee or subtenant, (d) a detailed
description of the business the assignee or subtenant intends to operate at the
Premises, (e) the proposed effective date of the assignment or sublease, (f) a
copy of the proposed sublease or assignment agreement which includes all of the
terms and conditions of the proposed assignment or sublease, and (g) a detailed
description of any ownership or commercial relationship between Tenant and the
proposed assignee or subtenant. If the obligations of the proposed assignee or
subtenant will be guaranteed by any person or entity, Tenant's written request
shall not be considered complete until the information described in (a), (b) and
(c) of the previous sentence has been provided with respect to each proposed
guarantor. "Transfer" shall also include the transfer (a) if Tenant is a
corporation, and Tenant's stock is not publicly traded over a recognized
securities exchange, of more than twenty five percent (25%) of the voting stock
of such corporation during the Term of this Lease (whether or not in one or more
transfers) or the dissolution or merger of the corporation, or (b) if Tenant is
a partnership or other entity, of more than twenty five percent (25%) of the
profit and loss participation in such partnership or entity during the Term of
this Lease (whether or not in one or more transfers) or the dissolution or
liquidation of the partnership.
SEE ADDENDUM PARAGRAPH 11
12.2. STANDARD FOR APPROVAL. Landlord shall not unreasonably withhold its
consent to a Transfer provided that Tenant has complied with each and every
requirement, term and condition of this Section 12. Tenant acknowledges and
agrees that each requirement, term and condition in this Section 12 is a
reasonable requirement, term or condition. It shall be deemed reasonable for
Landlord to withhold its consent to a Transfer if any requirement, term or
condition of this Section 12 is not complied with or: (a) the Transfer would
cause Landlord to be in violation of its obligations under another lease or
agreement to which Landlord is a party; (b) in
16
Landlord's reasonable judgment, a proposed assignee has a smaller net worth than
Tenant had on the date this Lease was entered into with Tenant or is less able
financially to pay the rents due under this Lease as and when they are due and
payable; (c) a proposed assignee's or subtenant's business will impose a burden
on the Project's parking facilities, elevators, Common Areas or utilities that
is greater than the burden imposed by Tenant, in Landlord's reasonable judgment;
(d) the terms of a proposed assignment or subletting will allow the proposed
assignee or subtenant to exercise a right of renewal, right of expansion, right
of first offer, right of first refusal or similar right held by Tenant; (e) a
proposed assignee or subtenant does not, in Landlord's reasonable judgment, have
a good credit rating; (f) (g) a proposed assignee or subtenant refuses to enter
into a written assignment agreement or sublease, reasonably satisfactory to
Landlord, which provides that it will abide by and assume all of the terms and
conditions of this Lease for the term of any assignment or sublease and
containing such other terms and conditions as Landlord reasonably deems
necessary; (h) the use of the Premises by the proposed assignee or subtenant
will not be identical to the use permitted by this Lease; (i) Landlord has ever
evicted or been involved in litigation with the proposed assignee or subtenant;
(j) any guarantor of this Lease refuses to consent to the Transfer or to execute
a written agreement reaffirming the guaranty; (k) Tenant is in default as
defined in Section 13.1 at the time of the request; or (l) if requested by
Landlord, the assignee or sublessee refuses to sign a non-disturbance and
attornment agreement in favor of Landlord's lender, IN SUBSTANTIALLY THE SAME
FORM AS THE AGREEMENT SIGNED BY TENANT, IF APPLICABLE.
12.3. ADDITIONAL TERMS AND CONDITIONS. The following terms and conditions
shall be applicable to any Transfer:
(a) Regardless of Landlord's consent, no Transfer shall release
Tenant from Tenant's obligations hereunder or alter the primary liability of
Tenant to pay the rent and other sums due Landlord hereunder and to perform all
other obligations to be performed by Tenant hereunder or release any guarantor
from its obligations under its guaranty.
(b) Landlord may accept rent from any person other than Tenant
pending approval or disapproval of an assignment or subletting.
(c) Neither a delay in the approval or disapproval of a Transfer,
nor the acceptance of rent, shall constitute a waiver or estoppel of Landlord's
right to exercise its rights and remedies for the breach of any of the terms or
conditions of this Section 12.
(d) The consent by Landlord to any Transfer shall not constitute a
consent to any subsequent Transfer by Tenant or to any subsequent or successive
Transfer by an assignee or subtenant.
(e) In the event of any default under this Lease, Landlord may
proceed directly against Tenant, any guarantors or anyone else responsible for
the performance of this Lease, including any subtenant or assignee, without
first exhausting Landlord's remedies against any other person or entity
responsible therefor to Landlord, or any security held by Landlord.
(f) Landlord's written consent to any Transfer by Tenant shall not
constitute an acknowledgment that no default then exists under this Lease nor
shall such consent be deemed a waiver of any then existing default.
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(g) The discovery of the fact that any financial statement relied
upon by Landlord in giving its consent to an assignment or subletting was
materially false shall, at Landlord's election, render Landlord's consent null
and void.
(h) Landlord shall not be liable under this Lease or under any
assignment or sublease to any assignee or subtenant., EXCEPT FOR AN ASSIGNEE TO
WHICH LANDLORD HAS OTHERWISE CONSENTED.
(i) No assignment or sublease may be modified or amended without
Landlord's prior written consent.
12.4. ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Tenant of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Tenant hereby absolutely and unconditionally assigns and
transfers to Landlord all of Tenant's interest in all rentals and income arising
from any sublease entered into by Tenant, and Landlord may collect such rent and
income and apply same toward Tenant's obligations under this Lease; provided,
however, that until a default shall occur in the performance of Tenant's
obligations under this Lease, Tenant may receive, collect and enjoy the rents
accruing under such sublease. Landlord shall not, by reason of this or any
other assignment of such rents to Landlord nor by reason of the collection of
the rents from a subtenant, be deemed to have assumed or recognized any sublease
or to be liable to the subtenant for any failure of Tenant to perform and comply
with any of Tenant's obligations to such subtenant under such sublease,
including, but not limited to, Tenant's obligation to return any security
deposit. Tenant hereby irrevocably authorizes and directs any such subtenant,
upon receipt of a written notice from Landlord stating that a default exists in
the performance of Tenant's obligations under this Lease, to pay to Landlord the
rents due as they become due under the sublease. Tenant agrees that such
subtenant shall have the right to rely upon any such statement and request from
Landlord, and that such subtenant shall pay such rents to Landlord without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Tenant to the contrary.
(b) In the event Tenant shall default in the performance of its
obligations under this Lease, Landlord at its option and without any obligation
to do so, may require any subtenant to attorn to Landlord, in which event
Landlord shall undertake the obligations of Tenant under such sublease from the
time of the exercise of said option to the termination of such sublease;
provided, however, Landlord shall not be liable for any prepaid rents or
security deposit paid by such subtenant to Tenant or for any other prior
defaults of Tenant under such sublease.
12.5. TRANSFER PREMIUM FROM ASSIGNMENT OR SUBLETTING. Landlord shall be
entitled to receive from Tenant (as and when received by Tenant) as an item of
additional rent fifty percent (50%) of all amounts received by Tenant from such
assignee or subtenant in excess of the amounts payable by Tenant to Landlord
hereunder (the "Transfer Premium"). "Transfer Premium" shall mean all Base Rent,
additional rent or other consideration of any type whatsoever payable by the
assignee or subtenant in excess of the Base Rent and additional rent payable by
Tenant under this Lease. If less than all of the Premises is transferred, the
Base Rent and the additional rent shall be determined on a per rentable square
foot basis. "Transfer Premium" shall also include, but not be limited to, key
money and bonus money paid by the assignee or subtenant to Tenant in connection
with such Transfer, and any payment in excess of fair market value for services
rendered by Tenant to the assignee or subtenant or for assets, fixtures,
inventory, equipment, or furniture transferred by Tenant to the assignee or
subtenant in connection with such Transfer.
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12.6. LANDLORD'S OPTION TO RECAPTURE SPACE. Notwithstanding anything to
the contrary contained in this Section 12, except in instances where Landlord
has granted its prior consent to a sublease, Landlord shall have the option, by
giving written notice to Tenant within thirty (30) days after receipt of any
request by Tenant to assign this Lease or to sublease space in the Premises, to
terminate this Lease with respect to said space as of the date specified in
Tenant's notice. In the event of a recapture by Landlord, if this Lease shall be
canceled with respect to less than the entire Premises, the Base Rent, Tenant's
Share of Operating Expense increases and the number of parking spaces Tenant may
use shall be adjusted on the basis of the number of rentable square feet
retained by Tenant in proportion to the number of rentable square feet contained
in the original Premises, and this Lease as so amended shall continue thereafter
in full force and effect, and upon request of either party, the parties shall
execute written confirmation of same. If Landlord recaptures only a portion of
the Premises, it shall construct and erect at its sole cost such partitions as
may be required to sever the space to be retained by Tenant from the space
recaptured by Landlord. Landlord may, at its option, lease any recaptured
portion of the Premises to the proposed subtenant or assignee or to any other
person or entity without liability to Tenant. Tenant shall not be entitled to
any portion of the profit, if any, Landlord may realize on account of such
termination and reletting. Tenant acknowledges that the purpose of this Section
12.6 is to enable Landlord to receive profit in the form of higher rent or other
consideration to be received from an assignee or sublessee, to give Landlord the
ability to meet additional space requirements of other tenants of the Project
and to permit Landlord to control the leasing of space in the Project. Tenant
acknowledges and agrees that the requirements of this Section 12.6 are
commercially reasonable and are consistent with the intentions of Landlord and
Tenant.
12.7. LANDLORD'S EXPENSES. In the event Tenant shall assign this Lease or
sublet the Premises or request the consent of Landlord to any Transfer, then
Tenant shall pay Landlord's reasonable costs and expenses incurred in connection
therewith, including, but not limited to, attorneys', architects', accountants',
engineers' or other consultants' fees.
13. DEFAULT; REMEDIES.
13.1. DEFAULT BY TENANT. Landlord and Tenant hereby agree that the
occurrence of any one or more of the following events is a material default by
Tenant under this Lease and that said default shall give Landlord the rights
described in Section 13.2. Landlord or Landlord's authorized agent shall have
the right to serve any notice of default, notice to pay rent or quit or similar
notice.
(a) Tenant's failure to make any payment of Base Rent, Tenant's
Share of Operating Expense increases, parking charges, charges for after hours
HVAC, late charges, or any other payment required to be made by Tenant
hereunder, as and when due, where such failure shall continue for a period of
five (5) business days after written notice thereof from Landlord to Tenant. In
the event that Landlord serves Tenant with a notice to pay rent or quit pursuant
to applicable unlawful detainer statutes, such notice shall also constitute the
notice required by this Section 13.1(a).
(b) The abandonment of the Premises by Tenant in which event
Landlord shall not be obligated to give any notice of default to Tenant.
(c) The failure by Tenant to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed by
Tenant (other than those referenced in Sections 13.1(a) and (b), above), where
such failure shall
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continue for a period of twenty (20) days after written notice thereof from
Landlord to Tenant; provided, however, that if the nature of Tenant's non-
performance is such that more than twenty (20) days are reasonably required for
its cure, then Tenant shall not be deemed to be in default if Tenant commences
such cure within said twenty (20) day period and thereafter diligently pursues
such cure to completion. In the event that Landlord serves Tenant with a notice
to quit pursuant to applicable unlawful detainer statutes, said notice shall
also constitute the notice required by this Section 13.1(c). IF TENANT IS UNABLE
TO FULFILL ANY OF ITS OBLIGATIONS HEREUNDER OR IS DELAYED IN DOING SO, AND SUCH
INABILITY OR DELAY IS CAUSED BY REASON OF STRIKE OR OTHER LABOR PROBLEMS, ACTS
OF GOD, RIOT, INSURRECTION, GOVERNMENTAL ACTIONS OR REQUIREMENTS, OR ANY OTHER
CAUSE BEYOND THE REASONABLE CONTROL OF TENANT, THE TIME FOR TENANT'S PERFORMANCE
SHALL BE EXTENDED FOR THE PERIOD OF ANY SUCH DELAY.
(d)(i) The making by Tenant or any guarantor of any general
arrangement or general assignment for the benefit of creditors; (ii) Tenant or
any guarantor becoming a "debtor" as defined in 11 U.S.C. 101 or any successor
statute thereto (unless, in the case of a petition filed against Tenant or
guarantor, the same is dismissed within sixty (60) days); (iii) the institution
of proceedings seeking the appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where possession is not restored to Tenant
within thirty (30) days or the institution of a foreclosure proceeding against
Tenant's real or personal property; or (iv) the attachment, execution or other
judicial seizure of substantially all of Tenant's assets located at the Premises
or of Tenant's interest in this Lease, where such seizure is not discharged
within thirty (30) days. In the event that any provision of this Section 13.1(e)
is contrary to any applicable law, such provision shall be of no force or
effect.
(e) The discovery by Landlord that any financial statement,
representation or warranty given to Landlord by Tenant, or by any guarantor of
Tenant's obligations hereunder, is or was materially false.
(f) If Tenant is a corporation or a partnership, the dissolution or
liquidation of Tenant.
13.2 REMEDIES.
(a) In the event of any default or breach of this Lease by Tenant,
Landlord may, at any time thereafter, with or without notice or demand, and
without limiting Landlord in the exercise of any right or remedy which Landlord
may have by reason of such default:
(i) terminate Tenant's right to possession of the Premises
by any lawful means, in which case this Lease and the Term hereof shall
terminate and Tenant shall immediately surrender possession of the Premises to
Landlord. If Landlord terminates this Lease, Landlord may recover from Tenant
(A) the worth at the time of award of the unpaid rent which had been earned at
the time of termination; (B) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided; (C) the worth at the time of award of the amount
by which the unpaid rent for the balance of the Term after the time of award
exceeds the amount of such rental loss that Tenant proves could be reasonably
avoided; and (D) any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform its obligations
under the Lease or which in the ordinary course of things would be likely to
result therefrom, including, but not limited to, the cost of recovering
possession of the Premises, expenses of releasing, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, any real
estate commissions actually paid by Landlord and the unamortized value of any
free rent, reduced rent, tenant improvement allowance or other economic
concessions provided
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by Landlord. The "worth at time of award" of the amounts referred to in Section
13.2(a)(i)(A) and (B) shall be computed by allowing interest at the lesser of
two percent (2%) per annum over the "prime rate" as established by NationsBank
of Maryland, N.A., or the maximum interest rate permitted by applicable law. The
worth at the time of award of the amount referred to in Section 13.2(a)(i)(C)
shall be computed by discounting such amount at the discount rate of the Federal
Reserve Bank of Baltimore at the time of award plus one percent (1%). For
purposes of this Section 13.2(a)(i), "rent" shall be deemed to be all monetary
obligations required to be paid by Tenant pursuant to the terms of this Lease.
IN THE EVENT OF A TERMINATION OF TENANT'S RIGHT TO POSSESSION OF THE PREMISES
PURSUANT TO THIS SECTION, LANDLORD SHALL USE COMMERCIALLY REASONABLE EFFORTS TO
MITIGATE TENANT'S DAMAGES.
(ii) maintain Tenant's right of possession in which event
Landlord shall have the remedy which permits Landlord to continue this Lease in
effect after Tenant's breach and abandonment and recover rent as it becomes due.
(iii) collect sublease rents (or appoint a receiver to
collect such rent) and otherwise perform Tenant's obligations at the Premises,
it being agreed, however, that the appointment of a receiver for Tenant shall
not constitute an election by Landlord to terminate this Lease.
(iv) pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the state in which the Premises
are located.
(b) No remedy or election hereunder shall be deemed exclusive, but
shall, wherever possible, be cumulative with all other remedies at law or in
equity.
(c) If Tenant abandons or vacates the Premises, Landlord may
re-enter the Premises and such re-entry shall not be deemed to constitute
Landlord's election to accept a surrender of the Premises or to otherwise
relieve Tenant from liability for its breach of this Lease. No surrender of the
Premises shall be effective against Landlord unless Landlord has entered into a
written agreement with Tenant in which Landlord expressly agrees to (i) accept a
surrender of the Premises and (ii) relieve Tenant of liability under the Lease.
The delivery of keys to Landlord or any employee or agent of Landlord shall not
constitute the termination of the Lease or the surrender of the Premises.
13.3 DEFAULT BY LANDLORD. Landlord shall not be in default under this
Lease unless Landlord fails to perform obligations required of Landlord within
thirty (30) days after written notice by Tenant to Landlord and to the holder of
any mortgage or deed of trust encumbering the Project whose name and address
shall have theretofore been furnished to Tenant in writing, specifying wherein
Landlord has failed to perform such obligation; provided, however, that if the
nature of Landlord's obligation is such that more than thirty (30) days are
required for its cure, then Landlord shall not be in default if Landlord
commences performance within such thirty (30) day period and thereafter
diligently pursues the same to completion. This Lease and the obligations of
Tenant hereunder shall not be affected or impaired because Landlord is unable to
fulfill any of its obligations hereunder or is delayed in doing so, if such
inability or delay is caused by reason of strike or other labor problems, acts
of God, riot, insurrection, governmental actions or requirements, or any other
cause beyond the reasonable control of Landlord, and the time for Landlord's
performance shall be extended for the period of any such delay.
13.4 LATE CHARGES. Tenant hereby acknowledges that late payment by
Tenant to Landlord of Base Rent, Tenant's Share of Operating Expense increases,
parking charges, after hours HVAC charges, or other sums due hereunder will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of which will be extremely difficult to ascertain. Such costs include, but are
not limited to,
21
processing and accounting charges and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed encumbering the Project.
Accordingly, if any installment of Base Rent, Tenant's Share of Operating
Expense increases, parking charges, after hours HVAC charges or any other sum
due from Tenant shall not be received by Landlord when such amount shall be due,
then, without any requirement for notice to Tenant, Tenant shall pay to Landlord
a late charge equal to six percent (6%) of such overdue amount. The parties
hereby agree that such late charge represents a fair and reasonable estimate of
the costs Landlord will incur by reason of late payment by Tenant. Acceptance of
such late charge by Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder including the
assessment of interest under Section 13.5.
13.5 INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein
provided, any amount due to Landlord that is not paid when due shall bear
interest at the lesser of two percent (2%) per annum over the "prime rate" as
established by NationsBank of Maryland, N.A., or the maximum rate permitted by
applicable law. Payment of such interest shall not excuse or cure any default by
Tenant under this Lease; provided, however, that interest shall not be payable
on late charges incurred by Tenant nor on any amounts upon which late charges
are paid by Tenant.
13.6 PAYMENT OF RENT AFTER DEFAULT. If Tenant fails to pay Base Rent,
Tenant's Share of Operating Expense increases, parking charges or any other
monetary obligation due hereunder on the date it is due, after Tenant's third
failure to pay any monetary obligation on the date it is due, at Landlord's
option, all monetary obligations of Tenant hereunder shall thereafter be paid by
cashiers check. If Landlord has required Tenant to make said payments by
cashiers check, Tenant's failure to make a payment by cashiers check shall be a
material default hereunder.
14. LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT. All covenants and
agreements to be kept or performed by Tenant under this Lease shall be performed
by Tenant at Tenant's sole cost and expense and without any reduction of rent.
If Tenant shall fail to perform any of its obligations under this Lease, within
a reasonable time after such performance is required by the terms of this Lease,
(taking into account the expiration of the notice and cure periods provided
herein) Landlord may, but shall not be obligated to, after ten (10) days' prior
written notice to Tenant, make any such payment or perform any such act on
Tenant's behalf without waiving its rights based upon any default of Tenant and
without releasing Tenant from any obligations hereunder. Tenant shall pay to
Landlord, within ten (10) days after delivery by Landlord to Tenant of
statements therefor, an amount equal to the expenditures reasonably made by
Landlord in connection with the remedying by Landlord of Tenant's defaults
pursuant to the provisions of this Section 14.
15. CONDEMNATION. If any portion of the Premises or the Project are
taken under the power of eminent domain, or sold under the threat of the
exercise of said power (all of which are herein called "condemnation"), this
Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs; provided that if so
much of the Premises or Project are taken by such condemnation as would
substantially and adversely affect the operation and profitability of Tenant's
business conducted from the Premises, and said taking lasts for ninety (90) days
or more, Tenant shall have the option, to be exercised only in writing within
thirty (30) days after Landlord shall have given Tenant written notice of such
taking (or in the absence of such notice, within thirty (30) days after the
condemning authority shall have taken possession), to terminate this Lease as of
the date the condemning authority takes such possession. If a taking lasts for
less than ninety (90) days, Tenant's rent shall be abated during said period but
Tenant shall not have the right to terminate this Lease. If Tenant does not
terminate this Lease in
22
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the rent and Tenant's
Share of Operating Expenses shall be reduced in the proportion that the usable
floor area of the Premises taken bears to the total usable floor area of the
Premises. Common Areas taken shall be excluded from the Common Areas usable by
Tenant and no reduction of rent shall occur with respect thereto or by reason
thereof. Landlord shall have the option in its sole discretion to terminate this
Lease as of the taking of possession by the condemning authority, by giving
written notice to Tenant of such election within thirty (30) days after receipt
of notice of a taking by condemnation of any part of the Premises or the
Project. Any award for the taking of all or any part of the Premises or the
Project under the power of eminent domain or any payment made under threat of
the exercise of such power shall be the property of Landlord, whether such award
shall be made as compensation for diminution in value of the leasehold or for
the taking of the fee, as severance damages, or as damages for tenant
improvements; provided, however, that Tenant shall be entitled to any separate
award for loss of or damage to Tenant's trade fixtures and removable personal
property and any award available for the relocation of Tenant's business. In the
event that this Lease is not terminated by reason of such condemnation, and
subject to the requirements of any lender that has made a loan to Landlord
encumbering the Project, Landlord shall to the extent of severance damages
received by Landlord in connection with such condemnation, repair any damage to
the Project caused by such condemnation except to the extent that Tenant has
been reimbursed therefor by the condemning authority. Tenant shall pay any
amount in excess of such severance damages required to complete such repair.
Except as set forth in this Section 15, Landlord shall have no liability to
Tenant for interruption of Tenant's business upon the Premises, diminution of
Tenant's ability to use the Premises, or other injury or damage sustained by
Tenant as a result of such condemnation.
16. VEHICLE PARKING.
16.1 USE OF PARKING FACILITIES. During the Term and subject to the rules
and regulations attached hereto as Exhibit "C" as reasonably modified by
Landlord from time to time (the "Rules"), Tenant shall be entitled to use the
number of parking spaces set forth in Section 1.13 in the parking facility of
the Project at the monthly rate applicable from time to time for monthly parking
as set by Landlord and/or its licensee. Landlord may, in its sole discretion,
assign tandem parking spaces to Tenant and designate the location of any
reserved parking spaces. Landlord reserves the right at any time to relocate
Tenant's reserved and unreserved parking spaces. If Tenant commits or allows in
the parking facility any of the activities prohibited by the Lease or the Rules,
then Landlord shall have the right, without notice, in addition to such other
rights and remedies that it may have, to remove or tow away the vehicle involved
and charge the cost to Tenant, which cost shall be immediately payable by Tenant
upon demand by Landlord. Tenant's parking rights are the personal rights of
Tenant and Tenant shall not transfer, assign, or otherwise convey its parking
rights separate and apart from this Lease.
16.2 PARKING CHARGES. The initial monthly parking rate per parking space
is set forth in Section 1.14 and is subject to change by Landlord upon five (5)
days' prior written notice to Tenant. Monthly parking fees shall be payable in
advance prior to the first day of each calendar month, provided, however, that
no fee for parking shall be charged Tenant during the initial term of this
Lease. Visitor parking rates shall be determined by Landlord from time to time
in Landlord's sole discretion. The parking rates charged to Tenant may not be
the lowest parking rates charged by Landlord for the use of the parking
facility. Notwithstanding anything to the contrary contained herein, any tax
imposed on the privilege of occupying space in the parking facility, upon the
revenues received by Landlord from the parking facility or upon the charges paid
for the
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privilege of using the parking facility by any governmental or
quasi-governmental entity may be added by Landlord to the monthly parking
charges paid by Tenant at any time, or Landlord may require Tenant and other
persons using the parking facility to pay said amounts directly to the taxing
authority.
SEE ADDENDUM XXXXXXXXX 00
00. BROKER'S FEE. Tenant and Landlord each represent and warrant to the other
that neither has had any dealings or entered into any agreements with any
person, entity, broker or finder other than the persons, if any, listed in
Section 1.15, in connection with the negotiation of this Lease, and no other
broker, person, or entity is entitled to any commission or finder's fee in
connection with the negotiation of this Lease, and Tenant and Landlord each
agree to indemnify, defend and hold the other harmless from and against any
claims, damages, costs, expenses, attorneys' fees or liability for compensation
or charges which may be claimed by any such unnamed broker, finder or other
similar party by reason of any dealings, actions or agreements of the
indemnifying party.
18. ESTOPPEL CERTIFICATE.
18.1. DELIVERY OF CERTIFICATE. Tenant shall at any time upon not less
than ten (10) BUSINESS days' prior written notice from Landlord execute,
acknowledge and deliver to Landlord a statement in writing certifying such
information as Landlord may reasonably request including, but not limited to,
the following: (a) that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification and certifying that
this Lease, as so modified, is in full force and effect) (b) the date to which
the Base Rent and other charges are paid in advance and the amounts so payable,
(c) that there are not, to Tenant's knowledge, any uncured defaults or
unfulfilled obligations on the part of Landlord, or specifying such defaults or
unfulfilled obligations, if any are claimed, and (d) that all tenant
improvements to be constructed by Landlord, if any, have been completed in
accordance with Landlord's obligations and Tenant has taken possession of the
Premises. Any such statement may be conclusively relied upon by any prospective
purchaser or encumbrancer of the Project.
18.2. FAILURE TO DELIVER CERTIFICATE. At Landlord's option, the failure
of Tenant to deliver such statement within THREE (3) BUSINESS DAYS AFTER
LANDLORD'S SECOND REQUEST THEREFOR shall constitute a material default of Tenant
hereunder, or it shall be conclusive upon Tenant that (a) this Lease is in full
force and effect, without modification except as may be represented by Landlord,
(b) there are no uncured defaults in Landlord's performance, (c) not more than
one month's Base Rent has been paid in advance, and (d) all tenant improvements
to be constructed by Landlord, if any, have been completed in accordance with
Landlord's obligations and Tenant has taken possession of the Premises.
18.3. FINANCIAL INFORMATION. If Landlord desires to finance, refinance,
or sell the Project, or any part thereof, Tenant hereby agrees to deliver, and
to cause any guarantor of Tenant's obligations to deliver, to any lender or
purchaser designated by Landlord such financial statements of Tenant or any
guarantor and other information as may be reasonably required by such lender or
purchaser. All such financial statements shall be received by Landlord and such
lender or purchaser in confidence and shall be used only for the purposes herein
set forth. NOTWITHSTANDING THE FOREGOING, SO LONG AS TENANT IS A PUBLICLY TRADED
COMPANY WITH PUBLICLY AVAILABLE FINANCIAL INFORMATION, TENANT SHALL NOT BE
REQUIRED TO SUBMIT ADDITIONAL FINANCIAL STATEMENTS.
19. LANDLORD'S LIABILITY. Tenant acknowledges that Landlord shall have the
right to transfer all or any portion of its interest in the Project and to
assign this Lease to
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the transferee. Tenant agrees that in the event of such a transfer Landlord
shall automatically be released from all liability under this Lease; and Tenant
hereby agrees to look solely to Landlord's transferee for the performance of
Landlord's obligations hereunder after the date of the transfer. Upon such a
transfer, Landlord shall, at its option, return Tenant's security deposit to
Tenant or transfer Tenant's security deposit to Landlord's transferee and, in
either event, Landlord shall have no further liability to Tenant for the return
of its security deposit. Subject to the rights of any lender holding a mortgage
or deed of trust encumbering all or part of the Project, Tenant agrees to look
solely to Landlord's equity interest in the Project for the collection of any
judgment requiring the payment of money by Landlord arising out of (a)
Landlord's failure to perform its obligations under this Lease or (b) the
negligence or willful misconduct of Landlord, its partners, employees and
agents. No partner, employee or agent of Landlord shall be personally liable for
the performance of Landlord's obligations hereunder or be named as a party in
any lawsuit arising out of or related to, directly or indirectly, this Lease and
the obligations of Landlord hereunder. The obligations under this Lease do not
constitute personal obligations of the individual partners of Landlord and
Tenant shall not seek recourse against the individual partners of Landlord or
their assets.
20. INDEMNITY. Tenant shall indemnify, defend and hold harmless Landlord, its
agents, partners, and employees from and against any and all claims for damage
to the person or property of any person or entity arising from Tenant's use of
the Project, or from the conduct of Tenant's business or from any activity, work
or things done, permitted or suffered by Tenant in or about the Project and
shall further indemnify, defend and hold harmless Landlord, its agents, partners
and employees from and against any and all claims, costs and expenses arising
from any breach or default in the performance of any obligation of Tenant to be
performed under the terms of this Lease, or arising from any act or omission of
Tenant, or any of Tenant's agents, contractors, employees, or invitees, and from
and against all costs, attorneys' fees, expenses and liabilities incurred by
Landlord, its agents, partners and employees as the result of any such use,
conduct, activity, default or negligence. In case any action or proceeding is
brought against Landlord, its agents, partners and employees, Tenant shall
defend Landlord, and its agents, partners and employees at Tenant's expense by
counsel reasonably satisfactory to Landlord and Landlord shall cooperate with
Tenant in such defense. Landlord need not have first paid any claim in order to
be so indemnified. This indemnity shall survive the expiration or sooner
termination of this Lease.
SEE ADDENDUM PARAGRAPH 13
21. EXEMPTION OF LANDLORD FROM LIABILITY. Tenant hereby agrees that Landlord
shall not be liable for injury to Tenant's business or any loss of income
therefrom or for loss of or damage to the goods, wares, merchandise or other
property of Tenant, Tenant's employees, invitees, customers, or any other person
in or about the Project, nor shall Landlord be liable for injury to the person
of Tenant, Tenant's employees, agents or contractors, whether such damage or
injury is caused by or results from any cause whatsoever including, but not
limited to, theft, criminal activity at the Project, negligent security
measures, bombings or bomb scares, hazardous waste, fire, steam, electricity,
gas, water or rain, breakage of pipes, sprinklers, plumbing, air conditioning or
lighting fixtures, or from any other cause, whether said damage or injury
results from conditions arising upon the Premises or upon other portions of the
Project, or from other sources or places, or from new construction or the
repair, alteration or improvement of any part of the Project, or of the
equipment, fixtures or appurtenances applicable thereto, unless the cause of the
damage or injury arises out of Landlord's or its employees or agents negligent
or intentional
25
acts. Except for the negligent acts or willful misconduct by Landlord,
Landlord shall not be liable for any damages arising from any act or neglect of
any other tenant, occupant or user of the Project, nor from the failure of
Landlord to enforce the provisions of the lease of any other tenant of the
Project. Tenant, as a material part of the consideration to Landlord hereunder,
hereby assumes all risk of damage to property of Tenant or injury to persons,
in, upon or about the Project arising from any cause, excluding Landlord's
negligence or the negligence of its agents, partners or employees, and Tenant
hereby waives all claims in respect thereof against Landlord, its agents,
partners and employees.
22. HAZARDOUS MATERIAL. For purposes of this Lease, the term "Hazardous
Material" means any hazardous substance, hazardous waste, infectious waste, or
toxic substance, material, or waste which becomes regulated or is defined as
such by any local, state or federal governmental authority. Except for small
quantities of ordinary office supplies such as copier toners, liquid paper,
glue, ink and common household cleaning materials, Tenant shall not cause or
permit any Hazardous Material to be brought, kept or used in or about the
Premises or the Project by Tenant, its agents, employees, contractors, or
invitees. Tenant hereby agrees to indemnify Landlord from and against any breach
by Tenant of the obligations stated in the preceding sentence, and agrees to
defend and hold Landlord harmless from and against any and all claims,
judgments, damages, penalties, fines, costs, liabilities, or losses (including,
without limitation, diminution in value of the Project, damages for the loss or
restriction or use of rentable space or of any amenity of the Project, damages
arising from any adverse impact on marketing of space in the Project, sums paid
in settlement of claims, attorneys' fees, consultant fees and expert fees) which
arise during or after the Term of this Lease as result of such breach. This
indemnification of Landlord by Tenant includes, without limitation, costs
incurred in connection with any investigation of site conditions and any
cleanup, remedial removal, or restoration work required due to the presence of
Hazardous Material. Tenant shall promptly notify Landlord of any release of a
Hazardous Material in the Premises or at the Project of which Tenant becomes
aware, whether caused by Tenant or any other person or entity. The provisions of
this Section 22 shall survive the termination of the Lease. TO THE BEST OF
LANDLORD'S ACTUAL KNOWLEDGE, THERE IS NO HAZARDOUS MATERIAL IN THE BUILDING OR
THE PROJECT AS OF THE DATE THIS LEASE IS FULLY EXECUTED BY LANDLORD AND TENANT.
23. MEDICAL WASTE DISPOSAL. If Tenant produces medical waste, Landlord may, at
its option, provide medical waste disposal services to Tenant. If Landlord
elects to provide such services, Landlord may require Tenant to use said
services. Landlord, at its option, may xxxx Tenant directly for such services,
which amounts shall then constitute additional rent hereunder, or Landlord may
include the cost of providing such services in Operating Expenses. Tenant waives
its right to the fullest extent allowed by law to assert any claim against
Landlord in connection with the negligent provision of medical waste disposal
services by Landlord. In the event Landlord is unable or chooses not to provide
such disposal services to Tenant, Tenant shall arrange for the disposal of its
medical waste and such disposal shall be done in compliance with all applicable
laws. Tenant hereby agrees to indemnify, defend and hold harmless Landlord
against any cost, loss, liability, action, suit or expense (including attorneys'
fees) arising out of or relating to the existence of or the disposal of medical
waste produced by Tenant at the Premises.
24. TENANT IMPROVEMENTS. Tenant acknowledges and agrees that Landlord shall
not be obligated to construct any tenant improvements on behalf of Tenant unless
a work letter agreement (the "Work Letter") is attached to this Lease as
Schedule 1. If a space plan is attached to the Work Letter, the space plan shall
not be effective unless separately initialed by Landlord. Except as set forth in
a Work Letter, it is specifically understood and agreed that Landlord has no
obligation and has made no promises to alter, remodel, improve, renovate, repair
or decorate the Premises, the Project, or any part thereof, or to provide any
allowance for such purposes, and that no
26
representations respecting the condition of the Premises or the Project have
been made by Landlord to Tenant.
SEE ADDENDUM PARAGRAPH 14
25. SUBORDINATION.
25.1. EFFECT OF SUBORDINATION. This Lease, and any Option (as defined in
Section 26 below) granted hereby, shall be subordinate to any ground lease,
mortgage, deed of trust, or any other hypothecation or security now or hereafter
placed upon the Project and to any and all advances made on the security thereof
and to all renewals, modifications, consolidations, replacements and extensions
thereof. Notwithstanding such subordination, Tenant's right to quiet possession
of the Premises shall not be disturbed if Tenant is not in default and so long
as Tenant shall pay the rent and observe and perform all of the provisions of
this Lease, unless this Lease is otherwise terminated pursuant to its terms. At
the request of any mortgagee, trustee, ground lessor or purchaser at
foreclosure, Tenant shall attorn to such person or entity. If any mortgagee,
trustee, ground lessor or purchaser at foreclosure shall elect to have this
Lease and any Options granted hereby prior to the lien of its mortgage, deed of
trust or ground lease, and shall give written notice thereof to Tenant, this
Lease and such Options shall conclusively be deemed prior to such mortgage, deed
of trust or ground lease, whether this Lease or such Options are dated prior or
subsequent to the date of said mortgage, deed of trust or ground lease or the
date of recording thereof.
25.2. EXECUTION OF DOCUMENTS. Tenant agrees to execute and acknowledge
any documents required to effectuate an attornment, a subordination, or to make
this Lease or any Option granted herein prior to the lien of any mortgage, deed
of trust or ground lease, as the case may be. Tenant's failure to execute such
documents within ten (10) business days after written demand shall constitute a
material default by Tenant hereunder or, at Landlord's option, Landlord shall
have the right to execute such documents on behalf of Tenant as Tenant's
attorney-in-fact. Tenant does hereby make, constitute and irrevocably appoint
Landlord as Tenant's attorney-in-fact and in Tenant's name, place and stead, to
execute such documents in accordance with this Section 25.2, said appointment to
be a power during the Term of this Lease coupled with an interest and
irrevocable.
26. OPTIONS.
26.1. DEFINITION. As used in this Lease, the word "Option" has the
following meaning: (1) the right or option to extend the Term of this Lease or
to renew this Lease, and (2) the option or right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease other space within the Project or the right of first offer to
lease other space within the Project. Any Option granted to Tenant by Landlord
must be evidenced by a written option agreement attached to this Lease as a
rider or addendum or said option shall be of no force or effect.
26.2. OPTIONS PERSONAL. Each Option granted to Tenant in this Lease, if
any, is personal to the original Tenant and may be exercised only by the
original Tenant while occupying the entire Premises (except that with respect to
the Option to Renew set forth in the Addendum, Tenant shall only be required to
be occupying a minimum of seventy-five percent (75%) of the premises) and may
not be exercised or be assigned, voluntarily or involuntarily, by or to any
person or entity other than Tenant, including, without limitation, any permitted
transferee as defined in Section 12. The Options, if any, herein granted to
Tenant are not assignable separate and apart from this Lease, nor may any Option
be separated from this Lease in any manner, either by reservation or otherwise.
If at any time an Option is exercisable by Tenant, the Lease has been assigned,
or a sublease exists as to any portion of the Premises, the Option
27
shall be deemed null and void and neither Tenant nor any assignee or subtenant
shall have the right to exercise the Option.
26.3. MULTIPLE OPTIONS. In the event that Tenant has multiple Options to
extend or renew this Lease a later Option cannot be exercised unless the prior
Option to extend or renew this Lease has been so exercised.
26.4. EFFECT OF DEFAULT ON OPTIONS. Tenant shall have no right to
exercise an Option (i) during the time commencing from the date Landlord gives
to Tenant a notice of default pursuant to Section 13.1 and continuing until the
noncompliance alleged in said notice of default is cured, or (ii) if Tenant is
in default of any of the terms, covenants or conditions of this Lease. The
period of time within which an Option may be exercised shall not be extended or
enlarged by reason of Tenant's inability to exercise an Option because of the
provisions of this Section 26.4.
26.5. LIMITATIONS ON OPTIONS. Notwithstanding anything to the contrary
contained in any rider or addendum to this Lease, any options, rights of first
refusal or rights of first offer granted hereunder shall be subject and
secondary to Landlord's right to first offer and lease any such space to any
tenant who is then occupying or leasing such space at the time the space becomes
available for leasing and shall be subject and subordinated to any other
options, rights of first refusal or rights of first offer previously given to
any other person or entity, PROVIDED, HOWEVER, THAT, FROM AND AFTER THE DATE
THIS LEASE IS FULLY EXECUTED BY LANDLORD AND TENANT, NO NEW OPTIONS SHALL BE
GRANTED WITH RESPECT TO THE EXPANSION SPACE PRIOR TO THE EXPIRATION OF THE
EXPANSION SPACE OPTION, AS SUCH TERMS ARE DEFINED IN THE ADDENDUM ATTACHED
HERETO.
SEE ADDENDUM PARAGRAPHS 15, 16, 17, 18 AND 19
27. LANDLORD RESERVATIONS. Landlord shall have the right: (a) to change the
name and , IF REQUIRED BY LAW, address of the Project or Building upon not less
than ninety (90) days prior written notice; (b) EXCLUDING TENANT'S SIGNS, to, at
LANDLORD'S expense AS A PART OF OPERATING EXPENSES, provide and install Building
standard graphics on or near the door of the Premises and such portions of the
Common Areas as Landlord shall determine, in Landlord's sole discretion; (c) to
permit any tenant the exclusive right to conduct any business as long as such
exclusive right does not conflict with any rights expressly given herein; and
(d) EXCEPT AS OTHERWISE PROVIDED PURSUANT TO ADDENDUM PARAGRAPH 20 to place
signs, notices or displays upon the roof, interior, exterior or Common Areas of
the Project. Tenant shall not use a representation (photographic or otherwise)
of the Building or the Project or their name(s) in connection with Tenant's
business or suffer or permit anyone, except in an emergency, to go upon the roof
of the Building. Landlord reserves the right to use the exterior walls of the
Premises, and the area beneath, adjacent to and above the Premises together with
the right to install, use, maintain and replace equipment, machinery, pipes,
conduits and wiring through the Premises, which serve other parts of the Project
provided that Landlord's use does not unreasonably interfere with Tenant's use
of the Premises.
28
28. CHANGES TO PROJECT. PROVIDED THAT TENANT'S USE OF AND ACCESS TO THE
PREMISES ARE NOT PERMANENTLY MATERIALLY ADVERSELY AFFECTED THEREBY, Landlord
shall have the right, in Landlord's sole discretion, from time to time, to make
changes to the size, shape, location, number and extent of the improvements
comprising the Project (hereinafter referred to as "Changes") including, but not
limited to, the Project interior and exterior, the Common Areas, elevators,
escalators, restrooms, HVAC, electrical systems, communication systems, fire
protection and detection systems, plumbing systems, security systems, parking
control systems, driveways, entrances, parking spaces, parking areas and
landscaped areas PROVIDED HOWEVER THAT THE SIZE OF THE COMMON AREAS AND THE
SCOPE OF SERVICES OFFERED TO TENANT AS OF THE DATE THIS LEASE IS FULLY EXECUTED
BY LANDLORD AND TENANT SHALL NOT BE PERMANENTLY MATERIALLY ADVERSELY DIMINISHED
AS A RESULT OF SUCH CHANGES. In connection with the Changes, Landlord may, among
other things, erect scaffolding or other necessary structures at the Project,
limit or eliminate access to portions of the Project, including portions of the
Common Areas, or perform work in the Building, which work may create noise, dust
or leave debris in the Building. Tenant hereby agrees that such Changes and
Landlord's actions in connection with such Changes shall in no way constitute a
constructive eviction of Tenant or entitle Tenant to any abatement of rent.
Landlord shall have no responsibility or for any reason be liable to Tenant for
any direct or indirect injury to or interference with Tenant's business arising
from the Changes, nor shall Tenant be entitled to any compensation or damages
from Landlord for any inconvenience or annoyance occasioned by such Changes or
Landlord's actions in connection with such Changes.
29. SUBSTITUTION OF OTHER PREMISES.
29
30. HOLDING OVER. If Tenant remains in possession of the Premises or any part
thereof after the expiration or earlier termination of the term hereof , as it
may be extended hereunder, with Landlord's consent, such occupancy shall be a
tenancy from month to month upon all the terms and conditions of this Lease
pertaining to the obligations of Tenant, except that during the first two (2)
months following the termination of the Lease, Base Rent shall be at one hundred
twenty-five (125%) of the Base Rent payable immediately preceding the
termination date of this Lease and thereafter the Base Rent payable shall be one
hundred fifty percent (150%) of the Base Rent payable immediately preceding the
termination date of this Lease, and all Options, if any, shall be deemed
terminated and be of no further effect. If Tenant remains in possession of the
Premises or any part thereof after the expiration of the Term hereof without
Landlord's consent, Tenant shall, at Landlord's option, be treated as a tenant
at sufferance or a trespasser. Nothing contained herein shall be construed to
constitute Landlord's consent to Tenant holding over at the expiration or
earlier termination of the Lease Term. Tenant hereby agrees to indemnify, hold
harmless and defend Landlord from any cost, loss, claim or liability (including
attorneys' fees) Landlord may incur as a result of Tenant's failure to surrender
possession of the Premises to Landlord upon the termination of this Lease.
31. LANDLORD'S ACCESS.
31.1. ACCESS. Landlord and Landlord's agents and employees shall have the
right to enter the Premises at reasonable times upon twenty-four (24) hours'
advance notice, except in the event of an emergency, where no notice shall be
required for the purpose of inspecting the Premises, performing any services
required of Landlord, showing the Premises to prospective purchasers, lenders,
or tenants, undertaking safety measures and making alterations, repairs,
improvements or additions to the Premises or to the Project. In the event of an
emergency, Landlord may gain access to the Premises by any reasonable means, and
Landlord shall not be liable to Tenant for damage to the Premises or to Tenant's
property resulting from such access. Landlord may at any time place on or about
the Building for sale or for lease signs and Landlord may at any time during the
last one hundred twenty (120) days of the Term hereof place on or about the
Premises for lease signs, PROVIDED HOWEVER, THAT THE SIZE AND PLACEMENT OF SUCH
SIGNS SHALL NOT UNREASONABLY INTERFERE WITH TENANT'S SIGNAGE.
31.2. KEYS. Landlord shall have the right to retain keys to the Premises
and to unlock all doors at the Premises, and in the case of emergency to enter
the Premises by any reasonably appropriate means, and any such entry shall not
be deemed a forcible or unlawful entry or detainer of the Premises or an
eviction. Tenant waives any claims for damages or injuries or interference with
Tenant's property or business in connection therewith. Tenant shall provide
Landlord with one key for each lock in the Premises.
32. SECURITY MEASURES. Tenant hereby acknowledges that Landlord shall have no
obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises or the Project, and Landlord shall have no liability
to Tenant due to its failure to provide such services. Nothing herein contained
shall prevent Landlord, at Landlord's sole option, from implementing security
measures for the Project or any part thereof, in which event Tenant shall
participate in such security measures and the cost thereof shall be included
within the definition of Operating Expenses. Landlord shall have the right, but
not the obligation, to require all persons entering or leaving the Project
30
to identify themselves to a security guard and to reasonably establish that such
person should be permitted access to the Project. NOTWITHSTANDING ANYTHING TO
THE CONTRARY CONTAINED IN THIS SECTION 32, LANDLORD SHALL, THROUGHOUT THE TERM
HEREOF AND ANY EXTENSIONS, PROVIDE SECURITY MEASURES COMMENSURATE WITH THOSE
SERVICES BEING PROVIDED AT THE TIME OF EXECUTION OF THIS LEASE.
33. EASEMENTS. Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Landlord deems necessary or
desirable, and to cause the recordation of parcel maps and restrictions, so long
as such easements, rights, dedications, maps and restrictions do not
unreasonably interfere with the use of the Premises by Tenant. Tenant shall sign
any of the aforementioned documents within ten (10) BUSINESS days after
Landlord's request and Tenant's failure to do so shall constitute a material
default by Tenant. The obstruction of Tenant's view, air, or light by any
structure erected in the vicinity of the Project, whether by Landlord or third
parties, shall in no way affect this Lease or impose any liability upon
Landlord.
34. TRANSPORTATION MANAGEMENT. Tenant shall fully comply with all present or
future programs implemented or required by any governmental or quasi-
governmental entity or Landlord to manage parking, transportation, air
pollution, or traffic in and around the Project or the metropolitan area in
which the Project is located.
35. SEVERABILITY. The invalidity of any provision of this Lease as determined
by a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof .
36. TIME OF ESSENCE. Time is of the essence with respect to each of the
obligations to be performed by Tenant AND LANDLORD under this Lease.
37. DEFINITION OF ADDITIONAL RENT. All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, but not limited to, Base
Rent, Tenant's Share of Operating Expenses, parking charges and charges for
after hours HVAC shall be deemed to be rent.
38. INCORPORATION OF PRIOR AGREEMENTS. This Lease and the attachments listed
in Section 1.16 contain all agreements of the parties with respect to the lease
of the Premises and any other matter mentioned herein. No prior or
contemporaneous agreement or understanding pertaining to any such matter shall
be effective. Except as otherwise stated in this Lease, Tenant hereby
acknowledges that no real estate broker nor Landlord or any employee or agents
of any of said persons has made any oral or written warranties or
representations to Tenant concerning the condition or use by Tenant of the
Premises or the Project or concerning any other matter addressed by this Lease.
39. AMENDMENTS. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification.
40. NOTICES. Any notice required or permitted to be given hereunder shall be
in writing and may be given by certified mail, return receipt requested,
personal delivery, Federal Express or other delivery service. If notice is given
by certified mail, return receipt requested, notice shall be deemed given FIVE
(5) days after the notice is deposited with the U.S. Mail, postage prepaid,
addressed to Tenant or to Landlord at AND THE REPRESENTATIVE the address set
forth in Section 1.17. If notice is given by personal delivery, Federal Express
or other delivery service, notice shall be deemed given on the date the notice
is actually received by Landlord or Tenant. Either party may by WRITTEN notice
to the other specify a different address for notice purposes. Notwithstanding
the address set forth
31
in Section 1.17 for Tenant, upon Tenant's taking possession of the Premises, the
Premises shall constitute Tenant's address for notice purposes. A copy of all
notices required or permitted to be given to Landlord hereunder shall be
concurrently transmitted to such party or parties at such addresses as Landlord
may from time to time designate by WRITTEN notice to Tenant.
41. WAIVERS. No waiver by EITHER PARTY of any provision hereof shall be deemed
a waiver of any other provision hereof or of any subsequent breach by THE OTHER
PARTY of the same or any other provision. Landlord's consent to, or approval of,
any act shall not be deemed to render unnecessary the obtaining of Landlord's
consent to or approval of any subsequent act by Tenant. The acceptance of rent
hereunder by Landlord shall not be a waiver of any preceding breach by Tenant of
any provision hereof, other than the failure of Tenant to pay the particular
rent so accepted, regardless of Landlord's knowledge of such preceding breach at
the time of acceptance of such rent. No acceptance by Landlord of partial
payment of any sum due from Tenant shall be deemed a waiver by Landlord of its
right to receive the full amount due, nor shall any endorsement or statement on
any check or accompanying letter from Tenant be deemed an accord and
satisfaction.
42. COVENANTS. This Lease shall be construed as though the covenants contained
herein are independent and not dependent and Tenant hereby waives the benefit of
any statute to the contrary.
43. BINDING EFFECT; CHOICE OF LAW. Subject to any provision hereof restricting
assignment or subletting by Tenant, this Lease shall bind the parties, their
heirs, personal representatives, successors and assigns. This Lease shall be
governed by the laws of the state OF MARYLAND and any litigation concerning this
Lease between the parties hereto shall be initiated in the county OF XXXXXXXXXX.
44. ATTORNEYS' FEES. If Landlord or Tenant brings an action to enforce the
terms hereof or declare rights hereunder, the prevailing party in any such
action, or appeal thereon, shall be entitled to its reasonable attorneys' fees
and court costs to be paid by the losing party as fixed by the court in the same
or separate suit, and whether or not such action is pursued to decision or
judgment. The attorneys' fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
and court costs reasonably incurred in good faith. Landlord shall be entitled to
reasonable attorneys' fees and all other costs and expenses incurred in the
preparation and service of notices of default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in connection
with such default.
45. AUCTIONS. Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas.
The holding of any auction on the Premises or Common Areas in violation of this
Section 45 shall constitute a material default hereunder.
46. SIGNS. Tenant shall not place any sign upon the Premises (including on the
inside or the outside of the doors or windows of the Premises) or the Project
without Landlord's prior written consent, which may be given or withheld in
Landlord's sole
32
discretion. Landlord shall have the right to place any sign it deems
appropriate on any portion of the Project except the interior of the Premises.
SEE ADDENDUM PARAGRAPH 20
47. MERGER. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, or a termination by Landlord, shall not result in
the merger of Landlord's and Tenant's estates, and shall, at the option of
Landlord, terminate all or any existing subtenancies or may, at the option of
Landlord, operate as an assignment to Landlord of any or all of such
subtenancies.
48. QUIET POSSESSION. Provided Tenant is not in default hereunder, Tenant
shall have quiet possession of the Premises for the entire Term hereof subject
to all of the provisions of this Lease.
49. AUTHORITY. If EITHER PARTY is a corporation, trust, or general or limited
partnership, THAT PARTY, and each individual executing this Lease on behalf of
such entity, represents and warrants that such individual is duly authorized to
execute and deliver this Lease on behalf of said entity, that said entity is
duly authorized to enter into this Lease, and that this Lease is enforceable
against said entity in accordance with its terms. If EITHER PARTY is a
corporation, trust or partnership, THAT PARTY shall deliver to THE OTHER upon
demand evidence of such authority satisfactory to Landlord THE REQUESTING PARTY.
50. CONFLICT. Except as otherwise provided herein to the contrary, any
conflict between the printed provisions, Exhibits, Addenda or Riders of this
Lease and the typewritten or handwritten provisions, if any, shall be controlled
by the typewritten or handwritten provisions.
51. MULTIPLE PARTIES. If more than one person or entity is named as Tenant
herein, the obligations of Tenant shall be the joint and several responsibility
of all persons or entities named herein as Tenant. Service of a notice in
accordance with Section 40 on one Tenant shall be deemed service of notice on
all Tenants.
52. INTERPRETATION. This Lease shall be interpreted as if it was prepared by
both parties and ambiguities shall not be resolved in favor of Tenant because
all or a portion of this Lease was prepared by Landlord. The captions contained
in this Lease are for convenience only and shall not be deemed to limit or alter
the meaning of this Lease. As used in this Lease the words tenant and landlord
include the plural as well as the singular. Words used in the neuter gender
include the masculine and feminine gender.
53. PROHIBITION AGAINST RECORDING. Neither this Lease, nor any memorandum,
affidavit or other writing with respect thereto, shall be recorded by Tenant or
by anyone acting through, under or on behalf of Tenant. Landlord shall have the
right to record a memorandum of this Lease, and Tenant shall execute,
acknowledge and deliver to Landlord for recording any memorandum prepared by
Landlord.
54. RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall be deemed
or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.
55. RULES AND REGULATIONS. Tenant agrees to abide by and conform to the Rules
and to USE REASONABLE EFFORTS TO cause its employees, suppliers, customers and
invitees to so abide and conform. Landlord shall have the right, from time to
time, to modify, amend and enforce the Rules IN A COMMERCIALLY REASONABLE
MANNER. Landlord shall not be responsible to Tenant for the failure of other
persons
33
including, but not limited to, other tenants, their agents, employees
and invitees to comply with the Rules.
56. RIGHT TO LEASE. Landlord reserves the absolute right to effect such other
tenancies in the Project as Landlord in its sole discretion shall determine, and
Tenant is not relying on any representation that any specific tenant or number
of tenants will occupy the Project.
57. SECURITY INTEREST.
58. SECURITY FOR PERFORMANCE OF TENANT'S OBLIGATIONS.
59. FINANCIAL INFORMATION. From time to time, at Landlord's request, Tenant
shall cause the following financial information to be delivered to Landlord, at
Tenant's sole cost and expense, upon not less than ten (10) days' advance
written notice from Landlord: (a) a current financial statement for Tenant and
Tenant's financial statements for the previous two accounting years, (b) a
current financial statement for any guarantor(s) of this Lease and the
guarantor's financial statements for the previous two accounting years and (c)
such other financial information pertaining to Tenant or any guarantor as
Landlord or any lender or purchaser of Landlord may reasonably request. All
financial statements shall be prepared in accordance with generally accepted
accounting principals consistently applied and, if such is the normal practice
of Tenant, shall be audited by an independent certified public accountant.
NOTWITHSTANDING THE FOREGOING, SO LONG AS TENANT IS A PUBLICLY TRADED COMPANY
WITH PUBLICLY AVAILABLE FINANCIAL INFORMATION, TENANT SHALL NOT BE REQUIRED TO
SUBMIT ADDITIONAL FINANCIAL STATEMENTS.
60. ATTACHMENTS. The items listed in Section 1.16 are a part of this Lease and
are incorporated herein by this reference.
SEE ADDENDUM PARAGRAPH 21
34
61. WAIVER OF JURY TRIAL. LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE
RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR CROSS-
COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER LANDLORD
AGAINST TENANT OR TENANT AGAINST LANDLORD ON ANY MATTER WHATSOEVER ARISING OUT
OF, OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF LANDLORD AND
TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF INJURY OR
DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, OR REGULATION,
EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT.
LANDLORD AND TENANT ACKNOWLEDGE THAT THEY HAVE CAREFULLY READ AND REVIEWED THIS
LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS
LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY
AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND
TENANT WITH RESPECT TO THE PREMISES. TENANT ACKNOWLEDGES THAT IT HAS BEEN GIVEN
THE OPPORTUNITY TO HAVE THIS LEASE REVIEWED BY ITS LEGAL COUNSEL PRIOR TO ITS
EXECUTION. PREPARATION OF THIS LEASE BY LANDLORD OR LANDLORD'S AGENT AND
SUBMISSION OF SAME TO TENANT SHALL NOT BE DEEMED AN OFFER BY LANDLORD TO LEASE
THE PREMISES TO TENANT OR THE GRANT OF AN OPTION TO TENANT TO LEASE THE
PREMISES. THIS LEASE SHALL BECOME BINDING UPON LANDLORD AND TENANT ONLY WHEN
FULLY EXECUTED BY BOTH PARTIES AND WHEN LANDLORD HAS DELIVERED A FULLY EXECUTED
ORIGINAL OF THIS LEASE TO TENANT.
LANDLORD TENANT
THE REALTY ASSOCIATES FUND III, L.P., a AMISYS MANAGED CARE SYSTEMS, INC.
Delaware limited partnership, doing a Delaware corporation
business in Maryland as The Realty
Associates Fund III, Limited
Partnership
By: Realty Associates Fund III GP
Limited Partnership, a Delaware
limited partnership, Its General
Partner By: /s/ XXXXXX X. XXXXXXXX
------------------------------
XXXXXX X. XXXXXXXX
By: Realty Fund III GP, Inc., a ------------------------------
Massachusetts corporation, (print name)
Its General Partner
Its: CHIEF FINANCIAL OFFICER
------------------------------
By: Xxxxxxxx X. Xxxxxxx (print title)
-------------------------
Its: Vice President
-------------------------
35
ADDENDUM
THIS ADDENDUM (the "Addendum") is attached to the Lease dated as of
December 4, 1996, by and between THE REALTY ASSOCIATES FUND III, L.P., a
Delaware limited partnership, doing business in Maryland as The Realty
Associates Fund III, Limited Partnership ("Landlord") and AMISYS MANAGED CARE
SYSTEMS, INC., a Delaware corporation ("Tenant") and incorporated herein by
reference thereto. To the extent that there are any conflicts between the
provisions of the Lease and the provisions of this Addendum, the provisions of
this Addendum shall supersede the conflicting provisions of the Lease.
1. TERM AND COMMENCEMENT DATE.
--------------------------
a. Notwithstanding anything to the contrary contained in Section 3.1
of the Lease, the Commencement Date for Premises A shall be January 1, 1997.
b. Notwithstanding anything to the contrary contained in Sections
1.6, 1.7 or 3.1 of the Lease, the Commencement Dates set forth in Section 1.7 of
the Lease with respect to Premises B, Premises C and Premises D are estimated
Commencement Dates. Landlord shall use reasonable efforts to deliver Premises B
to Tenant on or before January 1, 1997 for purposes of Tenant constructing the
Improvements to Premises B, as more particularly set forth in Schedule 1
----------
attached hereto and made a part hereof. Landlord shall use reasonable efforts to
deliver Premises C to Tenant on or before April 1, 1997 for purposes of Tenant
constructing the Improvements to Premises C in accordance with Schedule 1.
----------
Landlord shall use reasonable efforts to deliver Premises D to Tenant on or
before November 30, 1998 for purposes of Tenant constructing the Improvements to
Premises D in accordance with Schedule 1. The actual Commencement Date for each
----------
of Premises B, Premises C and Premises D shall be the earlier of: (i) three (3)
months following delivery of possession of Premises B, Premises C and Premises
D, as applicable, to Tenant, or (ii) substantial completion of the Improvements
to Premises B, Premises C and Premises D, respectively. The Term of the Lease
applicable to Premises A, Premises B, Premises C and Premises D shall be
computed from January 1, 1997, and accordingly the expiration date of the Lease
shall be December 31, 2006, unless sooner terminated pursuant to the terms and
conditions of the Lease.
2. DELAY IN POSSESSION. Section 3.2 of the Lease is hereby deleted in
-------------------
its entirety and the following Section 3.2 is substituted in lieu thereof:
"(a) Notwithstanding the estimated Commencement Dates specified in
Section 1.7, if for any reason Landlord cannot deliver possession of Premises B,
Premises C and/or Premises D on its respective estimated Commencement Date,
Landlord shall not be subject to any liability therefor, nor shall such failure
affect the validity of this Lease or the obligations of Tenant hereunder or
extend the Term hereof; provided, however, in such a case, Tenant shall not be
obligated to pay rent or perform any other obligation of Tenant under this
Lease, except as may be otherwise provided in this Lease, until the respective
Commencement Dates set forth in Addendum Paragraph 1. Landlord agrees to use
best efforts to deliver the applicable Premises to Tenant within one hundred
twenty (120) days following the estimated delivery dates specified in Addendum
Paragraph 1. Such efforts shall include evicting the existing tenants if the
existing tenants remain in a holdover of their respective leases. If Landlord is
unsuccessful in delivering the applicable Premises to Tenant within the
aforesaid one hundred twenty (120) days, Landlord shall have an additional sixty
(60) days to deliver the applicable Premises to Tenant provided that during said
sixty (60) day period Landlord shall pay to Tenant, to the extent Landlord
receives holdover rent from any such tenant, fifty percent (50%) of said
holdover rent, after deducting all of Landlord's legal expenses incurred in
connection with eviction proceedings (the "Net Holdover Rent"). If Landlord
shall not have delivered possession of the applicable Premises within said sixty
(60) days, Tenant may, at Tenant's option, by notice in writing to Landlord
within thirty (30) days after the
Add-1
expiration of the sixty (60) day period but prior to delivery of possession of
the applicable Premises by Landlord to Tenant, terminate the Lease with respect
to that portion of the Premises not so delivered to Tenant. If Tenant terminates
the Lease as provided for in the preceding sentence, the parties shall be
discharged from all obligations under the Lease with respect to that portion of
the Premises not so delivered to Tenant; and provided further that if such
written notice by Tenant is not received by Landlord within said thirty (30) day
period, Tenant shall not have the right to terminate the Lease with respect to
that portion of the Premises, and Landlord shall continue to pay Tenant the Net
Holdover Rent until such time as Landlord delivers the applicable Premises to
Tenant.
(b) If Landlord is unable to deliver possession of the applicable
Premises to Tenant on the delivery date specified in Addendum Paragraph 1, due
to a "Force Majeure Event", the respective delivery date shall be extended by
the period of the delay caused by the Force Majeure Event. A Force Majeure
Event shall mean fire, earthquake, weather delays or other acts of God, strikes,
boycotts, war, riot, insurrection, embargoes, shortages of equipment, labor or
materials, delays in issuance of governmental permits or approvals, or any other
cause beyond the reasonable control of Landlord. The provisions of Section 9.1
of the Lease regarding Landlord or Tenant's options to terminate the Lease shall
apply to a Force Majeure Event.
(c) Tenant acknowledges that the tenant who currently leases Premises
D has an option to renew its lease and accordingly Tenant's right to lease
Premises D is contingent on the existing tenant not exercising its option to
renew. In the event the existing tenant of Premises D exercises its option to
renew, Tenant shall no longer have the right to lease Premises D, and Landlord
shall have no obligation to lease Premises D to Tenant.
3. OPERATING EXPENSES AND REAL ESTATE TAXES. Notwithstanding anything to
----------------------------------------
the contrary in the definition of "Real Estate Taxes and Operating Expenses,"
Real Estate Taxes and Operating Expenses shall not include the following:
(a) Costs of repairs, restoration, replacements or other work
occasioned by (1) fire, windstorm or other casualty of an insurable nature
(whether such destruction be total or partial) to the extent that Landlord
is reimbursed by insurance, (2) the gross negligence or intentional tort of
Landlord, or any subsidiary or affiliate of Landlord, or (3) the act of any
other tenant in the Building, or any other tenant's agents, employees,
licensees or invitees to the extent Landlord has the right to recover the
applicable cost from such person;
(b) Leasing commissions, attorneys' fees, costs, disbursements and
other expenses incurred in connection with negotiations for leases with
tenants, other occupants, or prospective tenants or other occupants of the
Building, or similar costs incurred in connection with disputes with
tenants, other occupants, or prospective tenants;
(c) Allowances, concessions and other costs and expenses incurred in
completing, fixturing, furnishing, renovating or otherwise improving,
decorating or redecorating space for tenants (including Tenant),
prospective tenants or other occupants and prospective occupants of the
Building, or vacant, leasable space in the Building;
(d) Costs specifically billed to and paid by specific tenants;
(e) Payments of principal and interest or other finance charges made
on any debt and rental payments made under any ground or underlying lease
or leases;
Add-2
(f) Costs incurred in connection with the sales, financing,
refinancing, mortgaging, selling or change of ownership of the Building,
including brokerage commissions, attorneys' and accountants' fees, closing
costs, title insurance premiums, transfer taxes as a result of such action,
interest charges;
(g) Costs, fines, interest, penalties, legal fees or costs of
litigation incurred due to the late payment of taxes, utility bills and
other costs incurred by Landlord's failure to make such payments when due;
(h) Costs incurred by Landlord for trustee's fees, partnership
organizational expenses and accounting fees except accounting fees relating
solely to the ownership and operation of the Building;
(i) Depreciation and capital improvement costs, including rental of
same, with respect to the Building, the Project or any equipment,
machinery, fixtures or improvements therein, except for the cost of
improvements or equipment which are capital in nature and which are
installed for the purpose of either (1) reducing Operating Expenses, or (2)
of complying with any laws, ordinances, rules and regulations first taking
effect after the Premises A Commencement Date (and all such permitted
capital costs shall be amortized on a straight-line basis over the useful
life of the capital investment items, such useful life being determined in
accordance with real estate industry standards, with only the annual
amortized portion being included in Operating Expenses for any Comparison
Year);
(j) Landlord's general corporate overhead and general and
administrative expenses;
(k) Landlord's net income and franchise taxes;
(l) All amounts which would otherwise be included in operating
expenses which are paid to any affiliate or subsidiaries of Landlord, or
any representative, employee or agent of the same, to the extent the costs
of such services exceed the competitive rates for similar services of
comparable quality rendered by persons or entities of similar skill,
competence and experience;
(m) Costs or expenses of utilities directly metered to tenants of the
Building and payable separately by such tenants;
(n) Increased insurance premiums caused by Landlord's or any other
tenant's hazardous acts;
(o) Advertising and promotional costs associated with the leasing of
the Building;
(p) Costs incurred to correct violations by Landlord of any law,
rule, order or regulation which was in effect as of the Premises A
Commencement Date;
(q) Costs incurred for any items to the extent of Landlord's recovery
under a manufacturer's, materialman's, vendor's or contractor's warranty;
(r) Compensation paid to officers of Landlord or officers of the
management agent who are not involved in the operation, management,
maintenance or repair of the Building; and
(s) Management fees in excess of 4% of gross revenues collected.
Add-3
4. RIGHT TO AUDIT. Section 4.2(f) of the Lease is hereby modified by
--------------
adding the following at the end of such Section 4.2(f): "If Tenant disputes the
amount of actual Operating Expenses set forth in Landlord's statement (the
"Statement"), Tenant shall have the right, at Tenant's expense, not later than
ninety (90) days following receipt of such Statement, to inspect Landlord's
books and records which directly relate to the Operating Expenses for the
calendar year which is the subject of the Statement. The audit shall take place
at the offices of Landlord where its books and records are located at a mutually
convenient time during Landlord's regular business hours provided, however, that
Tenant's right to audit shall be limited to the ninety (90) day period following
the date that Landlord gives Tenant such Statement. If Tenant disputes
Landlord's calculations or determination (Tenant's notice must be given within
ten (10) days after the ninety (90) day period referred to herein), such dispute
shall be resolved by a public accounting firm reasonably acceptable to each
party. If such audit determines that an error has been made in Landlord's
determination and calculation which results in Tenant having paid an amount in
excess of the actual Operating Expenses by ten percent (10%) or more, Landlord
shall pay for the fees and expenses of such firm, otherwise, Tenant shall pay
for such fees and expenses. Upon final resolution of the matter, Tenant shall
pay any shortfall to Landlord within thirty (30) days after the audit, or in the
alternative, if the audit determined that Tenant made an overpayment to Landlord
on account of Operating Expenses, Landlord shall reimburse Tenant for such
overpayment within thirty (30) days after the audit."
5. OPERATING EXPENSES. Section 4.2 of the Lease is hereby modified by
------------------
adding the following new subsection (h) therein:
"(h) Notwithstanding anything to the contrary in this Section 4.2,
Tenant shall not be obligated to pay to Landlord its share of increases in
Operating Expenses to the extent that such increases exceed six percent (6%) of
the previous calendar year's Operating Expenses provided, however, that there
shall be no limitation on the payment by Tenant of increases in Operating
Expenses that cannot be controlled by Landlord (e.g., utility costs, insurance
----
costs, real property tax increases and any other costs that are beyond
Landlord's reasonable control)."
6. BASE RENT INCREASE. Section 4.3 of the Lease is hereby deleted in its
-------------------
entirety and the following Section 4.3 is substituted in its place: "The Base
Rent set forth in Section 1.8 hereinabove shall be increased by two percent (2%)
per annum on each anniversary of the Commencement Date for Premises A, B, C and
D, respectively, (unless the applicable Commencement Date is other than the
first day of a month, in which event the Base Rent shall be adjusted annually on
the first day of the calendar month following the applicable Commencement Date)
during the Term of the Lease as follows:
PREMISES A (46,386 RENTABLE SQUARE FEET):
-----------------------------------------
Lease Period Annual Base Rent Monthly Base Rent
1/1/97-12/31/97 $811,755.00 $ 67,646.25
1/1/98-12/31/98 $827,990.16 $ 68,999.18
1/1/99-12/31/99 $844,549.92 $ 70,379.16
1/1/00-12/31/00 $861,440.88 $ 71,786.74
1/1/01-12/31/01 $878,669.64 $ 73,222.47
1/1/02-12/31/02 $896,243.04 $ 74,686.92
1/1/03-12/31/03 $914,167.92 $ 76,180.66
1/1/04-12/31-04 $932,451.24 $ 77,704.27
1/1/05-12/31/05 $951,100.32 $ 79,258.36
1/1/06-12/31/06 $970,122.36 $ 80,843.53
Add-4
PREMISES B (11,081 RENTABLE SQUARE FEET):
-----------------------------------------
Lease Period in Months Annual Base Rent Monthly Base Rent
1-12 $193,917.48 $ 16,159.79
13-24 $197,795.88 $ 16,482.99
25-36 $201,751.80 $ 16,812.65
37-48 $205,786.80 $ 17,148.90
49-60 $209,902.56 $ 17,491.88
61-72 $214,100.64 $ 17,841.72
73-84 $218,382.60 $ 18,198.55
85-96 $222,750.24 $ 18,562.52
97-108 $227,205.24 $ 18,933.77
109-End of Term $231,749.40 $ 19,312.45
PREMISES C (16,527 RENTABLE SQUARE FEET):
-----------------------------------------
Lease Period in Months Annual Base Rent Monthly Base Rent
1-12 $289,222.56 $ 24,101.88
13-24 $295,007.04 $ 24,583.92
25-36 $300,907.20 $ 25,075.60
37-48 $306,925.32 $ 25,577.11
49-60 $313,063.80 $ 26,088.65
61-72 $319,325.04 $ 26,610.42
73-84 $325,711.56 $ 27,142.63
85-96 $332,225.76 $ 27,685.48
97-108 $338,870.28 $ 28,239.19
109-End of Term $345,647.64 $ 28,803.97
PREMISES D (11,838 RENTABLE SQUARE FEET):
-----------------------------------------
Lease Period in Months Annual Base Rent Monthly Base Rent
1-12 $207,165.00 $ 17,263.75
13-24 $211,308.36 $ 17,609.03
25-36 $215,534.52 $ 17,961.21
37-48 $219,845.16 $ 18,320.43
49-60 $224,242.08 $ 18,686.84
61-72 $228,726.96 $ 19,060.58
73-84 $233,301.48 $ 19,441.79
85-96 $237,967.56 $ 19,830.63
97-108 $242,726.88 $ 20,227.24
109-End of Term $247,581.36 $ 20,631.78"
7. SECURITY DEPOSIT. Section 5 of the Lease is hereby amended by adding
----------------
the following at the end of Section 5:
"(a) The security deposit shall be in the form of cash or, at Tenant's
option, an irrevocable letter of credit (the "Security Deposit L/C"). If the
security deposit is in the form of letter of credit, the Security Deposit L/C
shall be delivered to Landlord at Tenant's sole cost and expense. The Security
Deposit L/C shall be issued by and drawn on a bank reasonably acceptable to
Landlord, in Landlord's sole discretion, and shall name Landlord as Beneficiary.
If the maturity date of the Security Deposit L/C is prior to the end of the Term
of the Lease, Tenant shall renew the Security Deposit L/C as often as is
necessary with the same bank or financial institution (or a similar bank or
financial institution reasonably acceptable to Landlord) and upon the same terms
and conditions, not less than thirty (30) days prior to the purported expiration
date of the Security Deposit L/C. In the event that Tenant fails to timely renew
the Security Deposit L/C as aforesaid, Landlord shall be entitled to draw
against the entire amount of the Security Deposit L/C. The Security Deposit L/C
shall be assignable by Landlord
Add-5
and upon such assignment to any party assuming in writing the lessor interest in
this Lease, Landlord shall be relieved from all liability to Tenant therefor.
"(b) Upon the occurrence of any default by Tenant in the payment of Base
Rent (and the expiration of any applicable notice or cure periods) or upon the
occurrence of the events described in Section 13.1 of the Lease (and following
any applicable notice or cure periods) or in the event that Landlord terminates
this Lease in accordance with the terms hereof following a default by Tenant,
Landlord shall have the right to draw the entire amount of the Security Deposit
L/C. In the event that Tenant defaults (after the expiration of any applicable
notice or cure periods) in making any money payment required to be made by
Tenant under the terms of this Lease other than the payment of Base Rent, then
Landlord shall be entitled to draw upon so much of the Security Deposit L/C as
equals the defaulted payment(s), plus any interest or other charges due thereon
in accordance with this Lease, plus an additional ten percent (10%) of such
total. If Landlord elects to make a partial draw upon the Security Deposit L/C,
Tenant shall promptly restore the Security Deposit L/C to its original amount.
Landlord's election to make a partial draw upon the Security Deposit L/C shall
in no event prejudice or waive Landlord's right to terminate this Lease if
permitted under applicable provisions of this Lease, nor shall such election
prejudice or waive any other remedy of Landlord reserved under the terms of this
Lease, including the right to draw the entire amount of the Security Deposit
L/C, if applicable. The Security Deposit L/C shall be available for payment
against the presentation of a sight draft by the Landlord (with simultaneous
notice to Tenant) together with a certificate from Landlord that Tenant is in
default of its obligations hereunder beyond expiration of any applicable notice
and cure periods and that Landlord is entitled, by the terms of this Lease, to
draw upon the Security Deposit L/C. The proceeds of the Security Deposit L/C, if
drawn by Landlord pursuant to the terms hereof, shall be held by Landlord and
applied to reduce any amount owed by Tenant to Landlord. Interest shall be
payable in accordance with Section 5 of the Lease for any Security Deposit L/C
proceeds held on account.
"(c) In the event that (1) Landlord draws the full amount of the Security
Deposit L/C as a result of a default by Tenant, (2) this Lease is not terminated
by Landlord as a result of such default, (3) such default is fully cured by
Tenant, and (4) there is no outstanding uncured default by Tenant, then the
balance of the sums drawn (after the payment of any sums related to the curing
of any defaults) shall be applied first to obtain a replacement letter of credit
as security for Tenant's performance hereunder, and the remaining balance, if
any, will be refunded to Tenant. Upon the termination of this Lease and the
payment in full to Landlord of all damages, costs and expenses to which Landlord
is entitled, the balance of any funds drawn from the Security Deposit L/C after
satisfying such obligations in full shall be refunded to Tenant.
"(d) To the extent that the Security Deposit L/C is either lost or the
issuing bank will not honor the Security Deposit L/C, Xxxxx personally
guarantees the proceeds of the Security Deposit L/C and will immediately remit
to Landlord the amount of the Security Deposit in cash to be held in accordance
with this Section 5 of the Lease."
8. CONDITION OF PREMISES. Section 6.3 of the Lease is hereby amended by
---------------------
adding the following to the end of Section 6.3:
"Landlord warrants to Tenant that, to the best of Landlord's knowledge, the
Building, in the state existing on the date this Lease is executed by Landlord
and Tenant, but without regard to alterations or improvements to be made by
Tenant or the use for which Tenant will occupy the Premises, does not violate
any covenants or restrictions of record, or any applicable building code,
regulation or ordinance in effect on such date (collectively, "Law(s)"). To the
extent that the Landlord receives any notice from a governmental entity that the
Building is not in compliance with the Americans with Disabilities Act ("ADA")
or any other Law and the Landlord is obligated pursuant to a final determination
to undertake action in order to comply with ADA or any other Law, then in such
event Landlord agrees to undertake such
Add-6
remedial action at Landlord's sole cost and expense. To the extent that such
notice requires action with regard to Tenant's particular use of the Premises,
Tenant shall be obligated to undertake such action at Tenant's sole cost and
expense."
9. ALTERATIONS AND ADDITIONS. Section 7.3(a) of the Lease is hereby
-------------------------
modified by inserting the following at the end of such Section 7.3(a):
"Notwithstanding anything to the contrary in Section 7.3(a), Tenant shall have
the right to make cosmetic, non-structural Alterations to the Premises without
obtaining Landlord's prior written consent, provided that Tenant provides
Landlord with prior written notice of its intention to make such Alterations
together with the plans and specifications for the same. To the extent
Landlord's consent is required pursuant to subsection (a) herein, Landlord
agrees to notify Tenant concurrently with Landlord's decision concerning such
Alteration whether Landlord will require Tenant to remove such Alteration at the
of the Term. For purposes of the Lease, it shall be deemed reasonable for
Landlord to require Tenant to perform Alterations during non-business hours if
such Alterations will create unreasonable noise, noxious fumes or otherwise
interfere with the quiet enjoyment of the other tenants in the Building."
10. UTILITIES.
---------
a. Notwithstanding anything to the contrary contained in subsection
11.3 of the Lease, payments by Tenant to Landlord for after hours HVAC shall be
equal to Landlord's actual out-of-pocket costs plus a ten percent (10%)
administrative fee.
b. Notwithstanding anything contained in Section 11 to the contrary,
if any interruption of utilities or services shall continue for more than three
(3) consecutive business days and shall render all or any portion of the
Premises unusable for the normal conduct of Tenant's business, and if Tenant
does not in fact use or occupy such portion of the Premises, then all Base Rent
and additional rent payable hereunder with respect to such portion of the
Premises which Tenant does not occupy shall be abated from and after such third
(3rd) business day until full use of such portion of the Premises is restored to
Tenant.
11. ASSIGNMENT AND SUBLETTING. Notwithstanding anything to the contrary
-------------------------
contained in Section 12 of the Lease, Tenant shall have the right, without
Landlord's consent, upon thirty (30) days advance written notice to Landlord, to
assign this Lease or sublet the whole or any part of the Premises to any entity
which is owned by Tenant or which owns Tenant; provided, that such assignment or
sublease is subject to the satisfaction of the following conditions:
(a) Tenant shall remain fully liable under the terms of the Lease;
(b) In addition to the requirements of this Addendum section, any
such assignment or sublease shall be subject to all of the terms,
covenants and conditions of the Lease;
(c) Landlord shall not be liable to any subtenant;
(d) The assignment or sublease will not cause Landlord to be in
violation of its obligations under another lease or agreement to which Landlord
is a party;
(e) The use of the Premises by the assignee or subtenant must be
identical to the Tenant's use of the Premises;
(f) Prior to the date an assignment or sublease will take effect, the
assignee or subtenant and Tenant shall enter into Landlord's standard consent to
sublease agreement, attached hereto as Exhibit E or consent to assignment
agreement;
(g) Prior to the date an assignment or sublease will take effect, any
guarantor of Tenant's obligations under the Lease shall give its written consent
to the assignment or sublease and shall acknowledge that the guaranty shall
remain in full force and effect following the assignment or subletting; and
Add-7
(h) Prior to the date an assignment or sublease will take effect,
Tenant shall pay the reasonable costs and expenses (including legal fees)
incurred by Landlord in confirming that the assignment or sublease meets the
requirements of this Addendum section and in preparing any consent to sublease
agreement or consent to assignment agreement.
12. PARKING.
-------
a. Section 16.1 of the Lease is hereby modified by adding the
following to the end of Section 16.1: "If Tenant, Tenant's invitees and/or
agents should utilize more than 3.4 spaces per 1,000 square feet of space in the
Premises ("Parking Allotment"), and such over usage continues for more than five
(5) days after notice thereof from Landlord to Tenant, Landlord shall have the
right, in addition to such other rights and remedies that it may have, to
institute a parking plan, including but not limited to, any or all of following
actions, at Tenant's sole expense, in order to ensure that the Parking Allotment
is adhered to by Tenant:
(i) segregate Tenant's parking spaces, i.e., assign tandem
parking spaces or special areas for Tenant's parking);
(ii) to implement a parking sticker program; and/or
(iii) to provide Tenant with off-site parking and shuttle service
to the Building.
b. In addition to the foregoing, Tenant hereby agrees that Landlord
upon Landlord's good faith determination that a problem exists, shall have the
right from time to time, at Tenant's expense, to monitor the parking of Tenant's
vehicles to determine if Tenant is utilizing in excess of the Parking Allotment.
Tenant shall be responsible for all costs associated with the evaluation,
implementation and monitoring of the parking, including, but not limited to, any
fees paid to consultants. Any expenses incurred pursuant to this Paragraph 12
shall be deemed "rent" under the Lease and shall be due within thirty (30) days
after Landlord delivers to Tenant a statement of the amount(s) incurred as a
result of maintaining the Parking Allotment.
13. INDEMNITY BY LANDLORD. Notwithstanding the provisions of Sections 20
---------------------
and 21 of the Lease to the contrary, Tenant shall not be required to indemnify
and hold Landlord harmless from any loss, cost, liability, damage or expense
(collectively "Claims"), to any person, property or entity resulting from the
negligence or willful misconduct of Landlord or its agents or employees, in
connection with Landlord's obligations under the Lease, and Landlord hereby
indemnifies and saves Tenant harmless from any such Claims. Tenant's agreement
to indemnify and hold Landlord harmless set forth above are not intended to, and
shall not relieve any insurance carrier of its obligations under policies
required to be carried by Landlord or Tenant pursuant to the provisions of the
Lease to the extent that such policies cover the results of such acts or
conduct.
14. TENANT IMPROVEMENTS. Section 24 of the Lease is hereby deleted in its
-------------------
entirety and the following Section 24 is hereby substituted in lieu thereof:
"Tenant shall construct the tenant improvements ("Improvements") for Premises A,
Premises B, Premises C and Premises D in accordance with the Work Letter
Agreement attached hereto as Schedule 1. Landlord hereby grants to Tenant an
----------
allowance for the Improvements (the "Improvement Allowance") of Eighteen and
60/100 Dollars per square foot of space in the Premises. The Improvement
Allowance shall only be used for the items specified in the Cost Breakdown as
defined in the Work Letter Agreement. The Improvement Allowance for Premises A
may only be used to construct Improvements to Premises A; the Improvement
Allowance for Premises B may only be used to construct Improvements to Premises
B; the Improvement Allowance for Premises C may only be used to construct
Improvements to Premises C and the Improvement Allowance for Premises D may only
be used to construct Improvements to Premises D. In addition thereto, if Tenant
does not fully draw down the
Add-8
Improvement Allowance for a particular space within one hundred twenty (120)
days of the date that particular Premises is delivered to Tenant, then any
unused portion of that particular Improvement Allowance shall not be paid or
refunded to Tenant or be available to Tenant as a credit against any obligations
of Tenant under the Lease. Notwithstanding the foregoing, if Tenant has not
fully drawn down the Improvement Allowance for a particular space within the
aforesaid one hundred twenty (120) day period, but Tenant is diligently pursuing
completion of the Tenant Improvements, Landlord shall grant Tenant such
additional time as is reasonable to complete the Improvements.
15. EXPANSION SPACE OPTION.
----------------------
(a) Subject to the provisions of Section 26 of the Lease, and
provided that Tenant is not in default at the time of Tenant's exercise of the
Option, Tenant shall have the one-time Option to expand into 19,514 rentable
square feet of space on the second (2nd) floor of the Building and currently
known as Suite 200 (the "Expansion Space"), as shown on Exhibit A-2 attached
hereto. Tenant shall provide to Landlord on a date that is between September 1,
1998 and November 1, 1998, written notice of Tenant's exercise of the Option to
expand into the Expansion Space, time being of the essence. Such notice shall be
given in accordance with Section 40 of the Lease. If notification of the
exercise of this Option is not so given and received, the Expansion Space Option
granted herein shall automatically expire, and Tenant shall have no further
Option to expand into the Expansion Space. Landlord shall notify Tenant within
thirty (30) days following Tenant's exercise of the Option when Landlord
anticipates delivering the Expansion Space to Tenant. Landlord agrees to use
best efforts to deliver the Expansion Space to Tenant no later than December 31,
1999. Such efforts shall include evicting the existing tenant if the existing
tenant remains in a holdover of its lease. If Landlord is unsuccessful in
delivering the Expansion Space to Tenant by December 31, 1999, Landlord shall
have an additional sixty (60) days to deliver the Expansion Space to Tenant
provided that during said sixty (60) day period Landlord shall pay to Tenant, to
the extent Landlord receives holdover rent from the existing tenant, fifty
percent (50%) of the Net Holdover Rent (as defined in Paragraph 2 of the
Addendum). If Landlord shall not have delivered possession of the Expansion
Space within said sixty (60) days, Tenant may, at Tenant's option, by notice in
writing to Landlord within thirty (30) days after the expiration of the sixty
(60) day period but prior to delivery of the Expansion Space by Landlord to
Tenant, rescind its option to lease the Expansion Space. If Tenant rescinds its
option as provided for in the preceding sentence, the parties shall be
discharged from all obligations under the Lease with respect to the Expansion
Space.
(b) If Tenant leases the Expansion Space, the commencement date of
the Lease with respect to the Expansion Space shall be the earlier to occur of:
(i) the date the tenant improvements for the Expansion Space are completed, or
(ii) ninety (90) days after the date Landlord delivers the Expansion Space to
Tenant. The Base Rent payable for the Expansion Space shall be at the same Base
Rent rate in effect for Premises A at the beginning of the Term with respect to
the Expansion Space and shall be increased by two percent (2%) per annum on each
anniversary date of the Commencement Date of the Lease applicable to the
Expansion Space. The Improvement Allowance applicable to the Expansion Space
shall be equal to One and 86/100 Dollars ($1.86) per square foot of space in the
Expansion Space per year for the number of years remaining in the Term. (For
example, if the Expansion Space is taken with six (6) years remaining in the
Term x $1.86 per year = an Improvement Allowance of $11.16 per square foot
attributable to the Expansion Space.) Tenant shall construct the Improvements
for the Expansion Space in accordance with the terms and conditions of Schedule
--------
1 attached hereto. All other terms and conditions of the Lease shall remain the
-
same.
16. 00 XXXX XXXX XXXXX SPACE OPTION. Subject to the provisions of Section
-------------------------------
26 of the Lease, and provided that Tenant is not in default at the time of
Tenant's
Add-9
exercise of the Option, Tenant shall have the one-time Option to expand into
10,914 rentable square feet of space on the first (1st) floor of the building
located at 00 Xxxx Xxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx and currently known as Suite
130 (the "40 West Xxxx Space"). Tenant shall provide to Landlord on a date that
is between January 1, 1998 and April 1, 1998, written notice of Tenant's
exercise of the Option to expand into the 40 West Xxxx Space, time being of the
essence. Such notice shall be given in accordance with Section 40 of the Lease.
If notification of the exercise of this Option is not so given and received, the
40 West Xxxx Space Option granted herein shall automatically expire, and Tenant
shall have no further Option to expand into the 40 West Xxxx Space. Landlord
shall notify Tenant within thirty (30) days following Tenant's exercise of the
Option when Landlord anticipates delivering the 40 West Xxxx Space to Tenant.
Landlord agrees to use best efforts to deliver the 40 West Xxxx Space to Tenant
no later than December 31, 1998. Such efforts shall include evicting the
existing tenant if the existing tenant remains in a holdover of its lease. If
Landlord is unsuccessful in delivering the 40 West Xxxx Space to Tenant by
December 31, 1998, Landlord shall have an additional sixty (60) days to deliver
the 40 West Xxxx Space to Tenant provided that during said sixty (60) day period
Landlord shall pay to Tenant, to the extent Landlord receives holdover rent from
the existing tenant, fifty percent (50%) of the Net Holdover Rent (as defined in
Paragraph 2 of the Addendum). If Landlord shall not have delivered possession of
the 40 West Xxxx Space within said sixty (60) days, Tenant may, at Tenant's
option, by notice in writing to Landlord within thirty (30) days after the
expiration of the sixty (60) day period but prior to delivery of the 40 West
Xxxx Space by Landlord to Tenant, rescind its option to lease the 40 West Xxxx
Space. If Tenant rescinds its option as provided for in the preceding sentence,
the parties shall be discharged from all obligations under the Lease with
respect to the 40 West Xxxx Space. The Base Rent payable for the 40 West Xxxx
Space shall be the Fair Market Rent, as defined below, for the 40 West Xxxx
Space at the time of the estimated commencement date of the Lease with respect
to the 40 West Xxxx Space. If the parties cannot agree upon the Fair Market
Rental of the 40 West Xxxx Space, then the provisions of Paragraph 18(b) of the
Addendum shall apply. The term of the Lease applicable to the 40 West Xxxx Space
shall be, at Tenant's option: (i) five (5) years or (ii) coterminous with the
term of the existing Lease.
17. RIGHT OF FIRST OFFER. Subject to the provisions of Section 26 of this
--------------------
Lease, and provided that Tenant is not in default hereunder at the time of
Tenant's exercise of the Option, and subject to all other options held by
existing tenants of the Project (as defined in Section 2.1 of the Lease), Tenant
shall have a one time right of first offer on any space that becomes available
in the Project (the "Option Space"). Prior to leasing the Option Space, Landlord
shall give Tenant written notice of its intent to lease the Option Space. Tenant
may exercise such right only as to all of the Option Space described in the
Landlord's notice, and not to merely a part of such Option Space. Tenant shall
have ten (10) business days in which to provide Landlord with written notice of
its election to exercise such right. The Base Rent payable for the Option Space
shall be at the current rental rate for Premises A at the beginning of the Term
applicable to the Option Space and shall be increased by two percent (2%) per
annum on each anniversary date of the Commencement Date of the Lease applicable
to the Option Space. If Tenant does not give Landlord written notice of its
election to lease such Option Space or terms and conditions are not agreed upon
within the ten (10) business day period, Landlord shall thereafter be free to
lease such Option Space to a third party on any terms and conditions that
Landlord shall select, with no further obligation to Tenant. In the event that
Landlord offers any space to Tenant pursuant to this right of first offer, and
Tenant elects not to lease the space, the space so offered shall no longer be
subject to this right of first offer, and thereafter Landlord shall not be
obligated to offer said space to Tenant.
Add-10
18. OPTION TO RENEW.
----------------
(a) Subject to the provisions of Section 26 of the Lease, and
provided that Tenant is not in default at the time of Tenant's exercise of the
Option or at the commencement of the extended term, Tenant shall have two (2)
five (5) year Options to renew this Lease. Tenant shall provide to Landlord on a
date which is prior to the date that each option period would commence (if
exercised) by at least two hundred seventy (270) days and not more than three
hundred sixty days (360) days, a written notice of the exercise of the option to
extend the Lease for the additional Option term, time being of the essence. Such
notice shall be given in accordance with Section 40 of the Lease. If
notification of the exercise of either Option is not so given and received, all
Options granted hereunder shall automatically expire. Base Rent applicable to
the Premises for each Option term shall be equal to the "Fair Market Rental" as
hereinafter defined. All other terms and conditions of the Lease shall remain
the same.
(b) If Tenant exercises an Option, Landlord shall then propose the
Fair Market Rental by using its good faith judgment. Landlord shall provide
Tenant with written notice of such amount within fifteen (15) days after Tenant
exercises an Option. Tenant shall have fifteen (15) days ("Tenant's Review
Period") after receipt of Landlord's notice of the new base rent within which to
accept such rental. In the event Tenant fails to accept in writing such rental
proposal by Landlord, then such proposal shall be deemed rejected and Landlord
and Tenant shall attempt to agree upon such Fair Market Rental, using their best
good faith efforts. If Landlord and Tenant fail to reach agreement within
fifteen (15) days following Tenant's Review Period ("Outside Agreement Date")
then the parties shall each within ten (10) days following the Outside Agreement
Date appoint a real estate broker who shall be licensed in the State of Maryland
and who specializes in the field of commercial office space leasing in the
Rockville, Maryland market, has at least five (5) years of experience and is
recognized within the field as being reputable and ethical. If one party does
not timely appoint a broker, then the broker appointed by the other party shall
promptly appoint a broker for such party. Such two individuals shall each
determine within ten (10) days after their appointment such base rent. If such
individuals do not agree on base rent, then the two individuals shall, within
five (5) days, render separate written reports of their determinations and
together appoint a third similarly qualified individual having the
qualifications described above. If the two brokers are unable to agree upon a
third broker, the third broker shall be appointed by the President of the
District of Columbia Board of Realtors. In the event the District of Columbia
Board of Realtors is no longer in existence, the third broker shall be appointed
by the President of its successor organization. If no successor organization is
in existence, the third broker shall be appointed by the Chief Judge of the
Circuit Court of Xxxxxxxxxx County, Maryland. The third individual shall within
ten (10) days after his or her appointment make a determination of such base
rent. The third individual shall determine which of the determinations of the
first two individuals is closest to his own and the determination that is
closest shall be final and binding upon the parties, and such determination may
be enforced in any court of competent jurisdiction. Landlord and Tenant shall
each bear the cost of its broker and shall share equally the cost of the third
broker. Upon determination of the base rent payable pursuant to this Section,
the parties shall promptly execute an amendment to this Lease stating the rent
so determined.
(c) The term "Fair Market Rental" shall mean the annual amount per
rentable square foot that a willing, comparable renewal tenant would pay and a
willing, comparable landlord of a similar office building would accept at arm's
length for similar space, giving appropriate consideration to the following
matters: (i) annual rental rates per rentable square foot; (ii) the type of
escalation clauses (including, without limitation, operating expense, real
estate taxes, and CPI) and the extent of liability under the escalation clauses
(i.e., whether determined on a "net lease" basis or by increases over a
particular base year or base dollar amount); (iii) rent abatement
Add-11
provisions reflecting free rent and/or no rent during the lease term; (iv)
length of lease term; (v) size and location of premises being leased; and (vi)
other generally applicable terms and conditions of tenancy for similar space;
provided, however, Tenant shall not be entitled to any tenant improvement or
refurbishment allowance. The Fair Market Rental may also designate periodic
rental increases, a new Base Year and similar economic adjustments. The Fair
Market Rental shall be the Fair Market Rental in effect as of the beginning of
the Option period, even though the determination may be made in advance of that
date, and the parties may use recent trends in rental rates in determining the
proper Fair Market Rental as of the beginning of the Option period.
19. TENANT'S OPTION TO TERMINATE. Subject to the provisions of Section 26
----------------------------
of the Lease, and provided that Tenant is not in default at the time of Tenant's
exercise of the Option, Tenant shall have one (1) option to terminate this
Lease. The termination date shall be January 1, 2004 (the "Termination Date").
Tenant shall provide to Landlord on or before January 1, 2003 (the "Notice
Date") written notice of the exercise of the Option to terminate this Lease,
time being of the essence. Such notice shall be given in accordance with Section
40 of the Lease. If notification of the exercise of this Option is not so given
and received, the Option granted hereunder shall automatically expire. As a
condition to the effectiveness of this Option, Tenant shall pay to Landlord on
the Notice Date an amount equal to: (i) one hundred percent (100%) of all
unamortized out-of-pocket costs and expenses incurred by Landlord in connection
with the Lease, including, but not limited to, brokerage fees, legal fees,
unamortized tenant improvement and architectural costs, as detailed by Landlord
in a written statement, plus (ii) Two Million Eight Hundred Thousand and 00/100
Dollars ($2,800,000.00) (items (i) and (ii) are, collectively, the "Termination
Payment"). The Termination Payment is in addition to payment by the Tenant of
all other amounts payable by Tenant to Landlord pursuant to the Lease prior to
the Termination Date.
20. SIGNS. Section 46 of the Lease is hereby amended by adding the
-----
following at the end of Section 46: "Provided Tenant occupies at least 46,386
square feet of space in the Building, Tenant shall have the exclusive right to
install signage on the exterior facade of the Building, excluding soffits,
depicting Tenant's logo and logotype, the size, color, location and installation
of which are subject to Landlord's prior written approval (but subject to
compliance with all applicable codes). Tenant shall be responsible for
obtaining all applicable governmental approvals and permits."
21. STORAGE SPACE LEASE. Subject to and upon the terms set forth in this
-------------------
Xxxxxxxxx 00, Xxxxxxxx leases approximately Three Thousand Eight Hundred Sixty-
Four (3,864) square feet on the lower level in the Building more particularly
set forth on Exhibit A-1 attached hereto ("Premises E") to Tenant, and Tenant
-----------
leases Premises E from Landlord.
(a) Landlord shall deliver Premises E to Tenant in its as-is
condition existing on the date this Lease is fully executed by Landlord and
Tenant and Landlord shall have no obligation to construct improvements to
Premises E, provided, however, if local zoning/building codes require a bathroom
to be installed, said installation shall be paid by Tenant, and shall be
constructed in accordance with Section 7 of the Lease.
(b) Tenant's lease of Premises E shall be coterminous with the Term
of the Lease for the Premises. During the initial term of the Lease, and subject
to adjustment as hereinafter provided, Tenant shall pay Base Rent equal to
Eleven Dollars and 95/100 ($11.95) per rentable square foot ("Storage Base
Rent") without offset of deduction on the first day of each calendar month.
Tenant shall commence payment of the Storage Base Rent on April 1, 1997, and
during the Term hereof, Storage Base Rent shall be increased two percent (2%) on
each January 1 thereafter, as follows:
Add-12
PREMISES E (3,864 RENTABLE SQUARE FEET):
----------------------------------------
Lease Period Annual Base Rent Monthly Base Rent
4/1/97-12/31/97 $46,174.80 $3,847.90
1/1/98-12/31/98 $47,098.32 $3,924.86
1/1/99-12/31/99 $48,040.32 $4,003.36
1/1/00-12/31/00 $49,001.16 $4,083.43
1/1/01-12/31/01 $49,981.20 $4,165.10
1/1/02-12/31/02 $50,980.80 $4,248.40
1/1/03-12/31/03 $52,000.44 $4,333.37
1/1/04-12/31-04 $53,044.44 $4,420.37
1/1/05-12/31/05 $54,105.36 $4,508.78
1/1/06-12/31/06 $55,187.52 $4,598.96
(c) Commencing April 1, 1998, Tenant shall pay Tenant's Share of
increases in Operating Expenses for Premises E in the manner provided in Section
4.2 of this Lease, including, but not limited to, the provision that the Base
Year Operating Expenses shall include an expense component for electricity of
One and 65/100 Dollars ($1.65) per square foot and that any increases in
electricity over the $1.65 per square foot component in any Comparison Year
shall be paid by Tenant regardless of the total amount of increases in Operating
Expenses over the Base Year.
(d) Tenant shall use Premises E for a storage room, a computer room,
a mail room, a reprographics room and related back office use.
(e) Except as otherwise provided in this Paragraph 21, the terms and
conditions of this lease of Premises E shall be as set forth in this Lease with
respect to the Premises.
Add-13
EXHIBIT A
[FLOORING DEPICTING 5TH FLOOR REFERENCE]
[30 WEST XXXX DRIVE, ROCKVILLE MD]
A-1
EXHIBIT A
[FLOORING DEPICTING 0XX XXXXX XXXXXXXXX]
[00 XXXX XXXXX, XXXXXXXXX MD]
A-2
EXHIBIT A
[FLOORING DEPICTING 3RD FLOOR REFERENCE]
[30 WEST XXXX DRIVE, ROCKVILLE MD]
A-4
EXHIBIT A
[FLOORING DEPICTING 1ST FLOOR REFERENCE]
[30 WEST XXXX DRIVE, ROCKVILLE MD]
X-0
XXXXXXX X-0
PREMISES E FLOOR PLAN
[TO BE INSERTED]
A1-1
EXHIBIT A-1
[FLOORING DEPICTING LOWER LEVEL REFERENCE]
[30 WEST XXXX DRIVE, ROCKVILLE MD]
EXHIBIT A-2
EXPANSION SPACE FLOOR PLAN
[TO BE INSERTED]
A2-1
EXHIBIT A-2
[FLOORING DEPICTING 2ND FLOOR REFERENCE]
[30 WEST XXXX DRIVE, ROCKVILLE MD]
EXHIBIT B
VERIFICATION LETTER
AMISYS MANAGED CARE SYSTEMS, INC., a Delaware corporation,, ("Tenant")
hereby certifies that it has entered into a lease with THE REALTY ASSOCIATES
FUND III, L.P., a Delaware limited partnership, doing business in Maryland as
The Realty Associates Fund III, Limited Partnership ("Landlord") and verifies
the following information as of the _______ day of _______________, 19__:
Number of Rentable Square Feet in Premises: ____________________________
Commencement Date: ____________________________
Lease Termination Date: ____________________________
Tenant's Share: ____________________________
Initial Base Rent: ____________________________
Billing Address for Tenant: ____________________________
____________________________
____________________________
Attention: ____________________________
Telephone Number: ____________________________
Federal Tax I.D. No.: ____________________________
Tenant acknowledges and agrees that all tenant improvements Landlord is
obligated to make to the Premises, if any, have been completed, that Tenant has
accepted possession of the Premises and that as of the date hereof, there exist
no offsets or defenses to the obligations of Tenant under the Lease. Tenant
acknowledges that it has inspected the Premises and found them suitable for
Tenant's intended commercial purposes.
TENANT
AMISYS MANAGED CARE SYSTEMS, INC.
By:________________________________
________________________________
(print name)
Its:_______________________________
(print title)
ACKNOWLEDGED AND AGREED TO:
LANDLORD
THE REALTY ASSOCIATES FUND III, L.P., a
Delaware limited partnership, doing
business in Maryland as The Realty
Associates Fund III, Limited
Partnership
By: Realty Associates Fund III GP
Limited Partnership, a Delaware
limited partnership, Its General
Partner
By: Realty Fund III GP, Inc., a
Massachusetts corporation, Its
General Partner
By: ____________________________
Its: ____________________________
B-1
EXHIBIT C
RULES AND REGULATIONS
GENERAL RULES
Tenant shall faithfully observe and comply with the following Rules and
Regulations.
1. Tenant shall not alter any locks or install any new or additional locks or
bolts on any doors or windows of the Premises without obtaining Landlord's prior
written consent. Tenant shall bear the cost of any lock changes or repairs
required by Tenant. Keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord.
2. All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises. Tenant shall assume any
and all responsibility for protecting the Premises from theft, robbery and
pilferage, which includes keeping doors locked and other means of entry to the
Premises closed.
3. Landlord reserves the right to close and keep locked all entrance and exit
doors of the Project except during the Project's normal hours of business as
defined in Section 11.3 of the Lease. Tenant, its employees and agents must be
sure that the doors to the Project are securely closed and locked when leaving
the Premises if it is after the normal hours of business of the Project. Tenant,
its employees, agents or any other persons entering or leaving the Project at
any time when it is so locked, or any time when it is considered to be after
normal business hours for the Project, may be required to sign the Project
register. Access to the Project may be refused unless the person seeking access
has proper identification or has a previously received authorization for access
to the Project. Landlord and its agents shall in no case be liable for damages
for any error with regard to the admission to or exclusion from the Project of
any person. In case of invasion, mob, riot, public excitement, or other
commotion, Landlord reserves the right to prevent access to the Project during
the continuance thereof by any means it deems appropriate for the safety and
protection of life and property.
4. No furniture, freight or equipment of any kind shall be brought into the
Project without Landlord's prior authorization. All moving activity into or out
of the Project shall be scheduled with Landlord and done only at such time and
in such manner as Landlord designates. Landlord shall have the right to
prescribe the weight, size and position of all safes and other heavy property
brought into the Project and also the times and manner of moving the same in and
out of the Project. Safes and other heavy objects shall, if considered
necessary by Landlord, stand on supports of such thickness as is necessary to
properly distribute the weight, and Tenant shall be solely responsible for the
cost of installing all supports. Landlord will not be responsible for loss of
or damage to any such safe or property in any case. Any damage to any part of
the Project, its contents, occupants or visitors by moving or maintaining any
such safe or other property shall be the sole responsibility and expense of
Tenant.
5. The requirements of Tenant will be attended to only upon application at the
management office for the Project or at such office location designated by
Landlord. Tenant shall not ask employees of Landlord to do anything outside
their regular duties without special authorization from Landlord.
6. Tenant shall not disturb, solicit, or canvass any occupant of the Project
and shall cooperate with Landlord and its agents to prevent the same. Tenant,
its employees and agents shall not loiter in or on the entrances, corridors,
sidewalks, lobbies, halls, stairways, elevators, or any Common Areas for the
purpose of smoking tobacco products or for any other purpose, nor in any way
obstruct such areas, and shall use them only as a means of ingress and egress
for the Premises. Smoking shall not be permitted in the Common Areas.
C-1
7. The toilet rooms, urinals and wash bowls shall not be used for any purpose
other than that for which they were constructed, and no foreign substance of any
kind whatsoever shall be thrown therein. The expense of any breakage, stoppage
or damage resulting from the violation of this rule shall be borne by the tenant
who, or whose employees or agents, shall have caused it.
8. Except for vending machines intended for the sole use of Tenant's employees
and invitees, no vending machine or machines other than fractional horsepower
office machines shall be installed, maintained or operated upon the Premises
without the written consent of Landlord.
9. Tenant shall not use or keep in or on the Premises or the Project any
kerosene, gasoline or other inflammable or combustible fluid or material. Tenant
shall not bring into or keep within the Premises or the Project any animals,
birds, bicycles or other vehicles.
10. Tenant shall not use, keep or permit to be used or kept, any foul or
noxious gas or substance in or on the Premises, or permit or allow the Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Project by reason of noise, odors, or vibrations, or to
otherwise interfere in any way with the use of the Project by other tenants.
11. No cooking shall be done or permitted on the Premises, nor shall the
Premises be used for the storage of merchandise, for loading or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' Laboratory approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors of Tenant, provided that such use is in
accordance with all applicable federal, state and city laws, codes, ordinances,
rules and regulations; and provided further that such cooking does not result in
odors escaping from the Premises.
12. Landlord shall have the right to approve where and how telephone wires are
to be introduced to the Premises. No boring or cutting for wires shall be
allowed without the consent of Landlord. The location of telephone call boxes
and other office equipment affixed to the Premises shall be subject to the
approval of Landlord. Tenant shall not xxxx, drive nails or screws, or drill
into the partitions, woodwork or plaster contained in the Premises or in any way
deface the Premises or any part thereof without Landlord's prior written
consent. Tenant shall not install any radio or television antenna, satellite
dish, loudspeaker or other device on the roof or exterior walls of the Project.
Tenant shall not interfere with broadcasting or reception from or in the Project
or elsewhere.
13. Landlord reserves the right to exclude or expel from the Project any person
who, in the judgment of Landlord, is intoxicated or under the influence of
liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.
14. Tenant shall not waste electricity, water or air conditioning and agrees to
cooperate fully with Landlord to ensure the most effective operation of the
Project's heating and air conditioning system, and shall refrain from attempting
to adjust any controls. Tenant shall not without the prior written consent of
Landlord use any method of heating or air conditioning other than that supplied
by Landlord.
15. Tenant shall store all its trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash in the vicinity of the
Project without violation of any law or ordinance governing such disposal. All
trash, garbage and refuse disposal shall be made only through entry-ways and
elevators provided for such purposes at such times as Landlord shall designate.
C-2
16. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
17. No awnings or other projection shall be attached to the outside walls or
windows of the Project by Tenant. No curtains, blinds, shades or screens shall
be attached to or hung in any window or door of the Premises without the prior
written consent of Landlord. All electrical ceiling fixtures hung in the
Premises must be fluorescent and/or of a quality, type, design and bulb color
approved by Landlord. Tenant shall abide by Landlord's regulations concerning
the opening and closing of window coverings which are attached to the windows in
the Premises. The skylights, windows, and doors that reflect or admit light and
air into the halls, passageways or other public places in the Project shall not
be covered or obstructed by Tenant, nor shall any bottles, parcels or other
articles be placed on the windowsills.
18. Tenant shall not employ any person or persons other than the janitor of
Landlord for the purpose of cleaning the Premises unless otherwise agreed to in
writing by Landlord. Except with the prior written consent of Landlord, no
person or persons other than those approved by Landlord shall be permitted to
enter the Project for the purpose of cleaning same. Landlord shall in no way be
responsible to Tenant for any loss of property on the Premises, however
occurring, or for any damage done to the effects of Tenant or any of its
employees or other persons by the janitor of Landlord. Janitor service shall
include ordinary dusting and cleaning by the janitor assigned to such work and
shall not include cleaning of carpets or rugs, except normal vacuuming, or
moving of furniture and other special services. Window cleaning shall be done
only by Landlord at reasonable intervals and as Landlord deems necessary.
PARKING RULES
1. Parking areas shall be used only for parking by vehicles no longer than
full size, passenger automobiles herein called "Permitted Size Vehicles".
2. Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, suppliers, shippers, customers, or
invitees to be loaded, unloaded, or parked in areas other than those designated
by Landlord for such activities. Users of the parking area will obey all posted
signs and park only in the areas designated for vehicle parking.
3. Parking stickers or identification devices shall be the property of
Landlord and shall be returned to Landlord by the holder thereof upon
termination of the holder's parking privileges. Tenant will pay such replacement
charges as is reasonably established by Landlord for the loss of such devices.
Loss or theft of parking identification stickers or devices from automobiles
must be reported to the parking operator immediately. Any parking identification
stickers or devices reported lost or stolen found on any unauthorized car will
be confiscated and the illegal holder will be subject to prosecution.
4. Landlord reserves the right to relocate all or a part of parking spaces
from floor to floor, within one floor, and/or to reasonably adjacent off site
locations(s), and to allocate them between compact and standard size and tandem
spaces, as long as the same complies with applicable laws, ordinances and
regulations.
5. Unless otherwise instructed, every person using the parking area is
required to park and lock his own vehicle. Landlord will not be responsible for
any damage to vehicles, injury to persons or loss of property, all of which
risks are assumed by the party using the parking area.
6. Validation of visitor parking, if established, will be permissible only by
such method or methods as Landlord may establish at rates determined by
Landlord, in Landlord's sole discretion.
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7. The maintenance, washing, waxing or cleaning of vehicles in the parking
structure or Common Areas is prohibited.
8. Tenant shall be responsible for seeing that all of its employees, agents
and invitees comply with the applicable parking rules, regulations, laws and
agreements. Garage managers or attendants are not authorized to make or allow
any exceptions to these Parking Rules and Regulations. Landlord reserves the
right to terminate parking rights for any person or entity that willfully
refuses to comply with these rules and regulations.
9. Every driver is required to park his own car. Where there are tandem
spaces, the first car shall pull all the way to the front of the space leaving
room for a second car to park behind the first car. The driver parking behind
the first car must leave his key with the parking attendant. Failure to do so
shall subject the driver of the second car to a Fifty Dollar ($50.00) fine.
Refusal of the driver to leave his key when parking in a tandem space shall be
cause for termination of the right to park in the parking facilities. The
parking operator, or his employees or agents, shall be authorized to move cars
that are parked in tandem should it be necessary for the operation of the
garage. Tenant agrees that all responsibility for damage to cars or the theft of
or from cars is assumed by the driver, and further agrees that Tenant will hold
Landlord harmless for any such damages or theft.
10. No vehicles shall be parked in the parking garage overnight. The parking
garage shall only be used for daily parking and no vehicle or other property
shall be stored in a parking space.
Landlord reserves the right at any time to change or rescind any one or
more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's reasonable judgment may from
time to time be necessary for the management, safety, care and cleanliness of
the Project, and for the preservation of good order therein, as well as for the
convenience of other occupants and tenants therein. Landlord may waive any one
or more of these Rules and Regulations for the benefit of any particular tenant,
but no such waiver by Landlord shall be construed as a waiver of such Rules and
Regulations in favor of any other tenant, nor prevent Landlord from thereafter
enforcing any such Rules or Regulations against any or all tenants of the
Project. Tenant shall be deemed to have read these Rules and Regulations and to
have agreed to abide by them as a condition of its occupancy of the Premises.
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EXHIBIT D
CLEANING SPECIFICATIONS
[TO BE INSERTED]
D-1
Exhibit D
CLEANING SCHEDULE
NIGHTLY
(BETWEEN THE HOURS OF 7:00 P.M. AND 6:00 A.M., MONDAY THROUGH FRIDAY, LEGAL
HOLIDAYS EXCEPTED).
1. Clean lavatories as follows:
(a) Sweep and wash floors, using an odorless disinfectant in wash water.
(b) Wash and polish all mirrors, powder shelves, bright work, and enamel
surfaces.
(c) Thoroughly scour, wash and disinfect all basins, bowls, and urinals.
(d) Wash and disinfect all toilet seats, both sides.
(e) Wash all partitions tile walls, towel, paper, and sanitary napkin
dispenser, and receptacles as required.
(f) Empty and clean paper towel and sanitary disposal receptacles.
(g) Fill toilet tissue holders, soap dispensers and bathroom towel
dispensers, materials to be furnished by Landlord.
2. Empty and clean all waste receptacles, ashtrays and sand ums. Utilize
plastic bag liners in all waste receptacles.
3. Wash, clean and disinfect all water fountains and water coolers.
4. Hand dust all office furniture and fixtures, shelves, xxxxx and other dust
collecting surfaces.
5. Remove all rubbish and trash from Premises.
6. Vacuum all rugs carpeting and remove any spots or stains.
7. Dust mop all uncarpeted areas, Using treated mops and damp mop, as
necessary to remove any stains or spills.
8. Damp mop floors in entrance foyers, elevator lobbies, and public corridors,
if applicable.
9. Wet sponge wipe table tops in employee lounge, including cleaning of any
spills, if applicable.
10. During nightly tour, close all windows and blinds, extinguish lights, lock
doors and report any malfunctions.
11. keep storage and slop sink rooms in a clean and orderly manner.
WEEKLY
1. Damp mop and buff polish all uncarpeted areas.
2. Wash all directory board, display, entry door, and side light glass, as
necessary.
MONTHLY
1. All uncarpeted floor areas to be washed, waxed and machine polished.
2. Clear air conditioning grilles as required.
3. High dusting:
(a) Dust in place all pictures, frames, charts, graphs and similar wall
hangings.
(b) Dust clean all vertical surfaces, such as walls, partitions, doors,
books and other surfaces not reached in nightly cleaning.
(c) Dust clean all exposed pipes, air conditioning louvers, ducts and other
areas not reached in nightly cleaning.
(d) Dust clean all lighting fixtures.
(e) Dust all mine blinds.
4. Remove all finger marks and smudges from doors, partitions, woodwork,
window ledges and window mullions.
5. Wash, clean, and disinfect all lavatory vinyl.
SEMI-ANNUALLY
1. Wash all windows inside and out.
ANNUALLY
1. Clean all vinyl.
EXHIBIT E
CONSENT TO SUBLEASE
THIS CONSENT TO SUBLEASE ("Consent Agreement") dated as of ________199__ is
made with reference to that certain sublease (the "Sublease") ________ 19__ by
and between ________________("Tenant") and __________ ("Sublessee"), and is
entered into between the foregoing parties and __________ ("Landlord"), having
an address at ________________ with reference to the following facts:
A. Landlord and Tenant are the parties to that certain master lease (the
"Master Lease") dated as of ____________, 19__ respecting certain premises
("Premises") known as Suite(s) ___, located in the building ("Building") located
at ________________________.
B. Tenant and Sublessee wish to enter into the Sublease respecting the
portion of the Premises described therein (the "Sublease Premises").
C. The Master Lease provides that Tenant may not enter into any sublease
without Landlord's prior written approval.
D. Tenant and Sublessee have herewith presented the fully-executed
Sublease to Landlord for Landlord's approval, and Landlord is willing to approve
the same, upon all of the terms and conditions hereinafter appearing.
NOW, THEREFORE, for good valuable consideration, the parties hereto agree
as follows:
1. Neither the Master Lease, the Sublease nor this Consent Agreement
shall be deemed to grant Sublessee any rights whatsoever against Landlord.
Sublessee hereby acknowledges and agrees that its sole remedy for any alleged or
actual breach of its rights in connection with the Sublease Premises shall be
solely against Tenant.
2. This Consent Agreement shall not release Tenant from any existing or
future duty, obligation or liability to Landlord, pursuant to the Master Lease,
nor shall this Consent Agreement change, modify or amend the Master Lease in any
manner. This Agreement shall not be deemed Landlord's consent to any further
subleases.
3. (a) In the event of Master Lease Termination (as hereinafter defined)
prior to the termination of the Sublease, at Landlord's option, Sublessee agrees
to attorn to Landlord and to recognize Landlord as Sublessee's Landlord under
the Sublease, upon the terms and conditions and at the rental rate specified in
the Sublease, and for the then remaining term of the Sublease, except that
Landlord shall not be bound by any provision of the Sublease which in any way
increases Landlord's duties, obligations or liabilities to Sublessee beyond
those owed to Tenant under the Master Lease. Sublessee agrees to execute and
deliver at any time and from time to time, upon the request of Landlord, any
instruments which may be necessary or appropriate to evidence such attornment.
Landlord shall not (i) be liable to Sublessee for any act, omission or breach of
the Sublease by Tenant, (ii) be subject to any offsets or defenses which
Sublessee might have against Tenant, (iii) be bound by any rent or additional
rent which Sublessee might have paid in advance to Tenant, (iv) be bound to
honor any rights of Sublessee in any security deposit made with Tenant except to
the extent Tenant has turned over such security deposit to Landlord. Tenant
hereby agrees that in the event of Master Lease Termination, Tenant shall
immediately pay or transfer to Landlord any security deposit, rent or other sums
then held by Tenant.
(b) "Master Lease Termination" means any event, which by voluntary or
involuntary act or by operation of law, might cause or permit the Master Lease
to be terminated, expired, canceled, foreclosed against, or otherwise come to
an end, including but not limited to (i) a default by Tenant under the Master
Lease of any of the terms or provisions thereof, (ii) foreclosure proceedings
brought by the holder of any mortgage or trust deed to which the Master Lease is
subject; or (iii) the termination of Tenant's leasehold estate by dispossession
proceeding or otherwise.
(c) In the event of attornment hereunder, Landlord's liability shall
be limited to matters arising during Landlord's ownership of the Building and in
the event that Landlord (or any successor owner) shall convey or dispose of the
Building to another party such party shall thereupon be and become Landlord
hereunder and shall be deemed to have fully assumed and be liable for all
obligations of this Consent Agreement or the Sublease to be performed by
Landlord which first arise after the date of conveyance including the return of
any security deposit, and Tenant shall attorn to such other party, and Landlord
(or such successor owner) shall, from and after date of conveyance, be free of
all liabilities and obligations hereunder not then incurred. The liability of
Landlord to Sublessee for any default by Landlord under this Consent Agreement
or the Sublease after such attornment or arising in connection with Landlord's
operation management, leasing, repair, renovation, alteration any other matter
relating to the Building or the Sublease Premises, shall be limited to the
interest of the Landlord in the Building (and proceeds thereof). Under no
circumstances shall any present or future general partner of Landlord (if
Landlord is a partnership) have any liability for the performance of Landlord's
obligation under this Consent Agreement or the Sublease.
4. In addition to Landlord's rights under Section 3 hereof, in the event
Tenant is in default under any of the terms and provisions of the Master Lease,
Landlord may elect to receive directly from Sublessee all sums due or payable to
Tenant by Sublessee pursuant to the Sublease, and upon receipt of Landlord's
notice, Sublessee shall thereafter pay to Landlord any and all sums becoming due
or payable under the Sublease and Tenant shall receive from Landlord a
corresponding credit for such sums against any payments then due or thereafter
becoming due from Tenant. Neither the service of such written notice nor the
receipt of such direct payments shall cause Landlord to assume any of Tenant's
duties, obligations and/or liabilities under the Sublease, nor shall such event
impose upon Landlord the duty or obligation to honor the Sublease, nor
subsequently to accept Sublessee's attornment pursuant to Section 3(a) hereof.
5. Sublessee hereby acknowledges that it has read and has knowledge of
all of the terms, provisions rules regulations of the Master Lease and agrees
not to do or omit to do anything which would
E-1
cause Tenant to be in breach of the Master Lease. Any such act or omission shall
also constitute a breach of this Consent Agreement and shall entitle Landlord to
recover any damage, loss, cost or expense which it thereby suffers, from
Sublessee, whether or not Landlord proceeds against Tenant.
6. In the event of any Litigation between the parties hereto with respect
to the subject matter hereof, the unsuccessful party agrees to pay the
successful party all costs, expenses and reasonable attorney's fees incurred
therein by the successful party, which shall be included as a part of the
judgment therein rendered.
7. This Consent Agreement shall be binding upon an inure to the benefit
of the parties' respective successors and assigns, subject to all agreements and
restrictions contained in the Master Lease, the Sublease and herein with respect
to subleasing, assignment, or other transfer. The agreements contained herein
constitute the entire understanding between the parties with respect to the
subject matter hereof, and supersede all prior agreements, written or oral,
inconsistent herewith. No amendment, modification or change therein will be
effective unless Landlord shall have given its prior written consent thereto.
This Consent Agreement may be amended only in writing, signed by all parties
hereto.
8. Notices required or desired to be given hereunder shall be effective
either upon personal delivery or three (3) days after deposit in the United
States mail, by certified mail, return receipt requested, addressed to the
Landlord at the address set forth above, or to Tenant or Sublessee at the
address of the Premises or of the Sublease Premises, respectively. Any party may
change its address for notice by giving notice in the manner hereinabove
provided.
9. As a condition to the effectiveness of Landlord's consent to the
Sublease, Tenant agrees to pay Landlord concurrently with Tenant's delivery of
an executed counterpart hereof, Dollars ($______) in reimbursement of Landlord's
reasonable attorneys' fees and administrative expenses incurred in connection
with this Consent Agreement, as additional rent. Landlord's acceptance of such
fee shall impose no duty on Landlord to approve or execute the Sublease. Tenant
shall also promptly pay Landlord any share of bonus rents, or other items
required under the Master Lease in connection with subleases.
10. Notwithstanding anything to the contrary set forth herein or
elsewhere, if the Master Lease was guaranteed at the time of execution or at any
time prior hereto by any guarantor, the Landlord may at any time hereafter
declare all of its agreement in this Consent Agreement to be null and void and
or no force and effect unless and until Landlord receives a counterpart of this
Consent Agreement indicating approval thereof by any and all such guarantor(s),
and their spouses (if any).
11. Tenant and Sublessee agree to indemnify and hold Landlord harmless
from and against any loss, cost, expense, damage or liability, including
reasonable attorney's fees, incurred as a result of a claim by any person or
entity (i) that is entitled to a commission, finder's fee or like payment in
connection with the Sublease or (ii) relating to or arising out of the Sublease
or any related agreements or dealings.
12. Tenant agrees to hold any and all payments due under the Sublease as a
trust fund to be applied first to the satisfaction of all of Tenant's
obligations under the Master Lease and hereunder before using any part thereof
for any other purpose.
IN WITNESS WHEREOF, the following parties have executed this Consent
Agreement as of the date first above written.
TENANT:
By:________________________________
Its:_______________________________
SUBLESSEE:
___________________________________
By:________________________________
Its:_______________________________
LANDLORD:
___________________________________
By:________________________________
Its:_______________________________
GUARANTOR(S) (and spouse)
___________________________________
___________________________________
E-2
SCHEDULE 1
WORK LETTER AGREEMENT
(Improvement Allowance)
1. PLANS.
Tenant shall cause its architects and engineers to prepare and submit to
Landlord for approval detailed plans, specifications and working drawings
("Plans") for the construction of Tenant's leasehold improvements
("Improvements") to the Premises. Landlord reserves the right to approve any
space planner, architect or engineer employed by Tenant. Tenant's Plans shall
include items and information as Landlord shall reasonably require to evaluate
Tenant's work. Tenant shall use the Plans to obtain all permits and approvals
which are necessary to construct the Improvements. All Improvements shall be
constructed in a good and workmanlike manner and in accordance with all
applicable laws, codes and regulations, including the Americans with
Disabilities Act ("ADA"). It is expressly agreed that (a) Tenant shall not
commence any such work until said Plans have been approved by Landlord, and (b)
the Plans which have been so approved by Landlord shall be used by Tenant to
obtain all permits that are necessary to construct the Improvements. As used
herein, the term "Improvements" shall include all work to be done in the
Premises pursuant to the Plans, including, but not limited to: demolition work,
partitioning, doors, ceiling, floor coverings, wall finishes (including paint
and wallcoverings), window coverings, electrical (including lighting, switching,
telephones, outlets, computer and special electrical equipment, etc.), plumbing,
heating, ventilating and air conditioning, fire protection, cabinets and other
millwork. After approval of the Plans by Landlord, no further changes to the
Plan shall be made without the prior written approval of Landlord. Tenant
acknowledges that Landlord's review and approval of the Plans is not conducted
for the purpose of determining the accuracy and completeness of the Plans, their
compliance with applicable codes and governmental regulations including ADA, or
their sufficiency for purposes of obtaining a building permit, all of which
shall remain the responsibility of Tenant and Tenant's architect. Accordingly,
Landlord shall not be responsible for any delays in obtaining the building
permit due to the insufficiency of the Plans or any delays due to changes in the
Plans required by the applicable governmental regulatory agencies reviewing the
Plans.
2. IMPROVEMENT ALLOWANCE.
Tenant shall provide Landlord with a breakdown of the estimated total cost
of the Improvements ("Cost Breakdown"). Landlord hereby grants to Tenant an
"Improvement Allowance" of Eighteen and 60/100 Dollars ($18.60) per square foot
of space in the Premises, excluding Premises E (i.e., the Improvement Allowance
attributable to Premises A is $862,779.60; the Improvement Allowance
attributable to Premises B is $206,106.60; the Improvement Allowance
attributable to Premises C is $307,402.20; and the Improvement Allowance
attributable to Premises D is $220,186.80). The Improvement Allowance shall be
disbursed to Tenant not more frequently than once per month based on
disbursement requests submitted by Tenant to Landlord and certified by Tenant's
architect. Such disbursement request shall set forth the total amount incurred,
expended and/or due for each requested item less prior disbursements and a
description of the work performed, and materials supplied and/or costs incurred
or due with respect to each item for which disbursement is requested. Each such
disbursement request shall be accompanied by invoices, vouchers, statements,
affidavits, payroll records and/or other documents reasonably requested by
Landlord, which substantiate costs incurred to justify such a disbursement,
together with lien waivers for those contractors and materialmen providing
construction services or materials. In addition, each disbursement shall be
subject to inspection and approval of completed work by Landlord's construction
Sch 1-1
engineer. In the event the Cost Breakdown exceeds the Improvement Allowance,
Tenant shall pay from another source of funds the amount by which the Cost
Breakdown exceeds the Improvement Allowance prior to any disbursement of the
Improvement Allowance by Landlord. If, at any time during the construction of
the Improvements, the total amount remaining to be paid for construction of the
Improvements exceeds the amount of the Improvement Allowance remaining to be
disbursed, at Landlord's option, no further disbursement of the Improvement
Allowance shall be made by Landlord unless, and until Tenant has expended such
sums as to cause the Improvement Allowance to again be sufficient to pay the
remaining costs. In the event the actual cost of the Improvements is less than
the Improvement Allowance, the unused portion of the Improvement Allowance shall
not be paid or refunded to Tenant or be available to Tenant as a credit against
any obligations of Tenant under the Lease. IF, AS A RESULT OF THE BUILD-OUT OF
THE IMPROVEMENTS, CHANGES ARE REQUIRED TO THE BASE BUILDING LIFE-SAFETY PANEL,
THEN THE COST OF MAKING SUCH CHANGES TO THE LIFE-SAFETY PANEL SHALL BE BORNE BY
LANDLORD.
3. CONSTRUCTION OF IMPROVEMENTS.
3.1 Tenant shall obtain Landlord's approval of Tenant's contractor.
Additionally, Tenant shall submit a copy of the proposed construction contract
to Landlord for Landlord's approval. Landlord's approval, when required in this
Work Letter Agreement, shall be given or denied (as applicable) within ten (10)
business days of receipt of the necessary information from Tenant. Tenant's
contractors and subcontractors shall be required to provide the following types
of insurance, in the minimum amounts indicated, naming Landlord (and Landlord's
mortgagee, if required by Landlord) as additional insured:
(a) Workmen's Compensation with full statutory limits for employer's
liability.
(b) Commercial General Liability Insurance including direct and
contingent liability in the aggregate amount of One Million and No/100 Dollars
($1,000,000.00) combined single limit coverage per occurrence for personal
injury, death or property damage.
(c) The Liability Policy shall include coverage for Broad Form Hold
Harmless Agreement as is contained in the standard contract.
(d) Automobile Liability insurance with bodily injury limits of $250,000
per person, $500,000 per accident, and $50,000 per accident for Property Damage.
Original policies or copies of all of the foregoing insurance shall be delivered
to Landlord before construction of the Improvements is started and before
Tenant's contractor's equipment is placed upon the Premises. In all other
respects, the insurance coverage above mentioned shall comply with the Lease
provisions.
3.2 It is agreed that Tenant assumes the entire responsibility and
liability due to its negligence, including statutory or common law, for any and
all injuries or death of any or all persons, including its contractor,
subcontractors and employees, and for any and all damages to property caused by
or resulting from or arising out of any act or omission on the part of Tenant,
its contractor, subcontractors or employees, in the prosecution of the work
thereunder. With respect to such work Tenant agrees to indemnify and save
harmless Landlord, its mortgagee, architect, engineers and their employees and
all other tenants of the Property from and against all losses and expense,
including legal fees, which they may suffer or pay as the result of claims or
lawsuits due to, because of or arising out of any and all such injuries, death
or damage, whether real or alleged, and Tenant, its contractor and
subcontractors shall assume and defend at their own expense all such claims or
lawsuits. Tenant agrees to insure this assumed liability in its Comprehensive
General Liability Policy and the
Sch 1-2
original or copy of the policy delivered to Landlord shall indicate this
contractual coverage.
3.3 For and during the period of construction, Tenant shall provide and
pay for all utilities consumed upon the Premises during said period and for the
removal of all temporary connections.
3.4 Upon completion of the Improvements, Tenant's contractors and/or
subcontractors shall provide Landlord, without cost to Landlord, with one (1)
set of transparent "as built" drawings.
3.5 Completion. Tenant shall endeavor to cause the contractor to
substantially complete construction of the Improvements in a diligent manner.
It shall be the sole responsibility of Tenant to file all drawings and
specifications, pay all fees and obtain all permits and applications from any
governmental authorities having jurisdiction, and to obtain any certificates or
approvals, including a certificate of occupancy, required to enable Tenant to
occupy the Premises. Landlord shall not be liable for any loss or damages as a
result of delays in construction of the Premises. No delay in completion of
construction of the Improvements shall delay the Commencement Date of the Lease
beyond the date specified in the Lease.
4. INCORPORATION. This Agreement is and shall be incorporated by reference in
the Lease, and all of the terms and conditions of the Lease are and shall be
incorporated herein by this reference.
Sch 1-3
