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EXHIBIT 10.3
AGREEMENT OF LEASE
BETWEEN
COLGATEDRIVE ASSOCIATES, L.P.
AS LANDLORD
AND
e.spire COMMUNICATIONS, INC.
AS TENANT
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OFFICE LEASE
LEASE made this ____ day of September, 1999 by and between COLGATEDRIVE
ASSOCIATES, L.P., a Pennsylvania limited partnership (hereinafter called
"LANDLORD"), and e.spire COMMUNICATIONS, INC., a Delaware corporation
(hereinafter called "TENANT").
FUNDAMENTAL LEASE PROVISIONS
1. "TERM": Seven (7) years commencing on the Commencement Date and
ending on the date (the "Expiration Date") which is (I) the day immediately
preceding the seventh (7th) anniversary of the Commencement Date, if the
Commencement Date is the first day of a calendar month, or (ii) the last day of
the calendar month in which the seventh (7th) anniversary of the Commencement
Date occurs, if the Commencement Date is any day other than the first day of a
calendar month.
2. (a) "DEMISED PREMISES": approximately 90,000 rentable square feet
("TENANT'S RSF") in the building known as The Renaissance at Columbia Gateway,
7125 Columbia Gateway Drive (the "BUILDING") consisting of approximately 613,000
rentable square feet in the aggregate, located in the City of Columbia, Xxxxxx
Xxxxxx, Xxxxxxxx, 00000, which Demised Premises are shown cross-hatched on the
plan attached hereto as EXHIBIT "A". The Building and the land on which the
Building is located are hereinafter referred to as the "PROPERTY". The square
footage of the Demised Premises shall, for all purposes under this Lease, be
deemed to be the square footage set forth above. Notwithstanding the foregoing,
on or prior to sixty (60) days after the Commencement Date, the Landlord shall
cause its architect to certify to Tenant the rentable square footage of the
Demised Premises, which calculation shall be based upon the BOMA standard (ANSI
265.1-1980) of measurement (which shall take into account the Building's final
loss factor). Within thirty (30) days after receipt of Landlord's architect's
measurement, Tenant shall have the right to cause its architect to confirm
Landlord's architect's measurement, using the same measurement standard as
Landlord's architect. If the two architects' measurements differ by more than
four percent (4%), and Landlord and Tenant cannot promptly resolve any
differences regarding such square footage, then the Landlord's architect and the
Tenant's architect shall agree upon a third, neutral architect or space planner
with at least ten (10) years of interior design and measurement experience to
resolve any conflicts, and the measurement determined by such neutral architect
shall be binding upon the parties. Following determination of the rentable
square footage of the Demised Premises, all provisions hereunder based on
Tenant's RSF shall be adjusted accordingly.
(b) "OFFICE BUILDING": shall mean that portion of the Building
that Landlord has designated for lease by office tenants, as the same may be
adjusted from time to time. Landlord currently anticipates that the Office
Building shall consist of approximately 317,395 rentable square feet following
100% occupancy of the Building.
(c) "WAREHOUSE/RETAIL BUILDING": shall mean that portion of the
Building which Landlord has designated for lease by warehouse, retail and other
non-office tenants, as the same may be adjusted from time to time.
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3. "OFFICE BUILDING RSF": the rentable square footage of the Office
Building (as hereinafter defined), which is currently estimated to be 317,395
rentable square feet. The rentable square footage of the Office Building will be
revised to reflect the final rentable square footage of the Office Building upon
100 % occupancy of the Building.
4. "TENANT'S FRACTION": 28.356%, which is Tenant's RSF divided by the
Office Building RSF, as the same may be adjusted from time to time.
5. "BASE YEAR": Calendar Year 2000 and, with respect to Taxes, Tax
Year 1999-2000.
6. "COMMENCEMENT DATE": the earlier of (i) the date the Tenant first
opens for business in the Demised Premises and (ii) March 1, 2000; provided,
however, that in the event that the Landlord fails to Substantially Complete the
Preliminary Base Building Work by November 1,1999, then the date set forth in
clause (ii) above shall be extended by one day for each day that Substantial
Completion of the Preliminary Base Work is delayed beyond November 1,1999.
7. "ESTIMATED COMMENCEMENT DATE": March 1, 2000.
8. "NOTICE ADDRESSES":
Landlord: c/o Preferred Real Estate Investments, Inc.
000 Xxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Tenant: 000 Xxxxxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx Xxxxxxxx, Xxxxxxxx 00000
Attn: Real Estate Department
cc: General Counsel
9. "PERMITTED USE": General office use.
10. "ANNUAL BASE RENT":
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YEAR/PERIOD Annual rent Monthly Installment Rent/Sq. Ft.
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Lease Year l $1,621,800.00 $135,150.00 $18.02
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Lease Year 2 $1,660,500.00 $138,375.00 $18.45
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Lease Year 3 $1,700,100.00 $141,675.00 $18.89
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Lease Year 4 $1,740,600.00 $145,050.00 $19.34
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Lease Year 5 $1,782,000.00 $148,500.00 $19.80
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Lease Year 6 $1,825,200.00 $152,100.00 $20.28
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Lease Year 7 $1,869,300.00 $155,775.00 $20.77
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11. "SECURITY DEPOSIT": $267,000.00.
12. "PROPERTY MANAGER": Rent Payment Address:
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Equivest Management Company
X0 Xxx 00000
Xxxxxxxxxxxx, XX 00000-0000
13. BROKERS:
"LANDLORD'S BROKER" - Preferred Real Estate Advisors, Inc.
"TENANT'S BROKER" - CB Xxxxxxx Xxxxx, Inc.
14. "SERVICE BUSINESS HOURS":
Monday - Friday: 8:00 a.m. -6:00 p.m.
Saturday: 9:00 a.m. - 1:00 p.m.
List of Exhibits
Exhibit "A" - Demised Premises
Exhibit "B" - Base Building Work
Exhibit "B-1" - Preliminary Base Building Work
Exhibit "B-2" - Tenant's Plans
Exhibit "C" - Form of Letter of Credit
Exhibit "C-1" - Rules and Regulations
Exhibit "D" - Janitorial Specifications
Exhibit "E" - First Offer Space
Exhibit "F" - Expansion Space
Exhibit "G" - Storage Space
Exhibit "H" - Reserved Parking
Exhibit "I" - Exterior Signage
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WITNESSETH, THAT:
1. DEMISED PREMISES. Landlord, for the Term and subject to the
provisions and conditions hereof, leases to Tenant and Tenant accepts from
Landlord, the Demised Premises. Tenant shall not use or occupy, or permit or
suffer to be used or occupied, the Demised Premises or any part thereof, other
than for the Permitted Use.
2. TERM. The first lease year of the Term shall commence on the
Commencement Date and shall end on (i) the day immediately preceding the first
anniversary of the Commencement Date, if the Commencement Date is the first day
of the month, or (ii) the last day of the month in which the first anniversary
of the Commencement Date occurs, if the Commencement Date is any day other than
the first day of a calendar month. Each lease year after the first lease year
shall be a consecutive twelve (12) month period commencing on the first day of
the calendar month immediately following the preceding lease year.
3. TENANT IMPROVEMENTS.
(a) Landlord shall, at its sole expense, construct the base
building work identified on Exhibit "B" attached hereto and made a part hereof
(the "BASE BUILDING WORK"). Landlord shall secure all necessary permits and
comply with all applicable laws in connection therewith (but excluding any
permits and approvals required for the performance of the Tenant Improvements as
hereinafter defined). Landlord shall substantially complete the "Preliminary
Base Building Work" identified on Exhibit "B-1" on or prior to November 1,1999.
"SUBSTANTIAL COMPLETION" is defined as that point in time when Landlord's
architect certifies that construction of the Preliminary Base Building Work is
complete except for (i) any improvements or work to be performed by Tenant; (ii)
minor or insubstantial details of construction, mechanical adjustments, or
finishing touches, which items shall not adversely affect Tenant's conduct of
its ordinary business activities in the Premises; (iii) items not then completed
because of Tenant Delays and (iv) items to be performed by Landlord
contemporaneously with Tenant's construction of the Tenant Improvements (as
hereinafter defined), namely, all Base Building Work other than the Preliminary
Base Building Work. "TENANT DELAY" is defined as delay directly impacting
Landlord's ability to timely achieve Substantial Completion which is caused by
Tenant, provided, however, in no event shall Tenant Delay be claimed as a basis
for relief from the provisions specified above unless and until Landlord has
first given Tenant notice that it intends to claim delay as a result of Tenant's
acts or failure to timely act. Except for the Base Building Work, Landlord shall
have no obligation to perform any improvements to the Demised Premises to
prepare the space for Tenant's occupancy, and Tenant acknowledges that, except
for the Base Building Work to be completed by Landlord, Tenant has inspected the
Demised Premises and accepts the same in its "AS IS" condition, without any
representation or warranty by Landlord. Tenant shall be entitled to the benefit
of any contractor warranties, to the extent assignable, with respect to the Base
Building Work.
(b) Except for the Base Building Work, Tenant shall perform, at
its sole cost and expense, all work which Tenant deems necessary or desirable to
prepare the space for Tenant's initial occupancy, which tenant improvements
shall be subject to the prior written approval of Landlord, which approval shall
not be unreasonably withheld, conditioned, or
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delayed. All contractors utilized by Tenant for the performance of the Tenant
Improvements shall be subject to the prior written approval of Landlord, and all
work shall be performed in accordance with the Tenant's Plans (as hereinafter
defined) in a good and workmanlike manner and in accordance with all applicable
laws. Prior to the commencement of any work within the Demised Premises, Tenant
shall submit to Landlord, for Landlord's prior approval, which approval shall
not be unreasonably withheld, conditioned, or delayed, proposed plans and
specifications (the "PROPOSED TENANT'S PLANS") for Tenant's proposed
improvements to the Demised Premises, which plans shall be prepared by a
registered architect licensed to do business within the State in which the
Property is located. The Proposed Tenant's Plans shall include all information
and specifications necessary for Landlord to fully review the work described
therein and shall conform to all applicable laws and requirements of public
authorities and insurance underwriters' requirements. If Landlord reasonably
disapproves the Proposed Tenant's Plans, Landlord shall state specifically the
reasons for such disapproval, and Tenant shall cause its architects to promptly
make any changes in the Proposed Tenant's Plans reasonably required by Landlord.
The Proposed Tenant's Plans, as finally approved by Landlord hereunder, are
hereinafter referred as the "TENANT'S PLANS" and shall be deemed part of this
Lease. The work described in the Tenant's Plans is referred to herein as the
"TENANT IMPROVEMENTS."
(c) All subsequent changes in the Tenant's Plans shall be subject
to the approval of Landlord which approval shall not be unreasonably withheld,
conditioned, or delayed. If Landlord approves any change in the Tenant's Plans,
Tenant shall construct, at Tenant's sole cost and expense, the Tenant
Improvements in accordance with such change.
(d) Provided that Tenant is not in default of any of its
obligations hereunder beyond all applicable notice and cure periods, Landlord
shall provide Tenant with a construction allowance (the "TENANT IMPROVEMENT
ALLOWANCE") of Twenty-One Dollars ($21.00) per rentable square foot of the
Demised Premises, which shall be applied solely against Tenant's costs for the
Tenant Improvements and other expenses reasonably associated with Tenant's
occupancy of the Demised Premises (collectively, "TENANT'S COSTS"), including,
without limitation, Tenant's out-of-pocket contract or purchase price(s) for
materials, components, labor and services for the Tenant Improvements, and
related costs for space planning, design, architectural and engineering services
and moving expenses. In the event that Tenant's Costs exceed the amount of the
Tenant Improvement Allowance, Tenant shall be solely responsible for such excess
costs.
(e) Following commencement of Tenant's construction of the Tenant
Improvements, Tenant shall submit to Landlord on or before the tenth (10th) day
of each calendar month a requisition containing an itemized breakdown of
Tenant's Costs incurred by Tenant during the preceding calendar month, which
invoice shall be in such form and be supported by such complete information,
certificates and documents as Landlord or Landlord's mortgagee may require. The
amount to which Tenant shall be entitled upon any such monthly requisition shall
be the amount approved by Landlord's mortgagee. All approved payments shall be
made within twenty (20) days of Landlord's receipt of Tenant's invoice therefor.
To the extent that the Tenant Improvement Allowance is not fully paid during the
course of Tenant's construction of the Tenant Improvements, the remaining
balance shall be paid by Landlord to Tenant on the Commencement Date.
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4. DELAY IN POSSESSION. Intentionally Omitted.
5. RENT.
(a) During the Term of this Lease, Tenant shall pay to Landlord
the Annual Base Rent in the amount set forth in Section 10 of the Fundamental
Lease Provisions. Such Base Rent shall be payable in equal monthly installments
in advance on the first day of each calendar month.
(b) The term "rent" as used in this Lease shall mean the Annual
Base Rent, Operating Expenses (including, without limitation, Taxes) and all
other additional rent or other sums payable by Tenant to Landlord under this
Lease, all of which shall be deemed "rent" for purposes of Landlord's rights and
remedies with respect thereto.
(c) The first installment of rent shall be payable on the
Commencement Date. If the Term begins on a day other than the first day of a
month, rent from such day until the first day of the following month shall be
prorated on a per diem basis for each day of such partial month.
(d) All rent and other sums due to Landlord hereunder shall be
payable to Landlord do Landlord's Property Manager at the address specified in
Section 12 of the Fundamental Lease Provisions, or to such other party or at
such other address as Landlord may designate, from time to time, by written
notice to Tenant, without demand and without deduction, set-off or counterclaim
(except to the extent demand or notice shall be expressly provided for herein).
(e) If Landlord, at any time or times, shall accept said rent or
any other sum due to it hereunder after the same shall become due and payable,
such acceptance shall not excuse delay upon subsequent occasions, or constitute
or be construed as, a waiver of any of Landlord's rights hereunder.
6. SECURITY DEPOSIT / LETTER OF CREDIT. As additional security for
the full and prompt performance by Tenant of the terms and covenants of this
Lease, Tenant shall deliver to Landlord simultaneously with the execution of
this Lease, and shall maintain throughout the Term, an unconditional and
irrevocable letter of credit (the "Letter of Credit") in the amount of the
Security Deposit (as defined in Section 11 of the Fundamental Lease Provisions).
The Letter of Credit shall be in the form of Exhibit "C" attached hereto and
shall be issued by First National Bank of Maryland or such other national bank
approved in writing by Landlord, in its sole discretion. If at any time during
the Term Tenant defaults in the performance of any of its obligations hereunder,
Landlord shall have the right to draw upon the Letter of Credit to satisfy such
obligations including, without limitation, any damages to which Landlord is
entitled pursuant to Section 15 hereof. If any portion of the Letter of Credit
is used, applied or retained by Landlord, Tenant shall, upon demand, reinstate
the Letter of Credit in the full amount of the Security Deposit, and Tenant's
failure to do so shall constitute a default under this Lease for which Tenant
shall not be entitled to notice or an opportunity to cure. No later than thirty
(30) days prior to the expiration of any Letter of Credit then deposited
hereunder, Tenant shall replace or renew the existing Letter of Credit meeting
all of the requirements set
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forth herein extending the maturity date thereof for one (1) year. In the event
that Tenant fails to timely provide such substitute Letter of Credit or
amendment to the existing Letter of Credit, Landlord shall be entitled to draw
the entire amount of the Letter of Credit. If Tenant fully and faithfully
performs every term and covenant of this Lease during the Term, the Letter of
Credit shall be returned to Tenant after the expiration of the Term. Landlord
may assign and deliver the Letter of Credit to any purchaser or successor of
Landlord's interest in the Building, in which event Landlord shall be discharged
from any further liability with respect to the Letter of Credit. The Letter of
Credit shall not be construed as liquidated damages, and if Landlord's claims
hereunder exceed the amount of the Letter of Credit, Tenant shall remain liable
for the balance of such claims.
7. PAYMENT OF OPERATING EXPENSES.
(a) As used herein, the following terms shall be defined as
hereinafter set forth:
(i) "TAXES" shall mean all real estate taxes and assessments,
general and special, ordinary or extraordinary, foreseen or unforeseen, imposed
upon the Property or with respect to the ownership thereof by all applicable
governmental authorities. If due to a future change in the method of taxation,
any franchise, income, profit or other tax, however designated, shall be levied
or imposed in substitution in whole or in part for (or in lieu of) any tax which
would otherwise be included within the term "Taxes" as defined herein, then the
same shall be included in the term "Taxes."
(ii) "OPERATING EXPENSES" shall mean, except as hereinafter
limited Landlord's actual out-of-pocket expenses in respect of the operation,
maintenance and management of the Property that Landlord allocates, in
Landlord's reasonable discretion, to the Office Building, and shall include,
without limitation: (1) wages and salaries (and taxes imposed upon employers)
with respect to those employed by Landlord for rendering service in the normal
operation, cleaning, maintenance, repair and replacement of the Property; (2)
costs for the operation, maintenance, repair and replacement of the Property,
including payments to contractors; (3) the cost of steam, electricity
(excluding, however, electricity to individual tenant spaces), water and sewer
and other utilities (except for electricity, which is separately paid for by
Tenant as herein provided) chargeable to the operation and maintenance of the
Property; (4) cost of insurance for the Property including fire and extended
coverage, elevator, boiler, sprinkler leakage, water damage, public liability
and property damage, environmental liability, plate glass, and rent protection,
but excluding any charge for increased premiums due to acts or omissions of
other occupants of the Building or because of extra risk which are reimbursed to
Landlord by such other occupants; (5) supplies; (6) legal and accounting
expenses relating solely to the operation of the Property; (7) Taxes; (8)
management expense (not to exceed 3% of the net rental income from the
Property); and (9) all other costs and expenses incurred by or on behalf of
Landlord in connection with the repair, replacement, operation, maintenance,
securing, insuring and policing the Property. The term "Operating Expenses"
shall not include: (1) the cost of any repair or replacement item which, by
standard accounting practice, should be capitalized,; (2) any charge for
depreciation, interest on encumbrances or ground rents paid or incurred by
Landlord; (3) any charge for Landlord's income tax, excess profit taxes,
franchise taxes or similar taxes on Landlord's business; (4) commissions and
marketing expenses; (5) costs actually
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reimbursed by insurance proceeds; (6) costs incurred exclusively for the benefit
of the tenants of the Warehouse Building and not associated with the tenants of
the Office Building; (7) the costs of any service provided to other tenant(s) of
the Building to the extent Landlord is entitled to be reimbursed directly (i.e.,
not as on Operating Expense pass-through) therefor, and the cost of any service
provided to other tenant(s) of the Building but not to Tenant; (8) executive
salaries of Landlord; (9) salaries or service personnel to the extent that such
service personnel perform services not solely in connection with the management,
operation, repair or maintenance of the Building or the Property; (10)
Landlord's general overhead expenses not related to the Building; (11) legal
fees, accountants' fees and other expenses incurred in connection with disputes
with tenants or other occupants of the Building or associated with the
enforcement of any leases or defense of Landlord's title to or interest in the
Building or any part thereof.
(b) In determining Operating Expenses for any year, if less than
one hundred percent (100%) of the Building rentable area shall have been
occupied by tenants at any time during such year, Operating Expenses shall be
deemed for such year to be an amount equal to the like expenses which Landlord
reasonably determines would normally be incurred had such occupancy been one
hundred percent (100%) throughout such year. In addition, in the event that
Landlord shall obtain a reduction of any item(s) of Operating Expenses included
in Base Year Operating Expenses, then the Base Year Operating Expenses shall
thereafter be deemed to have been reduced by the amount of the reduction so
obtained by Landlord.
(c) For and with respect to each calendar year of the Term there
shall accrue, as additional rent, an amount ("TENANT'S SHARE") equal to the
product obtained by multiplying (A) Tenant's Fraction by (B) the increase, if
any, between (i) Operating Expenses for such calendar year, minus (ii) Operating
Expenses for the Base Year (appropriately prorated for any partial calendar year
included within the beginning and end of the Term). Notwithstanding the
foregoing, for purposes of determining Tenant's Share of Operating Expenses
hereunder, for each calendar year of the Term after the Base Year, increases in
"Controllable Operating Expenses" shall not exceed six percent (6%) per calendar
year, on a cumulative basis. As used herein, the term "CONTROLLABLE OPERATING
EXPENSES" shall include all Operating Expenses with the exception of Taxes,
insurance costs, utility costs, snow removal costs, and extraordinary
expenditures.
(d) Landlord shall furnish to Tenant as soon as reasonably
possible (but in no event more than 180 days) after the beginning of each
calendar year of the Term:
(i) A statement (the "EXPENSE STATEMENT") setting forth (1)
Operating Expenses for the previous calendar year, and (2) Tenant's Share of
Operating Expenses for the previous calendar year; and
(ii) A statement of Landlord's good faith estimate of
Operating Expenses, and the amount of Tenant's Share thereof (the "ESTIMATED
SHARE"), for the current calendar year.
(e) Within thirty (30) days after Tenant receives the Expense
Statement, Tenant shall pay to Landlord the difference, if positive, between the
Tenant's Share of Operating Expenses for such previous year and the actual
payments made by Tenant during
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such calendar year, or if the actual payments exceed Tenant's Share of Operating
Expenses for such previous year, Tenant shall receive a credit against the next
payment(s) of Operating Expenses falling due or, if the Lease shall have
expired, a refund of such overpayment.
(f) Upon the written request of Tenant delivered to Landlord
within one hundred eighty days after delivery of the Expense Statement, Landlord
shall give Tenant the opportunity during normal business hours to review
Landlord's books and records relating to Operating Expenses, provided Tenant
thereafter diligently and promptly completes such inspection, and such
inspection privilege shall not delay Tenant's obligation to pay on account all
sums due pursuant to such Expense Statement. Unless Tenant, within thirty-six
(36) months after any Expense Statement is furnished, shall give notice to
Landlord that Tenant disputes said statement, specifying in detail the basis for
such dispute, each Expense Statement furnished to Tenant by Landlord under this
Section shall be conclusively binding upon Tenant as to the Operating Expenses
due from Tenant for the period represented thereby. In the event that Tenant
timely disputes such Expense Statement and the dispute is not amicably resolved
within 30 days after Tenant's notice of dispute, then either party may refer the
dispute to an independent certified public accounting firm mutually acceptable
to Landlord and Tenant, and the determination of such accounting firm shall be
final, binding and conclusive on Landlord and Tenant. Tenant agrees to pay for
the cost of such audit by said accounting firm unless it is determined that
Landlord's original determination of the actual Operating Expenses was in error
by more than five percent (5%), in which event Landlord shall pay the cost of
such audit. Pending resolution of any dispute, Tenant shall pay the additional
rent in accordance with the Expense Statement furnished by Landlord. Any amounts
determined to have been collected in error by Landlord shall be refunded to
Tenant together with interest at the rate of 10% per annum.
(g) Within thirty (30) days after delivery of the statement of
Tenant's Estimated Share, Tenant shall pay to Landlord, on account of its share
of Operating Expenses, one-twelfth (1/12) of the Estimated Share multiplied by
the number of full or partial calendar months elapsed during the current
calendar year up to and including the month payment is made (less any amounts
previously paid by Tenant on account of Operating Expenses for such period).
(h) On the first day of each succeeding month up to the time
Tenant shall receive a new statement of Tenant's Estimated Share, Tenant shall
pay to Landlord, on account of its share of Operating Expenses, one-twelfth of
the then current Estimated Share. Any payment due from Tenant to Landlord on
account of Operating Expenses not yet determined as of the expiration of the
Term shall be made within twenty (20) days after submission to Tenant of the
next Expense Statement, which obligation shall survive the expiration or earlier
termination of this Lease.
(i) The costs of janitorial services to the Demised Premises shall
be included within Operating Expenses as set forth herein. Notwithstanding the
foregoing, Tenant shall have the right to discontinue janitorial service by
providing Landlord with at least thirty (30) days advance written notice
thereof. As of the date that such janitorial service is effectively discontinued
(i) Landlord shall have no further obligation to provide janitorial service, as
the case may be, to the Demised Premises; (ii) Annual Base Rent shall thereafter
be reduced by $0.80 per rentable square foot of the Demised Premises; (iii)
Operating Expenses shall thereafter
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be deemed to exclude the costs of janitorial services for individual tenant
spaces, but shall continue to include such costs for common areas of the
Building; and (iv) Base Year Operating Expenses shall thereafter be deemed to be
reduced by $0.80 per rentable square foot of the Building.
(j) In allocating Operating Expenses between the Office Building
and Warehouse Building, Landlord shall allocate such Operating Expenses in its
reasonable discretion. By way of example and not by limitation, Operating
Expenses may be allocated by Landlord using the following criteria, which
criteria shall be determined by Landlord in its reasonable discretion, so as to
obtain an equitable allocation under the circumstances, depending upon the
nature of the Operating Expense: (i) the proportion by which the net rental
income from the Office Building bears to the net rental income for the entire
Building (e.g., Taxes), (ii) the proportion by which the total number of
employees for tenants of the Office Building bears to the total number of
employees for the entire Building; (iii) the proportion by which the total
number of parking spaces allocated to tenants of the Office Building bears to
the total number of parking spaces for the entire Building (e.g., parking and
snow removal costs); (iv) the proportion by which the total square footage of
the Office Building bears to the total square footage of the entire Building; or
(v) the proportionate usage/consumption by the tenants of the Office Building
with respect to the particular item of Operating Expenses. Notwithstanding the
foregoing, Operating Expenses incurred solely for the benefit of the tenants of
the Office Building shall be allocated 100% to the Office Building.
8. UTILITIES SEPARATELY CHARGED TO DEMISED PREMISES. Tenant shall be
responsible for all utilities (including gas and electric) which are consumed
within the Demised Premises. With respect to electricity, Tenant shall pay for
the consumption of electricity within the Demised Premises based on its metered
usage, which payment shall be made directly to the electricity provider. With
respect to other utilities, if a separate meter is installed, Tenant shall pay
for the consumption of such utilities based on its metered usage, which payment
shall be made directly to the utility provider if the Demised Premises are
directly metered or to the Landlord if the Demised Premises are submetered. If
no meter is installed Tenant shall pay a pro-rata share of any utility charges
covering the Demised Premises and other areas of the Building, which pro-rata
share shall be based on the percentage which the Tenant's RSF bears to the
square footage of the areas of the Building serviced by such utility. In the
event that the Demised Premises are not directly metered, the rate for Tenant's
usage shall be the general service rate charged by the applicable utility
provider for the Building. Landlord shall have the right, to be exercised by
written notice to Tenant, to direct Tenant to contract directly with the utility
provider supplying electricity to the Building, in which event Tenant shall pay
all charges therefor directly to the utility provider. Landlord shall at all
times have the exclusive right to select the provider or providers of utility
service to the Demised Premises and the Property, and Landlord shall have the
right of access to the Demised Premises from time to time to install or remove
utility facilities.
9. SERVICES. Landlord agrees that it shall:
(a) Provide water for life safety, drinking, lavatory and toilet
purposes drawn through fixtures installed by Landlord
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(b) Provide heat, ventilation and air-conditioning to the Demised
Premises (utilizing utilities directly paid for by Tenant);
(c) Provide janitorial services in accordance with Landlord's
building standard janitorial specifications attached hereto as Exhibit "D". Any
and all additional or specialized janitorial service desired by Tenant shall be
contracted for by Tenant directly and the cost and payment thereof shall be the
sole responsibility of Tenant; and
(d) Provide Tenant with standard signage on the directory in the
Building lobby.
(e) Provide Tenant with access to the Building 24 hours per day, 7
days per week, 365 days per year (except in the event of an emergency or fire or
other casualty).
The cost of the foregoing services shall be included in Operating
Expenses (except with respect to electricity charges for the services referenced
in subparagraph (b) above, which shall be paid directly by Tenant pursuant to
Section 8 hereof). It is understood that Landlord does not warrant that any of
the services referred to in this Section will be free from interruption from
causes beyond the reasonable control of Landlord. No interruption of service
shall ever be deemed an eviction or disturbance of Tenant's use and possession
of the Demised Premises or any part thereof or render Landlord liable to Tenant
for damages, permit Tenant to xxxxx rent or otherwise relieve Tenant from
performance of Tenant's obligations under this Lease. Notwithstanding the
foregoing, in the event that any interruption of services is caused by
Landlord's negligence and such interruption renders the Demised Premises
untenantable for a period of five (5) or more consecutive business days after
written notice thereof by Tenant to Landlord, then, to the extent that the
Demised Premises are rendered untenantable, Tenant shall be entitled to a
proportionate abatement of rent until such time as the Demised Premises are
thereafter rendered tenantable. In addition, in the event that any interruption
of services renders the entire Demised Premises untenantable for a period of 180
or more consecutive days, then Tenant shall have the right to terminate this
Lease at any time prior to the Demised Premises having been restored to a
tenantable condition by providing at least thirty (30) days' advance written
notice thereof to Landlord.
10. CARE OF DEMISED PREMISES. Tenant agrees, on behalf of itself, its
employees and agents that it shall:
(a) Comply at all times with any and all federal, state and local
statutes regulations, ordinances, and other requirements of any of the
constituted public authorities relating to its use and occupancy of the Demised
Premises.
(b) Give Landlord escorted access to the Demised Premises at all
reasonable times and upon reasonable notice (except in the event of emergency),
without charge or diminution of rent, to enable Landlord (i) to examine the same
and to make such repairs, additions and alterations as Landlord may be permitted
to make hereunder or as Landlord may deem reasonably advisable for the
preservation of the integrity, safety and good order of the Building or any part
thereof; and (ii) to show the Demised Premises to prospective mortgagees
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and purchasers and, during the six (6) months prior to expiration of the Term,
to prospective tenants;
(c) Maintain, repair and replace the interior, non-structural
portions of the Demised Premises in good order and repair as and when needed
(unless such damage is not caused by Tenant, its agents or employees), and
replace all glass broken by Tenant, its agents, employees or invitees with glass
of the same quality as that broken, except for glass broken by fire and extended
coverage-type risks, and commit no waste in the Demised Premises;
(d) Upon the expiration or earlier termination of this Lease,
remove Tenant's goods and effects (excepting, however, the Tenant Improvements)
and those of any other person claiming under Tenant, and quit and deliver up the
Demised Premises to Landlord peaceably and quietly in as good order and
condition as existed at the inception of the Term, reasonable wear and tear,
damage caused by Landlord, its agents and employees and damage from fire and
casualty excepted. Goods and effects not removed by Tenant at the termination of
this Lease, however terminated, shall be considered abandoned and Landlord may
dispose of and/or store the same as it deems expedient, the cost thereof to be
charged to Tenant;
(e) Not place signs on the Demised Premises except for (i) signs
located entirely within the Demised Premises and which are not visible from the
exterior of the Demised Premises, and (ii) signs on doors provided that the
lettering and text are approved by Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed;
(f) Not overload, damage or deface the Demised Premises or do any
act which might make void or voidable any insurance on the Demised Premises or
the Building or which may render an increased or extra premium payable for
insurance as a direct result of Tenant's operations (and without prejudice to
any right or remedy of Landlord regarding this subparagraph, Landlord shall have
the right to collect from Tenant, upon demand, any such increase or extra
premium). Tenant shall maintain at its own sole cost adequate insurance coverage
for the full replacement value of all of its equipment, furniture, supplies and
fixtures and provide Landlord with certificates evidencing such coverage;
(g) Not make any alteration of or addition to the Demised Premises
without the prior written approval of Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed, except for interior,
nonstructural alterations of a decorative nature that do not exceed more than
$50,000 in the aggregate;
(h) Not install any equipment of any kind whatsoever which might
necessitate any changes, replacements or additions to any of the heating,
ventilating, air-conditioning, electric, sanitary, elevator or other systems
serving the Demised Premises or any other portion of the Building, or to any of
the services required of Landlord under this Lease, without the prior written
approval of Landlord, which approval shall not be unreasonably withheld,
conditioned or delayed, and in the event such consent is granted, such
replacements, changes or additions shall be paid for by Tenant at Tenant's sole
cost and expense. At the expiration or earlier termination of this Lease, if
such improvements were not a part of the Tenant Improvements Tenant shall pay
Landlord's cost of restoring such systems to their condition prior to such
replacements, changes or additions. Notwithstanding the foregoing,
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Landlord acknowledges that Tenant desires to install a generator and associated
fuel storage equipment (collectively, the "Additional Equipment") to benefit the
Demised Premises, and Landlord agrees to not unreasonably withhold its consent
to the installation of the Additional Equipment, subject to the following
conditions: (i) Tenant shall submit to Landlord detailed plans for the
installation of such Additional Equipment for Landlord's prior approval, which
approval shall not unreasonably withheld, conditioned, or delayed, (ii) Tenant
shall install such Additional Equipment at its sole cost and expense, using
contractors which have been approved by Landlord, which approval shall not
unreasonably withheld, conditioned, or delayed, for the installation of such
Additional Equipment; (iii) Tenant shall obtain, at Tenant's sole cost and
expense, all requisite permits and approvals for the installation of the
Additional Equipment, (iv) such Additional Equipment shall not adversely affect
the mechanical, electrical, structural and life-safety systems in the Building,
(v) Tenant shall pay all utility costs (including, without limitation, all
consumption and installation costs) attributable to such Additional Equipment,
(vi) Tenant shall operate and maintain the Additional Equipment in accordance
with all applicable laws, including, without limitation Environmental Statutes,
and (vii) Tenant shall remove the Additional Equipment on or before the
expiration or earlier termination of this Lease, which obligation shall survive
the expiration or termination of this Lease;
(i) Not install or authorize the installation of any coin operated
vending machine, except for the dispensing of cigarettes, coffee, and similar
items to the employees of Tenant for consumption upon the Demised Premises; and
(j) Observe the rules and regulations annexed hereto as EXHIBIT
"C-1," as Landlord may from time to time amend the same, for the general safety,
comfort and convenience of Landlord, occupants and tenants of the Building. In
the event of any conflict between the rules and regulations and the terms of
this Lease, the terms of this Lease shall prevail.
11. MECHANIC'S LIEN. Tenant shall, within ten (10) business days after
notice from Landlord, cause to be discharged of record by payment, deposit, bond
or otherwise, any mechanic's lien for materials or labor claimed to have been
furnished to the Demised Premises on Tenant's behalf (except for work contracted
for by Landlord) and shall indemnify and hold harmless Landlord from any loss
incurred in connection therewith. Provided that Tenant shall have caused such
mechanic's lien to be discharged as aforesaid, Tenant shall have the right to
contest the validity of such lien. Notwithstanding the foregoing, if Tenant
shall fail to cause such lien or claim to be discharged and removed from record
within such ten (10) day period, then, Landlord may, but shall not be obligated
to, contest the lien or claim or discharge it by payment, deposit, bond or
otherwise; and Landlord shall be entitled, if Landlord so decides, to compel the
prosecution of an action for the foreclosure of such lien by the lienor and to
pay the amount of the judgment in favor of the lienor with interest and costs.
Any amounts so paid by Landlord and all costs and expenses, including attorneys'
fees, incurred by Landlord in connection therewith together with interest at the
default rate payable hereunder from the respective dates of Landlord's making of
the payment or incurring of the cost or expense, shall constitute additional
rent payable by Tenant under this Lease and shall be paid by Tenant to Landlord
promptly on demand.
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12. REPAIRS AND MAINTENANCE. Landlord shall keep and maintain the
public areas of the Building clean and in good working order. Landlord shall
further make, or cause to be made, all necessary repairs to the structure and
exterior of the Building, as well as to the mechanical, HVAC, electrical and
plumbing systems servicing Building, provided that Landlord shall have no
obligation to make any repairs until Landlord shall have actual knowledge of
and/or received notice of the need for such repair. The cost of the foregoing
maintenance and repairs shall be included in Operating Expenses to the extent
permitted by Section 4 hereof (unless the need for such maintenance or repair is
caused by the negligence of Landlord, its agents or employees). Notwithstanding
the foregoing, all repairs made necessary by Tenant's specific use, occupancy or
alteration of the Building, or by the negligent acts of Tenant, its agents,
employees or invitees, shall be made at the sole cost and expense of Tenant.
13. SUBLETTING AND ASSIGNING.
(a) Tenant shall not assign this Lease or sublet all or any
portion of the Demised Premises, whether voluntarily or by operation of law,
without first obtaining Landlord's prior written consent thereto, which consent
shall not be unreasonably withheld, conditioned or delayed. Tenant acknowledges
that it shall be reasonable for Landlord to withhold its consent if, by way of
example and not limitation, Tenant is in default of any of its obligations
hereunder, such subtenant's or assignee's business is not consonant with that of
the other tenants of the Building, or if the proposed sublease or assignment is
to a tenant of the Building. In addition, Tenant shall not mortgage, pledge or
hypothecate this Lease. Any assignment, sublease, mortgage, pledge or
hypothecation in violation of this Section shall be void at the option of
Landlord and shall constitute a default hereunder without the opportunity for
notice or cure by Tenant.
(b) A transfer or sale by Tenant of a majority of the voting
shares, partnership interests or other controlling interests in Tenant shall be
deemed an assignment of this Lease by Tenant requiring Landlord's prior written
consent pursuant to subparagraph (a) above. Notwithstanding the foregoing, so
long as Tenant is not in default under this Lease, upon thirty (30) days prior
written notice to Landlord, Tenant shall have the right, without Landlord's
consent, to sublet all or a portion of the Demised Premises or to assign the
Lease to any company which is an Affiliate of Tenant. As used herein,
"Affiliate" shall mean any entity controlling, controlled by or under common
control with Tenant.. The term "control" shall mean direct ownership of more
than fifty percent (50%)of the voting interests in such entity.
(c) Notwithstanding the foregoing, no subletting or assignment
with or without Landlord's consent shall in any way relieve or release Tenant
from liability for the performance of all terms, covenants and conditions of
this Lease. Furthermore, no assignment requiring the Landlord's consent
hereunder will be valid unless the Tenant shall have obtained the Landlord's
consent thereto pursuant to subparagraph (a) above and the assignee shall have
executed and delivered to Landlord an assumption of liability agreement in form
reasonably satisfactory to Landlord, including an assumption by the assignee of
all of the obligations of Tenant and the assignee's ratification of and
agreement to be bound by all the provisions of this Lease; and no subletting
requiring Landlord's consent hereunder will be valid unless Tenant shall have
obtained the Landlord's consent thereto pursuant to subparagraph (a) above and
Tenant and the subtenant have executed and delivered to Landlord a sublease
agreement
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pursuant to which such subtenant agrees to be bound by the terms of this Lease.
Tenant agrees to provide Landlord with prior written notice of any assignment or
subletting which does not require Landlord's consent hereunder, together with
copies of the assignment or sublease agreement(s), as the case may be.
(d) Tenant shall pay to Landlord, as additional rent hereunder,
50% of all subrents or other sums or economic consideration received by Tenant
(after deducting Tenant's reasonable costs of reletting including, without
limitation, free rent, tenant improvements, brokerage commissions, etc.),
whether denominated as rentals or otherwise, in excess of the monthly sums which
Tenant is required to pay under this Lease.
(e) Tenant shall have the right, without requiring Landlord's
consent hereunder, to collocate up to 5% of the rentable square footage of the
Demised Premises in the aggregate with a user(s) providing/sharing services in
conjunction with Tenant's operations in the Demised Premises.
14. FIRE OR CASUALTY. In the event that the whole or a substantial
part of the Building or the Demised Premises is damaged or destroyed by fire or
other casualty, then, within forty-five (45) days after the date that Landlord
receives notice of such fire or other casualty, Landlord shall provide written
notice to Tenant as to whether Landlord intends to repair or rebuild and the
estimated time period for the completion thereof. In the event that Landlord's
notice provides that the repairs to the Demised Premises shall require more than
one hundred eighty (180)) days to complete, then Tenant shall have the right to
terminate this Lease by providing written notice thereof to Landlord within
thirty days (30) after receipt of Landlord's notice. In the event that Landlord
elects to repair or rebuild (and Tenant does not have the right to, or has
elected not to, terminate this Lease in accordance with the foregoing sentence),
Landlord shall thereupon cause the damage (excepting, however, Tenant's
furniture, fixtures, equipment and improvements, which shall be Tenant's
responsibility to restore) to be repaired with reasonable speed, subject to
delays, which may arise by reason of adjustment of loss under insurance policies
and for delays beyond the reasonable control of Landlord. In the event the
damage shall be so extensive that Landlord shall decide not to repair or
rebuild, this Lease shall, at the option of Landlord, be terminated effective as
of the date of casualty. To the extent and for the time that the Demised
Premises are rendered untenantable on account of fire or other casualty, the
rent shall proportionately xxxxx. All prepaid rents paid by Tenant that are
applicable to periods after the effective date of termination shall be refunded
to Tenant.
15. EMINENT DOMAIN. If the whole or a substantial part of the Building
is taken or condemned for a public or quasi-public use under any statute or by
right of eminent domain by any competent authority or sold in lieu of such
taking or condemnation, such that in the opinion of Landlord the Building is not
materially operable as before without substantial alteration or reconstruction,
this Lease shall automatically terminate on the date that the right to
possession shall vest in the condemning authority (the "Taking Date"), with rent
being adjusted to said Taking Date, and Tenant shall have no claim against
Landlord for the value of any unexpired term of this Lease. Tenant shall have no
claim against Landlord and no claim or right to any portion of any amount that
may be awarded as damages or paid as a result of any taking, condemnation or
purchase in lieu thereof; all rights of Tenant thereto are hereby assigned by
Tenant to Landlord. Notwithstanding the foregoing, Tenant shall have the right
to pursue a
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separate claim against the condemning authority so long as such
claim does not diminish Landlord's recovery. If any part of the Demised Premises
is so taken or condemned so as to materially interfere with Tenant's business,
this Lease shall automatically terminate as to the portion of the Demised
Premises so taken or condemned, as of the Taking Date, and this Lease shall
continue in full force as to the remainder of the Demised Premises, with rent
abating only to the extent of the Demised Premises so taken or condemned;
provided, however, that if the remaining portion of the Demised Premises is no
longer suitable for the Permitted Use, then Tenant shall have the right to
terminate this Lease by providing written notice thereof to Landlord within
thirty (30) days after the Taking Date. In the event that this Lease is so
terminated, any rents paid in advance by Tenant for periods after the effective
date of termination shall be refunded to Tenant.
16. INSOLVENCY. (a) The appointment of a receiver or trustee to take
possession of all or a portion of the assets of Tenant, or (b) an assignment by
Tenant for the benefit of creditors, or (c) the institution by or against Tenant
of any proceedings for bankruptcy or reorganization under any state or federal
law (unless in the case of involuntary proceedings, the same shall be dismissed
within forty-five (45) days after institution), or (d) any execution issued
against Tenant which is not stayed or discharged within fifteen (15) days after
issuance of any execution sale of the assets of Tenant, shall constitute a
breach of this Lease by Tenant. Landlord in the event of such a breach, shall
have, without need of further notice, the rights enumerated in Section 17
herein.
17. DEFAULT.
(a) If Tenant shall fail to pay rent or any other sum payable to
Landlord hereunder when due and such failure continues for more than ten (10)
days after written notice thereof from Landlord to Tenant (provided, however,
that Landlord shall not be required to provide notice to Tenant more than two
times during any twelve month period), or if Tenant shall fail to perform or
observe any of the other covenants, terms or conditions contained in this Lease
and such failure continues for more than thirty (30) days after written notice
thereof from Landlord (or such longer period as is reasonably required to
correct any such default, provided Tenant promptly commences and diligently
continues to effectuate a cure, but in any event within sixty (60) days after
written notice thereof by Landlord), or if any of the events specified in
Section 16 occur, then and in any of said cases (notwithstanding any former
breach of covenant or waiver thereof in a former instance), Landlord, in
addition to all other rights and remedies available to it by law or equity or by
any other provisions hereof, may at any time thereafter, pursue any one or more
of the following remedies:
(i) Landlord may, without further notice, terminate this
Lease, whereupon Tenant shall immediately vacate and surrender the Demised
Premises and deliver possession thereof to Landlord.
(ii) Landlord may, without further notice and without
terminating this Lease, terminate Tenant's right to possession of the Demised
Premises and enter upon and repossess the Demised Premises, by force, summary
proceedings, ejectment or otherwise, and may dispossess Tenant and remove Tenant
and all other persons and property
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from the Demised Premises and may have, hold and enjoy the Demised Premises and
the rents and profits therefrom.
(b) In the event that Landlord terminates this Lease, Landlord
shall be entitled to recover from Tenant all damages and expenses which Landlord
may suffer or incur by reason of Tenant's default hereunder (including
reasonable attorneys' fees), including, without limitation, damages for such
breach in an amount equal to the aggregate rent payable by Tenant throughout the
entire balance of the Term (determined from and after the date of Landlord's
election under this subsection) less the fair rental value of the Demised
Premises for the remainder of the term of this Lease (taken without regard to
the early termination), discounted to present value using an interest factor of
10% per annum, and such damages shall be payable by Tenant upon demand. Nothing
contained in this Lease shall limit or prejudice the right of Landlord to prove
and obtain as damages incident to a termination of this Lease, in any bankruptcy
reorganization or other court proceedings, the maximum amount allowed by any
statute or rule of law in effect with such damages are to be proved.
(c) In the event that Landlord terminates Tenant's right to
possession without terminating this Lease, Landlord may, in its own name, as
agent for Tenant, relet the Demised Premises or any part thereof for such term
or terms (which may be greater or less than the period which would otherwise
have constituted the balance of the Term) and on such terms (which may include
concessions of free rent) as Landlord in its sole discretion may determine.
Landlord may, in connection with any such reletting, cause the Demised Premises
to be decorated, altered, divided, consolidated with other space or otherwise
changed or prepared for reletting. In the event that Landlord terminates
Tenant's right to possession hereunder, Landlord agrees to use reasonable
efforts to relet the Demised Premises; provided, however, in no event shall
Landlord be required to (i) lease the Demised Premises over other available
space in the Building, (ii) accept a below-market rental rate for the Demised
Premises, (iii) accept any tenant whose creditworthiness is unsatisfactory to
Landlord, in its sole discretion, or (iv) accept any tenant whose business is
not compatible with the other tenants of the Building, as determined by Landlord
in its sole discretion. Upon any such reletting, all rent received from such
reletting shall be applied first to the payment of any sums other than rent due
from Tenant to Landlord hereunder; second, to the payment of any cost or
expenses of reletting (including, without limitation, brokerage commissions,
reasonable attorneys' fees, etc.), third to the payment of rent due and payable
hereunder; and the balance, if any, to be held by Landlord and applied against
the payment of future rent hereunder. Tenant shall pay to Landlord, on demand,
any deficiency that may result on account of such reletting. No reletting shall
be deemed a surrender and acceptance of the Demised Premises.
(d) Any and all remedies set forth in this Lease (i) shall be
cumulative, (ii) shall be in addition to any and all remedies which Landlord may
have at law or in equity, and (iii) may be pursued successively or concurrently,
as Landlord may elect. The exercise of any remedy by Landlord shall not be
deemed an election of remedies, nor shall the same preclude Landlord from
thereafter exercising any other remedies. Tenant hereby waives any and all
rights of redemption, reentry or repossession granted at law or in equity and
any notices to quit required by applicable law.
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(e) If rent or any other sum due from Tenant to Landlord shall be
overdue for more than five (5) days after notice from Landlord, it shall
thereafter bear interest at the rate of fifteen percent (15%) per annum (or, if
lower, the highest legal rate) until paid.
18. LANDLORD'S RIGHT TO CURE. Landlord may (but shall not be
obligated) on five (5) days notice to Tenant (except that no notice need be
given in case of emergency) cure on behalf of Tenant any default hereunder by
Tenant, and the cost of such cure (including any attorney's fees incurred) shall
be deemed additional rent payable upon demand.
19. INSURANCE. Tenant shall at all times during the Term, including
any renewal or extension thereof, maintain in full force and effect with respect
to the Demised Premises and Tenant's use thereof, (i) comprehensive public
liability insurance, covering injury to person and property in amounts at least
equal to Two Million Dollars ($2,000,000) per occurrence and annual aggregate
limit for bodily injury of One Million Dollars ($1,000,000) per occurrence and
annual aggregate limit for property damage, with increases in such limits as
Landlord may from time to time reasonably request, and (ii) all-risk or fire and
extended coverage insurance upon Tenant's personal property and leasehold
improvements in the Demised Premises for the full replacement value of such
personal property and leasehold improvements. All liability insurance policies
shall name Landlord and at Landlord's request any mortgagee of all or any
portion of the Property as additional insureds. Tenant shall lodge with Landlord
duplicate originals or certificates of such insurance at or prior to the
Commencement Date and shall lodge with Landlord renewals thereof at least
fifteen (15) days prior to expiration. All such policies or certificates shall
provide that such insurance coverage may not be cancelled or materially amended
unless Landlord and any mortgagee designated by Landlord as aforesaid are given
at least thirty (30) days prior written notice of the same. Landlord shall carry
(i) comprehensive public liability insurance, covering injury to person and
property in amounts at least equal to Two Million Dollars ($2,000,000) per
occurrence and annual aggregate limit for bodily injury of One Million Dollars
($1,000,000) per occurrence, and (iii) all risk or fire and extended coverage
insurance upon the Building for the full replacement value thereof. Landlord's
insurance obligation may be satisfied by a blanket policy of insurance (covering
other properties in addition to the Property) with so-called "umbrella"
coverage.
20. WAIVER OF SUBROGATION. Each party hereto hereby waives any and
every claim which arises or which may arise in its favor against the other party
hereto during the Term, including any extension or renewal thereof, for any and
all loss of, or damage to, any of its property located within or upon or
constituting a part of the Building, to the extent that such loss or damage is
covered under an insurance policy or policies and to the extent such policy or
policies contain provisions permitting such waivers of claims. Each party agrees
to request its insurers to issue policies containing such provisions and if any
extra premium is payable therefor, the party which would benefit from the
provision shall have the option to pay such additional premium in order to
obtain such benefit.
21. LIABILITY. Tenant agrees that Landlord, the Property Manager and
their respective officers, employees and agents shall not be liable to Tenant,
and Tenant hereby releases said parties, for any personal injury or damage to or
loss of personal property in the Demised Premises from any cause whatsoever
unless such damage, loss or injury is the result of
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the negligence or willful misconduct of Landlord, its Property Manager, or their
officers, employees, agents or contractors. Landlord, the Property Manager and
their respective officers, employees and agents shall not be liable to Tenant
for any such property damage or property loss whether or not the result of their
negligence or willful misconduct to the extent Tenant would be covered by
insurance that Tenant is required to carry hereunder. Tenant shall and does
hereby indemnify and hold Landlord harmless of and from all loss or liability
incurred by Landlord (including, without limitation, reasonable attorney's fees)
in connection with any failure of Tenant to fully perform its obligations under
this Lease and in connection with any personal injury or damage of any type or
nature occurring in, or resulting out of Tenant's use of, the Demised Premises,
unless due to the negligence of Landlord, its Property Manager, or their
officers, employees or agents. Subject to the limitations on liability set forth
herein, Landlord agrees to indemnify and hold Tenant harmless from and against
all loss or liability incurred by Tenant (including reasonable attorneys' fees)
in connection with any personal injury or damage of any type or nature resulting
out of the negligence of Landlord, its officers, agents, employees and
contractors.
22. ENVIRONMENTAL MATTERS.
(a) Tenant shall conduct, and cause to be conducted, all
operations and activity at the Property (including, without limitation, the
installation, operation and removal of the Additional Equipment) in compliance
with, and shall in all other respects applicable to the Demised Premises and the
Additional Equipment comply with, all applicable present and future federal,
state, municipal and other governmental statutes, ordinances, regulations,
orders, directives and other requirements, and all present and future
requirements of common law concerning the environment (hereinafter collectively
called "Environmental Statutes") including, without limitation, (i) those
relating to the generation, use, handling, treatment, storage, transportation,
release, emission, disposal, remediation or presence of any material, substance,
liquid, effluent or product, including, without limitation, hazardous
substances, hazardous waste or hazardous materials, (ii) those concerning
conditions at, below or above the surface of the ground and (iii) those
concerning conditions in, at or outside the Building.
(b) Tenant shall not cause or suffer or permit to occur in, on or
under the Property any generation, use, manufacturing, refining, transportation,
emission, release, treatment, storage, disposal, presence or handling of
hazardous substances, hazardous wastes or hazardous materials (as such terms are
now or hereafter defined under any Environmental Statute) or any other material,
substance, liquid, effluent or product now or hereafter regulated by any
Environmental Statute (all of the foregoing herein collectively called
"Hazardous Substances"), except that construction materials (other than asbestos
or polychlorinated biphenyls), office equipment, fuel and similar products (if
contained in vehicles or the Additional Equipment) and cleaning solutions, and
other maintenance materials that are or contain Hazardous Substances may be
used, generated, handled or stored on the Demised Premises, provided such is
incident to and reasonably necessary for the operation and maintenance of the
Demised Premises as an office and is in compliance with all Environmental
Statutes and all other applicable governmental requirements. Should Tenant, its
agents, employees or invitees cause any release of Hazardous Substances at the
Demised Premises or relating to the Additional Equipment, Tenant shall
immediately contain, remove and dispose of, such Hazardous Substances and any
material that was contaminated by the release and to remedy and mitigate all
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threats to human health or the environment relating to such release. When
conducting any such measures the Tenant shall comply with all Environmental
Statutes.
(c) Tenant hereby agrees to indemnify and to hold harmless
Landlord of, from and against any and all expense, loss or liability suffered by
Landlord by reason of Tenant's breach of any of the provisions of this Section,
including, but not limited to, (i) any and all expenses that Landlord may incur
in complying with any Environmental Statutes, (ii) any and all costs that
Landlord may incur in studying, assessing, containing, removing, remedying,
mitigating, or otherwise responding to, the release of any Hazardous Substance
or waste at or from the Property, (iii) any and all costs for which Landlord may
be liable to any governmental agency for studying, assessing, containing,
removing, remedying, mitigating, or otherwise responding to, the release of a
Hazardous Substance or waste at or from the Property, (iv) any and all fines or
penalties assessed, or threatened to be assessed, upon Landlord by reason of a
failure of Tenant to comply with any obligations, covenants or conditions set
forth in this Article, and (v) any and all reasonable legal fees and costs
incurred by Landlord in connection with any of the foregoing.
(d) Subject to the limitations on liability set forth herein,
Landlord hereby agrees to indemnify and to hold harmless Tenant of, from and
against any and all expense, loss or liability suffered by Tenant by reason of
the use, disposal, emission, release, disposal, presence or handling of
Hazardous Substances at the Property by Landlord, including, without limitation,
(i) any and all expenses that Tenant may incur in complying with any
Environmental Statutes, (ii) any and all costs that Tenant may incur in
studying, assessing, containing, removing, remedying, mitigating, or otherwise
responding to, the release of any Hazardous Substance or waste at or from the
Demised Premises, (iii) any and all costs for which Tenant may be liable to any
governmental agency for studying, assessing, containing, removing, remedying,
mitigating, or otherwise responding to, the release of a Hazardous Substance or
waste at or from the Demised Premises, and (iv) any and all fines or penalties
assessed upon Tenant by reason of a failure Landlord's use, disposal, emission,
release, disposal, presence or handling of Hazardous Substances at the Property.
(e) Each party's covenants, obligations and liabilities under this
Section shall survive the expiration or earlier termination of this Lease.
23. SUBORDINATION. This Lease is and shall be subject and subordinate
to all the terms and conditions of all underlying mortgages and to all ground or
underlying leases of the entire Building which may now or hereafter encumber the
Building and/or the Property, and to all renewals, modifications,
consolidations, replacements and extensions thereof, provided, however, that
with respect to future mortgages, this Lease shall be subject and subordinate so
long as the holder of any such mortgage shall have provided to Tenant a
nondisturbance agreement which shall provide, inter alia, that (a) Tenant's
rights under this Lease shall not be extinguished by any foreclosure or other
enforcement proceedings so long as Tenant is not in default under this Lease (b)
subject to the foregoing, the Tenant's rights under this Lease are subordinate
to the rights of the holder of such mortgagee, and (c) Tenant shall attorn to
the holder of such mortgage. Except as provided above, this clause shall be
self-operative and no further instrument of subordination shall be necessary.
Notwithstanding the automatic subordination of this Lease, Tenant shall execute,
within five (5) days after request,
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any certificate that Landlord may reasonably require acknowledging such
subordination, subject, however, to the preceding sentence. If Landlord has
attached to this Lease, or subsequently delivers to Tenant, a form of
subordination agreement required by a mortgagee of the Property, Tenant shall
execute and return the same to Landlord within five (5) days after receipt
thereof by Tenant. Notwithstanding the foregoing, the party holding the
instrument to which this Lease is subordinate shall have the right to recognize
and preserve this Lease in the event of any foreclosure sale or possessory
action, and in such case this Lease shall continue in full force and effect at
the option of the party holding the superior lien, and Tenant shall attorn to
such party and shall execute, acknowledge and deliver any instrument that has
for its purpose and effect the confirmation of such attornment.
24. ESTOPPEL STATEMENT. Tenant shall from time to time, within five
(5) days after delivery by Landlord, execute, acknowledge and return to Landlord
a statement certifying that this Lease is unmodified and in full force and
effect (or that the same is in full force and effect as modified, listing any
instruments or modifications), the dates to which rent and other charges have
been paid, and whether or not, to the best of Tenant's knowledge, Landlord is in
default or whether Tenant has any claims or demands against Landlord (and, if
so, the default, claim and/or demand shall be specified), and such other
information reasonably requested by Landlord.
25. RENEWAL OPTION. Provided that Tenant is not in default in the
performance of any of its obligations beyond all applicable notice and cure
periods hereunder, Tenant shall have the option to extend the Term for two (2)
separate, consecutive extension periods (each, an "EXTENSION PERIOD"), upon the
following terms and conditions:
(a) The first Extension Period (the "FIRST EXTENSION PERIOD")
shall be for a three(3) or five (5) year period commencing on the day
immediately following the expiration date of the initial Term of this Lease and
expiring at midnight on the day immediately preceding the third or fifth
anniversary thereof, as the case may be. The second Extension Period (the
"SECOND EXTENSION PERIOD") shall be for a five (5) year period commencing on the
day immediately following the expiration date of the First Extension Period and
expiring at midnight on the day immediately preceding the fifth (5th)
anniversary thereof. If Tenant fails to exercise any Extension Period, all
subsequent Extension Periods shall be null and void and of no further force and
effect.
(b) Tenant must exercise each Extension Period, if at all, upon at
least 300 days' written notice to Landlord prior to the expiration date of the
then current Term of this Lease, time being of the essence. With respect to the
First Extension period, Tenant's exercise notice shall provide whether Tenant
has elected a three or five year extension.
(c) Each Extension Period shall be on the same terms and
conditions contained in this Lease, except that (i) the Annual Base Rent shall
be the "Fair Market Rental Rate" for the Demised Premises, but in no event less
than the sum of (A) $19.00 per rentable square foot of the Demised Premises, and
(B) janitorial and utility costs for the Demised Premises (to the extent that
Landlord is to provide such services), (ii) Tenant shall not be entitled to any
improvement allowances set forth herein with respect to the Extension Periods;
and (iii) Tenant shall not have any further options of renewal after the Second
Extension Period.
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(d) Except for the specific Extension Periods set forth above,
there shall be no further privilege of renewal.
(e) As used herein, the term "Fair Market Rental Rate" shall mean
the average of the annual rental rates then being charged for comparable space
in the Building or, if no comparable space exists in the Building, for "Class A"
office space in the Columbia, Maryland market (exclusive of Town Center) for
leases commencing on or about the commencement of the Extended Term, taking into
consideration the age, use, location and floor level of the applicable building,
leasehold improvements or allowances provided, rental concessions, the term of
the lease under consideration, the extent of services provided thereunder, the
creditworthiness of Tenant, rent escalations and other adjustments to the base
rental and any other relevant term or condition in making such evaluation.
Landlord shall determine the Fair Market Rental Rate using its good faith
judgment and shall provide written notice of such rate within fifteen (15) days
after Tenant's exercise notice pursuant to this Section. Tenant shall thereupon
have the following options: (i) to accept such proposed "Fair Market Rental
Rate", (ii) to decline to exercise its renewal option, or (iii) to notify
Landlord in writing that Tenant objects to the proposed rental rate. Tenant must
provide Landlord with written notification of its election within fifteen (15)
days after Tenant's receipt of Landlord's notice, otherwise Tenant shall be
deemed to have elected clause (ii) above, in which event Tenant shall be deemed
to have rescinded its exercise notice and this Lease shall expire on the
Expiration Date as if Tenant had not elected to exercise its renewal option
hereunder. If Tenant objects to Landlord's proposed "Fair Market Rental Rate" in
accordance with clause (iii) above, Landlord and Tenant shall attempt to
negotiate a mutually acceptable rental rate within fifteen (15) days following
notification by Tenant, and if such negotiations have not been concluded within
such fifteen (15) day period, either party may require determination of the Fair
Market Rental Rate for the Extension Period by giving written notice to the
other no later than ten (10) days after the expiration of such fifteen (15) day
period, which notice shall designate a real estate broker selected by the
initiating party experienced in office leasing in the Columbia, Maryland market.
Within ten (10) days after receipt of such notice, the other party to this Lease
shall select a real estate broker meeting the aforesaid requirements and give
written notice of such selection to the initiating party. If the two (2) real
estate brokers fail to agree upon the Fair Market Rental Rate within ten (10)
days after selection of the second broker, the two (2) brokers shall select a
third (3rd) real estate broker meeting the foregoing requirements to determine
the Fair Market Rental Rate within ten (10) days after the appointment of the
third (3rd) broker. The Fair Market Rental Rate applicable to the Extended Term
shall equal the arithmetic average of such three (3) determinations; provided,
however, that if one (1) broker's determination deviates more than five percent
(5%) from the median of the three (3) determinations, the Fair Market Rental
Rate shall be an amount equal to the average of the other two (2)
determinations. The determination of Fair Market Rental Rate shall be final,
binding and conclusive on Landlord and Tenant.
26. RIGHT OF FIRST OFFER. Provided that Tenant is not in default under
the terms of the Lease beyond all applicable notice and cure periods hereunder,
Tenant shall have a one-time right of first offer to lease space identified on
Exhibit "E" attached hereto and located on the second and first floors of the
Building, consisting of approximately 25,000 rentable square feet and 58,000
rentable square feet in the aggregate, respectively, upon the following terms
and conditions.
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(a) In the event that Landlord anticipates that all or any portion
of the First Offer Space may become available during the Term, Landlord shall
give Tenant written notice of the availability of such First Offer Space setting
forth the terms and conditions (including, without limitation, the rental rate
and the commencement and duration of the proposed term, etc.) upon which
Landlord would be willing to lease such First Offer Space ("Landlord's
Availability Notice"). Within ten (10) days after Tenant's acceptance receipt of
Landlord's Availability Notice, Tenant must give Landlord written notice
pursuant to which Tenant shall elect either (i) to lease such First Offer Space
on the terms and conditions set forth in Landlord's Availability Notice, or (ii)
to decline to lease such First Offer Space. If Tenant fails to elect clause (i)
within such ten (10)-day period, then Tenant shall be deemed to have declined to
lease the First Offer Space. In the event that Tenant declines (or is deemed to
have declined) to lease the First Offer Space, then Landlord shall be free to
Lease such First Offer Space to any other party(-ies) without any further
obligation to Tenant hereunder, provided, however that Tenant shall retain its
first offer rights hereunder with respect to any part of the First Offer Space
(i) not covered by Landlord's Availability Notice and (ii) not covered by any
previous Landlord's Availability Notice.
(b) If Tenant chooses to lease the First Offer Space in accordance
with subparagraph (a) above, then Landlord and Tenant shall execute an amendment
to the Lease to provide for the inclusion of the First Offer Space under the
terms and conditions set forth in Landlord's Availability Notice. Except as
provided in Landlord's Availability Notice, all other terms and conditions of
the Lease shall apply to the First Offer Space except that (i) Tenant's Fraction
with respect to Operating Costs shall be increased to take into account the
additional square footage of the First Offer Space and all other figures in the
Lease affected by the addition of such square footage shall be adjusted
accordingly, (ii) Landlord shall not be required to perform any improvements to
the First Offer Space unless specifically provided for in Landlord's
Availability Notice, and (iii) Tenant shall not be entitled to any allowances,
credits, options or other concessions with respect to the First Offer Space
unless specifically provided for in Landlord's Availability Notice.
(c) The effective date of the addition of the First Offer Space to
the Demised Premises shall be the later of (i) the thirty-first (31st) day after
Tenant's acceptance of Landlord's Availability Notice, or (ii) the date that
Landlord delivers possession of the First Offer Space to Tenant in accordance
with the terms of Landlord's Availability Notice.
(d) Except as otherwise provided in Landlord's Availability
Notice, Tenant agrees to accept the First Offer Space in its "AS IS" condition,
in the then current physical state and condition thereof, without any
representation or warranty by Landlord.
(e) If Tenant fails to exercise its right of first offer strictly
in accordance with the provisions of this Section, then Landlord shall have the
right to lease such First Offer Space to any other party(ies) with no further
obligation to offer such space to Tenant pursuant to the terms of this Section.
(f) Notwithstanding anything herein to the contrary, Tenant's
Right of First Offer hereunder is subject to all expansion, extension, renewal,
first offer, first refusal and other rights to lease, as applicable, which
Landlord (or any predecessor to Landlord's interest in
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the Property) has granted to other tenants of the Building prior to the date of
this Lease. Thus, Landlord's Availability Notice will be delivered to Tenant
only after Landlord has appropriately notified and received negative responses
from all other tenants with rights in the First Offer Space superior to
Tenant's. Landlord acknowledges that, as of the date hereof, the following
tenants have rights to the First Offer Space which are superior to the rights of
Tenant:
Scientific Applications International Corporation
27. EXPANSION RIGHTS. Provided that Tenant is not in default in the
performance of any of its obligations hereunder beyond all applicable notice and
cure periods hereunder, Landlord hereby grants Tenant the right (the "EXPANSION
OPTION") to lease an additional 25,000 square feet of space on the second floor
of the Building as shown on Exhibit "F" attached hereto and made a part hereof
(the "EXPANSION SPACE"), subject to the following terms and conditions:
(a) In the event that Tenant desires to exercise the Expansion
Option, Tenant shall provide Landlord with written notice (the "EXPANSION
EXERCISE NOTICE") on or before June 1, 2000 (the "EXERCISE DEADLINE") of
Tenant's election to exercise the Expansion Option, time being of the essence.
(b) All other terms and conditions of the Lease shall apply to the
Expansion Space except that (i) the Annual Rent with respect to Expansion Space
for the balance of the initial Term shall be as determined by subparagraph (c)
below; (ii) the Annual Base Rent with respect to Expansion Space for any
Extension Period, if applicable, shall be the same Base Rental rate (on a
dollars per square foot basis) payable with respect to the balance of the
Demised Premises pursuant to Section 25 hereof; (iii) Tenant's Fraction with
respect to Operating Expenses shall be increased to take into account the
additional square footage of the Expansion Space and all other figures in the
Lease affected by the addition of such square footage shall be adjusted
accordingly; and (iv) Tenant shall not be entitled to any allowances, credits,
options or other concessions with respect to the First Offer Space.
(c) Landlord and Tenant acknowledge that the Annual Base Rent
payable with respect to the Expansion Space shall be determined based upon the
scope of the improvements to be performed by Landlord, if any, with respect to
the Expansion Space (the "EXPANSION SPACE IMPROVEMENTS"), as hereinafter
provided:
(i) Within sixty (60) days after Landlord's receipt of
Tenant's Expansion Exercise Notice, Landlord shall provide written notice to
Tenant describing the scope of the Expansion Space Improvements to be performed
by Landlord, if any. If Landlord's notice provides that Landlord will construct
the "EXPANSION SPACE SHELL" (as hereinafter defined), then the Annual Base Rent
payable by Tenant with respect to the Expansion Space shall be the
then-escalated Base Rental rate in effect with respect to the balance of the
Demised Premises as set forth in Section 10 of the Fundamental Lease Provisions
(with corresponding adjustments for subsequent lease years) reduced by $5.22 per
rentable square foot (the "EXPANSION BASE RENT"). Accordingly, in the event that
the Landlord constructs the Expansion Space Shell, the Expansion Base Rent shall
be payable as follows (proportionately prorated for any partial lease year in
which the Expansion Space Commencement Date occurs):
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------------------------------------------------------------------------
YEAR/PERIOD Annual rent Monthly Installment Rent/Sq. Ft.
------------------------------------------------------------------------
Lease Year 1 $320,000.00 $26,666.67 $12.80
------------------------------------------------------------------------
Lease Year 2 $330,750.00 $27,562.50 $13.23
------------------------------------------------------------------------
Lease Year 3 $341,500.00 $28,458.33 $13.66
------------------------------------------------------------------------
Lease Year 4 $352,750.00 $29,395.83 $14.11
------------------------------------------------------------------------
Lease Year 5 $364,250.00 $30,354.16 $14.57
------------------------------------------------------------------------
Lease Year 6 $376,000.00 $31,333.33 $15.04
------------------------------------------------------------------------
Lease Year 7 $388,000.00 $32,333.33 $15.52
------------------------------------------------------------------------
(ii) As used herein, the "Expansion Space Shell" shall include
only the construction of the Expansion Space floor, the installation of windows,
and no other improvements. Tenant acknowledges that the Expansion Space Shell
shall exclude, by way of example and not limitation, any heating, ventilating
and air conditioning systems, utility systems and any demising walls.
(iii) In the event that Landlord agrees to perform any
additional work requested by Tenant in excess of the Expansion Space Shell, then
the Expansion Base Rent shall be increased by the cost of such additional
improvements, amortized on a straight-line basis over the balance of the initial
Term of the Lease with an interest factor of 12% per annum.
(iv) In the event that Landlord elects not to construct all or
part of the Expansion Space Shell, then the Expansion Base Rent shall be
reduced: (i) by $1.65 per rentable square foot of the Expansion Space if
Landlord elects not to construct the Expansion Space floor, and/or (ii) by $0.65
per rentable square foot of the Expansion Space if Landlord elects not to
install windows with respect to the Expansion Space.
(v) Notwithstanding anything contained herein to the contrary,
Landlord shall have no obligation to construct the Expansion Space Shell or to
perform any other Expansion Space Improvements. In the event that Landlord
declines to perform any Expansion Space Improvements, then the Expansion Base
Rent shall be adjusted pursuant to the terms of this Section and Tenant shall be
obligated to perform all improvements necessary to prepare the Expansion Space
for Tenant's occupancy.
(d) Except for any Expansion Space Improvements to be performed by
Landlord pursuant to subparagraph (c) above, if any, Tenant shall perform, at
its sole cost and expense, all improvements necessary to convert the Expansion
Space to office use (including, without limitation, decking the Expansion Space
and installing windows if Landlord elects not to perform such work pursuant to
subparagraph (c) above) and all other work which Tenant deems necessary or
desirable for Tenant's initial occupancy thereof, which improvements shall be
subject to the prior written approval of Landlord, which approval shall not be
unreasonably withheld, conditioned, or delayed. All contractors utilized for the
performance of such improvements shall be subject to the prior written approval
of Landlord, and all work shall be performed in accordance with the Expansion
Plans (as hereinafter defined) in a good and workmanlike manner and in
accordance with all applicable laws. Prior to the commencement of any work
within the Expansion Space, Tenant shall submit to Landlord, for Landlord's
prior approval, proposed plans and specifications (the "PROPOSED EXPANSION
PLANS") for Tenant's proposed improvements to the Expansion Space, which plans
shall be prepared by a registered
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architect licensed to do business within the State of Maryland. The Proposed
Expansion Plans shall include all information and specifications necessary for
Landlord to fully review the work described therein and shall conform to all
applicable laws and requirements of public authorities and insurance
underwriters' requirements. If Landlord reasonably disapproves the Proposed
Expansion Plans, Landlord shall state specifically the reasons for such
disapproval, and Tenant shall cause its architects to promptly make any changes
in the Proposed Expansion Plans reasonably required by Landlord. The Proposed
Expansion Plans, as finally approved by Landlord, are referred to herein as the
"EXPANSION PLANS." All work described in the Expansion Plans is referred to
herein as the "EXPANSION SPACE IMPROVEMENTS."
(e) In the event that Tenant exercises the Expansion Option in
accordance with this Section, the term of the Expansion Space shall commence on
the later of (i) the Substantial Completion (as hereinafter defined) of any
Expansion Space Improvements to be performed by Landlord, if any, or (ii) April
1, 2001 (the "EXPANSION SPACE COMMENCEMENT DATE") and shall expire coterminous
with the Expiration Date of this Lease (subject to Tenant's options to renew as
provided herein). Notwithstanding the foregoing, if the Expansion Space
Commencement Date has not occurred because of the holding over or retention of
possession of any tenant or occupant, or for any other reason, Landlord shall
not be subject to any liability to Tenant. Under such circumstances, the rent
reserved and covenanted to be paid herein with respect to the Expansion Space
shall not commence until Landlord delivers possession of the Expansion Space to
Tenant, and no such failure to deliver possession shall in any other respect
affect the validity of this Lease. As used herein, the term "Substantial
Completion" shall mean that the Expansion Space Improvements to be performed by
Landlord, if any, have been completed except for: (i) any improvements or work
to be performed by Tenant; (ii) minor or insubstantial details of construction,
mechanical adjustments, or finishing touches like plastering or painting, which
items shall not adversely affect Tenant's ability to commence construction of
any improvements to be performed by Tenant; (iii) items not then completed
because of failure by Tenant to promptly make changes in the Proposed Expansion
Plans reasonably required by Landlord in connection with the approval thereof;
(iv) changes in the Proposed Expansion Plans requested by Tenant; and (v) the
performance of any work or activity in the Demised Premises by Tenant or any of
its employees, agents or contractors.
(f) In the event that Tenant exercises the Expansion Option in
accordance with this Section, Landlord and Tenant shall, within seventy-five
(75) days thereafter, execute an amendment to this Lease memorializing Tenant's
lease of the Expansion Space under the terms set forth herein. Tenant shall
commence payment of rent with respect to the Expansion Space as of the Expansion
Space Commencement Date.
(g) Except for any Expansion Space Improvements to be performed by
Landlord, if any, in accordance with this Section, Tenant agrees to accept the
Expansion Space in its "AS IS" condition, in the physical state and condition
thereof at the time of lease execution (excepting, however, structural defects
with respect to the Building of the presence of the Hazardous Substances in the
Expansion Space), without any representation or warranty by Landlord.
(h) If Tenant fails to exercise its Expansion Option strictly in
accordance with the provisions of this Section, then Landlord shall have the
right to lease such
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Expansion Space to any other party(-ies) with no further obligation to lease
such space to Tenant pursuant to the terms of this Section.
(i) Notwithstanding anything herein to the contrary, Tenant's
Expansion Option hereunder is subject to all expansion, extension, renewal,
first offer, first refusal and other rights to lease, as applicable, which
Landlord (or any predecessor to Landlord's interest in the Property) has granted
to other tenants of the Building prior to the date of this Lease.
28. STORAGE SPACE. In addition to the Demised Premises, Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord approximately
5,000 rentable square feet of storage space (the "Storage Space") located in the
basement of the Building as set forth on Exhibit "G" attached hereto and made a
part hereof. The term of letting with respect to the Storage Space shall
commence on the Commencement date and expire on the Termination date. The gross
rental payable with respect to the Storage Space shall be Five Thousand Dollars
($5,000.00) per annum, plus electricity costs. Tenant accepts the Storage Space
in its "AS IS" condition, in the current physical state and condition thereof,
without any representation or warranty by Landlord. Landlord shall be
responsible for repairing exterior walls and drainage pipes to prevent water
from entering the Storage Space. Notwithstanding the foregoing, if at any time
during the Term hereof Tenant leases additional office space in the Building
such that the total office square footage leased by Tenant in the Building
exceeds 95,000 rentable square feet in the aggregate, then Tenant shall have the
right to terminate the term of letting with respect to the Storage Space by
providing written notice thereof to Landlord upon sixty (60) days' advance
written notice.
29. SIGNAGE. Tenant shall have the right to install, at its sole cost
and expense, one exterior sign on the top floor of the Building, provided,
however, that Tenant shall have first obtained (i) Landlord's prior written
approval as to the design and location of such signage, which approval shall not
be unreasonably withheld, and (ii) at Tenant's sole cost and expense, all
requisite permits and governmental or other approvals (including, without
limitation, Xxxxxx Research and Development Corporation) prior to the
installation of such signage. Landlord hereby approves Tenant's signage as shown
on Exhibit "I" attached hereto and made a part hereof, subject to Tenant
obtaining all requisite approvals pursuant to clause (ii) above.
30. ROOF RIGHTS.
(a) Tenant shall have the right to utilize a portion of the
Building rooftop for the purpose of installing, at tenant's sole cost and
expense, an antenna and satellite and associated equipment (collectively, the
"COMMUNICATIONS EQUIPMENT") necessary for the conduct of Tenant's operations at
the Demised Premises. The location of the rooftop portion to be utilized by
Tenant (the "Equipment Space") shall be subject to Landlord's prior written
approval, which shall not be unreasonably withheld, conditioned or delayed, and
shall not exceed 500 square feet in the aggregate.
(b) Prior to the installation of any Communications Equipment,
Tenant shall, deliver to Landlord, for Landlord's approval, which approval shall
not be unreasonably withheld, conditioned or delayed, detailed plans specifying
the location and design of the
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Communications Work as well as any work proposed in connection with the
installation thereof. In the event that Landlord approves such plans, Tenant
shall install, at its sole cost and expense, such Communications Equipment in
accordance with the plans. Prior to the installation of the Communications
Equipment, Tenant shall obtain, at its sole cost and expense, all requisite
permits and approvals necessary for the installation and operation of the
Communications Equipment. All work shall be performed in a safe, good and
workmanlike manner.
(c) Tenant agrees to (i) keep the Equipment Space and the
Communications Equipment in good order and repair and to promptly repair all
damage to the Building caused by Tenant, its agents, contractors and employees;
and (ii) not disrupt, interfere or otherwise adversely affect or interfere with
other providers of services to the Building; and (iii) promptly eliminate any
interruption with the communications facilities and/or equipment of
communications service providers located at and/or servicing the Building
existing as of the date that Tenant installs the Communications Equipment.
Landlord agrees to either include similar language in any other leases/licenses
for communications providers at the Building or to use reasonable efforts,
without unreasonable expense, to cause such other tenants/licensees to avoid
unreasonable interference with Tenant's Communications Equipment or, in the
alternative, to assign its enforcement rights under such leases/licenses to
Tenant.
31. PARKING RIGHTS. At all times during the Term of this Lease,
Landlord agrees to provide Tenant with the use of up to seven (7) parking spaces
per 1,000 rentable square feet of the Demised Premises, rent-free, of which (A)
one (1) parking space per 1,000 rentable square feet of the Demised Premises
shall be reserved, and (B) six (6) parking spaces per 1,000 rentable square feet
of the Demised Premises shall be non-reserved. The location of the reserved
parking spaces shall be as set forth on Exhibit "H" attached hereto and made a
part hereof.
32. COMMUNICATIONS SERVICE.
Tenant shall have the non-exclusive right to be a provider of
fiber optic telephone service to the Building. Landlord agrees that, so long as
this Lease remains in full force and effect and e.spire Communications, Inc. is
providing fiber optic telephone service to the Building, Landlord shall either
(A) include language in future tenant proposals that e.spire Communications,
Inc. is a provider of communications service to the Building, or (B) advise all
existing tenants at the Building that e.spire Communications, Inc. is a provider
of communications service to the Building. Notwithstanding the foregoing,
nothing herein shall be deemed to preclude Landlord from, by way of example and
without limitation, contracting with or authorizing other communications and/or
telephone service providers to provide services to the Building that are the
same or similar to those provided by Tenant, nor shall the foregoing preclude
Landlord from informing prospective and/or existing tenants of the Building as
to the availability of such service from other providers.
33. HOLDING-OVER. Should Tenant continue to occupy the Demised
Premises after the expiration of the Term, including any renewal or renewals
thereof, or after a forfeiture incurred, such tenancy shall (without limitation
of any of Landlord's rights or remedies therefor) be one at sufferance at a
minimum monthly rental equal to one hundred twenty-five percent (125%) of the
rent payable for the last month of the Term for each of the first three (3)
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months (or portions thereof) of such holdover period, and for each month
thereafter at a minimum monthly rent equal to one hundred fifty percent (150%)
of the rent payable during the last month of the Term.
34. SECURITY INTEREST. Intentionally Omitted.
35. FINANCIAL STATEMENTS. Upon the request of any mortgagee,
prospective mortgagee or prospective purchaser of the Property, but in no event
more than twice annually, Tenant shall provide to Landlord complete copies of
Tenant's latest annual financial statements and such other public or readily
available information as may be reasonably requested by such mortgagee and/or
purchaser.
36. RENT TAX. If, during the Term, including any renewal or extension
thereof, any tax is imposed upon the privilege of renting or occupying the
Demised Premises or upon the amount of rentals collected therefor, Tenant will
pay each month, as additional rent, a sum equal to such tax or charge that is
imposed for such month, but nothing herein shall be taken to require Tenant to
pay any income, estate, inheritance or franchise tax imposed upon Landlord.
37. QUIET ENJOYMENT. So long as Tenant is not in default of its
obligations under this lease beyond all applicable notice and cure periods
hereunder, Tenant shall quietly have and enjoy the Demised Premises during the
term of this Lease without hindrance or molestation by anyone claiming by or
through Landlord, subject, however, to the exceptions, reservations and
conditions of this Lease.
38. NOTICES. All notices required to be given by Landlord to Tenant
shall be sufficiently given., by overnight express delivery service or by
courier service delivery against written receipt or signed proof of delivery, or
mailing the same by registered or certified mail, return receipt requested, to
Tenant's Address. Notices given by Tenant to Landlord must be given by
registered or certified mail, return receipt requested, overnight express
delivery service or by courier service delivery against written receipt or
signed proof of delivery, to Landlord at Landlord's Address, with a copy to the
Property Manager, and to such other person and address as Landlord may from time
to time designate in writing.
39. MISCELLANEOUS.
(a) Landlord and Tenant each represents and warrants to the other
that it has dealt with no broker, agent or other intermediary in connection with
this Lease other than Landlord's Broker and Tenant's Broker, described in
Section 13 of the Fundamental Lease Provisions, and that insofar as it knows, no
other broker, agent or other intermediary negotiated this Lease or introduced
Tenant to Landlord or brought the Building to Tenant's attention for the lease
of space therein. Each of Landlord and Tenant agrees to indemnify, defend and
hold the other and its partners, employees, agents, their officers and partners,
harmless from and against any claims made by any broker, agent or other
intermediary claiming through the indemnifying party other than Landlord's
Broker or Tenant's Broker, with respect to a claim for broker's commission or
fee or similar compensation brought by any person in connection with this Lease,
provided that the other party has not in fact retained such broker, agent or
other intermediary. Landlord agrees to pay all commissions payable to Landlord's
Broker pursuant to a separate
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agreement between Landlord and Landlord's Broker. Landlord's Broker shall pay
Tenant's Broker A co-brokerage commission pursuant to a separate agreement
between Landlord's Broker and Tenant's Broker.
(b) The word "Tenant" as used in this Lease shall be construed to
mean tenants in all cases where there is more than one tenant, and the necessary
grammatical changes required to make the provisions hereof apply to
corporations, partnerships or individuals, men or women, shall in all cases be
assumed as though in each case fully expressed. This Lease shall not inure to
the benefit of any assignee, heir, legal representative, transferee or successor
of Tenant except in accordance with the provisions of Section 3 of this Lease.
Subject to the foregoing limitation, each provision hereof shall extend to and
shall, as the case may require, bind and inure to the benefit of Tenant and its
heirs, legal representatives successors and assigns.
(c) The term "Landlord" as used in this Lease means the fee owner
of the Building or, if different, the party holding and exercising the right, as
against all others (except space tenants of the Building) to possession of the
entire Building. In the event of the voluntary transfer of such ownership or
right to a successor-in-interest of Landlord, Landlord shall be freed and
relieved of all further liability and obligation hereunder which shall
thereafter accrue (and, as to any unapplied portion of Tenant's security
deposit, Landlord shall be relieved of all liability therefor upon transfer of
such portion to its successor in interest) and Tenant shall look solely to such
successor in interest for the performance of the covenants and obligations of
the Landlord hereunder (either in terms of ownership or possessory rights). The
successor in interest shall not (i) be liable for any previous act or omission
of a prior landlord; (ii) be subject to any rental offsets or defenses against a
prior landlord; (iii) be bound by any payment by Tenant of Annual Base Rent in
advance in excess of one (1) month's rent; or (iv) be liable for any security
not actually received by it. Subject to the foregoing, the provisions hereof
shall be binding upon and inure to the benefit of the successors and assigns of
Landlord.
(d) Notwithstanding anything to the contrary contained in this
Lease, it is expressly understood and agreed by Tenant that none of Landlord's
covenants, undertakings or agreements are made or intended as personal
covenants, undertakings or agreements by Landlord or its partners, shareholders
or trustees, or any of their respective partners, shareholders or trustees, and
any liability for damage or breach or nonperformance by Landlord, or for
Landlord's negligence, shall be collectible only out of Landlord's interest in
the Building and no personal liability is assumed by, nor at any time may be
asserted against, Landlord or its partners, shareholders or trustees or any of
its or their partners, shareholders, trustees, officers, agents, employees,
legal representatives, successors or assigns, if any; all such liability, if
any, being expressly waived and released by Tenant. Notwithstanding anything to
the contrary contained in this Lease, in no event shall Landlord be liable to
Tenant for any consequential damages, lost profits, loss of business or other
similar damages, regardless of whether the same arises out of the negligence of
Landlord, its agents or employees.
(e) Landlord and Landlord's agents have made no representation,
agreements, conditions, warranties, understandings, or promises, either oral or
written, other than as herein set forth, with respect to this Lease, the
Building, the Property, the Demised Premises, or otherwise.
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(f) Time is of the essence of this Lease and all of its
provisions.
(g) If Landlord is delayed or prevented from performing any of its
obligations under this Lease by reason of causes beyond Landlord's control, the
period of such delay or prevention shall be deemed added to the time herein
provided for the performance of any such obligation by Landlord. If Tenant is
delayed or prevented from performing any of its non-monetary obligations under
this Lease (i.e., other than payment of rent) by reason of causes beyond
Tenant's control, the period of such delay or prevention shall be deemed added
to the time herein provided for the performance of any such non-monetary
obligation by Tenant.
40. PRIOR AGREEMENT, AMENDMENTS. This Lease, the exhibits, and any
riders attached hereto and forming a part hereof set forth all of the promises,
agreements, conditions, warranties, representations and understandings between
Landlord and Tenant relative to the Premises and this leasehold. No alteration,
amendment, modification, waiver, understanding or addition to this Lease shall
be binding unless reduced to writing and signed by the party against whom
enforcement is sought. Tenant agrees to execute any amendment to this Lease
required by a mortgagee of the Building, which amendment does not materially
adversely affect Tenant's rights or obligation hereunder.
41. CAPTIONS. The captions of the paragraphs in this Lease are
inserted and included solely for convenience and shall not be considered or
given any effect in construing the provisions hereof.
42. SEVERABILITY If any provision contained in this Lease shall, to
any extent, be invalid or unenforceable, the remainder of this Lease (and the
application of such provision to the persons or circumstances, if any, other
than those as to which it is invalid or unenforceable) shall not be affected
thereby, and each and every provision of this Lease shall be valid and
enforceable to the fullest extent permitted by law.
43. GOVERNING LAW. This Lease shall be governed by and construed in
accordance with the laws of the State in which the Property is located.
44. DELIVERY FOR EXAMINATION. DELIVERY OF THE LEASE TO TENANT SHALL
NOT BIND LANDLORD IN ANY MANNER, AND NO LEASE OR OBLIGATIONS OF LANDLORD SHALL
ARISE UNTIL THIS INSTRUMENT IS SIGNED BY BOTH LANDLORD AND TENANT.
45. YEAR 2000. Landlord represents that, TO Landlord's knowledge, all
equipment, software product, appliances and systems necessary for the proper
operation of the elevators, HVAC systems, utility systems, security systems
(other than those installed by Tenant) and power supply systems located within
the Building and the Demised Premises (other than items installed by Tenant) are
Year 2000 Compliant. Notwithstanding the foregoing, Landlord makes no
representation or warranty as to the performance or functionality of any
equipment, products, appliances and systems located outside of the Building
(including, without limitation, those owned or controlled by any utility
provider servicing the Building). "Year 2000 Compliant" shall mean that neither
the performance nor the functionality of such systems and facilities will be
affected by the date "January 1, 2000" or specific dates prior or subsequent
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thereto. In the event that such equipment, products, systems and facilities are
not Year 2000 Compliant and the performance or functionality of such equipment,
products, Systems and facilities are adversely affected as a result thereof,
then Landlord shall promptly take reasonable actions to restore such systems and
facilities to the performance and functionality levels which existed immediately
prior thereto.
46. SKYLIGHT. Landlord agrees to install a skylight in the Demised
Premises pursuant to plans prepared by Xxxxxxxx Xxxxx Architects which have been
approved by Landlord and Tenant. Landlord agrees to contribute the initial
Forty-Thousand Dollars ($40,000) towards the actual "hard" costs incurred in
connection with the construction of the skylight. All hard costs in excess of
$40,000 shall be divided equally between Landlord and Tenant. Notwithstanding
the foregoing, in no event shall Landlord's total contribution exceed Sixty
Thousand Dollars ($60,000) in the aggregate.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Lease or
caused this Lease to be executed by their duly authorized representatives the
day and year first above written.
LANDLORD:
COLGATEDRIVE ASSOCIATES, L.P.,
a Pennsylvania limited partnership
By: COLGATEDRIVE, INC.,
ATTEST: its general partner
By:
-------------------------- --------------------------------
Name: Xxxxxxx X'Xxxxx
Title: President
TENANT:
ATTEST e.spire COMMUNICATIONS, INC.
By:
-------------------------- -----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President/ Secretary
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