EXHIBIT 10.81
LEASE AGREEMENT
BETWEEN
OXBRIDGE DEVELOPMENT AT CROWN POINTE, L.C.
A MARYLAND LIMITED LIABILITY COMPANY
AS LANDLORD
AND
THERIMMUNE RESEARCH CORPORATION
A MARYLAND CORPORATION
AS TENANT
FOR PREMISES LOCATED AT
000 XXXXXXXXXXXX XXXXX
XXXXXXXXXXXX, XXXXXXXX
DATED: JUNE ___, 2001
TABLE OF CONTENTS
ARTICLE I BASIC LEASE PROVISIONS..................... 1
ARTICLE II DEFINITIONS................................ 2
ARTICLE III THE PREMISES............................... 5
ARTICLE IV TERM....................................... 8
ARTICLE V RENT....................................... 9
ARTICLE VI SECURITY DEPOSIT........................... 10
ARTICLE VII OPERATING EXPENSES......................... 10
ARTICLE VIII TAXES...................................... 16
ARTICLE IX PARKING.................................... 18
ARTICLE X USE; LEGAL COMPLIANCE...................... 18
ARTICLE XI ASSIGNMENT AND SUBLETTING.................. 19
ARTICLE XII MAINTENANCE AND REPAIR..................... 21
ARTICLE XIII INITIAL CONSTRUCTION; ALTERATIONS.......... 22
ARTICLE XIV SIGNS...................................... 24
ARTICLE XV TENANT'S EQUIPMENT AND PROPERTY............ 25
ARTICLE XVI RIGHT OF ENTRY............................. 27
ARTICLE XVII INSURANCE.................................. 27
ARTICLE XVIII LANDLORD SERVICES AND UTILITIES............ 21
ARTICLE XIX LIABILITY OF LANDLORD...................... 22
ARTICLE XX RULES AND REGULATIONS...................... 32
ARTICLE XXI DAMAGE; CONDEMNATION....................... 24
ARTICLE XXII DEFAULT OF TENANT.......................... 25
ARTICLE XXIII MORTGAGES.................................. 37
ARTICLE XXIV SURRENDER, HOLDING OVER.................... 37
ARTICLE XXV QUIET ENJOYMENT............................ 28
ARTICLE XXVI HAZARDOUS MATERIALS........................ 38
ARTICLE XXVII MISCELLANEOUS.............................. 30
LIST OF EXHIBITS
Exhibit A-1 Plat Showing Land and Building
Exhibit A-2 Floor Plan Showing Premises
Exhibit A-3 Legal Description of the Land
Exhibit B Work Agreement
Exhibit C Existing Title Matters
Exhibit D Form of Letter of Credit
Exhibit D-1 Drawing of Tenant's Sign
Exhibit E Rules and Regulations
Exhibit F Subordination, Nondisturbance, and Attornment Agreement
Exhibit G Janitorial Specifications
LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") is made as of the ____ day of June,
2001 (the "Date of Lease"), by OXBRIDGE DEVELOPMENT AT CROWN POINTE, L.C., a
Maryland limited liability company ("Landlord"), and THERIMMUNE RESEARCH
CORPORATION, a Maryland corporation ("Tenant").
Landlord and Tenant, intending legally to be bound, covenant and agree
as set forth below.
ARTICLE I
BASIC LEASE PROVISIONS
When used in this Lease, the following terms shall have the meanings
set forth below:
1.1. Building. The building, known as Crown Pointe II and
containing approximately 61,342 rentable square feet, as shown by cross-hatching
on Exhibit A-1 attached hereto and made a part hereof, including all
alterations, additions, improvements, restorations or replacements now or
hereafter made to such building, with an address of 000 Xxxxxxxxxxxx Xxxxx,
Xxxxxxxxxxxx, Xxxxxxxx 00000. The precise rentable area of the Building shall be
determined as set forth in Section 3.1. The Building is part of the Crown Pointe
Corporate Center (the "Corporate Park") which consists of the Building, Building
I (defined in Section 2.4), the Common Area (defined in Section 2.7), and the
Land (defined in Section 2.11).
1.2. Premises. Approximately 10,591 rentable square feet located on
the first floor of the Building, as cross-hatched on Exhibit A-2 attached to and
made a part of this Lease. The precise rentable area of the Premises shall be
determined as set forth in Section 3.1. The Premises do not include the loading
dock serving the Building, but such loading dock is part of the Common Area
which Tenant shall be entitled to use in common with other tenants under Section
3.1.
1.3. Term. The period commencing on the Commencement Date and
ending on February 28, 2011.
1.4. Renewal Options. One (1) five (5) year option to renew.
1.5. Commencement Date. Earlier of (i) September 15, 2001 or (ii)
the date Tenant commences business operations within the Premises. If, however,
Tenant is not given full access to the Premises by Landlord on or before June
15, 2001 for the commencement of construction of the Tenant Work (as defined in
the Work Agreement), the September 15, 2001 date shall be extended by one (1)
day for each day that elapses from (and including) June 16, 2001 until the date
that such access is provided, up to a maximum extension of thirty (30) days.
1.6. Expiration Date. February 28, 2011, as such date may be
extended pursuant to Section 4.2
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1.7. Basic Rent. Twenty-Six and 00/100 Dollars ($26.00) for each
rentable square foot of the Premises during the first Lease Year [equal to a
total of Two Hundred Seventy-Five Thousand Three Hundred Sixty Six and 00/100
Dollars ($275,366.00) for the first Lease Year, subject to annual increase under
Section 1.8].
1.8. Escalation. On the first day of the second Lease Year, and on
the first day of every Lease Year thereafter during the Term, the Basic Rent
shall increase at the rate of three percent (3%) per annum over the Basic Rent
in effect during the immediately preceding Lease Year.
1.9. Security Deposit. One Hundred Seventy- Six Thousand Two
Hundred Seventy- Five and 00/100 Dollars ($176,275.00), subject to reduction in
accordance with Article VI.
1.10. Intentionally Omitted.
1.11. Expense Stop. Four Hundred Forty-One Thousand Six Hundred
Sixty-Two and 40/100 Dollars ($441,662.40) ($7.20 per rentable square foot).
1.12. Tenant's Proportionate Share. A percentage obtained by
multiplying 100 by a fraction, the numerator of which shall be the rentable area
of the Premises and the denominator of which shall be the total rentable area of
the Building.
1.13. Parking Rent. None.
1.14. Parking Space Allocation. 42 unreserved, non-exclusive parking
spaces in the Parking Facilities (or such greater or fewer number of spaces as
will equal 4 spaces per 1,000 square feet of rentable area contained in the
Premises).
1.15. Permitted Use. General office purposes, laboratory research
not involving the use of live animals, and lawful uses ancillary thereto.
1.16. Broker(s). Landlord's: TSC Realty Services, LLC. Tenant's:
Atlantic Real Estate Group, Inc.
1.17. Landlord's Address. Oxbridge Development at Crown Pointe,
L.C., 000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, Attn: Xxxx X.
Xxxxx. Copies to: TSC Realty Services, LLC, 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxx 00000, Attn: Peregrine Xxxxxxx and Linowes and Xxxxxxx LLP,
0000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxx 00000 Attn: Xxxxxx X.
Xxxxxxxxx, Esquire.
1.18. Tenant's Address. TherImmune Research Corporation, 000
Xxxxxxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000, Attn: Xx. Xxxxxx Xxxxxxxx.
ARTICLE II
DEFINITIONS
When used in this Lease, the following terms shall have the meanings
set forth below:
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2.1. Additional Rent. As defined in Section 5.3.
2.2. Agents. Officers, partners, directors, employees, agents,
licensees, customers and invitees.
2.3. Alterations. Alterations, additions or improvements of any
kind or nature to the Premises or the Building, whether structural or
nonstructural, interior, exterior or otherwise excluding alterations which are
solely cosmetic in nature within the interior of the Premises (i.e. installation
or replacement of carpet, paint or wallcoverings).
2.4. Building I. The building located in the Corporate Park known
as Crown Pointe Corporate Center I, containing approximately 26,127 rentable
square feet and having a street address of 000 Xxxxxxxxxxxx Xxxxx, Xxxxxxxxxxxx,
Xxxxxxxx..
2.5. Building's Architect. Any architect, space planner, designer
or engineer retained by Landlord to provide professional services in connection
with the Premises or the Building.
2.6. Calendar Year. A period of twelve (12) consecutive months
commencing on each January 1 during the Term, except that the first Calendar
Year shall be that period from and including the Commencement Date through
December 31 of that same year, and the last Calendar Year shall be that period
from and including the last January 1 of the Term through the earlier of the
Expiration Date or date of the Lease termination.
2.7. Common Area. All areas, improvements, facilities and equipment
located within the Building or upon the Land from time to time designated by
Landlord for the common use or benefit of Tenant, other tenants and occupants of
the Building and/or the Corporate Park, and their Agents, including, without
limitation, roadways, entrances and exits, landscaped areas, open areas, park
areas, exterior lighting, service drives, pedestrian walkways, sidewalks,
atriums, courtyards, concourses, stairs and ramps, exterior utility lines,
common trash areas, Parking Facilities, washrooms, maintenance and utility rooms
and closets, hallways, lobbies, common window areas, common walls, common
ceilings and loading docks. The interior portions of Building I and the loading
docks serving Building I are not Common Area for the purposes of this Lease.
2.8. Event of Default. As defined in Article XXII.
2.9. Herein, Hereafter, Hereunder and Hereof. Anything contained in
this Lease, including, without limitation, all Exhibits and any Riders.
2.10. Interest Rate. The per annum interest rate listed as the prime
rate on corporate loans at large U.S. money center commercial banks as published
from time to time under "Money Rates" in the Wall Street Journal, plus two (2)
points, but in no event greater than the maximum rate permitted by law. In the
event the Wall Street Journal ceases to publish the prime rate, Landlord shall
choose, at Landlord's reasonable discretion, a similar publication which
publishes such rate.
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2.11. Land. The piece or parcel of land, containing approximately
7.51 acres, shown on Exhibit A-1 and described on Exhibit A-3 attached hereto
and made a part hereof, and all rights, easements and appurtenances belonging or
pertaining to such parcel, or such portion of the parcel as shall be allocated
by Landlord to the Building by re-subdivision or otherwise.
2.12. Lease Year. Each consecutive twelve (12) month period elapsing
after (i) the Commencement Date if the Commencement Date occurs on the first day
of a month, or (ii) the first day of the first month following the Commencement
Date if the Commencement Date does not occur on the first day of the month.
2.13. Mortgage. Any mortgage, deed of trust, security interest or
title retention interest affecting the Building or the Land.
2.14. Mortgagee. The holder of any note or obligation secured by a
mortgage, deed of trust, security interest or title retention interest affecting
the Building or the Land, including, without limitation, lessors under ground
leases, sale-leasebacks and lease-leasebacks.
2.15. Operating Expenses. As defined in Section 7.2.
2.16. Parking Facilities. All parking areas now or hereafter made
available by Landlord for use by tenants and occupants of the Corporate Park,
including, without limitation, open-air parking, parking decks and parking areas
under or within the Building.
2.17. Real Estate Taxes. As defined in Article VIII.
2.18. Rent. Basic Rent as set forth in Section 1.7 and Additional
Rent as defined in Section 5.3.
2.19. Rules and Regulations. The rules and regulations set forth in
Exhibit E attached hereto and made a part hereof, as the same may be amended or
supplemented from time to time, upon notice to Tenant.
2.20. Space Plan. The configuration of the internal portion of the
Premises as designed by Tenant and approved by Landlord in accordance with
Exhibit B.
2.21. Substantial Completion. As defined in the Work Agreement
attached hereto and made a part hereof as Exhibit B.
2.22. Substantial Part. More than fifty percent (50%) of the
rentable square feet of the Premises or the Building, as applicable to a
particular provision of this Lease.
2.23. Tenant's Architect. Any architect, space planner, designer or
engineer retained by Tenant to provide professional services in connection with
the Premises.
2.24. Work Agreement. Exhibit B attached hereto and made a part
hereof.
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ARTICLE III
THE PREMISES
3.1. Lease of Premises. In consideration of the agreements
contained herein, Landlord hereby leases the Premises to Tenant, and Tenant
hereby leases the Premises from Landlord, for the Term and upon the terms and
conditions hereinafter provided. It is specifically understood that the rentable
area of the Premises and Building shall be determined by the Building's
Architect prior to the Commencement Date according to the Building Owners and
Managers Association International Standard Method for Measuring Floor Space in
Office Buildings (1996) (the "BOMA Method"), subject to verification by Tenant's
Architect, and that, for the purposes of any calculations based upon the
rentable area of the Premises and the Building for all purposes under this Lease
the rentable area so determined shall control. In the event there shall occur
during the Term any permanent increase or decrease to the rentable area of the
Building or the Premises, Tenants' Proportionate Share shall be appropriately
adjusted as of the date of substantial completion of such change.
3.2. Common Rights. As an appurtenance to the Premises, Tenant
shall have the non-exclusive right, together with other tenants and occupants of
the Corporate Park, to use the Common Area. Landlord shall retain absolute
dominion and control over the Common Area and shall operate and maintain the
Common Area in such manner as Landlord, in its reasonable discretion, shall
determine; provided, however, that such exclusive right shall not operate to
impair or impede in any material and adverse manner Tenant's use of the Premises
for the Permitted Use or Tenant's use of the Common Area for its intended
purposes. Landlord expressly reserves the right permanently to change, modify,
eliminate, or temporarily close any portion of the Common Area so long as such
action does not unreasonably interfere with Tenant's use or enjoyment of the
Premises. The Premises are leased subject to, and Tenant agrees not to violate,
(i) the existing easements, covenants, conditions, restrictions, and other
matters of record which affect the Building or the Land as of the Date of Lease,
as set forth on Exhibit C attached to and made a part of this Lease ("Existing
Title Matters"), or (ii) any additional easements, covenants, conditions,
restrictions, and other matters of record which may affect the Building or the
Land in the future ("Future Title Matters"), provided that none of the Future
Title Matters shall materially and adversely affect Tenant's use of the Building
for the Permitted Use or use of the Common Area for parking and access. The
Existing Title Matters and Future Title Matters are sometimes collectively
referred to in this Lease as the "Permitted Exceptions".
3.3. Landlord's Reservations. In addition to the other rights of
Landlord under this Lease, Landlord reserves the right (i) to change the street
address of the Building provided written notice thereof is given to Tenant not
later than sixty (60) days prior to the Commencement Date and/or name of the
Building, (ii) to install, erect, use, maintain and repair mains, pipes,
conduits and other such facilities in and through the Premises to serve the
Building's tenants, provided that Landlord will use commercially reasonable
efforts to minimize interference with the operation of Tenant's business, (iii)
to grant to anyone the exclusive right to conduct any particular business or
undertaking in the Building as long as such use is permitted under the zoning
and any covenants applicable to the Building, (iv) to re-subdivide the Land or
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establish a condominium regime for the Building, the Land and/or the Common Area
and to include the Premises therein, (v) subject to Tenant's rights hereunder,
to control the use of the roof and exterior walls of the Building for any
purpose, and (vi) to use Tenant's name in promotional materials relating to the
Corporate Park and/or the Building. Subject to Tenant's right of quiet
enjoyment, Landlord may exercise any or all of the foregoing rights without
being deemed to be guilty of an eviction, actual or constructive, or a
disturbance or interruption of Tenant's business or Tenant's use or occupancy of
the Premises.
3.4. Right of First Offer For Expansion Space
(i) Notice; Exercise. During the eighteen (18)-month
period immediately following the Commencement Date ("Expansion Rights Period"),
Landlord shall give Tenant written notice (the "Offer Notice") of its intention
to lease all or any portion of the Expansion Space (hereinafter defined) within
five (5) days prior to the full execution and delivery of a letter of intent
between Landlord and a third party with respect to the proposed leasing of such
space ("Third Party Letter"). If the Offer Notice pertains to less than all of
the Expansion Space, the Offer Notice shall set forth in reasonable detail the
size and specific location of such portion of the Expansion Space. Should Tenant
so elect, Tenant shall give written notice to Landlord of its intention to lease
not less than all of the Expansion Space identified in the Offer Notice
("Tenant's Notice") not more than five (5) days after receipt by Tenant of the
Offer Notice, in which case Landlord and Tenant shall promptly enter into an
amendment to this Lease adding such Expansion Space to the Premises, adjusting
Tenant's Proportionate Share to reflect such addition and providing for the term
of the lease of such space to expire on the Expiration Date. All other terms and
conditions of this Lease shall apply to any Expansion Space leased by Tenant,
including without limitation the provisions hereof with respect to Rent and
Additional Rent so that at all times Tenant will be paying the same Rent and
Additional Rent per square foot for the Expansion Space as Tenant is paying per
square foot for the original Premises. If Tenant shall fail to exercise its
option to lease the Expansion Space within five (5) days of the date on which
Landlord gives the Offer Notice to Tenant, then Landlord shall be free to offer
such Expansion Space to others on such terms and conditions as Landlord
determines in its sole and absolute discretion. As used herein, the term
"Expansion Space" shall mean and refer to the approximately seven thousand five
hundred (7,500) square feet of rentable area located immediately adjacent to the
Premises on the first (1st) floor of the Building as shown and depicted on
Exhibit A-2 hereto.
(ii) Holding Over by a Previous Tenant. In the event the
previous tenant or occupant of all or any portion of the Expansion Space in
respect of which Tenant has delivered to Landlord Tenant's Notice holds over or
otherwise refuses to surrender or vacate such Expansion Space on or before the
scheduled availability date set forth in Landlord's Offer Notice, Landlord shall
not be liable to Tenant for any wrongful holdover by the previous tenant or
occupant, so long as Landlord is diligently pursuing all commercially reasonable
actions available to it, and the date on which Tenant is obligated to commence
payment of Basic Rent and Additional Rent in respect of such Expansion Space
shall be postponed by the number of days beyond such scheduled availability date
required for Landlord to obtain and deliver to Tenant possession of such
Expansion Space.
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(iii) Condition of Expansion Space. Landlord shall deliver
such Expansion Space in "as is" condition (i.e., in "building shell" condition
as defined in Schedule 1 to the Work Agreement) ("Building Shell")), except that
such space shall be broom clean. If Tenant shall exercise any of its rights to
lease Expansion Space pursuant to this Section, Tenant shall have the right to
remodel such space at Tenant's sole cost and expense [but subject to application
of a tenant improvement allowance per square foot of Expansion Space rentable
area leased equal to Twenty-Five Dollars multiplied by a fraction, the numerator
of which is the number of months in the term for such Expansion Space and the
denominator of which is the number of months in the original Term for the
Premises] using contractors of its choice and reasonably approved in advance in
writing by Landlord. Tenant shall furnish to Landlord for Landlord's written
approval, at least fifteen (15) days prior to the date Landlord specifies such
Expansion Space will be available (as set forth in the Offer Notice) and at
Tenant's sole cost and expense, final plans and specifications for any
remodeling of such Expansion Space desired by Tenant, as such plans and
specifications are described in Article 13 of this Lease. Landlord shall within
ten (10) days after receipt of such plans and specifications provide Tenant with
written notice of whether or not such plans have been approved. Landlord agrees
that its approval shall not be unreasonably withheld, conditioned or delayed. If
Landlord, in its reasonable discretion, disapproves Tenant's plans thus
submitted, it shall state its specific objections and Tenant shall promptly
thereafter resubmit plans and specifications revised to satisfy those
objections. The foregoing procedure shall continue expeditiously until Landlord
finally approves a final set of Tenant's plans (the "Final Tenant Plans"), a
copy of which Final Tenant's Plans shall be initialed by Landlord and Tenant and
deemed to be made a part of this Lease.
(iv) Commencement of Rent With Respect to Expansion Space.
Tenant's obligation to pay Basic Rent and Additional Rent with respect to the
Expansion Space leased pursuant to this Section 3.4 shall commence on the
earlier of (i) the date Tenant commences business operations within such
Expansion Space, or (ii) ninety (90) days following the date Landlord delivers
such Expansion Space in the condition specified in subsection (iii) of this
Section 3.4. ("Expansion Space Rent Commencement Date"). In the event Tenant's
obligation to pay Basic Rent and Additional Rent for any Expansion Space does
not commence on the first (1st) day of a calendar year, Rent, Tenant's Share of
Operating Expenses and Tenant's Management Fee (on account of the addition of
such Expansion Space to the Premises) shall be appropriately prorated and
adjusted based on the number of days in such calendar year prior to and after
the date Basic Rent and Additional Rent for such Expansion Space commences.
(v) Termination. If at any time Tenant does not timely
deliver Tenant's Notice to Landlord following Landlord's giving of an Offer
Notice, the provisions of this Section 3.4 shall remain in full force and effect
with respect to any portion of the Expansion Space not leased to third-parties
pursuant to a Third Party Letter as to which Tenant has received an Offer Notice
and has not timely elected to lease, until the end of the Expansion Rights
Period.
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ARTICLE IV
TERM
4.1. Term. The Term shall commence on the Commencement Date and
expire at midnight on the Expiration Date. In the event that the Commencement
Date occurs on other than the first day of a month, the Expiration Date shall be
extended so as to be the last day of the month in which the Expiration Date
occurs. If requested by Landlord, Tenant shall, within five (5) business days of
such request, sign a declaration acknowledging the Commencement Date and the
Expiration Date. From the Date of Lease until the Commencement Date, all of the
terms of this Lease shall be in full force and effect, except that Basic Rent
and other amounts due from Tenant shall not be payable with respect to the
period preceding the Commencement Date.
4.2 Renewal Option.
(i) Tenant shall have one (1) option (the "Renewal
Option") to extend the Term for an additional five (5) year period (the "Renewal
Period"). The Renewal Option shall be exercised, if at all, strictly in
accordance with this Section 4.2 and such exercise shall be effective only if no
Event of Default shall exist at the time of exercise or at the time of
commencement of the Renewal Period. The Renewal Option shall be exercisable only
by written notice given by Tenant to Landlord at least twelve (12) months prior
to the expiration of the Term. In the event that Tenant does not timely exercise
the Renewal Option, the Renewal Option shall be null and void and of no further
force or effect. As used in this Lease, "Term" shall mean the initial Term and,
if the Renewal Option is properly exercised in accordance with this Section 4.2,
the Renewal Period.
(ii) If Tenant properly exercises the Renewal Option, all
terms and conditions of this Lease shall be applicable during the Renewal
Period, except that (a) no further Renewal Options may be exercised under this
Lease, (b) Tenant shall not be entitled again to any of the rental abatements,
rental credits, tenant allowances, or tenant improvements once provided under
this Lease (but market rental concessions shall be taken into account in
determining "Prevailing Market Rent" as provided below), and (c) the Basic Rent
during the first Lease Year of the Renewal Period shall be the greater of (1)
the Basic Rent applicable during the last Lease Year of the Term then expiring,
increased in accordance with Section 1.8, or (2) the then "Prevailing Market
Rent". The Prevailing Market Rent shall be the full service rent which is being
asked of tenants for office/R and D space comparable to the Premises under five
(5) year leases in similar buildings in the Gaithersburg, Maryland area as of
the date the brokers make their determinations under Section 4.2(iii), taking
into account the value of brokerage commissions, rental abatements, rental
credits, and tenant allowances, if any, typically being offered or paid under
such leases.
(iii) If Tenant exercises the Renewal Option, Landlord and
Tenant shall endeavor in good faith to agree on the Prevailing Market Rent. If,
however, they are unable to do so within thirty (30) days, Tenant shall notify
Landlord of the name and address of a leasing broker selected by Tenant to
determine the Prevailing Market Rent. Within ten (10) days after receipt of
Tenant's notice, Landlord shall notify Tenant in writing of the name and address
of a leasing broker selected by Landlord to determine the Prevailing Market
Rent. Each broker shall independently make his or her determination of the
Prevailing Market Rent within thirty (30)
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days after the appointment of Landlord's broker. The Prevailing Market Rent
shall be deemed to be the average of the two determinations unless the higher of
such determinations is greater than one hundred five percent (105%) of the lower
of the determinations. If the higher determination is greater than one hundred
five percent (105%) of the lower determination, the brokers selected by Landlord
and Tenant shall together select a third broker within ten (10) days after
rendering their determinations. The third broker shall have twenty (20) days to
make his or her determination of the Prevailing Market Rent and upon such
determination, the Prevailing Market Rent shall be deemed to be the median
determination made by the three (3) brokers.
(iv) Each broker appointed pursuant to this Section shall
be a disinterested broker licensed in the State of Maryland having recognized
competence in the field of commercial leasing and a minimum of ten (10) years
experience as a commercial leasing broker or agent in Xxxxxxxxxx County,
Maryland. Each party shall pay for the consulting fee of the broker which it
selects and the parties shall share equally the consulting fees of the third
broker, if any.
(v) Beginning with the second Lease Year of the Renewal
Period and continuing in each subsequent Lease Year of the Renewal Period, Basic
Rent shall increase in the manner provided in Section 1.8. If, however, Basic
Rent for the first Lease Year of the Renewal Period is determined on the basis
of Prevailing Market Rent, the escalation factor that shall apply to Basic Rent
over the balance of the Renewal Period shall be determined as part of the
determination of Prevailing Market Rent.
ARTICLE V
RENT
5.1. Basic Rent. Tenant shall pay to Landlord the Basic Rent as
specified in Section 1.7, escalated in accordance with Section 1.8.
5.2. Payment of Basic Rent. Commencing on the Commencement Date and
continuing throughout the Term, Basic Rent for each Lease Year shall be payable
in twelve (12) equal monthly installments, in advance, without demand, notice,
deduction, offset, recoupment or counterclaim (except as otherwise expressly
provided in this Lease), on or before the first day of each and every calendar
month during the Lease Year; provided, however, that if the Commencement Date
occurs on a date other than on the first day of a calendar month, Basic Rent
shall be pro rated on a per diem basis for the period from the Commencement Date
through the last day of such calendar month at the rate payable for the first
Lease Year and shall be due and payable on the Commencement Date. Tenant shall
pay the Basic Rent and all Additional Rent, by good check or in lawful currency
of the United States of America, to Landlord at Landlord's Address, or to such
other address or in such other manner as Landlord from time to time specifies by
written notice to Tenant. Any payment made by Tenant to Landlord on account of
Basic Rent may be credited by Landlord to the payment of any late charges then
due and payable and to any Basic or Additional Rent then past due before being
credited to Basic Rent currently due.
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5.3. Additional Rent. All sums payable by Tenant under this Lease,
other than Basic Rent, shall be deemed "Additional Rent", and, unless otherwise
set forth herein, shall be payable in the same manner as set forth above for
Basic Rent.
ARTICLE VI
SECURITY DEPOSIT
6.1 Letter of Credit. Simultaneously with the execution of this
Lease, Tenant shall deliver the Security Deposit to Landlord. The Security
Deposit shall consist of an irrevocable letter of credit substantially in the
form of Exhibit D attached to and made a part of this Lease (the "Letter of
Credit"). The Letter of Credit shall be issued by either Allfirst Bank or such
other federally insured bank with branches in the Washington, D.C. metropolitan
area which is reasonably acceptable to Landlord and shall be transferable by
Landlord. Subject to the reductions set forth below, the Letter of Credit shall
be maintained in full force and effect by Tenant throughout the Term until
returned to Tenant for cancellation. The Security Deposit shall be held by
Landlord, without obligation for interest, as security for the performance of
Tenant's obligations and covenants under this Lease. It is expressly understood
and agreed that the Security Deposit is not an advance rental deposit or a
measure of Landlord's damages in case of an Event of Default. If an Event of
Default shall occur or if Tenant fails to surrender the Premises in the
condition required by this Lease, Landlord shall have the right (but not the
obligation), and without prejudice to any other remedy which Landlord may have
on account thereof, to draw upon and use all or any portion of the Security
Deposit to cure the default or remedy the condition of the Premises. In the
event any portion of the Security Deposit has been so used by Landlord during
the Term, Tenant shall restore the Security Deposit to its full original amount
within ten (10) days after Landlord has drawn upon the Security Deposit. If at
any time prior to the return of the Security Deposit to Tenant either (a) Tenant
fails to renew the Letter of Credit for a one (1) year period at least thirty
(30) days prior to its then current expiration date, or (b) Landlord receives
written notice from the issuer of the Letter of Credit that such issuer does not
intend to renew the Letter of Credit for another one (1) year period, Landlord
may draw upon the Letter of Credit to its full outstanding amount and the
proceeds of such draw shall thereafter constitute the Security Deposit. If
Landlord shall sell or transfer its interest in the Building, Landlord shall
transfer the Security Deposit to the purchaser or transferee, in which event
Tenant shall look solely to such purchaser or transferee for the return of the
Security Deposit, and Landlord shall be released from all liability to Tenant
for the return of the Security Deposit. Tenant, upon request by Landlord, shall
cooperate with Landlord and execute any documents which may be required to
effectuate the transfer of the Security Deposit to any purchaser, transferee or
Mortgagee of the Building. Any remaining balance of the Security Deposit shall
be returned to Tenant at the later of (i) thirty (30) days after the Expiration
Date or earlier termination of this Lease or (ii) the fulfillment of all of
Tenant's obligations under this Lease following the Expiration Date or earlier
termination of this Lease.
6.2. Reduction of Letter of Credit. Notwithstanding the foregoing,
the Security Deposit shall be reduced to One Hundred Twelve Thousand Eight
Hundred Sixteen Dollars ($112,816.00) as of the first day of the fourth Lease
Year and to Forty Six Thousand Five Hundred Thirty- Six and 60/100 Dollars
($46,536.60) as of the first day of the ninth Lease Year, provided that, at the
time for reduction, no Event of Default exists and no event has occurred and is
continuing which would
10
constitute an Event of Default with the giving of notice or the passage of time
or both. Each reduction shall be effectuated by Tenant obtaining and furnishing
to Landlord, as of the time for reduction, an amendment of the Letter of Credit
appropriately reducing the amount of the Letter of Credit. If required by the
issuer of the Letter of Credit, Landlord shall confirm in writing its consent to
such amendment, provided that the conditions for reduction set forth above are
satisfied. Except as expressly provided in this Article, the Security Deposit
shall not be reduced.
6.3. Increase of Letter of Credit. Notwithstanding anything
contained in this Article, the Security Deposit shall be subject to increase,
and the reduction provisions of Section 6.2 shall not apply, to the extent set
forth in Section 11.1.
ARTICLE VII
OPERATING EXPENSES
7.1. Tenant's Proportionate Share. Commencing with the second Lease
Year and during each Lease Year of the Term thereafter, Tenant shall pay to
Landlord, as Additional Rent, Tenant's Proportionate Share of the amount by
which the Operating Expenses incurred during each Calendar Year exceed the
amount of the Expense Stop ("Tenant's Share of Operating Expenses"). In the
event that Tenant is required to pay Tenant's Share of Operating Expenses for
any partial Calendar Year, then, for the purposes of determining Tenant's Share
of Operating Expenses for that partial Calendar Year, the Operating Expenses
incurred during the entire Calendar Year in question and the amount of the
Expense Stop shall be pro rated on a per diem basis to correspond to the number
of days in the partial Calendar Year for which Tenant is required to pay such
Share. By way of example, assume that the Commencement Date is September 1, 2001
and that this Lease terminates on August 31, 2009. In that event, Tenant's Share
of Operating Expenses for the last Calendar Year within the Term (i.e., partial
Calendar Year 2009) shall be Tenant's Proportionate Share of the amount by which
the Operating Expenses incurred during Calendar Year 2009 exceed the amount of
the Expense Stop, multiplied by 243/365. In no event shall the Basic Rent to be
paid by Tenant and retained by Landlord for any Calendar Year be less than the
annual Basic Rent required to be paid by Tenant under Section 5.1 of this Lease.
7.2. Operating Expenses Defined. As used herein, the term
"Operating Expenses" shall mean all expenses and costs of every kind and nature
which Landlord incurs because of or in connection with the ownership,
maintenance, repair, management and operation of the Building and the Common
Area, subject to the exceptions set forth below. The Operating Expenses that
vary with occupancy and that are attributable to any part of the Term during
which less than 95% of the rentable area of the Building is occupied by tenants
will be adjusted by Landlord to the amount that Landlord reasonably believes
Landlord would have incurred if 100% of the rentable area of the Building had
been occupied. Operating Expenses shall include, without limitation, all costs,
expenses and disbursements incurred or made in connection with the following:
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(i) Wages and salaries of all employees up to and
including the grade of chief engineer, whether employed by Landlord or the
Corporate Park's or the Building's management company, engaged in the operation
and maintenance or security of the Land, the Building, and the Common Area
(except that if any such employee is not employed full-time in connection with
providing such services to the Corporate Park or the Building, such wages and/or
salaries shall be prorated proportionally to reflect the percentage of time such
employee is engaged in work related to the Corporate Park or the Building), and
all costs related to or associated with such employees or the carrying out of
their duties, including uniforms and their cleaning, taxes, insurance and
benefits;
(ii) All supplies and materials used directly in the
operation and maintenance of the Building, the Land and the Common Area;
(iii) All utilities serving the Building, the Land, or the
Common Area;
(iv) All maintenance, operation and service agreements for
the Building, the Land and the Common Area and any equipment related thereto,
including, without limitation, service and/or maintenance agreements for
security, energy management, heating, ventilating, air conditioning (HVAC),
sprinkler, plumbing and electrical systems, and for groundskeeping, interior and
exterior landscaping and plant maintenance;
(v) All insurance purchased by Landlord or the Building's
management company relating to the Building, the Land and the Common Area and
any equipment or other property contained therein or located thereon, including,
without limitation, property, liability, sprinkler and water damage insurance;
(vi) All repairs and replacements to the Building and the
Common Area [excluding capital improvements (which are addressed in subsection
(xi) below) and amounts paid for by proceeds of insurance or by Tenant or other
third parties other than as a part of the Operating Expenses], including
interior and exterior, regardless of whether foreseen or unforeseen;
(vii) All operation and maintenance of the Building, the
Land and the Common Area, including, without limitation, painting, ice and snow
removal, window washing, landscaping, groundskeeping, sweeping and trash
removal, maintenance of entry features and directional signage, patching,
re-striping and resurfacing of roads, driveways and parking lots, and lighting
of the Common Area;
(viii) Accounting and legal fees incurred in connection with
the operation and maintenance of the Building, the Land and the Common Area,
except as otherwise provided in Section 7.3, excluding attorneys' fees and other
expenses incurred in connection with leasing space in the Building or with
negotiations or disputes with tenants, brokers, adjoining parties, other
occupants, or prospective tenants or occupants of the Building;
(ix) Any additional services not provided to the Building,
the Land or the Common Area at the Commencement Date but thereafter provided by
Landlord as Landlord shall deem necessary or desirable in connection with the
management or operation of the Land, the
12
Common Area or the Building, provided that the additional services are
customarily furnished by landlords in similar office and R and D complexes in
Xxxxxxxxxx County, Maryland;
(x) All owners association dues and all assessments,
whether general, special or otherwise, levied against Landlord, the Building,
the Land or the Common Area pursuant to any declaration or other instrument
affecting the Building, the Land or the Common Area, subject to the limitations
on the costs of capital improvements set forth below;
(xi) Any capital improvements (including, without
limitation, replacements) made to the Building or Common Area after the
Commencement Date which are primarily installed for the purpose of reducing
Operating Expenses (as opposed to those installed because of the obsolescence of
the item being replaced or the recognition that such item has reached the end of
its useful life) or are required or imposed by any law or governmental rule,
regulation, or requirement that was not applicable to the Building or Common
Area at the time the Building and the Common Area were constructed (each a
"Permitted Capital Improvement"). The cost of each Permitted Capital Improvement
shall be amortized over the useful life of that improvement consistent with
generally accepted accounting principles consistently applied ("GAAP"), together
with interest on the unamortized balance of such cost at the Interest Rate or
such higher rate as may have been paid by Landlord on funds borrowed for the
purposes of constructing or installing the Permitted Capital Improvement, to the
extent that such higher rate is consistent with then prevailing market interest
rates;
(xii) All Real Estate Taxes, as defined in Article VIII
below; and
(xiii) Other expenses and costs reasonably necessary for
operating and maintaining the Building, the Land and the Common Area.
To the extent that Landlord incurs Operating Expenses that relate to exterior
Common Area serving both the Building and Building I or to the Corporate Park as
a whole, only a proportionate amount of such Operating Expenses, as determined
by Landlord, shall be included for the purposes of determining Tenant's Share of
Operating Expenses under this Article.
7.3 Exclusions from Operating Expenses. Notwithstanding Section
7.2, Operating Expenses shall not include any of the following: (i) depreciation
or expenses for capital improvements made to the Land or Corporate Park, other
than Permitted Capital Improvements; (ii) costs of repairs, restoration,
replacements or other work occasioned by either (a) fire, windstorm or other
casualty coverable by the property insurance required to be maintained by
Landlord under Section 17.6, (whether such destruction be total or partial),
provided, however, that up to Ten Thousand Dollars ($10,000.00) of the costs of
such repairs and restoration may be included in Operating Expenses to the extent
such costs are payable by Landlord pursuant to the deductible under its property
insurance, (b) the exercise by governmental authorities of the right of eminent
domain, whether such taking be total or partial, of (c) the negligence or
intentional tort of Landlord, or any subsidiary or affiliate of Landlord, or any
representative, employee or agent of same; (iii) interest and amortization of
funds borrowed by Landlord, whether secured or unsecured, and other financing
costs (except financing for Permitted Capital Improvements); (iv) bad debt
charges; (v) leasing commissions or costs to obtain prospective or actual
tenants of the Building; (vi) costs, fines, interest, penalties, legal fees or
costs of litigation incurred due to
13
Landlord's late payment of taxes utility bills and other costs (or late filing
of tax returns or other informational returns or reports), unless caused by late
payment of Rent and other amounts by Tenant under this Lease (or, in the case of
tax or informational returns or reports, Tenant's failure or delay in furnishing
to Landlord information relative to Tenant required for the filing of the
returns); (vii) costs incurred for any item covered by a manufacturer's,
materialmen's, vendor's or contractor's warranty (a "Warranty") to the extent
that proceeds under the Warranty are paid to Landlord for such item (but costs
of obtaining recovery under the Warranty shall be included as part of Operating
Expenses); (viii) income, excess profits, franchise taxes or other such taxes
imposed on or measured by the income of Landlord from the operation of the
Building (ix) costs of Landlord's defense of lawsuits against Landlord and any
judgments or costs of settlement resulting from such lawsuits (but this
exclusion shall not be deemed to limit in any way any indemnification by Tenant
provided for in this Lease); (x) legal fees and other costs (including charges
for prepayment of any indebtedness) incurred in connection with any mortgaging,
financing, refinancing, sale, or change of ownership or entering into,
extending, or modifying any financing, declaration of covenants, ground lease or
other lease; (xi) the costs of services or items provided by Landlord's
affiliates to the extent that such costs exceed reasonable and customary charges
for such services or items in the Washington, D.C. metropolitan area (the
"Market Area"); (xii) acquisition or leasing costs of sculpture, paintings or
other objects of art; (xiii) accounting fees, other than those incurred in
connection with the preparation of statements required pursuant to the
provisions of this Lease; (xiv) costs and expenses (including court costs,
attorneys' fees and disbursements) related to or in connection with disputes
with any holder of a mortgage or by or among any persons having an interest in
Landlord or the Corporate Park or any part thereof; (xv) consulting costs and
expenses paid by Landlord, except those involving maintenance, repair, or
improvement of the Common Area or Building; (xvi) any cost incurred in
connection with the investigation or remediation of any Hazardous Material (as
defined in Section 26.1) located in, on, under or about the Corporate Park as of
the Date of Lease or any Hazardous Material stored, used or released by
Landlord, its employees, agents, licensees, or tenants after the Date of Lease,
and any cost incurred in connection with any government investigation, order,
proceeding or report with respect thereto (unless such substances were
introduced in the Building or Corporate Park by Tenant, its invitees or guests);
(xvii) costs or fees incurred in connection with a sale, lease or transfer
(including testamentary transfers) of all or any part of the Corporate Park or
any interest therein, or of any interest in Landlord, or in any person
comprising, directly or indirectly, Landlord or in any person having an equity
interest, directly or indirectly in Landlord; (xviii) the cost of any utilities
consumed in Building I or the cost of any "tap fees" or one-time lump sum sewer
or water connection fees for the Corporate Park payable in connection with the
initial construction of the Corporate Park; (xix) any costs, fines or penalties
incurred as a result of a violation by Landlord of any legal requirements which
Landlord is required to comply with under the terms of this Lease; (xx) all
costs and expenses (including services and utilities) paid directly by Tenant to
the party (other than Landlord) from whom Tenant ordered such services; (xxi)
costs for repairing, replacing or otherwise correcting defects (but not the
costs of repair or normal wear and tear) in the initial construction of the
Building or Building I; (xxii) Insurance Premiums or any premiums for insurance
excluded from Insurance Premiums, Real Estate Taxes or any taxes excluded from
Real Estate Taxes (Insurance Premiums and Real Estate Taxes being separately
addressed elsewhere in this Lease); (xxiii) costs of initial construction of the
Building or Building I or any of the Common Areas; (xxiii) costs and expenses
incurred by Landlord associated with the operation of the legal entity or
14
entities which constitute Landlord (as opposed to costs and expenses associated
with the operation of the Corporate Park); (xxiv) rent for any on-site offices
of Landlord or its managing agent; (xxv) charitable or political contributions;
(xxvi) intentionally omitted; (xxvii) intentionally omitted; and (xxviii)
advertising and promotional expenditures in connection with leasing any space in
the Corporate Park. There shall not be duplication in charges to Tenant by
reason of the provisions setting forth Tenant's obligation to reimburse Landlord
for Operating Expenses and any other provision in this Lease.
7.4 Management Fee. In addition to Tenant's Proportionate Share of
Operating Expenses, Tenant shall pay to Landlord, for each Calendar Year, an
administrative fee for managing the Common Area equal to three percent (3%) of
the Basic Rent payable by Tenant during such Calendar Year (the "Management
Fee"). There shall be no other fee for management, overhead or supervision by
Landlord included in Operating Expenses, except as provided in Section 7.2(i).
7.5 Estimated Payments. Prior to the first day of the second Lease
Year and prior to the first day of each Calendar Year thereafter during the
Term, Landlord shall submit to Tenant a statement of Landlord's estimate of the
monthly amount of Tenant's Share of Operating Expenses for such Calendar Year.
In addition to the Basic Rent, Tenant shall pay to Landlord, beginning on the
first day of the second Lease Year and continuing on the first day of each month
thereafter during each Calendar Year during the Term, the monthly amount of the
estimated Tenant's Share of Operating Expenses payable for such Calendar Year as
set forth in Landlord's statement, plus one twelfth (1/12) of the Management Fee
payable for that Calendar Year. However, if the first day of the second Lease
Year is a day other than the first day of a calendar month, then the installment
of Tenant's Share of Operating Expenses and Management Fee for the first month
of the Term shall be pro rated on the basis of a thirty (30) day month. If
Landlord fails to give Tenant notice of its estimated payments due under this
Section for any Calendar Year, then Tenant shall continue making monthly
estimated payments in accordance with the estimate for the previous Calendar
Year until a new estimate is provided. When the new estimate is provided, Tenant
shall pay, at the time its first monthly payment is due in accordance with the
new estimate, any deficiency in monthly payments made during the preceding
months of the Calendar Year in question. No delay by Landlord in providing any
estimate under this Section or any statement under Section 7.5 shall excuse
Tenant from paying Tenant's Share of Operating Expenses for any period within
the Term. If Landlord determines during any Calendar Year that, because of
unexpected increases in Operating Expenses, Landlord's estimate of the Operating
Expenses for that Calendar Year was too low, then Landlord shall have the right
to give a new statement of the estimated Tenant's Share of Operating Expenses
for such Calendar Year or the balance thereof and to xxxx Tenant for any
deficiency which may have accrued during such Calendar Year, and Tenant shall
thereafter pay monthly estimated payments based on such new statement.
7.6 Actual Operating Expenses. Within ninety (90) days after the
end of each Calendar Year or as soon thereafter as reasonably practicable,
Landlord shall submit a statement to Tenant showing the actual Operating
Expenses for such Calendar Year and the amount of Tenant's Proportionate Share
of such actual Operating Expenses. If, for any Calendar Year, Tenant's estimated
payments exceeded Tenant's Proportionate Share of actual Operating Expenses,
15
Tenant shall receive a credit in the amount of the overpayment toward Tenant's
next monthly payments of Operating Expenses. If, for any Calendar Year, Tenant's
estimated monthly payments were less than Tenant's Proportionate Share of actual
Operating Expenses, then Tenant shall pay the total amount of such deficiency to
Landlord within thirty (30) days after receipt of the statement from Landlord.
Landlord's and Tenant's obligations with respect to any overpayment or
underpayment of Tenant's Proportionate Share of Operating Expenses shall survive
the expiration or termination of this Lease.
7.7 Audit Rights. Tenant or its agent shall have the right, for a
period of ninety (90) days after Tenant's receipt of the statement of actual
Operating Expenses for each Calendar Year, and upon giving reasonable notice to
Landlord and during normal business hours, to audit, review and inspect at
Landlord's offices Landlord's bills, invoices and records applicable to the
actual Operating Expenses for that particular Calendar Year to verify the
Operating Expenses. Such audit, review and inspection shall be at Tenant's sole
cost, except as otherwise provided below. Unless otherwise mutually agreed,
should such audit, review or inspection result in a dispute by Tenant as to the
Operating Expenses charged by Landlord, such dispute shall be determined by
arbitration, in the jurisdiction in which the Building is located, in accordance
with the then current commercial rules of the American Arbitration Association.
The costs of the arbitration shall be divided equally between Landlord and
Tenant, except that each party shall bear the cost of its own legal fees, unless
(i) the arbitration results in a determination that Landlord's statement
contained a discrepancy of less than five percent (5%) in Landlord's favor, in
which event Tenant shall bear all costs incurred in connection with such
arbitration, including, without limitation, reasonable legal fees, or (ii) the
arbitration results in a determination that Landlord's statement contained a
discrepancy of at least five percent (5%) in Landlord's favor, in which event
Landlord shall bear all costs incurred in connection with such arbitration,
including, without limitation, reasonable legal fees. If such review, audit or
inspection reveals that Landlord overstated Tenant's obligation for Operating
Expenses in any Calendar Year, the excess shall be credited against Tenant's
next monthly payments of Operating Expenses. If such review, audit or inspection
reveals that Landlord understated Tenant's obligation for Operating Expenses in
any Calendar Year, Tenant shall pay the total amount of such deficiency to
Landlord within thirty (30) days after such determination. During the pendency
of any audit or arbitration proceedings as provided for in this Section, Tenant
shall continue to make payments of Operating Expenses as required by this Lease.
7.8 Direct Costs. Notwithstanding any other provision of this
Lease, where utility costs or other costs are charged directly to or paid
directly by a tenant of the Building other than Tenant ("Direct Payment Costs"),
the Direct Payment Costs shall be excluded from Operating Expenses payable by
Tenant under this Lease and Tenant's Proportionate Share of those costs which
are of the same type as the Direct Payment Costs shall be appropriately adjusted
as determined by Landlord. Tenant's Proportionate Share of all other Operating
Expenses shall remain as set forth in Section 1.11. Tenant shall be liable for,
and shall timely pay, all taxes levied against personal property and trade
fixtures placed by Tenant in the Building.
16
ARTICLE VIII
TAXES
8.1 "Real Estate Taxes" shall mean all taxes and assessments,
including, but not limited to, general or special, ordinary or extraordinary,
foreseen or unforeseen, assessed, levied or imposed by any governmental
authority upon the Building, the Land and the Common Area, and upon the
fixtures, machinery, equipment or systems in, upon or used in connection with
any of the foregoing, and the rental, revenue or receipts derived therefrom,
under the current or any future taxation or assessment system or modification
of, supplement to, or substitute for such system. Real Estate Taxes shall not
include any special assessments for public improvements, including, without
limitation, road improvement assessments, special use area assessments and
school district assessments (collectively, "Special Assessments"), levied as of
the Date of Lease, but shall include Special Assessments levied after the Date
of Lease and annual sewer and water front foot benefit charges. If at any time
the method of taxation prevailing at the Date of Lease shall be altered so that
in lieu of, as a substitute for or in addition to the whole or any part of the
taxes now levied or assessed, there shall be levied or assessed a tax of
whatever nature, then the same shall be included as Real Estate Taxes hereunder.
Further, for the purpose of this Article, Real Estate Taxes shall include the
reasonable expenses (including, without limitation, reasonable attorneys' fees)
incurred by Landlord in challenging or obtaining or attempting to obtain a
reduction of Real Estate Taxes, regardless of the outcome of such challenge,
provided that such challenge relates to a period elapsing during the Term (and
in the event any challenge pertains to a period extending either before or after
the Term, the costs of that challenge shall be appropriately prorated based upon
the period covered by such challenge in relationship to the Term).
Notwithstanding the foregoing, Landlord shall have no obligation to challenge
Real Estate Taxes. Real Estate Taxes shall not include any (i) interest and
penalties due to late payment (or late filing of returns) by Landlord, unless
caused by Tenant's late payment or nonpayment, (ii) franchise, capital stock, or
similar taxes of Landlord, (iii) any income, excess profits, or other taxes of
Landlord determined on the basis of its income, receipts, or revenues, (iv) any
sales or excise tax imposed on the rent payable by Tenant under the Lease, (v)
any estate, inheritance, succession, gift, capital levy, or similar tax of
Landlord, and (vi) any transfer taxes (except as provided in Section 27.18),
recording fees, tap fees, excise taxes, license fees, permit fees, impact fees,
or inspection fees payable in connection with Landlord's completion of the
Corporate Park or any part thereof. Real Estate Taxes shall specifically exclude
any abatements, reductions or credits received by Landlord. Assessments which
may be paid over a period in excess of twelve months without penalties shall be
included within taxes only to the extent such payments are required to be made
within the particular Calendar Year. In the event any contest or appeal of the
Real Estate Taxes for any given year during the Term shall result in a net
refund of taxes (i.e., the net amount remaining after paying all costs and
expenses of securing the refund, including reasonable attorneys fees) which were
included in Operating Expenses for any calendar year for the purpose of
calculating Tenant's Share of Operating Expenses, such share shall be
recalculated to give effect to such net refund and Landlord shall pay to Tenant
the amount of any overpayment by Tenant based upon such recalculation.
8.2 Personal Property Taxes. Tenant shall be liable for, and shall
timely pay, all taxes levied against personal property and trade fixtures placed
by Tenant in the Building.
17
ARTICLE IX
PARKING
9.1. Parking Spaces. During the Term, Tenant shall have the right
to use the Parking Space Allocation without charge of any kind. The Parking
Space Allocation shall be unreserved and non-exclusive parking spaces as set
forth in Section 1.14.
9.2. Changes to Parking Facilities. Landlord shall have the right,
from time to time, without Tenant's consent, subject to Tenant's right of quiet
enjoyment, to change, alter, add to, temporarily close or otherwise affect the
Parking Facilities in such manner as Landlord, in its sole discretion, deems
appropriate, including, without limitation, the right to designate reserved
spaces available only for use by one or more tenants (however, in such event,
those parking spaces shall still be deemed Common Area for the purpose of the
definition of Operating Expenses), provided that (except in emergency situations
or situations beyond Landlord's control) Landlord shall provide alternative
Parking Facilities sufficient to provide Tenant's Parking Space Allocation
within the same approximate distance as the normal Parking Facilities are from
the Building.
ARTICLE X
USE; LEGAL COMPLIANCE
Tenant shall occupy the Premises solely for the Permitted Use. The
Premises shall not be used for any other purpose without the prior written
consent of Landlord. Tenant shall comply, at Tenant's expense, with (i) all
present and future laws, ordinances, regulations and orders of the United States
of America, the State of Maryland and any other public or quasi-public federal,
state or local authority ("Governmental Requirements") as such Governmental
Requirements apply to Tenant's use and occupancy of the Premises, and (ii) any
reasonable requests of any Mortgagee or any insurance company providing coverage
with respect to the Premises. Without limiting the generality of the preceding
sentence, Tenant shall comply with all Governmental Requirements pertaining to
its improvement and use of the Premises, including, without limitation, the
Americans with Disabilities Act of 1990, as amended, and all regulations
promulgated thereunder (the "ADA"). Tenant shall not use or occupy the Premises
in any manner that is unlawful or dangerous or that shall constitute waste,
unreasonable annoyance or a nuisance to Landlord or the other tenants of the
Building. However, Tenant shall not be required to comply with any Governmental
Requirements (i) which would require Tenant to perform any Alterations if
Tenant's use of the Premises without such Alterations is "grandfathered" under
Governmental Requirements, (ii) which are required by reason of use or
construction within any portion of the Building beyond the Premises, or (iii)
which would require Tenant to correct or cure any defect or deficiency in work
performed by Landlord which has been noted in writing by Tenant to Landlord
within six (6) months after the earlier of the Commencement Date or the date
that Tenant has taken occupancy of the Premises. Tenant shall not use, store or
dispose of any hazardous, dangerous, inflammable, toxic or explosive materials
on the Premises or otherwise act in a manner which will increase Landlord's
insurance rates as set forth in Section 17.1 below. Landlord shall not have any
liability for violations of Governmental Requirements created by Tenant or other
tenants of the Building or Corporate Park.
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ARTICLE XI
ASSIGNMENT AND SUBLETTING
11.1 Consent. Except as otherwise provided herein, Tenant shall not
assign, transfer, mortgage or otherwise encumber this Lease or sublet (or permit
a third party to occupy or use) all or any part of the Premises, nor shall any
assignment or transfer of this Lease occur by operation of law or otherwise,
without the prior written consent of Landlord in each instance. Landlord's
consent shall not be unreasonably withheld, conditioned, or delayed. If Tenant
desires to assign this Lease or sublet all or any part of the Premises, Tenant
shall notify Landlord in writing of such desire and the notice shall set forth
the name and address of the proposed assignee or subtenant, the rent and all
other sums to be paid under the proposed assignment or sublease, and all other
material terms of the proposed assignment or sublease. The notice shall be
accompanied by a current financial statement for the proposed assignee or
subtenant prepared in accordance with GAAP and certified as correct by the chief
financial officer or other authorized officer of the proposed assignee or
subtenant. In addition, Landlord shall be entitled to review the documentation
of the proposed assignment or sublease. Tenant shall also furnish to Landlord
such additional information about the proposed assignee or subtenant and its
intended use of the Premises as Landlord may reasonably request. Without
limiting the matters which Landlord may take into consideration in determining
whether to grant or deny its consent to the proposed assignment or sublease,
Landlord shall be deemed to be reasonable in denying its consent (i) if the
proposed assignee or subtenant is not reputable or does not have a previous
record of honoring lease, credit, and other legal obligations or does not have a
tangible net worth reasonably indicating that it is capable of satisfying its
financial obligations under this Lease or the proposed sublease, as the case may
be, in addition to its other liabilities, or (ii) if the use intended to be made
of the Premises by the proposed assignee or subtenant, although in accordance
with the Permitted Use, would interfere with any of the other uses being
conducted in the Corporate Park or is not of a character in keeping with a first
class office/R&D center. Within fifteen (15) days after written request by
Landlord, Tenant shall pay to Landlord the reasonable attorneys' fees incurred
by Landlord in connection with Tenant's request for consent to the assignment or
subletting, up to a maximum of $1,000.00 for each such Tenant request. Any
permitted assignment or sublease shall be subject to all of the terms of this
Lease. In the event of a permitted assignment or sublease of twenty percent
(20%) or more of the rentable area of the Building, other than a No Consent
Transfer (as defined below), Tenant shall pay to Landlord, as and when received
by Tenant, fifty percent (50%) of all rent, additional rent, or other
consideration paid to Tenant by the assignee or subtenant in excess of the Rent
payable by Tenant pursuant to this Lease, after recovery by Tenant of any
remodeling, move in or other concession, brokerage, and legal expenses incurred
by Tenant with respect to the assignment or transfer. Any assignment, transfer,
encumbrance, or subletting undertaken without Landlord's written consent shall
be voidable by Landlord and, at Landlord's election, constitute an Event of
Default. Neither the consent by Landlord to any assignment, transfer or
encumbrance of this Lease or subletting of all or any portion of the Premises,
nor the collection or acceptance by Landlord of rent from any assignee,
subtenant or occupant shall be construed as a waiver or release of any Tenant or
Guarantor from the terms and conditions of this Lease or relieve Tenant or any
subtenant, assignee or other party from obtaining the consent in writing of
Landlord to any further assignment, transfer, encumbrance or subletting. Tenant
hereby assigns to Landlord the
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rent and other sums due from any subtenant, assignee or other occupant of the
Premises and hereby authorizes and directs each such subtenant, assignee or
other occupant to pay such rent or other sums directly to Landlord; provided,
however, that until the occurrence of an Event of Default, Tenant shall have the
license to continue collecting such rent and other sums. For purposes of this
Section 11.1, except during any period in which Tenant's stock is publicly
traded and except with respect to transfers made in connection with a proposed
public offering or debt placement by Tenant, a "Control Transfer" (defined
below) shall be deemed to be an assignment of this Lease subject to Landlord's
reasonable approval as set forth above. "Control Transfer" means a transfer by
Xxxxxxx X. Xxxxxxxx, at any one time or cumulatively, of fifty percent (50%) or
more of the beneficial interests which he holds in Tenant as of the Date of
Lease (whether stock, partnership interests, membership interests or other form
of ownership or control), other than to his estate, court appointed
representative in the case of incompetency, spouse, descendants, or trust for
the benefit of his spouse and/or descendants. A dilution of Xx. Xxxxxxxx'x
beneficial interests in Tenant resulting from the issuance by Tenant of
additional stock or other beneficial interests shall not be deemed to be a
Control Transfer so long as Xx. Xxxxxxxx continues to hold at least a five
percent (5%) ownership interest in Tenant after the transfer. Landlord shall be
entitled to reject any proposed Control Transfer to a party (a) that is known in
the community as being of bad moral character; (b) that is controlled, directly
or indirectly, by persons who have been convicted of felonies in any state or
federal court; or (c) that has failed to honor its material financial
obligations within the five (5) year period immediately preceding the effective
date of the proposed Control Transfer (a "Non-Permissible Party"). In the event
of a proposed Control Transfer to a party other than a Non-Permissible Party, if
the transfer is not approved by Landlord, the Control Transfer may nevertheless
take place if, prior to the effective date of such transfer, Tenant delivers to
Landlord an additional Security Deposit. The additional Security Deposit shall
(1) be in the form of cash or a letter of credit meeting the requirements of
Section 6.1, (2) be in an amount sufficient to increase the total amount of the
Security Deposit under this Lease to Three Hundred Twenty Thousand Eight Hundred
Twenty and 50/100 Dollars ($320,820.50) if the effective date of the Control
Transfer occurs prior to the commencement of the ninth (9th) Lease Year or One
Hundred Ninety- Two Thousand Seventy- Four and 35/100 Dollars ($192,074.35) if
the effective date of the Control Transfer occurs on or after the commencement
of the ninth (9th) Lease Year (or during the Renewal Period), and (3) be subject
to the terms of Section 6.1 as if it were a part of the original Security
Deposit. Upon the posting of the additional Security Deposit, the reduction
provisions of Section 6.2 shall not apply. Instead, if the additional Security
Deposit is posted prior to the commencement of the ninth (9th) Lease Year, then
the total amount of the Security Deposit may be reduced to One Hundred Ninety-
Two Thousand Seventy- Four and 35/100 Dollars ($192,074.35) upon the
commencement of the ninth (9th) Lease Year and shall remain at that amount for
the duration of the Term (including the Renewal Period).
11.2 Surrender. In the event of an assignment or subletting not
consented to by Landlord, Landlord shall have the right, by notice given to
Tenant, to terminate this Lease in its entirety in the event of an assignment or
as to the subleased portion of the Premises in the event of a sublease, and to
require that all or part, as the case may be, of the Premises be surrendered to
Landlord for the balance of the Term.
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11.3 Permitted Assignment and Subletting. Notwithstanding any other
provision of this Lease to the contrary, Tenant has the right to assign this
Lease or sublet the Premises in whole or in part to any subsidiary of Tenant,
affiliate of Tenant, or successor corporation or successor partnership to Tenant
with financial strength equal to or greater than that of Tenant, without
Landlord's consent, upon giving Landlord ten (10) days' prior written notice of
such assignment or subletting. Any such assignment or subletting is herein
referred to as a "No Consent Transfer". A "subsidiary" of Tenant shall mean any
corporation having fifty-one percent (51%) or more of its outstanding voting
stock owned, directly or indirectly, by Tenant. An "affiliate" of Tenant shall
mean any corporation which, directly or indirectly, controls or is controlled by
or is under common control with Tenant. For the purpose of the definition of
"affiliate", the word "control" (including "controlled by" and "under common
control with"), as used with respect to any corporation, partnership, or
association shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policy of a particular
corporation, partnership or association, whether through the ownership of voting
securities or by contract or otherwise. A "successor corporation or successor
partnership" shall mean any corporation or partnership into which Tenant is
merged or with which Tenant is consolidated or to which all or a substantial
portion of Tenant's assets are transferred. In addition, Tenant, without the
necessity of Landlord's consent, shall be entitled to enter into subleases or
license agreements with parties who are bona fide joint venture partners with
Tenant in particular drug testing projects, provided that Tenant or any
subsidiary, affiliate or successor corporation of Tenant shall continue to
occupy not less than eighty percent (80%) of the rentable area of the Building
after such sublease or license.
ARTICLE XII
MAINTENANCE AND REPAIR
12.1 Landlord's Obligation. From and after the Commencement Date
and throughout the Term, Landlord shall keep and maintain in good condition and
repair and in a manner consistent with comparable buildings in the Gaithersburg,
Maryland area, the following: (i) the Land and Common Area, (ii) the structural
elements, foundation, exterior walls, and roof of the Building, including,
without limitation, masonry, curtain walls, structural walls, columns, and floor
slab, and (iii) the mechanical systems (i.e., the plumbing, electrical, HVAC,
security and sprinkler systems) of the Building which are a part of the Building
Shell and the loading docks of the Building, all of the foregoing being
hereinafter referred to, collectively, as the "Landlord Repair Items". Landlord
shall comply with Governmental Requirements as they relate to the Land, Common
Area and the Landlord Repair Items. The cost of maintenance, repairs, and
replacements to the Common Area and the Building shall be included in the
Operating Expenses (unless otherwise expressly excluded under this Lease or the
responsibility of Landlord under Article XXI) and paid by Tenant as and to the
extent provided in Article VII. Subject to the provisions of Article XXI Section
17.7, if any repairs or replacements to the Common Area or Building are
necessitated by the negligence or willful misconduct of Tenant, its assignees or
subtenants, or its or their agents, servants, employees, contractors, invitees,
licensees, customers or subtenants ("Permittees"), Tenant, at its own expense,
shall promptly make such repairs and replacements [or, if requested by Landlord,
Tenant will reimburse Landlord for the costs of such repairs and replacements
within thirty (30) days of written demand]. Tenant shall promptly
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notify Landlord of any maintenance, repairs, and replacements to the Common Area
or Building of which Tenant becomes aware. Landlord shall not be responsible for
any maintenance, repair, or replacement which are Tenant's responsibility under
the express terms of this Lease.
12.2 Tenant's Obligation. Subject to the obligations of Landlord
pursuant to Section 12.1 above, from and after the Commencement Date and
throughout the Term, Tenant shall maintain the non-structural portion of the
Premises in good condition and repair, at its sole expense, in a manner
consistent with comparable buildings in the Gaithersburg, Maryland area,
ordinary wear and tear, damage from casualty or condemnation, and damage caused
by Landlord or Landlord's Agents excepted. Tenant's obligation under this
Section shall include, without limitation, (i) the maintenance, repair, and
replacement of any equipment, fixtures or other improvements to the Premises
that are part of the Tenant Work and are not "building standard" items
(excluding mechanical systems, unless exclusively serving the Premises), all
doors and windows of the Premises which are not "building standard", all
facilities and equipment located within the Premises that exclusively serve the
Premises, and all personal property within the Premises, and (ii) the repair of
any and all damage caused by Tenant or Tenant's agents, employees, contractors,
subcontractors or invitees, to the Premises. Subject to the provisions of
Section 17.7 below, Tenant also shall be responsible, at its sole expense, for
(a) the full cost of repairs (including interest thereon at the Interest Rate
from the date due until paid) of any and all damage caused by Tenant or its
Permittees to the Building and the Common Area, ordinary wear and tear and
damage by fire, casualty or condemnation excepted, and, (b) the maintenance,
repair, and replacement of Tenant's Sign in accordance with Section 14.2, and
(c) the maintenance, repair, and replacement of any facilities and equipment
located outside of the Premises that exclusively serve the Premises.
12.3 Landlord's Right to Maintain or Repair. If, within fifteen
(15) days following written notice to Tenant (or within such shorter time as may
reasonably be designated by Landlord if exigent circumstances require prompter
action), Tenant fails to perform any maintenance, repair, or replacement which
Tenant is obligated to perform under Section 12.2 or elsewhere in this Lease,
Landlord may, at its option, cause such maintenance, repairs or replacements to
be made. Within fifteen (15) days after written demand by Landlord, Tenant shall
pay to Landlord all reasonable costs incurred in connection therewith, plus
interest thereon at the Interest Rate from the due date until paid.
ARTICLE XIII
INITIAL CONSTRUCTION; ALTERATIONS
13.1. Initial Construction. Landlord and Tenant agree that the
construction of the Tenant Work and other initial construction with respect to
the Premises shall be performed in accordance with Exhibit B attached hereto and
made a part hereof.
13.2. Alterations. Tenant shall not make or permit any Alterations,
without the prior written consent of Landlord. Such consent shall not be
unreasonably withheld or delayed in the case of interior Alterations which do
not affect the structure, roof, foundation, exterior walls, or mechanical or
sprinkler systems of the Building or Premises and may be granted or withheld in
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Landlord's sole discretion in the case of all other Alterations. Landlord may
impose any reasonable conditions to its consent to Alterations, including,
without limitation, (i) delivery to Landlord, as the work progresses, of partial
waivers of mechanic's and materialmen's liens with respect to the Premises, the
Building and the Land for all work, labor and services performed and materials
furnished, signed by all contractors, subcontractors, materialmen and laborers
participating in the Alterations (with a final fully executed release of liens
to be delivered to Landlord upon completion of the Alterations), (ii) prior
approval of the plans and specifications and Tenant's contractor(s) with respect
to the Alterations, and (iii) supervision by Landlord or Landlord's
representative of the Alterations. The Alterations shall conform to the
requirements of Landlord's and Tenant's insurers and of the federal, state and
local governments having jurisdiction over the Premises (including, without
limitation, all applicable provisions of the ADA), shall be performed in
accordance with the terms and provisions of this Lease in a good and workmanlike
manner and shall not adversely affect the value, utility or character of the
Premises or the Building. If the Alterations are not performed in accordance
with the terms hereof, Landlord shall have the right, at Landlord's option, to
halt any further Alterations, or to require Tenant to construct the Alterations
as herein required or, in the event that Tenant begins performing the
Alterations without first obtaining Landlord's prior written consent, to require
Tenant to restore the Premises to the condition in which they existed before
such Alterations. Notwithstanding the foregoing, if any mechanic's or
materialmen's lien is filed against the Premises, the Building or the Land for
work claimed to have been done for, or materials claimed to have been furnished
to or for the benefit of Tenant, such lien shall be discharged of record by
Tenant within fifteen (15) days after the date of filing by the payment thereof
or the filing of any bond required by law. If Tenant shall fail to timely
discharge any such lien, Landlord may (but shall not be obligated to) discharge
the same, the cost of which shall be paid by Tenant within ten (10) days of
demand by Landlord. Such discharge by Landlord shall not be deemed to waive or
release the default of Tenant in not discharging the same. Neither Landlord's
consent to the Alterations nor anything contained in this Lease shall be deemed
to be the agreement or consent of Landlord to subject Landlord's interest in the
Premises, the Building or the Land to any mechanic's or materialmen's liens
which may be filed in connection with the Alterations. Tenant shall be entitled
to install normal decorations in the Premises without Landlord's prior consent.
13.3. Removal of Alterations. All or any part of the Alterations
whether made without the consent of Landlord, shall, at Landlord's option,
either be removed by Tenant at its expense before the expiration of the Term or
shall remain upon the Premises and be surrendered therewith at the Expiration
Date or earlier termination of this Lease as the property of Landlord without
disturbance, molestation or injury, provided that Tenant shall have the right
and the obligation to remove any and all removable Alterations which constitute
trade fixtures and detachable furniture prior to the Expiration Date or earlier
termination of this Lease. Notwithstanding the foregoing, Landlord shall not be
entitled to require the removal of any Alteration unless Landlord advises Tenant
in writing, not later than six (6) months before the expiration of the Term,
that removal of that Alteration is required. If Landlord requires the removal of
all or part of the Alterations, Tenant, at its expense, shall repair any damage
to the Premises or the Building caused by such removal. If Tenant fails to
remove any Alterations which Landlord has requested be removed, then Landlord
may (but shall not be obligated to) remove the same and the cost of such removal
and repair of any damage caused by the same, together with any and all damages
23
which Landlord may suffer and sustain by reason of the failure of Tenant to
remove the same, shall be charged to and paid by Tenant upon demand.
13.4. Landlord Alterations. Landlord shall have no obligation to
make any Alterations in or to the Premises, the Building, the Common Area or the
Land except as specifically provided in the Work Agreement or otherwise herein.
Landlord hereby reserves the right, from time to time, to make Alterations to
the Building, Common Area, or Corporate Park, erect other buildings and
structures in the Corporate Park, and erect such scaffolding and other aids to
construction in or adjacent to and about the Building as Landlord reasonably
deems appropriate, and, subject to Tenant's right of quiet enjoyment, no such
Alterations, changes, construction or erection shall constitute an eviction,
constructive or otherwise, or permit Tenant any abatement of Rent or other
claim.
ARTICLE XIV
SIGNS
14.1. General. Other than building standard door signage at the
entry to Tenant's suite, to be provided at Landlord's expense, no other sign,
advertisement or notice shall be inscribed, painted, affixed, placed or
otherwise displayed by Tenant on any part of the Land or the outside or the
inside (including, without limitation, the windows) of the Building or the
Premises without the prior written consent of Landlord, except that a sign which
displays Tenant's "corporate logo" shall be permitted in the reception area of
the Premises. Any other permitted signs shall be installed and maintained by
Landlord at Tenant's sole expense. Landlord shall have the right to prohibit any
sign, advertisement, notice or statement to the public by Tenant which, in
Landlord's opinion, tends to impair the reputation or desirability of the
Building. If any prohibited sign, advertisement or notice is nevertheless
exhibited by Tenant, Landlord shall have the right to remove the same, and
Tenant shall pay any and all expenses incurred by Landlord in such removal,
together with interest thereon at the Interest Rate, upon demand.
14.2. Building Sign. Notwithstanding the foregoing, provided the
same is in accordance with applicable zoning and other laws and regulations and
with private restrictions of record, Tenant shall have the right, at its sole
expense, to install on the top right corner of the exterior facade of the
Building facing Building I a sign displaying the "corporate logo" of Tenant
having the design shown and depicted on the architectural drawing to scale
attached hereto as Exhibit D-1 and made a part of this Lease ("Tenant's Sign"),
provided that (i) the size, fabrication, lighting, location and manner of
installation of Tenant's Sign shall be subject to Landlord's prior written
approval, to be granted or withheld in Landlord's sole discretion; (ii) the
installation of Tenant's Sign shall not damage or otherwise adversely affect the
structure or any component of the Building or invalidate or impair the coverage
of any warranty applicable to the same, (iii) in installing Tenant's Sign,
Tenant shall be subject to Section 13.2 as if such installation were the
installation of Alterations, (iv) after installing Tenant's Sign, Tenant, at its
own expense, shall maintain Tenant's Sign in good condition and repair at all
times, as needed, (v) upon termination of this Lease, Tenant shall remove
Tenant's Sign from the Building in accordance with Section 13.3 as if Tenant's
Sign were Alterations which Landlord required Tenant to remove, and (vi)
Tenant's indemnification set forth in Section 19.2 shall extend to all matters
arising from or related to Tenant's installation, maintenance and removal of
Tenant's
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Sign. The size of Tenant's sign shall be Tenant's pro rata share (based upon
rentable area) of the total sign area permitted for the Building. Tenant, at its
own expense, shall obtain all permits and approvals from the applicable
authorities, including, without limitation, Xxxxxxxxxx County, required for the
installation of Tenant's Sign. All reasonable costs incurred by Landlord in
regard to the installation of the Tenant's Sign, including, but not limited to,
the costs to review plans and specifications and to oversee or inspect the
installation, shall be reimbursed by Tenant to Landlord within fifteen (15) days
after written request by Landlord. The rights provided for in this Section 14.2
shall not run in favor of any assignee or subtenant of Tenant except for a
permitted assignee, or a permitted subtenant of the entire Premises, pursuant to
Section 11.3. In the event of an assignment or subletting which is not pursuant
to Section 11.3, Tenant shall remove Tenant's Sign in the manner specified in
clause (v) above as if this Lease had terminated.
ARTICLE XV
TENANT'S EQUIPMENT AND PROPERTY
15.1. Moving Tenant's Property. Any and all damage or injury to the
Premises or the Building or Common Area caused by moving the property of Tenant
into or out of the Premises, or due to the same being on the Premises, shall be
repaired by Landlord, at the expense of Tenant. Any furniture, equipment or
other bulky matter of any description shall be delivered only through the
designated delivery entrance in the Building (if any), or by such other means as
Landlord may reasonably approve, at such times as may be reasonably designated
by Landlord. The moving of furniture, equipment, and other materials into the
Premises upon Tenant's initially taking occupancy of the Premises shall be
subject to the observation and general supervision of Landlord. Thereafter,
Tenant shall give Landlord at least five (5) days' notice (oral or written)
prior to moving any bulky furniture, equipment, or other materials into or out
of the Premises so that Landlord may again observe and generally supervise the
moving. In no event, however, shall Landlord be responsible for any damages to
or charges for moving the same. Tenant shall promptly remove from the Common
Area any of Tenant's furniture, equipment or other property which it deposits
there.
15.2. Installing and Operating Tenant's Equipment. Without first
obtaining the written consent of Landlord, to be granted or withheld in
Landlord's sole discretion, Tenant shall not install or operate in the Premises
(i) any electrically operated equipment or other machinery, other than standard
office and laboratory equipment that does not require wiring, cooling or other
service in excess of Building standards, (ii) any equipment of any kind or
nature whatsoever which will require any changes, replacements or additions to,
or material changes in the use of any water, heating, plumbing, air conditioning
or electrical system of the Premises or the Building, or (iii) any equipment
which causes the floor load to exceed the design limits. Landlord's consent to
such installation or operation may be conditioned upon the payment by Tenant of
additional compensation for any power, wiring, cooling or other service or
Alterations that may result from such equipment. Machines and equipment which
cause noise or vibration that may be transmitted to the structure of the
Building or to any space therein so as to be objectionable to Landlord or any
other tenants or occupants of the Building shall not be installed by Tenant and
Landlord shall use reasonable efforts to uniformly enforce such rule in Building
II.
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15.3. Rooftop Equipment. Tenant shall have the right, at its own
expense, to install on the roof of the Building such HVAC package units which
are not a part of the Building Shell as may be required under the Plans to
furnish heating, ventilation, and air conditioning to the Building and, if in
accordance with applicable zoning and other laws and regulations and with
private restrictions of record, one (1) antenna or satellite dish (collectively,
the "Rooftop Equipment"), provided that (i) the design, size, shape, location,
and manner of installation of the Rooftop Equipment shall be subject to
Landlord's prior written approval, to be granted or denied in Landlord's sole
discretion, and Tenant, at Tenant's sole cost, shall cause the Rooftop Equipment
to be adequately screened from view by an enclosure constructed of such
materials as may be reasonably specified by Landlord; (ii) the installation of
the Rooftop Equipment shall not damage or otherwise adversely affect the roof or
any other component of the Building or invalidate or impair the coverage of any
warranty applicable to the same, (iii) in installing the Rooftop Equipment,
Tenant shall be subject to Section 13.2 as if such installation were the
installation of Alterations (including, without limitation, the requirement that
such installation comply with all applicable laws); (iv) after installing the
Rooftop Equipment, Tenant, at its own expense, shall maintain the Rooftop
Equipment in good condition and repair at all times, (v) Tenant's operation of
any rooftop antenna or satellite dish shall not interfere with the operation of
communications equipment elsewhere in, on, or near the Building, (vi) upon
termination of this Lease, the Rooftop Equipment shall be subject to removal
from the Building in compliance with Section 13.3 as if the Rooftop Equipment
were Alterations, (vii) Tenant's indemnification set forth in Section 19.2 shall
extend to all matters arising from or related to Tenant's installation, use,
maintenance, and removal of the Rooftop Equipment, and (viii) Tenant shall use
the Rooftop Equipment solely for its own use and benefit and shall not grant to
any third party the right to use the Rooftop Equipment. Tenant, at its own
expense, shall obtain all permits and approvals from the applicable authorities,
including, without limitation, the City of Gaithersburg and Xxxxxxxxxx County,
required for the Rooftop Equipment. Landlord shall reasonably cooperate in those
efforts. All reasonable costs incurred by Landlord in regard to the installation
of the Rooftop Equipment, including, without limitation, the costs to seek
permits and approvals, review plans and specifications, and oversee or inspect
the installation, shall be reimbursed by Tenant to Landlord within fifteen (15)
days after written request by Landlord. Any costs incurred by Tenant in
connection with any rooftop antenna or satellite dish shall not be payable from
the Tenant Improvement Allowance.
15.4 Outside Generator. Tenant shall also have the right, at its
own expense, to install outside the Building an electrical generator to provide
emergency power in the event that the system supplying electricity to the
Building fails (the "Outdoor Generator"). All of the provisions of Section 15.3
applicable to the Rooftop Equipment shall equally apply to the Outdoor Generator
and the location, size and noise level of the Outdoor Generator shall be subject
to Landlord's prior written approval, which approval Landlord will not
unreasonably withhold.
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ARTICLE XVI
RIGHT OF ENTRY
Tenant shall permit Landlord or its Agents, upon twenty-four (24) hours
notice (except in an emergency, in which event no notice shall be required), to
enter the Premises, without charge therefor to Landlord and without diminution
of Rent: (i) to examine, inspect and protect the Premises and the Building; (ii)
to make such alterations and repairs or perform such maintenance which in the
reasonable judgment of Landlord may be deemed necessary or desirable; (iii) to
exhibit the same to prospective purchasers of the Building or to present or
future Mortgagees; or (iv) during the last six (6) months of the Term to exhibit
the same to prospective tenants and erect on, in, or outside the Building, but
outside the Premises, a suitable sign indicating that space is available within
the Building. In connection with such entry rights of Landlord, Tenant shall
provide Landlord and its Agents with access cards or an access code in order to
enter all of the Premises despite any additional security system that Tenant may
install.
ARTICLE XVII
INSURANCE
17.1. Insurance Rating. Tenant shall not conduct or permit any
activity, or place any equipment or material in or about the Premises, the
Building or the Common Area which will increase the rate of property or other
insurance carried by Landlord on the Building or Common Area or insurance
benefiting any other tenant of the Building or Corporate Park; and if any
increase in the rate of insurance is stated by any insurance company or by the
applicable insurance rating bureau to be due to any activity, equipment or
material of Tenant in or about the Premises, the Building or the Common Area,
such statement shall be conclusive evidence that the increase in such rate is
due to the same and, as a result thereof and provided that Landlord has
delivered a copy of such statement to Tenant in accordance with the provisions
of Section 27.6 hereof, Tenant shall pay such increase to Landlord upon demand.
17.2. Tenant's Liability Insurance. Tenant shall, at its sole
expense, procure and maintain throughout the Term a commercial general liability
policy insuring against claims, demands or actions arising out of or in
connection with: (i) the Premises; (ii) the condition of the Premises; (iii)
Tenant's operations in, and maintenance and use of the Premises, Building and
Common Area, and (iv) Tenant's liability assumed under this Lease. Such
insurance shall have such minimum limits as are reasonably required by Landlord,
but in no event less than a combined single limit of Two Million Dollars
($2,000,000.00) per occurrence and Three Million Dollars ($3,000,000) in the
aggregate per year for death, bodily injury, and property damage.
17.3. Tenant's Property Insurance. Tenant shall, at its sole
expense, procure and maintain throughout the Term "special form" property
insurance (i.e., property insurance written on an "all risk" basis) insuring any
Alterations made by Tenant, any other improvements which Tenant is responsible
to repair under this Lease, and all of Tenant's personal property, including,
but not limited to, equipment, furniture, fixtures, and furnishings, for not
less than the full replacement cost of these items. All proceeds of such
insurance shall be used to repair or replace these items.
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17.4. [INTENTIONALLY OMITTED]
17.5. Requirements of Insurance Coverage. All such insurance
required to be carried by Tenant herein shall be with an insurance company
licensed to do business in the State of Maryland and approved by Landlord. Such
insurance shall (i) contain an endorsement that such policy shall remain in full
force and effect notwithstanding that the insured has released its right of
action against any party before the occurrence of a loss; and (ii) provide that
the policy shall not be canceled, materially amended or failed to be renewed
without at least thirty (30) days' prior written notice, [ten (10) days if due
to non-payment of premium] to Landlord and, at Landlord's request, any
Mortgagee. In addition, (a) Tenant's commercial general liability policy shall
name Landlord and Landlord's Mortgagee, or any successor or assign thereof that
Landlord shall designate in writing, as additional insured parties; and (b)
Tenant's property insurance shall name Landlord and Landlord's Mortgagee, or any
successor or assign thereof that Landlord shall designate in writing, as loss
payees, except with respect to proceeds payable for loss or damage to Tenant's
movable equipment, furniture, furnishings and other personal property. On or
before the Commencement Date and, thereafter not less than thirty (30) days
before the expiration date of any insurance policy required to be maintained
under this Article XVII, an original of such policy (including any renewal or
replacement policy) or a certified copy or certificate of insurance thereof,
together with evidence satisfactory to Landlord of the payment of all premiums
for such policy, shall be delivered to Landlord and, at Landlord's request, to
any Mortgagee.
17.6. Landlord's Insurance. Landlord shall procure and maintain
during the Term: (i) commercial general liability insurance against claims for
bodily injury, death or property damage, occurring on, in or about the Building
having limits of not less than Two Million Dollars ($2,000,000) per occurrence
and Three Million Dollars ($3,000,000.00) in the aggregate per year; (ii)
"special form" (all risk) property insurance insuring the Building for not less
than its full replacement cost, exclusive of excavations, footings and
foundation below the lowest floor level and (iii) a policy of rent loss
insurance with respect to the Building providing coverage in the amount of one
year's Basic Rent. Notwithstanding the foregoing, Landlord's property insurance
shall not be required to cover the items required to be covered by Tenant's
property insurance under Section 17.3. The cost of Landlord's insurance shall be
part of the Operating Expenses under Article VII.
17.7. Waiver of Subrogation. Each party hereby releases the other
party from any and all liability for loss or damage to property owned by the
releasing party caused by the act or omission of the other party, its agents,
officers or employees, to the extent such loss or damage is covered by the
property insurance required to be maintained by the releasing party under this
Article XVII or would be covered by such insurance if such insurance were, in
fact, so maintained; provided that such release (i) shall not apply to the
extent of any deductible provided for by the releasing party's policy of
property insurance, up to a maximum amount of Twenty-Five Thousand Dollars
($25,000), and (ii) shall be effective only as to a loss or damage occurring
while the appropriate policy of insurance of the releasing party provides that
such release shall not impair the effectiveness of such policy or the insured's
ability to recover thereunder. Each party shall use reasonable efforts to have a
clause to such effect included in the insurance policies required to be
maintained hereunder and shall promptly notify the other in writing if such
clause cannot be included in any such policy.
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ARTICLE XVIII
SERVICES AND UTILITIES
18.1. Services to the Premises. Landlord shall provide to the
Premises throughout the Term: (i) electrical service sufficient for normal
office use; (ii) heating and air conditioning sufficient for normal office use
from 8:00 a.m. to 6:00 p.m., Monday through Friday, and 9:00 a.m. to 1:00 p.m.
Saturday, except for holidays set forth in Exhibit E hereto; (iii) regular trash
removal from the Building; (iv) hot and cold water from points of supply; (v)
normal and customary janitorial service as set forth in Exhibit G attached
hereto and made a part hereof; and (vi) restrooms as required by applicable
code.
18.2. After-Hour Services to the Premises. If Tenant requires or
requests that heating and air conditioning service be furnished to the Premises
by Landlord during periods in addition to the periods set forth in Section 18.1,
Tenant shall obtain Landlord's consent to such additional service by providing
at least twenty-four (24) hours prior notice to Landlord or Landlord's Agent
and, if such consent is granted, shall pay upon demand the after hours charge
for such service established from time to time by Landlord, provided that such
after hours charge shall be applicable uniformly to the other tenants in the
Building. Landlord's consent to after hours service shall not be unreasonably
withheld or delayed.
18.3. Interruption of Services. Landlord shall not be liable for,
nor shall there be any abatement of Rent or constructive eviction for, the
failure to furnish or the delay or suspension in furnishing any of the services,
either ordinary or extraordinary, required under this Article, whether caused by
breakdown, maintenance, repair, strikes, scarcity of labor or materials, acts of
God or any other cause whatsoever, unless caused by the gross negligence or
willful misconduct of Landlord or its Agents. In the event of any interruption
of services or utilities solely resulting from any negligence or intentional
misconduct by Landlord which renders Tenant unable to make reasonable use of the
Building for a period of more than four (4) consecutive business days or more
than an aggregate of five (5) business days in any Calendar Year, all Rent for
the Building shall xxxxx until the use is restored to Tenant of the Building.
18.4. Separate Billing. Landlord reserves the right to separately
meter or monitor the utility services provided to the Premises and xxxx the
charges directly to Tenant or to separately meter any other tenant or enter into
separate agreements with other tenants for the provision of Building services
and xxxx the charges directly to such tenants for such separate utilities or
services and to make appropriate adjustments to Tenant's Proportionate Share
based on such arrangements.
18.5. Utility Charges. All gas, heat, telephone, and other utility
service used by Tenant in the Premises shall be paid for by Tenant except to the
extent the cost of same is included within Operating Expenses. All electricity
used in the Premises will be measured by a submeter installed by Landlord at
Tenant's sole cost and expense and Tenant will pay to Landlord monthly the cost
of such usage as so measured, based upon the average unit cost of all of the
electricity metered to the Building during the preceding month.
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18.6. Security; Access. No installation by Landlord of any security
or alarm system for the Building and no engagement by Landlord of a professional
security service for the Building (in the event that Landlord determines, in its
sole discretion, to engage such a service) shall in any way increase Landlord's
liability for occurrences and/or consequences which such a system or service are
designed to detect or avert and Tenant shall look solely to its insurer for
claims for damages or injury to any property. Tenant shall have the right to
install its own security system for all or any portion of the Premises at its
sole cost. All employees will be issued an electronic card or conventional key
for the door entry system utilized in the Building at Tenant's expense which
will allow access to the Building after hours. Tenant and its Agents shall have
access to the Building and the Premises twenty-four (24) hours per day, seven
(7) days per week.
18.7. Electrical and Telecommunications Connections. Tenant shall
have the exclusive right to use one of the existing four (4) inch diameter
conduits connecting the Building and Building I for electrical distribution and
the non-exclusive right in common with other tenants of the Building to use one
of such four (4) inch conduits for wiring for telecommunications and data
transmission.
ARTICLE XIX
LIABILITY OF LANDLORD; INDEMNITY
19.1. No Liability. Landlord and its Agents shall not be liable to
Tenant or its Agents for, and Tenant, for itself and its Agents, does hereby
release Landlord and its Agents from, liability for any damage, compensation or
claim arising from (i) the necessity of repairing any portion of the Premises or
the Building or the Common Area or any structural defects thereto (subject to
the provisions of Section 27.1 below); (ii) any interruption in the use of the
Premises or the Common Area (subject to the provisions of Sections 18.2 and
21.1); (iii) fire or other casualty; (iv) personal or property injury, damage or
loss caused by other than fire or other casualty and resulting from the use or
operation (by Landlord, Tenant, or any other person whomsoever) of the Building
or the Common Area (subject to the indemnity provisions below); (v)
intentionally omitted; (vi) robbery, assault or theft; or (vii) any leakage in
the Premises from water, rain, snow or other cause whatsoever, except to the
extent that such events, other than that described in clause (iii) to the extent
covered by insurance, result from the gross negligence or willful misconduct of
Landlord. Subject to Tenant's right of quiet enjoyment hereunder, no such
occurrence shall give rise to constructive eviction. Any goods, automobiles,
property or personal effects stored or placed by Tenant or its Agents in or
about the Premises, the Building or the Common Area shall be at the sole risk of
Tenant, and Landlord and its Agents shall not in any manner be held responsible
therefor. Except to the extent expressly prohibited by law, Landlord and Tenant
each waive any claim it might have against the other or its respective Agents
for any consequential damages sustained by such waiving party arising out of the
loss or damage to any person or property. With respect to any provision of this
Lease which provides, in effect, that Landlord shall not unreasonably withhold,
condition or delay any consent or approval, Tenant shall in no event be entitled
to make any claim for money damages in excess of One Hundred Thousand Dollars
($100,000) (the "Damage Limit"), based upon any claim or assertion by Tenant
that Landlord has unreasonably withheld, conditioned or delayed any such consent
or approval in any particular instance, except the Damage Limit shall not apply
to the failure of Landlord to comply with the decision rendered by the
arbitrator pursuant to Section 19.4 below as soon as practicable
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following Landlord's receipt (or refusal of receipt) or written notice of the
decision. Nothing in this Section shall be deemed to limit Tenant's right to
pursue an action or proceeding to enforce any such provision by specific
performance, injunction or declaratory judgment.
19.2. Tenant's Indemnity. Subject to Section 17.7, Tenant shall
indemnify and hold harmless Landlord and its Agents from and against any and all
damage, claim, liability, cost or expense (including, without limitation,
reasonable attorneys' or other professionals' fees) of every kind and nature
(including, without limitation, those arising from any injury or damage to any
person, property or business, and those arising from Tenant's failure to comply
with all applicable provisions of the ADA) incurred by or claimed against
Landlord or its Agents, as a result or arising out of Tenant's or its Agents'
use and occupancy of the Premises, use of other portions of the Building or of
the Common Area or from Tenant's breach of this Lease, except if caused by the
negligence or intentional misconduct of Landlord, its Agents, or its property
manager. The provisions of this Section shall survive expiration or other
termination of this Lease. Notwithstanding the foregoing or any other provision
of this Lease, in no event shall Tenant have any liability for any indirect,
consequential, exemplary or punitive damages under this Lease.
19.3. Landlord's Indemnity. Subject to Sections 17.7, 18.3, and
19.1, Landlord shall indemnify and hold harmless Tenant and its Agents from and
against any and all damage, claim, liability, cost or expense (including,
without limitation, reasonable attorneys' or other professionals' fees) of every
kind and nature (including, without limitation, those arising from any injury or
damage to any person, property or business) incurred by or claimed against
Tenant or its Agents as a result or arising out of Landlord's or its Agents'
management and maintenance of the Building or the Common Area or from Landlord's
breach of this Lease, except if caused by the negligence or intentional
misconduct of Tenant or its Agents. The provisions of this Section shall survive
expiration or other termination of this Lease. Notwithstanding the foregoing or
any other provision of this Lease, in no event shall Landlord have any liability
for any indirect, consequential, exemplary or punitive damages under this Lease.
19.4. Mandatory Binding Arbitration. The parties desire to provide a
mechanism to promptly resolve disputes arising by reason of Tenant's contention
that Landlord has unreasonably withheld, delayed or conditioned its consent or
approval in any instance where this Lease expressly requires that such consent
or approval not be unreasonably withheld, delayed or conditioned. Consequently,
if, at any time and for any reason, Tenant believes that Landlord has
unreasonably withheld, delayed or conditioned its consent or approval under this
Lease, in contravention of the express terms of this Lease, Tenant may send
written notice to Landlord requiring that such dispute be submitted to binding
arbitration by a single arbitrator in accordance with the rules of the American
Arbitration Association. To be effective, such notice by Tenant shall be given
within thirty (30) days following Tenant's receipt (or refusal of receipt) of
Landlord's written notice denying consent to or disapproving the matter at issue
or setting forth Landlord's conditions to the consent or approval of such
matter. The arbitrator shall be an experienced real estate attorney in the
Washington, D.C. metropolitan area, who is in active practice. Absent mutual
consent of Landlord and Tenant, neither such attorney nor his firm shall do any
work for either Landlord or Tenant, or any individual owning more than ten
percent (10%) of the ownership interests in Landlord or Tenant. In the event
that Landlord and Tenant are unable mutually to agree upon the arbitrator within
five (5) business days following written
31
request from Tenant to appoint the arbitrator, then the American Arbitration
Association (or any successor organization, or if none, such organization or
party generally recognized in the Washington, D.C. metropolitan area as having
succeeded to the American Arbitration Association) shall be required to appoint
as soon as possible an arbitrator who shall qualify in accordance with the
requirements set forth in the two immediately preceding sentences. Any
arbitrator serving hereunder shall consider the proposed action by Tenant and
the basis upon which Landlord has withheld or conditioned its consent or
approval and Landlord and Tenant shall submit to each other and to the
arbitrator, within five (5) business days following notice to Landlord and
Tenant of the arbitrator's designation, a written statement of their respective
positions. At a mutually agreeable time, not less than three (3) or more than
ten (10) business days after the statements are required to be submitted, the
arbitrator shall hold a hearing not to exceed five (5) hours in duration unless
the parties otherwise mutually agree. At the hearing each party shall present
its arguments. The arbitrator shall determine the matter and issue a written
decision setting forth the reasons for his or her determination no later than
ten (10) business days following the hearing. The decision of the arbitrator
shall be binding upon Landlord and Tenant, shall be non-appealable, and may be
enforced by the parties in a court of law or equity. Should the arbitrator agree
that Landlord has acted reasonably, Tenant shall pay all costs of the arbitrator
and, if necessary, all costs (including reasonable attorneys fees and court
costs) to enforce the arbitrator's decision. Should the arbitrator agree that
Landlord has failed to act reasonably, Landlord shall pay all costs of the
arbitrator and, if necessary, all costs (including reasonable attorneys fees and
court costs) to enforce the arbitrator's decision. Each party shall bear its own
legal fees in connection with the arbitration.
ARTICLE XX
RULES AND REGULATIONS
Tenant and its Agents shall at all times abide by and observe the Rules
and Regulations and any reasonable amendments thereto that may be promulgated
from time to time by Landlord for the operation and maintenance of the Corporate
Park, the Building and/or the Common Area, and the Rules and Regulations shall
be deemed to be covenants of the Lease to be performed and/or observed by
Tenant. Except to the extent set forth herein, nothing contained in this Lease
shall be construed to impose upon Landlord any duty or obligation to enforce the
Rules and Regulations or the terms or provisions contained in any other Lease
against any other tenant or occupant of the Corporate Park. Landlord shall not
be liable to Tenant for any violation by any party of the Rules and Regulations
or the terms of any other building lease. If there is any inconsistency between
this Lease and the Rules and Regulations, this Lease shall govern. Landlord
reserves the right reasonably to amend and modify the Rules and Regulations as
it deems necessary upon prior written notice to Tenant. All Rules and
Regulations that may be enforced by Landlord against Tenant shall be uniformly
enforced among all of the tenants of the Building. Landlord shall use its
reasonable efforts to enforce all of the Rules and Regulations against other
tenants whose breach of such Rules and Regulations adversely affect the use of
the Building or the Common Areas by Tenant or its Permittees.
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ARTICLE XXI
DAMAGE; CONDEMNATION
21.1. Damage to the Premises. If the Building shall be damaged by
fire or other cause, Landlord shall diligently, and as soon as practicable after
such damage occurs, repair such damage at the expense of Landlord, except as
otherwise provided in this Section 21.1 and provided, however, that Landlord
shall only be obligated to repair such damage to the extent of proceeds of
insurance actually received by Landlord (reduced by any proceeds retained
pursuant to the rights of any Mortgagee). Notwithstanding the foregoing, (i) if
the Building is damaged by fire or other cause to such an extent that, in
Landlord's reasonable judgment, (a) the damage cannot be substantially repaired
within two hundred seventy (270) days after the date of such damage, or (b)
insurance proceeds and other funds available to Landlord are not sufficient to
reasonably repair such damage, or (ii) if the Building is damaged during the
last two (2) Lease Years of the Term, then Landlord may terminate this Lease by
giving written notice to Tenant within ninety (90) days from the date of such
damage and the termination shall be effective as of the date of the notice.
Further, if the Building is damaged by fire or other cause during the last Lease
Year of the Term and a Substantial Part of the rentable area of the Premises is
rendered untenantable by such damage, Tenant may terminate this Lease by giving
written notice to Landlord within ninety (90) days from the date of such damage
and the termination shall be effective as of the date of the notice. If this
Lease shall be terminated under this Section 21.1, the Rent shall be apportioned
and paid to the date of such termination. If this Lease shall not be terminated
and the damage required to be repaired by Landlord is not repaired to such an
extent that the Premises are tenantable for the conduct of the Permitted Use
within two hundred seventy (270) days from the date of such damage, Tenant,
within thirty (30) days from the expiration of such two hundred seventy (270)
day period, may terminate this Lease by notice to Landlord. During the period
that Tenant is deprived of the use of the damaged portion of the Premises, Rent
for such portion shall xxxxx proportionately, provided that if by reason of the
fire or other casualty Tenant is unable reasonably to conduct its business
within the undamaged portion of the Premises, all Rent shall xxxxx as if the
entire Premises were untenantable. Any abatement of Rent under this Section
shall continue until the first to occur of (1) expiration of fifteen (15) days
following completion by Landlord of the repair or restoration of the Building or
the date Landlord would have completed the repair or restoration in the absence
of any delay caused by Tenant, or (2) the date Tenant resumes conduct of its
business operations within all or any substantial portion of the Premises
(provided that the abatement shall terminate proportionately as Tenant re
occupies any portion of the Premises that Tenant was forced to vacate by reason
of the casualty). Notwithstanding anything in this Section 21.1 to the contrary,
Landlord shall not be required to rebuild, replace or repair any damage to the
Tenant's Work, any Alterations made by Tenant or any other items required to be
covered by Tenant's property insurance under Section 17.3. Instead, unless this
Lease terminates in accordance with this Section 21.1, Tenant shall diligently,
and as soon as practicable after such damage occurs, repair such damage at the
expense of Tenant and the proceeds of Tenant's property insurance shall be made
available for this purpose.
21.2. Condemnation. If the whole or a Substantial Part of the
Premises shall be taken or condemned by any governmental or quasi-governmental
authority for any public or quasi-public
33
use or purpose (including, without limitation, sale under threat of such a
taking) or if any portion of the Common Areas shall be taken resulting in the
inability of Tenant to reasonably access the Building and the Parking
Facilities, or if the Parking Facilities shall be taken and not promptly
replaced with reasonably comparable and adequate parking facilities, then the
Term shall cease and terminate as of the date when title vests in such
governmental or quasi-governmental authority, and Rent shall be prorated to the
date when title vests in such governmental or quasi-governmental authority. If
less than a Substantial Part of the Premises is taken or condemned by any
governmental or quasi-governmental authority for any public or quasi-public use
or purpose (including, without limitation, sale under threat of such a taking),
Basic Rent and Tenant's Proportionate Share shall be reduced by the ratio that
the portion so taken bears to the rentable square footage of the Premises before
such taking, effective as of the date when title vests in such governmental or
quasi-governmental authority, and this Lease shall otherwise continue in full
force and effect. Tenant shall have no claim against Landlord (or otherwise) as
a result of such taking, and Tenant hereby agrees to make no claim against the
condemning authority for any portion of the amount that may be awarded as
compensation or damages as a result of such taking; provided, however, that
Tenant may, to the extent allowed by law, claim an award for moving expenses and
for the taking of any of Tenant's property [other than its leasehold interest in
the Premises, but including the value of the unamortized portion of any Tenant
Work (less the unamortized portion of the Tenant Improvement Allowance) and the
unamortized portion of Alterations or fixtures installed by Tenant in the
Premises] which does not, under the terms of this Lease, become the property of
Landlord at the termination hereof, as long as such claim is separate and
distinct from any claim of Landlord and does not diminish Landlord's award.
ARTICLE XXII
DEFAULT OF TENANT
22.1. Events of Default. Each of the following shall constitute an
Event of Default: (i) Tenant fails to pay Rent within five (5) business days
after written notice from Landlord, provided that no such notice shall be
required if at least two (2) such notices shall have been given during the same
Lease Year; (ii) Tenant fails to observe or perform any other term, condition or
covenant herein binding upon or obligating Tenant within thirty (30) days after
written notice from Landlord (or such longer period of time as may be reasonably
necessary to cure the default, provided that: (a) Tenant has commenced good
faith and diligent efforts to cure the default within the initial thirty (30)
day period, (b) Tenant continuously pursues those efforts thereafter, to the end
that the default may be cured at the earliest practicable time, and (c) in all
events, the default shall be cured within sixty (60) days after Landlord's
original notice; (iii) Tenant abandons or vacates the Building for a period in
excess of one hundred twenty (120) days; (iv) Tenant makes or consents to a
general assignment for the benefit of creditors or a common law composition of
creditors, or a receiver is appointed for the Premises or all or substantially
all of Tenant's assets; or (v) Tenant files a voluntary petition in any
bankruptcy or insolvency proceeding, or an involuntary petition in any
bankruptcy or insolvency proceeding is filed against Tenant and is not
discharged by Tenant within sixty (60) days of such filing.
22.2. Landlord's Remedies. Upon the occurrence of an Event of
Default, Landlord may, at its option, without further notice or demand to
Tenant, in addition to all other rights and remedies provided in this Lease, at
law or in equity:
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(i) Terminate this Lease and Tenant's right of possession of
the Premises and recover all damages to which Landlord is entitled under law,
specifically including, without limitation, all of Landlord's expenses of
reletting the Premises (including, without limitation, rental concessions to new
tenants, repairs, Alterations, reasonable legal fees, and to the extent
applicable to the portion of the relet term which coincides with the Term of
this Lease which would have remained had this Lease not been terminated,
brokerage commissions). If Landlord elects to terminate this Lease, every
obligation of the parties shall cease as of the date of such termination, except
that Tenant shall remain liable for payment of Rent and performance of all other
terms and conditions of this Lease to the date of termination;
(ii) Terminate Tenant's right of possession of the Premises
without terminating this Lease, in which event Landlord may, but shall not be
obligated to, relet the Building, or any part thereof, for the account of
Tenant, for such rent and term and upon such other conditions as are acceptable
to Landlord, in its sole and absolute discretion. For purposes of such
reletting, Landlord is authorized to redecorate, repair, alter and improve the
Premises to the extent Landlord, in its sole discretion, deems necessary. Until
Landlord relets the Premises, Tenant shall remain obligated to pay Rent to
Landlord as provided in this Lease. If and when the Premises are relet and if a
sufficient sum is not realized from such reletting after payment of all
Landlord's expenses of reletting (including, without limitation, rental
concessions to new tenants, repairs, Alterations, reasonable legal fees and as
limited above, brokerage commissions) to satisfy the payment of Rent due under
this Lease for any month, Tenant shall pay Landlord any such deficiency upon
demand. Tenant agrees that Landlord may file suit to recover any sums due
Landlord under this Section from time to time and that such suit or recovery of
any amount due Landlord shall not be any defense to any subsequent action
brought for any amount not previously reduced to judgment in favor of Landlord.
(iii) Notwithstanding the foregoing, Landlord agrees to use
commercially reasonable efforts to relet the Building following a termination of
Tenant's right of possession. Landlord shall be deemed to have satisfied this
obligation if it lists the Building for reletting with a reputable commercial
leasing broker.
(iv) Terminate this Lease and Tenant's right of possession of
the Premises, and recover from Tenant the net present value of the difference,
if any between (a) the Rent due from the date of termination until the
Expiration Date less (b) the then fair rental value of the Building, such
difference, if any, to be discounted at six percent (6%) per annum; or
(v) Re-enter and repossess the Premises and remove all persons
and effects therefrom, by summary proceeding, ejectment or other legal action.
Landlord shall have no liability by reason of any such re-entry, repossession or
removal.
22.3. Rights Upon Possession. If Landlord takes possession of the
Premises pursuant to this Article, with or without terminating this Lease,
Landlord may, at its option, enter into the Premises, remove Tenant's
Alterations, signs, personal property, equipment and other evidences of tenancy,
and store them at Tenant's risk and expense or dispose of them as Landlord may
see fit, and take and hold possession of the Premises; provided, however, that
if Landlord elects to take possession only without terminating this Lease, such
entry and possession shall not terminate this Lease or release Tenant or any
Guarantor, in whole or in part, from the obligation
35
to pay the Rent reserved hereunder for the full Term or from any other
obligation under this Lease or any guaranty thereof.
22.4. No Waiver. If Landlord shall institute proceedings against
Tenant and a compromise or settlement thereof shall be made, the same shall not
constitute a waiver of any other covenant, condition or agreement herein
contained, nor of any of Landlord's rights hereunder. No waiver by Landlord or
Tenant of any breach shall operate as a waiver of such covenant, condition or
agreement, or of any subsequent breach thereof. No payment of Rent by Tenant or
acceptance of Rent by Landlord shall operate as a waiver of any breach or
default by Tenant under this Lease. No payment by Tenant or receipt by Landlord
of a lesser amount than the monthly installment of Rent herein stipulated shall
be deemed to be other than a payment on account of the earliest unpaid Rent, nor
shall any endorsement or statement on any check or communication accompanying a
check for the payment of Rent be deemed an accord and satisfaction, and Landlord
may accept such check or payment without prejudice to Landlord's right to
recover the balance of such Rent or to pursue any other remedy provided in this
Lease. No payment by Tenant shall be deemed to constitute an accord or
satisfaction, or preclude Tenant from recovering from Landlord amounts paid in
error. No re-entry by Landlord, and no acceptance by Landlord of keys from
Tenant, shall be considered an acceptance of a surrender of this Lease or the
Premises hereunder demised.
22.5. Right of Landlord to Cure Tenant's Default. If an Event of
Default shall occur, then Landlord may (but shall not be obligated to) make such
payment or do such act to cure the Event of Default, and charge the amount of
the expense thereof, together with interest thereon at the Interest Rate, to
Tenant. Such payment shall be due and payable upon demand; however, the making
of such payment or the taking of such action by Landlord shall not be deemed to
cure the Event of Default or to stop Landlord from the pursuit of any remedy to
which Landlord would otherwise be entitled. Any such payment made by Landlord on
Tenant's behalf shall bear interest until paid at the Interest Rate.
22.6. Late Payment. If Tenant fails to pay any Rent within five (5)
days after such Rent becomes due and payable, Tenant shall pay to Landlord a
late charge of five percent (5%) of the amount of such overdue Rent. In
addition, any such late Rent payment shall bear interest from the date such Rent
became due and payable to the date of payment thereof by Tenant at the Interest
Rate. Such late charge and interest shall be due and payable within five (5)
days after written demand therefor from Landlord. Despite the foregoing, no such
late charge or interest shall be payable by Tenant on any late payment of Rent
in the event Tenant remits to Landlord the late payment within five (5) days
following written notice to Tenant that Landlord has failed to timely receive
any payment to which Landlord is entitled under this Lease. However, in the
event Tenant is late more than once in any period of twelve (12) consecutive
months, the preceding sentence shall not apply and Landlord shall be entitled to
the late charge and interest as provided above in the case of each late payment
following the first such late payment within the twelve (12) month period,
without the necessity of written notice.
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ARTICLE XXIII
MORTGAGES
23.1. Subordination. This Lease shall be subject and subordinate to
all ground or underlying leases and to any Mortgage(s) which may now or
hereafter affect the Land, and to all renewals, modifications, consolidations,
replacements and extensions thereof, provided that the Mortgagee agrees in
writing, in a commercially reasonable form, that, in the event of foreclosure or
deed in lieu of foreclosure under the Mortgage, it shall not terminate this
Lease during the Term so long as no Event of Default exists under this Lease
(such agreement being referred to as an "SNDA"). Without limiting the generality
of the preceding sentence, Tenant agrees that an SNDA substantially in the form
attached to and made a part of this Lease as Exhibit F is commercially
reasonable and will be satisfactory to Tenant. Within thirty (30) days after the
Date of Lease, Landlord shall obtain an SNDA in conformance with this Section
from the existing Mortgagee with respect to the Land. If Landlord fails to do
so, Tenant's sole recourse shall be to terminate this Lease, in which event
Landlord shall promptly return to Tenant any prepaid Rent and the Security
Deposit previously received by Landlord and Landlord shall reimburse Tenant for
its actual out of pocket expenses for the negotiation of this Lease and the
preparation of Tenant Plans under the Work Agreement, not to exceed Twenty-Five
Thousand Dollars ($25,000) in the aggregate and thereafter the parties shall be
relieved of all further liability under this Lease.. In the event of foreclosure
of a Mortgage, Tenant shall attorn to and recognize the purchaser at foreclosure
as Landlord under this Lease and such agreement shall be set forth in the SNDA.
Tenant shall promptly execute and deliver the SNDA upon request by Landlord.
Despite anything contained in this Section, before any foreclosure sale under a
Mortgage, the Mortgagee shall have the absolute right to subordinate the
Mortgage to this Lease.
23.2. Mortgage Protection. Tenant agrees to give any Mortgagee by
certified mail, return receipt requested, a copy of any notice of default served
upon Landlord, provided that Tenant has been given prior written notice of the
address of such Mortgagee. Tenant further agrees that if Landlord shall have
failed to cure such default within the time provided for in this Lease, then
Mortgagee shall have an additional thirty (30) days within which to cure such
default; provided, however, that if such default cannot be reasonably cured
within thirty (30) days, then such Mortgagee shall have such additional time as
may be necessary to cure such default so long as Mortgagee has commenced and is
diligently pursuing the remedies necessary to cure such default (including,
without limitation, the commencement of foreclosure proceedings, if necessary),
in which event this Lease shall not be terminated or Rent abated while such
remedies are being so diligently pursued. In the event of the sale of the Land
or the Building by foreclosure or deed in lieu thereof, the Mortgagee or
purchaser at such sale shall be responsible for the return of the Security
Deposit only to the extent that such Mortgagee or purchaser actually received
the Security Deposit.
ARTICLE XXIV
SURRENDER, HOLDING OVER
24.1. Surrender of the Premises. Tenant shall peaceably surrender
the Premises to Landlord on the Expiration Date or earlier termination of this
Lease, in broom-clean condition
37
and in as good condition as when Tenant took possession, including, without
limitation, the repair of any damage to the Premises caused by the removal of
any of Tenant's personal property, Alterations or trade fixtures from the
Premises, except for reasonable wear and tear and loss by fire, condemnation or
other casualty. Any of Tenant's personal property left on or in the Premises,
the Building or the Common Area after the Expiration Date or earlier termination
of this Lease shall be deemed to be abandoned, and, at Landlord's option, title
thereto shall pass to Landlord under this Lease. Tenant shall remove said
property within five (5) days of notification or Landlord shall remove or store
the property at Tenant's expense.
24.2. Holding Over. In the event that Tenant shall not immediately
surrender the Premises to Landlord on the Expiration Date or earlier termination
of this Lease, Tenant shall be deemed to be a month to month tenant upon all of
the terms and provisions of this Lease, except that the monthly Basic Rent shall
be 150% of the monthly Basic Rent in effect during the last month of the Term.
Notwithstanding the foregoing, if Tenant shall hold over after the Expiration
Date or earlier termination of this Lease, and Landlord shall desire to regain
possession of the Building, then Landlord may forthwith re-enter and take
possession of the Building, by any legal process in force in the State of
Maryland. Tenant shall indemnify Landlord against all liabilities and damages
sustained by Landlord by reason of Tenant's holding over in the Premises. Such
indemnity shall survive the termination of this Lease.
ARTICLE XXV
QUIET ENJOYMENT
Landlord covenants that if Tenant shall pay Rent and perform all of the
terms and conditions of this Lease to be performed by Tenant, Tenant shall,
during the Term, peaceably and quietly occupy and enjoy possession of the
Premises without molestation or hindrance by Landlord or any party claiming
through or under Landlord, subject to the provisions of this Lease, any Mortgage
to which this Lease is subordinate (provided that an SNDA is provided), and the
Permitted Title Exceptions. Tenant acknowledges and agrees that this Lease is or
will be subject and subordinate to a declaration of easements, conditions, and
restrictions applicable to the Crown Pointe Corporate Park and to a separate
subdivision plat of record for the Land.
ARTICLE XXVI
HAZARDOUS MATERIALS
26.1. Definition. As used in this Lease, the term "Hazardous
Material" means any flammable items, explosives, radioactive materials,
hazardous or toxic substances, materials or wastes or related materials,
including any substances defined as or included in the definition of "hazardous
substances", "hazardous wastes", "infectious wastes", "hazardous materials" or
"toxic substances" now or subsequently regulated under any federal, state or
local laws, regulations or ordinances, including, without limitation, oil,
petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks,
acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs
and similar compounds, and including any different products
38
and materials which are subsequently found to have adverse effects on the
environment or the health and safety of persons, but excluding small quantities
of chemicals and substances ordinarily used in an office environment (such as
cleaning supplies, copier toner, office supplies, etc.) provided that such
chemicals and substances are used, stored and disposed of in accordance with any
applicable laws and regulations.
26.2. General Prohibition. Tenant shall not cause or permit any
Hazardous Material to be generated, produced, brought upon, used, stored,
treated, discharged, released, spilled or disposed of on, in, under or about the
Premises, the Building, the Common Area, or the Land (collectively the
"Property") by Tenant, its affiliates, agents, employees, contractors,
subtenants, assignees or invitees. Tenant shall indemnify, defend and hold
harmless Landlord, its members, officers, employees, and agents, from and
against any and all actions (including, without limitation, remedial or
enforcement actions of any kind, administrative or judicial proceedings, and
orders or judgments arising out of or resulting therefrom), costs, claims,
damages (including without limitation, inspection costs, monitoring costs,
attorneys', consultants', and experts' fees, court costs and amounts paid in
settlement of any claims or actions), fines, forfeitures or other civil,
administrative or criminal penalties, injunctive or other relief (whether or not
based upon personal injury, property damage, or contamination of, or adverse
effects upon, the environment, water tables or natural resources), liabilities
or losses (including, without limitation, reduction of value of the Property)
arising from a breach of this prohibition by Tenant, its affiliates, agents,
employees, contractors, subtenants, assignees or invitees.
26.3. Notice. In the event that Hazardous Materials are discovered
upon, in, or under the Property, and any governmental agency or entity having
jurisdiction over the Property requires the removal of such Hazardous Materials,
Tenant shall be responsible for removing those Hazardous Materials arising out
of or related to a breach of the prohibition contained in Section 26.2 by Tenant
or its affiliates, agents, employees, contractors, subtenants, assignees or
invitees but not those of its predecessors. Notwithstanding the foregoing,
Tenant shall not take any remedial action in or about the Property or any
portion thereof without first notifying Landlord of Tenant's intention to do so
and affording Landlord the opportunity to protect Landlord's interest with
respect thereto. Tenant immediately shall notify Landlord in writing of: (i) any
spill, release, discharge or disposal of any Hazardous Material in, on or under
the Property or any portion thereof; (ii) any enforcement, cleanup, removal or
other governmental or regulatory action instituted, contemplated, or threatened
(if Tenant has notice thereof) pursuant to any laws respecting Hazardous
Materials; (iii) any claim made or threatened by any person against Tenant or
the Property or any portion thereof relating to damage, contribution, cost
recovery, compensation, loss or injury resulting from or claimed to result from
any Hazardous Materials; and (iv) any reports made to any governmental agency or
entity arising out of or in connection with any Hazardous Materials in, on under
or about or removed from the Property or any portion thereof, including any
complaints, notices, warnings, reports or asserted violations in connection
therewith. Tenant also shall supply to Landlord as promptly as possible, and in
any event within five (5) days after Tenant first receives or sends the same,
copies of all claims, reports, complaints, notices, warnings or asserted
violations relating in any way to the Premises, the Property or Tenant's use or
occupancy thereof.
39
26.4. Landlord's Representation. Landlord represents and warrants
that, to its actual knowledge, based solely upon the "Environmental Report"
(defined below) and without additional investigation or inquiry, the Land does
not contain any Hazardous Material in violation of applicable laws or
governmental regulations as of the Date of Lease. Landlord shall indemnify,
defend, and hold harmless Tenant and its directors, employees and agents from
all losses and other claims, actions, damages costs and expenses of every kind,
including reasonable attorneys', experts' and consultants' fees and costs,
incurred at any time and arising from or in connection with the breach of the
warranty set forth in this Section. "Environmental Report" means the following
report prepared by X.X.X., X.X. with respect to the Property: Phase I
Environmental Site Assessment, X.X.X., X.X. Project #A98120091, dated January
18, 1999.
26.5. Survival. The obligations of Landlord and Tenant under this
Article XXVI shall survive termination of this Lease.
ARTICLE XXVII
MISCELLANEOUS
27.1. No Representations by Landlord. Tenant acknowledges that
neither Landlord or its Agents nor any broker has made any representation or
promise with respect to the Premises, the Building, the Land or the Common Area,
except as herein expressly set forth, and no rights, privileges, easements or
licenses are acquired by Tenant except as herein expressly set forth. Tenant, by
taking possession of the Building, shall accept the Building "AS IS" subject to
completion of work as specified in the Work Agreement, any latent defects
discovered within the first six (6) months of occupancy and the written "punch
list" which will be signed by Landlord and Tenant prior to Tenant's occupancy of
the Building, and such taking of possession shall be conclusive evidence that
the Building is in good and satisfactory condition at the time of such taking of
possession.
27.2. No Partnership. Nothing contained in the Lease shall be deemed
or construed to create a partnership or joint venture of or between Landlord and
Tenant, or to create any other relationship between Landlord and Tenant other
than that of landlord and tenant.
27.3. Brokers. Landlord recognizes Brokers as the sole brokers
procuring this Lease and shall pay Brokers a commission therefor pursuant to a
separate agreement between Brokers and Landlord. Landlord and Tenant each
represents and warrants to the other that it has not employed any broker, agent
or finder other than Brokers relating to this Lease. Landlord shall indemnify
and hold Tenant harmless, and Tenant shall indemnify and hold Landlord harmless,
from and against any claim for brokerage or other commission arising from or out
of any breach of the indemnitor's representation and warranty.
27.4. Estoppel Certificate. Tenant shall, without charge, at any
time and from time to time, within ten (10) days after request therefor by
Landlord, any Mortgagee, any purchaser of the Land or the Building or any other
interested person, execute, acknowledge and deliver to such requesting party a
written estoppel certificate certifying, as of the date of such estoppel
certificate, the following: (i) that this Lease is unmodified and in full force
and effect (or if modified, that the Lease is in full force and effect as
modified and setting forth such
40
modifications); (ii) that the Term has commenced (and setting forth the
Commencement Date and Expiration Date (or if the Term has not commenced, setting
forth such fact); (iii) if then true, that Tenant is presently occupying the
Premises; (iv) the amounts of Base Rent and Additional Rent currently due and
payable by Tenant; (v) that any improvements to the Premises required by the
Lease to have been made by Landlord have been made to the satisfaction of Tenant
( or specifying any exceptions thereto); (vi) that there are no existing
set-offs, charges, liens, claims or defenses against the enforcement of any
right hereunder, including, without limitation, payment of Basic Rent or
Additional Rent (or, if alleged, specifying the same in detail); (vii) that no
Basic Rent (except the first installment thereof) has been paid more than thirty
(30) days in advance of its due date; (viii) that Tenant has no knowledge of any
then uncured default by Landlord of its obligations under this Lease (or, if
Tenant has such knowledge, specifying the same in detail); (ix) that Tenant is
not in default; (x) that the address to which notices to Tenant should be sent
is as set forth in the Lease (or, if not, specifying the correct address); and
(xi) any other reasonable factual certifications requested by Landlord. Landlord
agrees to provide similar estoppels within ten (10) days following written
request upon which Tenant or its designee may rely.
27.5. Waiver of Jury Trial. Landlord and Tenant hereby waive trial
by jury in any action, proceeding or counterclaim brought by either of the
parties against the other with respect to any matter whatsoever arising out of
or in any way connected with this Lease, the relationship of Landlord and Tenant
hereunder, Tenant's use or occupancy of the Premises, and/or any claim of injury
or damages resulting from this Lease or Tenant's use and occupancy of the
Premises. In the event Landlord commences any proceedings for nonpayment of
Rent, Tenant shall not interpose any counterclaims. This shall not, however, be
construed as a waiver of Tenant's right to assert such claims in any separate
action brought by Tenant.
27.6. Notices. All notices or other communications hereunder shall
be in writing and shall be deemed duly given upon actual delivery (or refusal of
delivery) if delivered in person or if mailed by certified or registered mail,
return receipt requested, postage prepaid, or if delivered by commercial courier
such as Federal Express, addressed and sent, if to Landlord to Landlord's
Address specified in Section 1.17; or if to Tenant to Tenant's Address specified
in Section 1.18. Landlord and Tenant may from time to time by written notice to
the other designate another address for receipt of future notices.
27.7. Invalidity of Particular Provisions. If any provisions of this
Lease or the application thereof to any person or circumstances shall to any
extent be invalid or unenforceable, the remainder of this Lease, or the
application of such provision to persons or circumstances other than those to
which it is invalid or unenforceable, shall not be affected thereby, and each
provision of this Lease shall be valid and enforced to the full extent permitted
by law.
27.8. Gender and Number. All terms and words used in this Lease,
regardless of the number or gender in which they are used, shall be deemed to
include any other number or gender as the context may require.
27.9. Benefit and Burden. Subject to the provisions of Article XI
and except as otherwise expressly provided, the provisions of this Lease shall
be binding upon, and shall inure
41
to the benefit of, the parties hereto and each of their respective
representatives, heirs, successors and assigns. Landlord may freely and fully
assign its interest hereunder, and in connection with any such assignment, shall
transfer the Security Deposit and any prepaid rent to the assignee.
27.10. Entire Agreement. This Lease (which includes all of the
Exhibits attached hereto) contains and embodies the entire agreement of the
parties hereto with respect to the Premises, and no representations, inducements
or agreements, oral or otherwise, between the parties not contained in this
Lease shall be of any force or effect. This Lease (other than the Rules and
Regulations, which may be changed from time to time as provided herein) may not
be modified, changed or terminated in whole or in part in any manner other than
by an agreement in writing duly signed by Landlord and Tenant.
27.11. Authority.
(i) If either party signs this Lease as a corporation,
the person executing this Lease on behalf of said party hereby represents and
warrants that said party is a duly formed and validly existing corporation, in
good standing, qualified to do business in the State of Maryland, that the
corporation has full power and authority to enter into this Lease and that he or
she is authorized to execute this Lease on behalf of the corporation.
(ii) If either party signs as a limited liability company
or partnership, the person executing this Lease on behalf of said party hereby
represents and warrants that said party is a duly formed, validly existing
limited liability company or partnership, as the case may be, qualified to do
business in the State of Maryland, that the limited liability company or
partnership has full power and authority to enter into this Lease, and that he
or she is authorized to execute this Lease on behalf of the limited liability
company or partnership.
27.12. [INTENTIONALLY OMITTED]
27.13. Attorneys' Fees. If, as a result of any default by either
party in the performance of any of the provisions of this Lease on its part to
be performed, the other party uses the services of any attorney in order to
secure compliance with such provisions or recover damages therefor, or to
terminate this Lease or (in the case of Landlord) evict Tenant, the prevailing
party in any legal action brought by either party against the other shall be
entitled to recover for the fees of its attorneys in such amount as the court
may adjudge reasonable.
27.14. Interpretation. This Lease is governed by the laws of the
State of Maryland, excluding choice of laws principles.
27.15. No Personal Liability; Sale. Neither Landlord nor its Agents,
whether disclosed or undisclosed, shall have any personal liability under any
provision of this Lease. If Landlord defaults in the performance of any of its
obligations hereunder or otherwise, Tenant shall look solely to Landlord's
equity, interest and rights in the Building for satisfaction of Tenant's
remedies on account thereof or in the case of a sale or transfer of the
Building, to the net proceeds of sale arising therefrom with respect to any
claims then existing against such transferring landlord as of the date of sale
or transfer. In the event that the original Landlord hereunder, or any successor
owner of the Building, shall sell or convey the Building, all liabilities
42
and obligations on the part of the original Landlord or such successor owner
under this Lease occurring thereafter shall terminate as of the day of such
sale, and thereupon all such liabilities and obligations shall be binding on the
new owner, except that the transferring Landlord shall remain liable to Tenant
for any prepaid rent or Security Deposit then held by such transferring Landlord
that is not transferred to the new owner. Tenant agrees to attorn to such new
owner. Any successor to Landlord's interest shall not be bound by (i) any
payment of Basic Rent or Additional Rent for more than one (1) month in advance,
except for the payment of the first installment of Basic Rent or (ii) as to any
Mortgagee or any purchaser at foreclosure, any amendment or modification of this
Lease made without the consent of such Mortgagee.
27.16. Time of the Essence. Time is of the essence as to all
obligations contained in this Lease.
27.17. Headings. Captions and headings are for convenience of
reference only, and shall in no event be used to construe or modify the
provisions set forth in this Lease.
27.18. Memorandum of Lease. Tenant shall, if requested by Landlord,
execute and deliver a memorandum of this Lease in recordable form within ten
(10) days after the request. Tenant shall not record such a memorandum or this
Lease without Landlord's consent. The party which requests recordation of a
memorandum of this Lease shall be obligated to pay all costs, fees and taxes, if
any, associated with such recordation.
27.19. Effectiveness. The furnishing of the form of this Lease shall
not constitute an offer and this Lease shall become effective only upon its
execution by and delivery to each party hereto.
27.20. Landlord Lien Waiver. Landlord shall execute and deliver to
Tenant within ten (10) days after written request such evidence of Landlord's
lien waiver as may reasonably be requested in connection with any acquisition or
financing by Tenant of equipment, furniture, furnishings or trade fixtures.
[SIGNATURE PAGE FOLLOWS]
43
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease under
seal as of the Date of Lease.
WITNESS: LANDLORD:
OXBRIDGE DEVELOPMENT AT CROWN
POINTE, L.C.,
a Maryland limited liability company
/s/ By: /s/ Xxxx X. Xxxxx [SEAL]
------------------------------ ----------------------------
Name: Xxxx X. Xxxxx
Title: President
WITNESS: TENANT:
THERIMMUNE RESEARCH CORPORATION
a Maryland corporation
/s/ By: /s/ Xxxxxx X. Angle, Jr. [SEAL]
------------------------------- Name: Xxxxxx X. Angle, Jr.
Title: Chief Financial Officer
44
EXHIBIT A-1
(PLAT SHOWING LAND AND BUILDING)
EXHIBIT A-2
(FLOOR PLAN SHOWING PREMISES)
EXHIBIT A-3
(LEGAL DESCRIPTION OF THE LAND)
EXHIBIT B
(WORK AGREEMENT)
This Work Agreement is attached to and made a part of the foregoing Lease
Agreement (the "Lease"), between OXBRIDGE DEVELOPMENT AT CROWN POINTE, L.C., a
Maryland limited liability company ("Landlord"), and THERIMMUNE RESEARCH
CORPORATION, a Maryland corporation ("Tenant"). The terms used in this Exhibit
that are defined in the Lease shall have the same meanings as provided in the
Lease.
1. General
1.1 Purpose. This Agreement sets forth the terms and conditions
governing the design, permitting and construction of the improvements to be
installed in the Premises.
1.2 Tenant's Representative. Tenant acknowledges that Tenant has
appointed Xxxxxx Xxxxx as its authorized representative ("Tenant's
Representative") with full power and authority to bind Tenant for all actions
taken with regard to the "Tenant Work" (defined below). Tenant ratifies all
actions and decisions with regard to the Tenant Work that the Tenant's
Representative may have taken prior to the execution of the Lease. Landlord
shall not be obligated to respond to or act upon any plan, drawing, change
order, approval request, or other matter relating to the Tenant Work until it
has been executed by Tenant's Representative.
1.3 Leasehold Improvements.
(a) Existing Improvements: Prior to the Date of Lease,
Landlord, at its sole expense, has constructed the Base Building Improvements.
The Base Building Improvements are composed of the completed Building structure
and other improvements described on Schedule 1 attached to and made a part of
this Agreement. Landlord reserves the right, without the consent of Tenant, to
make changes and modifications to the Base Building Improvements, provided that
such changes do not change the character of the Building or increase the cost to
be paid by Tenant for the Tenant Work. On the Date of Lease, Landlord has
delivered to Tenant and Tenant has accepted from Landlord the Building in its
"as is" and "where is" condition. Tenant acknowledges that prior to the Date of
Lease, Tenant inspected the Building and satisfied itself about its condition.
(b) New Improvements: In addition to the Existing
Improvements, Tenant shall construct and install, at its sole expense (but
subject to application of the Tenant Improvement Allowance provided for in
Section 4 below), all improvements, materials, finishes, equipment and
installations in the Premises as are mutually agreed upon by Landlord and Tenant
and shown in the "Tenant Plans" described in Section 2.1 below (the "Tenant
Work"). Unless otherwise provided in the Lease or this Agreement, the Tenant
Work shall consist solely of interior, non-structural improvements and shall
constitute long term improvements to the Premises which shall not be removed by
Tenant.
2. Design of Tenant Work
2.1 Tenant Plans. The Tenant Plans shall consist of the following:
(a) Space Plan: A plan for the Premises prepared by
Architectural, Inc.(the "Building's Architect") showing, among other things, the
partition layout, door locations, and other general details of the Tenant Work
(the "Space Plan").
(b) Construction Drawings and Specifications: All
construction working drawings, mechanical, electrical and other technical
specifications, finishing details (including wall finishes and colors), details
for the installation of technical and mechanical equipment, and other plans and
information showing or specifying the Tenant Work, as prepared by the Building's
Architect ("Construction Drawings").
2.2 Responsibility. Tenant shall cause the preparation of the
Tenant Plans by the Building's Architect promptly after the Date of Lease.
Tenant shall promptly furnish all necessary information to the Building's
Architect to enable the Building's Architect to prepare the Tenant Plans. The
Tenant Plans shall be subject to the reasonable approval of Landlord as set
forth in Section 2.3.
2.3 Approvals by Landlord.
(a) Promptly after preparation by the Building's
Architect, Tenant shall submit the Tenant Plans to Landlord, for Landlord's
approval. Landlord's approval shall not be unreasonably withheld or delayed,
except that Landlord shall have complete discretion with regard to granting or
withholding approval of Tenant Plans to the extent they provide for Tenant Work
which impacts the Building's structure, roof, foundation, exterior walls, or
mechanical systems, is visible from the exterior of the Building, or affects the
Common Area. Landlord will not unreasonably withhold, condition, or delay its
approval of Tenant Plans to the extent that the Tenant Plans provide for Tenant
Work which is consistent with the improvements made by Tenant and existing as of
the Date of Lease at Tenant's Firstfield Road location in Gaithersburg,
Maryland.
(b) Landlord shall approve or disapprove the Tenant
Plans, or any modifications of these materials, within seven (7) business days
following Landlord's receipt of the materials in question. In the event that
Landlord fails to approve or disapprove the Tenant Plans, or any revisions of
these materials, within seven (7) business days after receipt of the same,
Landlord shall be deemed to have approved such materials, provided that, at the
time of submitting the materials to Landlord, Tenant gives Landlord written
notice setting forth the following statement (a "Time Alert Notice"): "This is
to advise you that under the terms of our Work Agreement with you, if you fail
to approve or disapprove these materials in writing within seven (7) business
days after receipt, you will be deemed to have approved these materials." If
Tenant did not give Landlord a Time Alert Notice at the time of submitting the
materials to Landlord, the seven (7) business day period shall not begin to run
until the Time Alert Notice is given to Landlord. Moreover, the seven (7)
business day period for rendering Landlord's approval or disapproval of the
Space Plan shall in no event commence until the complete Space Plan has been
delivered to Landlord and the seven (7) business day period for rendering
Landlord's approval or disapproval of the Construction Drawings shall in no
event commence until a complete set of the Construction Drawings has been
delivered to Landlord and, in each
instance, notice to that effect has been given by Tenant to Landlord. Despite
the foregoing, Tenant, at its election, may submit the Construction Drawings to
Landlord in two (2) phases - the first phase consisting of the Construction
Drawings for the Office Improvements and the second phase consisting of the
Construction Drawings for the Remaining Improvements. In that case, upon each
such submission by Tenant and notice by Tenant that it has delivered a complete
set of Construction Drawings for the phase in question, the seven (7) business
day period for rendering Landlord's approval of these Construction Drawings
shall run from such submission and notice, provided that a Time Alert Notice has
also been given. In the event that Landlord disapproves any Tenant Plans, or any
revisions of Tenant Plans, within seven (7) business days after receipt, Tenant
shall modify the disapproved materials to satisfy Landlord's reasonable
objections and shall resubmit such materials to Landlord for Landlord's approval
within seven (7) business days after receipt of Landlord's objections.
(c) Any changes, additions, or deletions that Tenant
desires to make to the Tenant Plans or Tenant Work after approval of the Tenant
Plans by Landlord shall also be subject to Landlord's prior written approval.
Such approval shall be governed by the same standards as are applicable to
Landlord's approval of the original Tenant Plans.
(d) Landlord's review and approval of the Tenant Plans
are for Landlord's purposes only and shall not be deemed to constitute any
representation or warranty by Landlord as to the quality, adequacy, or utility
of the Tenant Work, the fitness of the Tenant Work for any particular purpose,
the compliance of the Tenant Work with Governmental Requirements, or any other
matter whatsoever.
3. Construction
3.1 Contractor. Tenant shall award the contract for the Tenant
Work to Xxxx Contracting, Inc. (the "General Contractor"). All major work to be
subcontracted out by the General Contractor [i.e., work involving subcontracts
of Ten Thousand Dollars ($10,000) or more] shall be performed by bondable and
reputable subcontractors approved by Landlord. Landlord's approval under this
Section 3.1 shall not be unreasonably withheld or delayed.
3.2 Performance of Work.
(a) The General Contractor selected to construct the
Tenant Work shall be responsible to obtain all required permits for the work.
(b) After Landlord's approval of the Construction
Drawings, Tenant's selection (and Landlord's approval) of the General
Contractor, and Tenant's receipt of all required permits for the Tenant Work,
Tenant shall promptly commence the construction of the Tenant Work and
diligently pursue the same to Substantial Completion. The Tenant Work shall be
constructed under the supervision and management of Landlord or a representative
of Landlord as Landlord may designate in writing to Tenant ("Landlord's
Representative"). It is expressly recognized that it is the intent of Tenant to
commence occupancy of the Premises on or before September 15, 2001. Landlord
shall use commercially reasonable efforts to assist Tenant
to accomplish its move-in by that date, provided that Landlord shall not be
required to incur any out of pocket expense in rendering such assistance.
(c) Tenant shall cause the Tenant Work to be constructed
and installed (i) in substantial accordance with the approved Construction
Drawings and this Agreement, including, without limitation, Landlord's
Construction Rules and Regulations attached to and made a part of this Agreement
as Schedule 2, (ii) in a good and workmanlike manner, using new materials of
good quality, and (iii) in accordance with all applicable Governmental
Requirements, including, without limitation, the Americans with Disabilities
Act. Landlord shall have no liability for, and Tenant shall hold Landlord
harmless from, any claims by Tenant or others related to any failure or alleged
failure of the Tenant Work to comply with Governmental Requirements. All Tenant
Work shall be constructed or installed by the General Contractor and any
subcontractors approved by Landlord as set forth in Section 3.1. Landlord and
Landlord's Representative shall have the right (but not the obligation) from
time to time to inspect the Tenant Work as they progress and to advise Tenant of
any variances noted from the requirements of the Lease, this Agreement or
Landlord's Construction Rules and Regulations. All such variances shall be
promptly corrected by Tenant. Any supervision, management, or inspection of the
Tenant Work by Landlord or Landlord's Representative are for the sole benefit of
Landlord. Landlord's supervision, management, and inspection of the Tenant Work
shall in no event be deemed to constitute any representation or warranty by
Landlord as to the quality, adequacy, or utility of the Tenant Work , the
fitness of the Tenant Work for any particular purpose, or the compliance of the
Tenant Work with the Construction Drawings, this Agreement, or applicable
Governmental Requirements.
3.3 Payment. Subject to Section 4 below, Tenant shall promptly pay
all costs of designing, obtaining permits for, and constructing the Tenant Work
(collectively, the "Construction Costs"), as and when the Construction Costs are
due, directly to the parties to whom such payment is due. Tenant shall hold
Landlord harmless from all Construction Costs. The provisions of Section 13.2 of
the Lease shall apply to any mechanic's or materialmen's liens sought to be
imposed against the Building, Land or Corporate Park as a result of the
Construction Costs.
3.4 Change Orders. If Tenant requests any change or addition to
the Tenant Work after Landlord's approval of the Construction Drawings for the
same, Landlord shall respond to Tenant's request within seven (7) business days
after it has been received. If Landlord approves such request, Tenant shall bear
the full cost of such change order and no delay in Substantial Completion of the
Tenant Work due to the change order shall delay the Commencement Date under the
Lease.
3.5 Substantial Completion. "Substantial Completion" of the Tenant
Work shall be conclusively deemed to have occurred as soon as the Tenant Work
has been constructed in accordance with the approved Construction Drawings and
approved change orders and is ready to be utilized for its intended purpose, as
certified by the Building's Architect, after consultation with Tenant's
architect. The issuance of a temporary certificate of occupancy by the proper
governmental entity shall be required for Substantial Completion of any portion
of the Tenant Work and, if granted, shall be deemed conclusive evidence that
Substantial Completion has occurred. Upon Substantial Completion of all of the
Tenant Work, Tenant shall obtain a final
certificate of occupancy for the Building. The cost of obtaining the
certificates of occupancy shall be payable from the Tenant Improvement
Allowance. Notwithstanding the above, Substantial Completion shall be deemed to
have occurred even though punch list items remain to be completed in the Tenant
Work, the lack of completion of which will not materially interfere with the
Permitted Use of the Building. Except as expressly provided in Section 1.5 of
the Lease, it is understood that the Commencement Date under the Lease is a
fixed date and that no delay in Substantial Completion shall result in any
extension of the Commencement Date.
3.6 Phased Construction. As contemplated in Section 1.3(b) above,
at Tenant's election, the design and construction of the Tenant Work may take
place in two (2) separate phases, i.e., one phase involving the Office
Improvements and the other phase involving the Remaining Improvements. If Tenant
elects to proceed in this fashion, the provisions of this Section 3 shall be
deemed to apply to each of the separate phases as and when it is undertaken.
4. Tenant Improvement Allowance. Tenant shall receive an allowance against
the cost of designing, obtaining permits for, and constructing the Tenant Work
in the amount of Twenty-Five Dollars ($25.00) per rentable square foot contained
within the Premises [for a total allowance of Two Hundred Sixty- Four Thousand
Seven Hundred Seventy- Five and 00/100 Dollars ($264,775.00] (the "Tenant
Improvement Allowance"). The Tenant Improvement Allowance shall be paid to
Tenant or its designee as the construction of the Tenant Work progresses and in
proportion to the completion of such work, subject to retainage as provided for
below. Each payment to Tenant or its designee shall be made within thirty (30)
days after written request for payment by Tenant (such request not to be made
more often than monthly), provided that (a) Landlord's Representative shall have
the right to inspect the Tenant Work performed within that period and Landlord
shall have the right to withhold payment for any defective or incomplete work
noted, and (b) all progress payments in connection with the Tenant Work shall be
subject to a ten percent (10%) retainage by Landlord until fifty (50%) of the
Tenant Work has been completed and a five percent (5%) retainage by Landlord
until Substantial Completion of the Tenant Work has occurred. Each request for
payment shall be accompanied by (i) a copy of the invoice or paid receipt in the
case of design or permitting expenses, (ii) the General Contractor's requisition
for payment to Tenant in the case of construction work, setting forth in
reasonable detail the costs of the Tenant Work incurred to the date of such
submission and the amount of those costs paid to date, and (iii) for all costs
other than permitting expenses, mechanics lien waivers duly executed by all
parties supplying labor, materials, or services with respect to the Tenant Work,
waiving all claims for mechanics' or materialmens' liens for all work,
materials, or services furnished to the Building except for the work, materials,
or services which are the subject of the current request for payment. All
payments of the Tenant Improvement Allowance made by Landlord to Tenant shall be
deemed to have been made in trust, for application only to the Construction
Costs. At Landlord's option, all checks may be made jointly payable to Tenant
and the General Contractor or other party furnishing labor, materials, or
services for the Tenant Work, as the case may be. The costs subject to payment
from the Tenant Improvement Allowance shall not include any interest or other
costs of financing or any overhead charge, construction management fee, or other
fee to Tenant or any affiliate of Tenant. Upon Substantial Completion of the
Tenant Work and provided that no Event of Default exists under the Lease (and no
event has occurred and is continuing which would constitute an Event of Default
upon the giving of notice or the passage of time), the retainage held back by
Landlord from the Tenant Improvement Allowance shall be paid to Tenant and if
the total
Construction Costs are less than the Tenant Improvement Allowance, the balance
of the Tenant Improvement Allowance shall be credited by Landlord to the first
installment or installments of Basic Rent coming due under the Lease until the
Tenant Improvement Allowance is exhausted. If the total costs of the Tenant Work
are in excess of the Tenant Improvement Allowance, the excess costs shall be
borne solely by Tenant.
5. Removal of Specialized Tenant Improvements. Tenant Work which Landlord
reasonably determines is specialized to Tenant's use and occupancy of the
Building shall, at the election of Landlord, exercised by written notice to
Tenant not later than six (6) months before the Expiration Date of the Lease, be
removed by Tenant at its expense before the expiration of the Term. Any other
Tenant Work not so elected by Landlord to be removed shall remain within the
Building and be surrendered on the Expiration Date or earlier date of
termination of this Lease as the property of Landlord without disturbance,
molestation or injury. If Landlord requires the removal of all or part of the
specialized Tenant Work, Tenant, at its expense, shall repair any damage to the
Building caused by such removal. If Tenant fails to remove any specialized
Tenant Work upon Landlord's request made consistent with the above provisions,
then Landlord may (but shall not be obligated to) remove the same and the cost
of such removal and repair of any damage caused by the same, together with any
and all damages which Landlord may suffer and sustain by reason of the failure
of Tenant to remove the same, shall be charged to Tenant and paid upon demand.
Upon failure of Tenant to make such payment, Landlord may drawn upon the
Security Deposit for the payment. This Section shall survive termination of the
Lease.
SCHEDULE 1 TO WORK AGREEMENT
BUILDING SHELL DEFINITION - CROWN POINTE II
Landlord, at its sole cost and expense, shall provide the Premises to Tenant in
an "air conditioned" shell state ("Building Shell"), which is defined as
follows:
A. FLOORS: Concrete floor surface to be ready to receive tenant finishes.
X. XXXXX: Perimeter walls, core walls, bulkheads, etc., to be sheetrocked
and finished to receive finish paint or wallcovering.
C. WINDOWS: Window xxxxx, mullions and trim to be complete, installed and
finished. Window blinds to be supplied and bagged for protection.
D. ELEVATOR LOBBY: All lobby features to be complete and installed
including, but not limited to, elevator door frames, thresholds, call
buttons, lights, trash receptacles, and code required signage. All
lobby alarm systems including, but not limited to, detectors,
annunciators, bells, pull stations, lights, flashers, firehouse
cabinets, extinguishers, etc., to be installed and complete.
E. CORE AREA: All core area spaces, including closets, toilet rooms, etc.,
to be complete and finished per code. Hallways not included.
F. PLUMBING: All wetstack plumbing systems to be complete and ready for
connection of Tenant added plumbing work.
G. ELECTRICAL: All main systems and floor systems to be complete,
including, but not limited to, breaker panels, disconnects,
transformers, etc., requiring further work for operation or occupancy
except distribution from floor panels.
H. MECHANICAL SYSTEMS: Four per floor areas, mechanical system to be
entirely complete up to and including one main trunk ducts. VAV boxes
and connection of flex duct to VAV boxes and distribution downstream of
VAV's, fan boxes or other air control systems by tenant. 33 VAV boxes
on the first floor and 34 VAV boxes on the second floor.
I. SPRINKLERS: Sprinkler main loop to be in place with heads up turned
with a density of 1 head per 250 S.F.
J. ALARMS, AND LIFE SAFETY SYSTEMS: All Building tenant alarm circuits,
emergency circuits, equipment, fixtures and trim to be available per
code for a shell building. Distribution by Tenant. Building systems
shall be adequate to support typical ADA and code required alarm
components.
SCHEDULE 2 TO WORK AGREEMENT
LANDLORD'S
CONSTRUCTION RULES AND REGULATIONS
The following rules and regulations are made a part of the terms and conditions
of this Agreement.
1. No smoking, eating or drinking are allowed in the building or directly
outside of the building; except in work area, contractor office or
areas specifically designated by Landlord. Workers will not litter
while at the job site. All related litter must be disposed of daily.
2. No loud music is allowed in the construction areas. Doors to spaces on
occupied floors shall be closed at all times.
3. Areas under construction, as well as storage areas, and all unoccupied
space are to be kept clean and orderly. They are to be secured when
unattended.
4. Contractor is to use only designated areas for working, loading and
unloading, trash containment and removal.
5. Construction personnel are confined to those areas in which related
work is in progress. They will not be allowed to congregate on grounds.
6. The area around the trash dumpster and parking areas are to be kept
clean by contractor.
7. Contractor must use an approved vendor for all roof work to maintain
roof warranty.
8. No alcoholic beverages, etc. allowed on the property.
9. Construction personnel is prohibited to travel on landscaped areas.
10. No owner supplied material is to leave the job site.
11. Contractor's failure to remove material or clean up work area will
result in Landlord performing the work, and holding the Contractor
liable for such costs.
12. All/any burning, welding, hammer or core drilling, and any other
extremely noisy or messy jobs must be prearranged through the
management office prior to doing the work and will only be permitted
before 7:30 a.m. and after 6:00 p.m.
13. Under no circumstances will any work be performed on the base building
MEP system or life support systems without prior approval of the
management office (i.e., Fire Sprinkler System, Smoke Detector System,
Water Supply System, Sanitary/Storm System, Main Electrical
Distribution System, etc.). All equipment rooms must be attended at all
times during work. If the area is left unattended, it is to be secured.
14. All fire alarm inspections must be scheduled 48 hours in advance, and
coordinated through Landlord. Inspections must be conducted before 7:30
a.m. or after 6:00 p.m. on weekdays only. Any inspections scheduled for
the weekends are subject to the engineer's salary at 1.5 times his
regular pay with a four hour minimum.
15. The general contractor will provide a qualified representative for the
full duration of his or any of his subcontractors' daily activities
within the building. This representative will be equipped with a pager.
16. Identification will be required for all construction personnel.
17. All work, material delivery and building access before 7:30 a.m. or
after 6:00 p.m. and on weekends or holidays must be coordinated with
the building management three (3) days in advance.
18. All construction personnel shall park in the area designated by
Landlord.
19. Any contractor acting in a less than professional manner will be
removed from the project and prohibited future access (i.e., use of
profanity).
20. Contractor is responsible for securing all materials and tools as well
as that of its subcontractor.
21. All blueprints and change orders must be furnished to and approved by
Landlord.
22. No work will be accepted as complete or final without a final punchlist
and inspection approval by Landlord.
23. Contractor and all employees, as well as subcontractors and their
employees, must be properly trained and certified for work they
perform.
24. Prior to the commencement of construction, a certificate of insurance
with a general aggregate sum of $2,000,000.00 must be issued to
Landlord, naming Landlord as additional insured.
25. All tenant keying must meet our base building requirements. Landlord
will provide the responsible party with the necessary confidential
information. Advance notice of all keying specifications must be
submitted to Landlord.
26. All penetrations into the slab that are more than 3/4" must be x-rayed.
Landlord must be notified in advance of any x-rays being performed on
the premises. These x-rays can only be scheduled when the building is
closed.
27. The property's trash dumpster may NOT be used for construction
purposes. Any special arrangements must be coordinated with Landlord.
28. All cosmetic detail changes or upgrades to existing perimeter columns
and walls will be at the sole expense of the general contractor.
29. It is the general contractor's responsibility to cover all smoke
detector devices located in a construction area prior to commencing
work daily. Landlord will uncover all devices at the end of each day.
Landlord will fine the general contractor if fire alarms are
accidentally activated due to their negligence.
30. The general contractor must submit a lighting schedule and an air
balance report to Landlord prior to the completion of construction.
31. Prior to the completion of the punchlist, the general contractor must
furnish Landlord with as-built drawings and any extra materials for
future repairs and maintenance of the space.
32. Landlord reserves the right to amend or rescind the Construction Rules
and Regulations at our sole discretion without prior notice.
BREACH OF ANY OF THE ABOVE RULES AND REGULATIONS MAY RESULT IN THE PERSON OR
CONTRACTOR INVOLVED BEING TERMINATED FROM WORKING IN THE BUILDING. NO CONTRACTOR
OR ITS SUBCONTRACTORS SHALL BE PERMITTED TO START WORK UNTIL THE APPROPRIATE
CERTIFICATES OF INSURANCE HAVE BEEN SUBMITTED AND APPROVED BY LANDLORD.
EXHIBIT C
(EXISTING TITLE MATTERS)
EXHIBIT D
(IRREVOCABLE STAND-BY LETTER OF CREDIT)
(Date)
Our Letter of Credit No. __________
To:
[INSERT NAME AND ADDRESS OF LANDLORD]
Gentlemen:
We hereby authorize you to draw on us for the account of _____________
[INSERT NAME OF TENANT], _______________________________ [INSERT ADDRESS OF
TENANT], the amount of _____________________________________ Dollars
($________________) [INSERT ORIGINAL AMOUNT OF SECURITY DEPOSIT], available by
your draft at sight accompanied by:
1. The original of, and all amendments to, this letter of credit.
2. A written statement executed by a purported member, officer,
manager, or other purported authorized representative of Oxbridge Development At
Crown Pointe, L.C., or of any transferee of this letter of credit, setting forth
as follows:
"Landlord is entitled to draw upon Letter of Credit No. _______ [INSERT
NUMBER OF THIS LETTER OF CREDIT] issued by ____________________ [INSERT
NAME OF BANK ISSUING THIS LETTER OF CREDIT] pursuant to the terms of
the Lease Agreement, dated _________, 2000, [INSERT DATE OF THE LEASE]
between Oxbridge Development At Crown Pointe, L.C., as Landlord, and
TherImmune Corporation, as Tenant, as may be amended from time to time,
for premises located at 000 Xxxxxxxxxxxx Xxxxx, Xxxxxxxxxxxx,
Xxxxxxxx."
Drafts must be drawn and negotiated at our offices located at [INSERT
ADDRESS OF OFFICES LOCATED IN WASHINGTON, D.C. METROPOLITAN AREA] not later than
_________________ [INSERT DATE WHICH IS NOT LESS THAN ONE YEAR FROM DATE OF
ISSUANCE]. However, the expiration date of this letter of credit shall be
automatically extended for consecutive one (1) year periods unless we give you
written notice of our intention not to extend this letter of credit at least
thirty (30) days before any then current expiration date. Any such notice shall
be sent to you by certified mail, postage prepaid, return receipt requested, at
your address set forth above or such other address as you may advise us of in
writing. If we notify you in accordance with this paragraph that we will not
extend the expiration date of this letter of credit, then, on or before the then
current expiration date, you may draw upon us for an amount not to exceed the
unused balance of this letter of credit, provided that the draft is accompanied
by the documents specified in paragraphs no. 1 and 2 above.
This credit is subject to the "Uniform Customs and Practice for
Documentary Credits, 1993 Revision, International Chamber of Commerce, Brochure
No. 500."
We hereby engage with you that all drafts drawn under and within the
terms and the amount of this credit, and accompanied by the documents specified
herein, will be duly honored upon presentation to us.
This letter of credit shall be binding upon our successors and assigns
and shall inure to the benefit of your successors and assigns and shall be
transferable by you or your successors and assigns.
Very truly yours,
[INSERT NAME OF BANK]
By:___________________________
Name:_________________________
Title:__________________________
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EXHIBIT D-1
(DRAWING OF TENANT'S SIGN)
EXHIBIT E
(RULES AND REGULATIONS)
1. No part or the whole of the sidewalks, plaza areas, entrances,
passages, courts, vestibules, stairways, corridors or halls of the Building or
the Land shall be obstructed or encumbered by Tenant or used for any purpose
other than ingress and egress to and from the Premises.
2. No awnings or other projections shall be attached to the
exterior walls of the Building. No skylights, window, door or transom of the
Building shall be covered or obstructed by Tenant, and no window shade, blind,
curtain, screen, storm window, awning or other material shall be installed or
placed on any window or in any window of the Premises except as approved in
writing by Landlord. If Landlord has installed or hereafter installs any shade,
blind or curtain in the Premises, Tenant shall not remove the same without first
obtaining Landlord's written consent thereto.
3. No showcases or other articles shall be put in front of or
affixed to any part of the exterior of the Building, nor placed in the Common
Area.
4. Tenant shall not place or permit its Agents to place any trash
or other objects anywhere within the Building or the Land other than the trash
receptacles designated by Landlord.
5. The water and wash closets and other plumbing fixtures shall
not be used for any purposes other than those for which they were constructed,
and no sweepings, rubbish bags or other substances (including, without
limitation, coffee grounds) shall be thrown therein.
6. Tenant shall not xxxx, paint, drill into or in any way deface
any part of the Building or the Premises. No boring, cutting or stringing of
wires shall be permitted, except for picture hanging and other ordinary
decorating purposes.
7. No cooking shall be done or permitted in the Building by
Tenant or its Agents except that Tenant may install and use microwave ovens.
Tenant shall not cause or permit any unusual or objectionable odors to emanate
from the Premises.
8. Tenant shall not make or permit any unseemly or disturbing
noises or disturb or interfere with other tenants of the Building or neighboring
buildings by the use of any musical instrument, radio, television set, other
audio device, unmusical noise, whistling, singing or in any other way.
9. Nothing shall be thrown out of any doors, windows or skylights
or down any passageways.
10. No additional locks or bolts of any kind shall be placed upon
any of the doors or windows of the Premises, nor shall any changes be made in
locks or the mechanism thereof without prior notice to and the approval of
Landlord; provided that Tenant may install separate locks and/or
a security system in its computer room. Tenant shall, upon the termination of
its Lease, return to Landlord all keys to the Premises and other areas furnished
to, or otherwise procured by, Tenant. In the event of the loss of any such keys,
Tenant shall pay Landlord the cost of replacement keys.
11. Tenant shall not use or occupy or permit any portion of the
Premises to be used or occupied for the storage, manufacture or sale of liquor,
narcotics or drugs, other than pharmaceutical drugs manufactured, stored,
handled, or used in connection with Tenant's research, testing and development
activities conducted within its laboratories in the Building, provided that all
such manufacturing, storage, handling, and use shall be in accordance with
Governmental Requirements.. Tenant shall not engage or pay any employee in the
Building except those actually working for Tenant in the Building. The Premises
shall not be used, or permitted to be used, for lodging or sleeping or for any
immoral or illegal purpose.
12. Normal business hours for the Building shall be Monday through
Friday, 8:00 A.M. to 6:00 P.M., and Saturday, 8:00 A.M. to 1:00 P.M., except for
holidays specified below.
13. Holidays for the Building shall be:
January New Year's Day
May Memorial Day
July Independence Day
September Labor Day
October Columbus Day
November Thanksgiving Day and Friday following
December Christmas Day
When the holiday falls on Saturday or Sunday, the preceding Friday or
following Monday, respectively, will be the day of closing.
14. Landlord reserves the right to control and operate the Common
Area in such manner as it deems best for the benefit of the Building tenants.
15. Tenant shall use its best efforts to see that all entrance
doors (if applicable) are locked and all lights and office equipment within the
Premises are turned off, and Landlord shall have no responsibility relating
thereto.
16. Building employees shall not be required to perform any work
outside of their regular duties unless under specific instructions from
Landlord.
17. Vending, canvassing, soliciting and peddling in the Building
are prohibited, and Tenant shall cooperate in seeking their prevention.
18. In connection with the delivery or receipt of merchandise,
freight or other matter, no hand trucks or other means of conveyance shall be
permitted except those equipped with rubber tires, rubber side guards or such
other safeguards as Landlord may require.
19. No animals of any kind shall be brought into or kept about the
Land or the Building by Tenant or its Agents, except seeing eye and other guide
dogs.
20. No vending machines shall be permitted to be placed or
installed in any part of the Building by Tenant without the permission of
Landlord. Landlord reserves the right to place or install vending machines in
the Building (other than in the Premises).
21. Tenant shall use its best efforts to keep the windows and
doors of the Premises (including, without limitation, those opening on corridors
and all doors between any room designed to receive heating or air conditioning
service end room(s) not designed to receive such service) closed while the
heating or air conditioning system is operating in order to minimize the energy
used by and to conserve the effectiveness of such systems.
22. The Premises and the Building and its grounds have been
designated as non-smoking areas. Tenant, its servants, employees, officers,
agents, customers, licensees, visitors, suppliers, or any other person
reasonably controlled by Tenant must adhere to the no-smoking policy.
EXHIBIT F
(FORM OF SNDA)
SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
THIS AGREEMENT is made as of this ____ day of __________, 2000 by and
among __________________________________________________a _________________
having an office and place of business at
_____________________________("Lender"), __________, a {Insert State}
corporation, whose address is __________, ("Landlord"), and __________, having
an office at _________, ("Tenant").
WITNESSETH
WHEREAS, Tenant has entered into a certain lease (the "Lease") dated
__________ with Landlord covering premises (the "Premises") within a certain
building known as __________, located in {Insert State} (a conformed copy of
said Lease has been delivered to Lender); and
WHEREAS, Lender has made a certain loan to Landlord, which loan is
secured by the mortgages (the "Mortgages") more particularly described in
Exhibit A annexed here to and affecting the premises known as __________, in the
{Insert City & County}, City, County and State of {Insert State}; and
WHEREAS, Lender has been requested by Tenant and by Landlord to enter
into a non-disturbance agreement with Tenant;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, the parties hereto mutually covenant and agree as
follows:
1. The Lease and any extensions, renewals, replacements or
modifications thereof, and all of the right, title and interest of
Tenant thereunder in and to the Premises are and shall be subject and
subordinate to the Mortgages and to all of the terms and conditions
contained therein, and to any renewals, modifications, replacements,
consolidations and extensions thereof.
2. Lender consents to the Lease and, in the event Lender comes
into possession of or acquires title to the Premises as a result of the
foreclosure or other enforcement of the Mortgages or the notes secured
by the Mortgages, or as a result of any other means, Lender agrees
that, so long as Tenant is not then in default hereunder or under the
Lease, Lender will recognize Tenant and will not disturb Tenant in its
possession of the Premises for any reason other than one which would
entitle Landlord to terminate the Lease under its terms.
1
3. Tenant agrees with Lender that if the interests of Landlord in
the Premises shall be transferred to and owned by Lender by reason of
foreclosure or other proceedings brought by it, or any other manner, or
shall be conveyed thereafter by Lender or shall be conveyed pursuant to
a foreclosure sale of the Premises, Tenant shall be bound to Lender
under all of the terms, covenants and conditions of the Lease for the
balance of the term thereof remaining and any extensions or renewals
thereof which may be effected in accordance with any option therefor in
the Lease, with the same force and effect as if Lender were the
landlord under the Lease, and Tenant does hereby attorn to Lender as
its landlord, said attornment to be effective and self-operative
without the execution of any further instruments on the part of any of
the parties hereto immediately upon Lender succeeding to the interest
of Landlord in the Premises. Tenant agrees, however, upon the election
of and written demand by Lender within twenty (20) days after Lender
receives title to the Premises, to execute an instrument in
confirmation of the foregoing provisions, satisfactory to Lender, in
which Tenant shall acknowledge such attornment and shall set forth the
terms and conditions of its tenancy.
4. Tenant agrees with Lender that if Lender shall succeed to the
interest of Landlord under the Lease, Lender shall not be (a) liable
for any action or omission of any prior landlord under the Lease,
except to the extent set forth in the last sentence of this section, or
(b) subject to any offsets or defenses which Tenant might have against
any prior landlord, or (c) bound by any rent or additional rent which
Tenant might have paid for more than the current month to any prior
landlord, or (d) bound by any security deposit which Tenant may have
paid to any prior Landlord, unless such deposit is in an escrow fund
available to Lender or has otherwise been transferred to such Lender,
or (e) bound by an amendment or modification of the Lease made without
Lender's written consent, or (f) bound by any notice of termination
given by Landlord to Tenant without Lender's written consent thereto,
or (g) personally liable under the Lease and Lender's liability under
the Lease shall be limited to the ownership interest of Lender in the
Premises. Tenant further agrees with Lender that Tenant will not
voluntarily subordinate the Lease to any lien or encumbrance without
Lender's written consent. Nothing herein shall be deemed to constitute
a release by Tenant of Lender or any purchaser to whom Tenant attorns
pursuant to Paragraph 3 hereof with respect to the required performance
by Lender or such purchaser of any obligation, duty or covenant of
Landlord under the Lease arising from and after the date Lender or any
such purchaser shall obtain possession of or title to the Premises.
5. In the event that Landlord shall default in the performance or
observance of any of the terms, conditions or agreements in the Lease,
Tenant shall give written notice thereof to Lender and Lender shall
have the right (but not the obligation) to cure such default. Tenant
shall not take any action with respect to such default under the Lease,
including, without limitation, any action in order to terminate,
rescind or void the Lease or to withhold any rental thereunder, for a
period of 10 days after receipt of such written notice by Lender with
respect to any such default capable of being cured by the payment of
money and for a period of 30 days after receipt of such written notice
by Lender with respect to any other such default (provided, that in the
case of any default which cannot be cured by the payment of money and)
cannot with diligence be cured within such 30-day
2
period because of the nature of such default or because Lender requires
time to obtain possession of the Premises in order to cure the default,
if Lender shall proceed promptly to attempt to obtain possession of the
Premises, where possession is required, and to cure the same and
thereafter shall prosecute the curing of such default with diligence
and continuity, then the time within which such default may be cured
shall be extended for such period as may be necessary to complete the
curing of the same with diligence and continuity).
6. Landlord has agreed in the mortgages that the rentals payable
under the Lease shall be paid directly by Tenant to Lender upon the
occurrence of a default by Landlord under the Mortgages. Accordingly,
after notice is given by Lender to Tenant that the rentals under the
Lease should be paid to Lender, Tenant shall pay to Lender, or in
accordance with the directions of Lender, all rentals and other moneys
due and to become due to Landlord under the Lease, or amounts equal
thereto. Tenant shall have no responsibility to ascertain whether such
demand by Lender is permitted under the Mortgages. Landlord hereby
waives any right, claim or demand it may now or hereafter have against
Tenant by reason of such payment to Lender, and any such payment to
Lender shall discharge the obligations of Tenant to make such payment
to Landlord.
7. Tenant declares, agrees and acknowledges that:
a. Lender, in making disbursements pursuant to any
agreement relating to the Loan, is under no obligation or duty to, nor
has Lender represented that it will, see to the application of such
proceeds by the person or persons to whom Lender disburses such
proceeds, and any application or use of such proceeds for purposes
other than those provided for in such agreement shall not defeat the
subordination herein made in whole or in part; and
b. It intentionally and unconditionally waives,
relinquishes and subordinates the Lease and its leasehold interest
thereunder in favor of the lien or charge of the Mortgages, and that in
consideration of this waiver, relinquishment and subordination,
specific loans and advances are being and will be made by Lender to
Landlord and, as part and parcel thereof, specific monetary and other
obligations are being and will be entered into by Landlord and Lender
which would not be made or entered into but for said reliance upon this
waiver, relinquishment and subordination.
8. This Agreement shall bind and inure to the benefit of the
parties hereto, their successors and assigns. As used herein the term
"Tenant" shall include Tenant, its successors and assigns; the words
"foreclosure" and "foreclosure sale" as used herein shall be deemed to
include the acquisition of Landlord's estate in the Premises by
voluntary deed (or assignment) in lieu of foreclosure; and the word
"Lender" shall include the Lender herein specifically named and any of
its successors, participants and assigns, including anyone who shall
have succeeded to Landlord's interest in the Premises by, through or
under foreclosure of the Mortgage.
3
9. All notices, consents and other communications pursuant to the
provisions of this Agreement shall be in writing and shall be sent by
registered or certified mail, return receipt requested, or by a
reputable commercial overnight carrier that provides a receipt, such as
Federal Express or Airborne, and shall be deemed given when postmarked
and addressed as follows:
If to Lender: With a copy to:
If to Tenant: If to Landlord: or to such other address as
shall from time to time have been designated by written notice by such
party to the other parties as herein provided.
10. This Agreement shall be the whole and only agreement between
the parties hereto with regard to the subordination of the Lease and
the leasehold interest of Tenant thereunder to the lien or charge of
the Mortgages in favor of Lender, and shall supersede and control any
prior agreements as to such, or any subordination, including, but not
limited to, those provisions, if any, contained in the Lease, which
provide for the subordination of the Lease and the leasehold interest
of Tenant thereunder to a deed or deeds of trust or to a mortgage or
mortgages to be thereafter executed, and shall not be modified or
amended and no provision herein shall be waived except in writing by
the party against whom enforcement of any such modification or
amendment is sought. The use of the neuter gender in this Agreement
shall be deemed to include any other gender, and words in the singular
number shall be held to include the plural, when the sense requires. In
the event any one or more of the provisions of this Agreement shall for
any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. This Agreement shall be governed by and
construed in accordance with the laws of the {Insert State}
IN WITNESS WHEREOF the parties hereto have placed their hands and seals
the day and year first above written.
Signed and acknowledged in TENANT:
the presence of us:
_______________________ By:_____________________________
Typed Name:
Title:
LANDLORD:
_______________________ By:_____________________________
4
Typed Name:
Title:
LENDER:
_______________________ By:______________________________
Typed Name:
Title:
5
EXHIBIT G
(JANITORIAL SCHEDULE)
Schedule: Monday through Friday
5:00 p.m. to 9:00 p.m.
Holidays
Excepted: New Year's Day, Memorial Day, Independence Day, Labor Day,
Columbus Day, Thanksgiving Day and Christmas Day
Provided: All supervision, labor, equipment, cleaning materials, plastic
liners, paper products, hand soap, insurance coverage and
administration to perform the following duties, at the
frequency stated.
Building Entrance and Lobby
clean entry doors on both sides - daily
clean/polish (brightly) door bucks/saddles - daily
clean all trim on inside of entrances - daily
polish (brightly) all handles on doors - daily
sweep, mop and buff lobby floor and surfaces - as necessary
vacuum and spot clean carpets - shampoo as necessary
the immediate exterior areas adjoining the lobby will be
maintained as necessary weather permitting
Public Corridors
vacuum carpet and spot clean - shampoos as necessary
clean and polish water fountains - daily
dust furniture, fireboxes, extinguishers, pictures, etc. - as
necessary
spot clean walls - as necessary
Restrooms
polish all brightware - daily
sweep floors - daily
mop floor with disinfectant water - daily
wash and polish all mirrors - daily
wash and polish hand basins and hardware - daily
wash and disinfect urinals - daily
wash and disinfect toilet seats - daily
dust walls and partitions - daily
replenish paper products and soap - daily
clean bowls - monthly
replace plastic liner in trash can - polish
trash receptacles - daily
clean and polish (brightly) all floor drains - weekly
Offices
remove trash - only remove what is in the waste - daily
can or clearly marked "trash" - daily
replace plastic liners as needed - daily
wipe trash receptacles clean - daily
dust furniture and desks, phones, filing cabinets, window
ledges - daily
do not touch or disturb articles on desks (papers, etc.) -
daily
mop all hard surface floors with a treated yard dust mop -
daily
spot clean walls, doors, partitions - daily
spot clean carpeting and hard surface floors - daily
all carpet and hard-to-get areas will be vacuumed - three
times a week
all hard surfaces (except wood) to be mopped, polished and
buffed - as necessary
polish and buff wood floors - as necessary
vacuum upholstered furniture - as necessary
dust picture frames, charts, graphs, etc. - as necessary
vacuum air vents - as necessary
clean partitions - as necessary
dust venetian blinds - as necessary
dust all overhead lights - quarterly
FIRST AMENDMENT TO LEASE AGREEMENT
THIS FIRST AMENDMENT TO LEASE AGREEMENT ("Amendment") made and effective as of
the 25th day of September, 2001, by and between OXBRIDGE DEVELOPMENT AT CROWN
POINTE, L.C., a Maryland limited liability company ("Landlord") and THERIMMUNE
RESEARCH CORPORATION, a Maryland corporation ("Tenant").
W I T N E S S E T H:
A. By that certain Lease Agreement dated as of June 22, 2001 (the
"Lease"), Landlord leased to Tenant, and Tenant leased from Landlord ten
thousand five hundred ninety-one (10,591) rentable square feet on the first
(1st) floor of the Building;
B. Landlord and Tenant now agree that the floor area of the Premises
will be reduced to seven thousand seven hundred twenty-three (7,723) rentable
square feet, as depicted on Exhibit "A" attached hereto and made a part hereof;
C. Accordingly, Landlord and Tenant now desire to modify and amend the
Lease to so decrease the rentable square feet of the Premises, to decrease the
rentable square feet of the Expansion Space, to decrease the annual Basic Rent,
to change the Commencement Date, to extend the Expiration Date, to decrease
Tenant's Parking Space Allocation, to decrease the size of Tenant's Sign, and to
otherwise modify the Lease in accordance with the terms, covenants, and
conditions set forth in this Amendment.
NOW, THEREFORE, in consideration of the sum of Ten and 00/100 Dollars
($10.00), and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. The recitals set forth above are incorporated in and made a
substantive part of this Amendment. Any capitalized terms used but not defined
in this Amendment shall have the meanings ascribed to such terms in the Lease.
2. The rentable area of the Premises is hereby decreased to seven
thousand seven hundred twenty-three (7,723) rentable square feet. The Floor Plan
Showing Premises which is attached as Exhibit "A-2" to the Lease is hereby
deleted in its entirety and there is substituted therefor the floor plan of the
Premises attached hereto as Exhibit "A". Tenant's Proportionate Share shall be
appropriately adjusted to reflect such decrease.
3. The rentable area of the Expansion Space as defined in Section 3.4
is hereby decreased to approximately five thousand (5,000) rentable square feet,
as shown and depicted on Exhibit "A".
4. The annual Basic Rent is hereby decreased to Two Hundred Three
Thousand Eight Hundred Eighty-Seven and 20/100 Dollars ($203,887.20) during the
first Lease Year ($16,990.60 per month) subject to adjustments thereafter
pursuant to Section 1.8 of the Lease, which amount for the initial Lease Year
shall be the product of Twenty-Six and 40/100 Dollars ($26.40) multiplied by the
rentable square feet of the Premises.
5. The parties hereto agree that the Commencement Date as defined in
Section 1.5 of the Lease is hereby established as being the earlier of (i) the
date Tenant commences business operations within the Premises or (ii) November
1, 2001.
6. The parties hereto agree that the Expiration Date as defined in
Section 1.6 of the Lease is hereby established as being March 15, 2011, as such
date may be extended pursuant to Section 4.2 of the Lease.
7. The first sentence of Section 4 of the Work Agreement attached to
the Lease as Exhibit B is hereby deleted in its entirety and the following is
substituted therefor:
"Tenant shall receive an allowance against the cost of
designing, obtaining permits for, and constructing the Tenant Work in
the amount of Twenty-Five and 00/100 Dollars ($25.00) per rentable
square foot contained within the Premises [for a total allowance of One
Hundred Ninety Three Thousand Seventy-Five and 00/100 Dollars
($193,075.00] (the "Tenant Improvement Xxxxxxxxx")."
0. The size of Tenant's Sign is hereby decreased based upon Tenant's
pro rata share (based upon its rentable area as reduced by this Amendment) of
the total sign area permitted for the Building.
9. Tenant's Parking Space Allocation as defined in Section 1.14 is
hereby reduced to thirty (30) unreserved, non-exclusive parking spaces in the
Parking Facilities.
10. Except as expressly provided for by this Amendment, all terms,
conditions and provisions of the Lease shall remain in full force and effect and
unmodified. To the extent of an inconsistency between the terms and conditions
of the Lease and the terms and conditions of this Amendment, the terms and
conditions of this Amendment shall govern and any language of, or provision in,
the Lease not referred to in this Amendment which is inconsistent or is in
conflict with this Amendment shall be deemed appropriately amended or modified.
11. Landlord and Tenant each represents and warrants to the other that
the person(s) signing this Amendment on its behalf have the requisite authority
and power to execute this Amendment and to thereby bind the party on whose
behalf it is being signed.
12. This Amendment shall be binding upon and inure to the benefit of
Landlord, Tenant and their respective heirs, successors and assigns.
13. Any question with respect to the interpretation of this Amendment
shall be governed by the laws of the State of Maryland, without regard to choice
of law principles.
14. The Lease, as amended by this Amendment and the Exhibit hereto,
contains and embodies the entire agreement of the parties hereto with respect to
the Premises, and no representations, inducements or agreements, oral or
otherwise, between the parties not contained in this Amendment shall be of any
force or effect. This Amendment may be waived, modified or terminated only by an
agreement in writing signed by the party against whom enforcement of the waiver,
modification, or termination is sought.
15. This Amendment may be executed in a number of identical
counterparts which, taken together, shall constitute collectively one (1)
agreement; but in making proof of this Amendment, it shall not be necessary to
produce or account for more than one such counterpart.
16. Tenants Security Deposit as defined in Section 1.9 and Section 6.2
is hereby reduced accordingly. In Section 1 .9, the Security Deposit shall be
reduced to One Hundred Thirty Thousand Five Hundred Dollars and 00/100
($130,500.00), and Section 6.2. the Security Deposit, shall be reduced to Eighty
Three Thousand Three Hundred Twenty Nine
Dollars and 00/100 ($83,329.00) and Thirty Five Thousand Four Hundred Fifteen
Dollars and 00/100 ($35,415.00), respectively.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the
day and year first hereinabove written.
ATTEST: TENANT:
THERIMMUNE RESEARCH CORPORATION,
A Maryland corporation
/s/ By: /s/ Xxxxxx X. Angle, Jr.
--------------- Name: Xxxxxx X. Angle, Jr.
Title: Chief Financial Officer
Date: September 25, 2001
ATTEST: LANDLORD:
OXBRIDGE DEVELOPMENT AT CROWN POINTE, L.C.,
A Maryland limited liability company
/s/ By: /s/ Xxxx Xxxxx
--------------- Name: Xxxx Xxxxx
Title: President
Date: September 26, 2001
Exhibit "A"
FLOOR PLAN SHOWING PREMISES
SECOND AMENDMENT TO LEASE AGREEMENT
THIS SECOND AMENDMENT TO LEASE AGREEMENT (this "Amendment") is made
this 20th day of December, 2002, by and between OXBRIDGE DEVELOPMENT AT CROWN
POINTE, L.C., a Maryland limited liability company ("Landlord"), and THERIMMUNE
RESEARCH CORPORATION, a Maryland corporation ("Tenant").
R E C I T A L S :
RECITAL 1. Landlord and Tenant have entered into a Lease dated June 22,
2001, as amended by a First Amendment to Lease Agreement (the "First Amendment")
dated September 25, 2001 (as so amended, the "Lease") pursuant to which Landlord
has leased to Tenant certain premises, consisting of approximately seven
thousand seven hundred twenty-three (7,723) rentable square feet of space,
located on the first floor of the building located at 000 Xxxxxxxxxxxx Xxxxx,
Xxxxxxxxxxxx, Xxxxxxxx 00000 (the "Building") and more particularly described in
the Lease (the "Original Space").
RECITAL 2. Landlord and Tenant desire to modify the Lease to provide
for the lease by Landlord to Tenant of certain additional space located on the
first floor of the Building situated in two components ("Expansion Space"), and
to otherwise modify the Lease in accordance with the terms, covenants and
conditions more particularly set forth below.
NOW THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency
which the parties acknowledge, Landlord and Tenant agree as follows:
1. The above Recitals are incorporated by reference in this
Amendment as if fully set forth herein. Unless otherwise defined in this
Amendment, all defined terms utilized herein shall have the meanings set forth
for them in the Lease.
2. Tenant shall be provided access to the Expansion Space
immediately following execution of this Amendment for the purpose of designing
and constructing the Tenant Work as defined in and subject to the provisions
contained in Exhibit B hereto. As of May 1, 2003 (the "Expansion Date"), there
shall be added to the Premises and the Premises shall include (in addition to
the Original Space) approximately Ten Thousand Eight Hundred Sixty-Nine (10,869)
rentable square feet of space located on the first floor of the Building (the
"Additional Space"). Notwithstanding the foregoing, the Expansion Date shall be
delayed on a day-for-day basis in the event of any delay caused solely by
Landord in the completion of the Landlord Items (as defined in Exhibit "B") or
if Tenant is delayed in obtained either a building permit for, or an inspection
of, the Tenant Work (as defined in Exhibit "B") or a certificate of occupancy
for the Additional Space, in each such instance solely by reason of a violation
within the Building outside of the Premises caused by Landlord. Both the
Original Space and the Additional Space are as shown on the drawing attached to
and made a part of this Amendment as Exhibit "A". The exact area of the
Additional Space shall be determined by Building Architect prior to the
Expansion Date according to the Building Owners and Managers Association
International Standard Method for Measuring Floor Space in Office Buildings
(1996) (the "BOMA Method"), subject to verification
by Tenant's Architect, and that, for the purposes of any calculations based upon
the rentable area of the Premises and the Building for all purposes under this
Lease the rentable area so determined shall control. From and after the
Expansion Date, subject to such measurement, all references in the Lease to the
"Premises" shall mean the Original Space and the Additional Space, for a total
rentable area of approximately eighteen thousand five hundred ninety-two
(18,592) rentable square feet. Exhibit "A" to the First Amendment is hereby
deleted and replaced by the Exhibit "A" referenced above.
3. The Commencement Date for the Additional Space shall be the
Expansion Date.
4. Section 1.6 of the Lease and Paragraph 6 of the First
Amendment shall be modified to provide that the Term for the Premises shall
expire on April 30, 2013, as such date may be extended pursuant to Section 4.2
of the Lease (the "Expiration Date"). It is the intent of Landlord and Tenant
that the Term shall be coterminous as to the Original Space and the Additional
Space.
5. Article 1, Section 1.7 of the Lease and Paragraph 4 of the
First Amendment are modified to provide that as of the Expansion Date the Basic
Rent for the entire Premises shall initially be calculated at the rate of
Twenty-Five and 00/100 Dollars ($25.00) for each rentable square foot contained
in the Premises, equaling a total annual Basic Rent of Four Hundred Sixty- Four
Thousand Eight Hundred and 00/100 Dollars ($464,800.00) for the Premises,
payable in twelve (12) equal monthly installments of Thirty-Eight Thousand Seven
Hundred Thirty-Three and 33/100 Dollars ($38,733.33) each, subject to
recalculation, if necessary, based upon the remeasurement performed in
accordance with Paragraph 2, above. Thereafter, the Basic Rent for the Premises
shall escalate annually at the rate of three percent (3%) per annum over the
Basic Rent for the Premises in effect during the preceding twelve (12) month
period, with the annual escalations occurring on each anniversary of the
Expansion Date. Notwithstanding the foregoing to the contrary, provided no Event
of Default by Tenant has then occurred, Landlord shall xxxxx fifty percent (50%)
of the Basic Rent installments (the "Abatement") payable for the nine (9) month
period from and after the Expansion Date (the "Abatement Period").
Notwithstanding the foregoing, in the event that Basic Rent would xxxxx pursuant
to the terms of the Lease for any reason (e.g., by reason of a fire of casualty
during such nine (9) month period then and in such event the Abatement Period
shall be extended on a day for day basis for each day of such other abatement,
so as to result in the provision to Tenant of a fifty percent (50%) rent credit
for nine (9) full months by reason of the provisions contained in this Amendment
as opposed to the other provisions in the Lease. However, in the event that
Tenant opts to use any or all of the Additional Allowance (as defined in Exhibit
"B"), the Abatement provided for hereunder shall be reduced, dollar-for-dollar,
by the amount of the Additional Allowance used by Tenant. Such reduction will be
applied monthly over the Abatement Period in nine (9) equal parts, and Tenant
shall pay to Landlord monthly the amount of such reduction of Abatement. The
Abatement shall not apply to Additional Rent due during the Abatement Period or
otherwise. Despite the foregoing, if an Event of Default occurs under the Lease
(as modified by this Amendment) after the date of this Amendment, the Abatement
shall be ineffective and Tenant shall be obligated to paid the abated rent to
Landlord on its regular due dates or, if the Event of Default occurs after the
regular due date(s) of any abated rent, within ten (10) days after written
demand by Landlord.
6. Section 1.11 of the Lease is hereby deleted in its entirety,
and the following substituted therefor: "Expense Stop. Year ending April 30,
2003 ("Base Year") actual Operating Expenses, grossed up to reflect ninety-five
percent (95%) occupancy within the entire Building during the entire Base Year.
Landlord will deliver written notice to Tenant on or before May 31, 2003.
setting forth the actual amount of the Expense Stop.
7. The first sentence of Section 7.1 of the Lease is hereby
deleted in its entirety and the following is substituted therefor: "During the
period commencing on May 1, 2003 and expiring on April 30, 2004, Tenant shall
pay to Landlord, as Additional Rent, twelve and six tenths percent (12.6%) of
the amount by which the Operating Expenses incurred during each Calendar Year
exceed the amount of the Expense Stop and during the Lease Year commencing on
May 1, 2004 and during each Lease Year of the Term thereafter, Tenant shall pay
to Landlord, as Additional Rent Tenant's Proportionate Share (i.e., thirty and
twenty-one hundredths percent (30.21%)) of the amount by which the Operating
Expenses incurred during each Calendar Year exceed the amount of the Expense
Stop ("Tenant's Share of Operating Expenses").
8. Article I, Section 1.14 of the Lease and Paragraph 9 of the
First Amendment are modified to provide that the total number of unreserved,
nonexclusive parking spaces allocated to the Premises shall be fifty-six (56) as
of the Expansion Date.
9. The size of Tenant's Sign is hereby increased based upon
Tenant's pro rata share (based upon its rentable areas as increased by this
Amendment) of the total sign area permitted for the Building. Landlord
acknowledges that Tenant shall be entitled to install at its own expense such
sign on the exterior facade of the Building in accordance with the provision of
Section 14.2 of the Lease.
10. Section 3.4 of the Lease is hereby deleted in its entirety and
the following language is hereby substituted therefor:
3.4 Right of First Offer For Expansion Space.
(i) Notice; Exercise. Except during the last two (2)
Lease Years of the Term of this Lease, as such may be extended,
Landlord shall give Tenant written notice (the "Offer Notice") of its
intention to lease the Expansion Space (hereinafter defined) within
five (5) days prior to the full execution and delivery of a letter of
intent between Landlord and a third party with respect to the proposed
leasing of such space ("Third Party Letter"). The Offer Notice shall
set forth in reasonable detail the size and specific location of the
Expansion Space. Should Tenant so elect, Tenant shall give written
notice to Landlord of its intention to lease not less than four
thousand (4,000) rentable square feet of the Expansion Space identified
in the Offer Notice ("Tenant's Notice") not more than five (5) days
after receipt by Tenant of the Offer Notice, in which case Landlord and
Tenant shall promptly enter into an amendment to this Lease adding such
Expansion Space (or portion thereof) to the Premises, adjusting
Tenant's Proportionate Share to reflect such addition and providing for
the term of the lease of such space to expire on the Expiration Date.
All other terms
and conditions of this Lease shall apply to any Expansion Space leased
by Tenant, including without limitation the provisions hereof with
respect to Additional Rent, except that the Basic Rent payable for the
Expansion Space shall be ninety-five percent (95%) of the Prevailing
Market Rent as determined by Landlord in its commercially reasonable
discretion, taken into consideration in such determination the
applicability of the Additional Rent provisions insofar as the
Expansion Space is concerned, the "as-is" condition of the Expansion
Space and the absence of concessions, allowances, and brokerage fees
relating thereto. If Tenant shall fail to exercise its option to lease
the Expansion Space within five (5) days of the date on which Landlord
gives the Offer Notice to Tenant, then Landlord shall be free to offer
such Expansion Space to others on such terms and conditions as Landlord
determines in its sole and absolute discretion. As used herein, the
term "Expansion Space" shall mean and refer to any space located
immediately adjacent to the Premises on the first (1st) floor of the
Building containing at least four thousand (4,000) rentable square feet
of space.
(ii) Holding Over by a Previous Tenant. In the event the
previous tenant or occupant of all or any portion of the Expansion
Space in respect of which Tenant has delivered to Landlord Tenant's
Notice holds over or otherwise refuses to surrender or vacate such
Expansion Space on or before the scheduled availability date set forth
in Landlord's Offer Notice, Landlord shall not be liable to Tenant for
any wrongful holdover by the previous tenant or occupant, so long as
Landlord is diligently pursuing all commercially reasonable actions
available to it, and the date on which Tenant is obligated to commence
payment of Basic Rent and Additional Rent in respect of such Expansion
Space shall be postponed by the number of days beyond such scheduled
availability date required for Landlord to obtain and deliver to Tenant
possession of such Expansion Space.
(iii) Condition of Expansion Space. Landlord shall deliver
such Expansion Space in "as is" condition (i.e., in "building shell"
condition as defined in Schedule 1 to the Work Agreement) ("Building
Shell")), except that such space shall be broom clean. If Tenant shall
exercise any of its rights to lease Expansion Space pursuant to this
Section, Tenant shall have the right to remodel such space at Tenant's
sole cost and expense using contractors of its choice and reasonably
approved in advance in writing by Landlord. Any remodeling shall be
performed in accordance with the requirements of the Lease (including,
but not limited to, the Alterations provision).
(iv) Commencement of Rent With Respect to Expansion Space.
Tenant's obligation to pay Basic Rent and Additional Rent with respect
to the Expansion Space leased pursuant to this Section 3.4 shall
commence on the earlier of (i) the date Tenant commences business
operations within such
Expansion Space, or (ii) ninety (90) days following the date Landlord
delivers such Expansion Space in the condition specified in subsection
(iii) of this Section 3.4. ("Expansion Space Rent Commencement Date").
In the event Tenant's obligation to pay Basic Rent and Additional Rent
for any Expansion Space does not commence on the first (1st) day of a
calendar year, Rent, Tenant's Share of Operating Expenses and Tenant's
Management Fee (on account of the addition of such Expansion Space to
the Premises) shall be appropriately prorated and adjusted based on the
number of days in such calendar year prior to and after the date Basic
Rent and Additional Rent for such Expansion Space commences.
(v) Termination. If at any time Tenant does not timely
deliver Tenant's Notice to Landlord following Landlord's giving of an
Offer Notice, the provisions of this Section 3.4 shall terminate and be
of no further force and effect. It is understood that Tenant's
expansion rights under this Section 3.4 consist of a one-time right,
and upon any one rejection or acceptance of an Offer Notice, Tenant
shall have no further rights under this Section.
1. Paragraph 7 of the First Amendment and the Work Agreement
attached to the Lease are deleted in their entirety, and shall be replaced by
the "Additional Space Work Agreement" attached hereto as Exhibit "B" and
incorporated by reference herein.
2. Landlord and Tenant each represent and warrant to the other
that it has not employed any broker, agent or finder except for TSC Realty
Services, LLC ("Landlord's Broker") and Atlantic Real Estate Group ("Tenant's
Broker") (together, the "Brokers"), which Brokers shall be paid commissions by
Landlord under a separate agreement. Landlord shall indemnify and hold Tenant
harmless, and Tenant shall indemnify and hold Landlord harmless, from and
against any claim for brokerage or other commission arising from or out of any
breach of the indemnitor's representation and warranty. Landlord hereby
discloses that one or more of the members of Landlord are associated with
Landlord's Broker, and that such individuals are licensed real estate persons
within the State of Maryland and have a pecuniary interest in both Landlord and
the Building.
3. Except as expressly modified herein, the Lease shall continue
in full force and effect. In the event of any inconsistency between the Lease
and this Amendment, this Amendment shall govern.
4. Upon execution of this Amendment, Tenant shall deliver to
Landlord, in the form of Letter of Credit, an additional security deposit in the
amount of Forty-Five Thousand Two Hundred Eight-Seven and 50/100 Dollars
($45,287.50) (the "Additional Deposit"). Tenant agrees that such Additional
Deposit may be commingled with Landlord's other funds and is not an advance
payment of rental or a measure of Landlord's damages in case of an Event of
Default by Tenant. Upon the occurrence of any Event of Default by Tenant,
Landlord may, from time to time, without prejudice to any other remedy provided
herein or provided by law, use such Additional Deposit to the extent necessary
to make good any arrears of rentals and any other damage, injury, expense or
liability caused to Landlord by such Event of Default, and Tenant
shall pay to Landlord on demand the amount so applied in order to restore the
Additional Deposit to its original amount. If Tenant is not then in default
hereunder, any remaining balance of such Additional Deposit shall be returned by
Landlord to Tenant within thirty (30) days after termination of this Lease, as
amended hereby.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Landlord and Tenant have executed this
Amendment as of the date and year first set forth above.
WITNESS/ATTEST: LANDLORD:
OXBRIDGE DEVELOPMENT AT CROWN
POINTE, L.C.,
a Maryland limited liability company
/s/ Xxxxxx Xxxxx By: /s/ Xxxxxx Xxxxx
------------------------------ Name: Xxxxxx Xxxxx
Title: Authorized Member
TENANT:
THERIMMUNE RESEARCH CORPORATION,
a Maryland corporation
/s/ Xxxxx Trevian By: /s/ Xxxxxx X. Angle, Jr.
------------------------------ Name: Xxxxxx X. Angle, Jr.
Title: Chief Financial Officer
January 1, 2003
EXHIBIT B
(ADDITIONAL SPACE WORK AGREEMENT)
This Work Agreement is attached to and made a part of the foregoing Amendment
(the "Amendment"), between OXBRIDGE DEVELOPMENT AT CROWN POINTE, L.C., a
Maryland limited liability company ("Landlord"), and THERIMMUNE RESEARCH
CORPORATION, a Maryland corporation ("Tenant"). The terms used in this Exhibit
that are defined in the Lease and the Amendment shall have the same meanings as
provided in the Lease and/or the Amendment.
1. General
1.1 Purpose. This Agreement sets forth the terms and conditions
governing the design, permitting and construction of the improvements to be
installed in the Additional Space.
1.2 Tenant's Representative. Tenant acknowledges that Tenant has
appointed Xxxxxx Angle, Jr. as its authorized representative ("Tenant's
Representative") with full power and authority to bind Tenant for all actions
taken with regard to the "Tenant Work" (defined below). Tenant ratifies all
actions and decisions with regard to the Tenant Work that the Tenant's
Representative may have taken prior to the execution of the Amendment. Landlord
shall not be obligated to respond to or act upon any plan, drawing, change
order, approval request, or other matter relating to the Tenant Work until it
has been executed by Tenant's Representative.
1.3 Leasehold Improvements.
(a) Existing Improvements: Landlord has constructed or
will construct the Base Building Improvements. The Base Building Improvements
are composed of the completed Building structure and other improvements
described on Schedule 1 attached to and made a part of this Agreement. Landlord
reserves the right, without the consent of Tenant, to construct and to make
changes and modifications to the Base Building Improvements at the same time the
Tenant's Work is being performed, provided that such changes do not change the
character of the Building or increase the cost to be paid by Tenant for the
Tenant Work. Tenant, and Tenant's contractors, agree to cooperate with Landlord,
and Landlord's contractors, during any period of time where Landlord or
Landlord's contractors shall require access to the Additional Space in order to
complete Base Building Improvements. On the date of full execution of the
Amendment, Landlord has delivered to Tenant and Tenant has accepted from
Landlord the Additional Space in its "as is" and "where is" condition, subject
to provision by Landlord Items below described. Tenant acknowledges that prior
to the date of the Amendment, Tenant inspected the Building and satisfied itself
about its condition subject to latent defects reported to Landlord within ninety
(90) days following the Expansion Date.
(b) New Improvements: In addition to the Existing Improvements,
Tenant shall construct and install, at its sole expense (but subject to
application of the Tenant Improvement Allowance provided for in Section 4
below), all improvements, materials, finishes, equipment and installations in
the Additional Space as are mutually agreed upon by Landlord and Tenant and
shown in the "Tenant Plans" described in Section 2.1 below (the "Tenant Work").
Unless otherwise provided in the Lease, the Amendment or this Agreement, the
Tenant Work shall consist solely of interior, non-structural improvements and
shall constitute long-term improvements to the Additional Space which shall not
be removed by Tenant.
(c) Landlord Items. Landlord shall provide at no cost or expense
to Tenant and without deduction from either the Tenant Improvement Allowance or
Additional Allowance, the following items ("Landlord Items") as soon as
practicable following execution of this Amendment and in all events no later
than the target dates below described for each such item:
(i) Provision for 300 amps of 208 volt electrical power
to the mainservice within the Tenant's proposed electrical closet for the
Premises. Target Date for completion: April 1, 2003.
(ii) Construction and completion of a fire corridor in
compliance with all applicable fire and life safety requirements as shown on the
drawing attached hereto as Schedule 3, Target Date for completion: April 1,
2003.
(iii) Construction and provision of requisite demising
walls in order to create the Additional Space, including construction and
completion of corridor area necessary for rear space. Target Date for
completion: April 1, 2003.
2. Design of Tenant Work
2.1 Tenant Plans. The Tenant Plans shall consist of the following,
to be paid by Tenant at Tenant's sole cost (subject to reimbursement from the
Tenant Improvement Allowance and Additional Allowance (hereinafter defined), if
applicable):
(a) Space Plan: A plan for the Additional Space prepared
by the Tenant Architect showing, among other things, the partition layout, door
locations, and other general details of the Tenant Work (the "Space Plan").
(b) Construction Drawings and Specifications: All
construction working drawings, mechanical, electrical and other technical
specifications, finishing details (including wall finishes and colors), details
for the installation of technical and mechanical equipment, and other plans and
information showing or specifying the Tenant Work, as prepared by the Tenant
Architect ("Construction Drawings").
2.2 Responsibility. Tenant shall cause the preparation of the
Tenant Plans by the Tenant Architect promptly after the date of full execution
of the Amendment. Tenant shall promptly furnish all necessary information to the
Tenant Architect to enable the Tenant Architect to prepare the Tenant Plans. The
Tenant Plans shall be subject to the reasonable approval of Landlord as set
forth in Section 2.3.
2.3 Approvals by Landlord.
(a) Promptly after preparation by the Tenant Architect,
Tenant shall submit the Tenant Plans to Landlord, for Landlord's approval.
Landlord's approval shall not be unreasonably withheld or delayed, except that
Landlord shall have complete discretion with regard to granting or withholding
approval of Tenant Plans to the extent they provide for Tenant Work which
impacts the Building's structure, roof, foundation, exterior walls, or
mechanical systems, is visible from the exterior of the Building, or affects the
Common Area.
(b) Landlord shall approve or disapprove the Tenant
Plans, or any modifications of these materials, within seven (7) business days
following Landlord's receipt of the materials in question. In the event that
Landlord fails to approve or disapprove the Tenant Plans, or any revisions of
these materials, within seven (7) business days after receipt of the same,
Landlord shall be deemed to have approved such materials, provided that, at the
time of submitting the materials to Landlord, Tenant gives Landlord written
notice setting forth the following statement (a "Time Alert Notice"): "This is
to advise you that under the terms of our Work Agreement with you, if you fail
to approve or disapprove these materials in writing within seven (7) business
days after receipt, you will be deemed to have approved these materials." If
Tenant did not give Landlord a Time Alert Notice at the time of submitting the
materials to Landlord, the seven (7) business day period shall not begin to run
until the Time Alert Notice is given to Landlord. Moreover, the seven (7)
business day period for rendering Landlord's approval or disapproval of the
Space Plan shall in no event commence until the complete Space Plan has been
delivered to Landlord and the seven (7) business day period for rendering
Landlord's approval or disapproval of the Construction Drawings shall in no
event commence until a complete set of the Construction Drawings has been
delivered to Landlord and, in each instance, notice to that effect has been
given by Tenant to Landlord. Despite the foregoing, Tenant, at its election, may
submit the Construction Drawings to Landlord in two (2) phases - the first phase
consisting of the Construction Drawings for the Office Improvements and the
second phase consisting of the Construction Drawings for the Remaining
Improvements. In that case, upon each such submission by Tenant and notice by
Tenant that it has delivered a complete set of Construction Drawings for the
phase in question, the seven (7) business day period for rendering Landlord's
approval of these Construction Drawings shall run from such submission and
notice, provided that a Time Alert Notice has also been given. In the event that
Landlord disapproves any Tenant Plans, or any revisions of Tenant Plans, within
seven (7) business days after receipt, Tenant shall modify the disapproved
materials to satisfy Landlord's reasonable objections and shall resubmit such
materials to Landlord for Landlord's approval within seven (7) business days
after receipt of Landlord's objections.
(c) Any changes, additions, or deletions that Tenant
desires to make to the Tenant Plans or Tenant Work after approval of the Tenant
Plans by Landlord shall also be subject to Landlord's prior written approval.
Such approval shall be governed by the same standards as are applicable to
Landlord's approval of the original Tenant Plans.
(d) Landlord's review and approval of the Tenant Plans
are for Landlord's purposes only and shall not be deemed to constitute any
representation or warranty by Landlord as to the quality, adequacy, or utility
of the Tenant Work, the fitness of the Tenant Work for any
particular purpose, the compliance of the Tenant Work with Governmental
Requirements, or any other matter whatsoever.
3. Construction
3.1 Contractor. Tenant may use a general contractor of its own
choice for the Tenant Work, subject to Landlord's reasonable approval (the
"General Contractor"). All major work to be subcontracted out by the General
Contractor [i.e., work involving subcontracts of Ten Thousand Dollars ($10,000)
or more] shall be performed by bondable and reputable subcontractors approved by
Landlord. Landlord's approval under this Section 3.1 shall not be unreasonably
withheld or delayed, and the deemed approval by Landlord of the General
Contractor following provision of a Time Alert Notice as above described shall
similarly apply under this Section 3.1.
3.2 Performance of Work.
(a) The General Contractor selected to construct the
Tenant Work shall be responsible to obtain all required permits for the work.
(b) After Landlord's approval of the Construction
Drawings, Tenant's selection (and Landlord's approval) of the General
Contractor, and Tenant's receipt of all required permits for the Tenant Work,
Tenant shall promptly commence the construction of the Tenant Work and
diligently pursue the same to Substantial Completion. The Tenant Work shall be
constructed under the supervision and management of Landlord or a representative
of Landlord as Landlord may designate in writing to Tenant ("Landlord's
Representative"). It is expressly recognized that it is the intent of Tenant to
commence occupancy of the Additional Space on or before May 1, 2003. Landlord
shall use commercially reasonable efforts to assist Tenant to accomplish its
move-in by that date, provided that Landlord shall not be required to incur any
out of pocket expense in rendering such assistance.
(c) Tenant shall cause the Tenant Work to be constructed
and installed (i) in substantial accordance with the approved Construction
Drawings and this Agreement, including, without limitation, Landlord's
Construction Rules and Regulations attached to and made a part of this Agreement
as Schedule 2, (ii) in a good and workmanlike manner, using new materials of
good quality, and (iii) in accordance with all applicable Governmental
Requirements, including, without limitation, the Americans with Disabilities
Act. Landlord shall have no liability for, and Tenant shall hold Landlord
harmless from, any claims by Tenant or others related to any failure or alleged
failure of the Tenant Work to comply with Governmental Requirements. All Tenant
Work shall be constructed or installed by the General Contractor and any
subcontractors approved by Landlord as set forth in Section 3.1. Landlord and
Landlord's Representative shall have the right (but not the obligation) from
time to time to inspect the Tenant Work as they progress and to advise Tenant of
any variances noted from the requirements of the Lease, the Amendment, this
Agreement or Landlord's Construction Rules and Regulations. All such variances
shall be promptly corrected by Tenant. Any supervision, management, or
inspection of the Tenant Work by Landlord or Landlord's Representative are for
the sole benefit of Landlord. Landlord's supervision, management, and inspection
of the Tenant Work shall in no event be
deemed to constitute any representation or warranty by Landlord as to the
quality, adequacy, or utility of the Tenant Work, the fitness of the Tenant Work
for any particular purpose, or the compliance of the Tenant Work with the
Construction Drawings, this Agreement, or applicable Governmental Requirements.
3.3 Payment. Subject to Section 4 below, Tenant shall promptly pay
all costs of designing, obtaining permits for, and constructing the Tenant Work
(collectively, the "Construction Costs"), as and when the Construction Costs are
due, directly to the parties to whom such payment is due. Tenant shall hold
Landlord harmless from all Construction Costs. The provisions of Section 13.2 of
the Lease shall apply to any mechanic's or materialmen's liens sought to be
imposed against the Building, Land or Corporate Park as a result of the
Construction Costs.
3.4 Change Orders. If Tenant requests any change or addition to
the Tenant Work after Landlord's approval of the Construction Drawings for the
same, Landlord shall respond to Tenant's request within seven (7) business days
after it has been received. If Landlord approves such request, Tenant shall bear
the full cost of such change order (subject to any application of the Tenant
Improvement Allowance, and if applicable the Additional Allowance) and no delay
in Substantial Completion of the Tenant Work due to the change order shall delay
the Expansion Date under the Amendment.
3.5 Substantial Completion. "Substantial Completion" of the Tenant
Work shall be conclusively deemed to have occurred as soon as the Tenant Work
has been constructed in accordance with the approved Construction Drawings and
approved change orders and is ready to be utilized for its intended purpose, as
certified by the Building Architect, after consultation with Tenant Architect.
The issuance of a temporary certificate of occupancy by the proper governmental
entity shall be required for Substantial Completion of any portion of the Tenant
Work and, if granted, shall be deemed conclusive evidence that Substantial
Completion has occurred. Upon Substantial Completion of all of the Tenant Work,
Tenant shall obtain a final certificate of occupancy for the Premises. The cost
of obtaining the certificates of occupancy shall be payable from the Tenant
Improvement Allowance or if applicable, the Additional Allowance.
Notwithstanding the above, Substantial Completion shall be deemed to have
occurred even though punch list items remain to be completed in the Tenant Work,
the lack of completion of which will not materially interfere with the Permitted
Use of the Building. It is understood that the Expansion Date under the
Amendment is a fixed date and that no delay in Substantial Completion shall
result in any extension of the Expansion Date.
3.6 Phased Construction. As contemplated in Section 1.3(b) above,
at Tenant's election, the design and construction of the Tenant Work may take
place in two (2) separate phases, i.e., one phase involving the Office
Improvements and the other phase involving the Remaining Improvements. If Tenant
elects to proceed in this fashion, the provisions of this Section 3 shall be
deemed to apply to each of the separate phases as and when it is undertaken.
4. Tenant Improvement Allowance. Tenant shall receive an allowance against
the cost of designing, obtaining permits for, and constructing the Tenant Work
in the amount of Thirty-Five Dollars ($35.00) per rentable square foot contained
within the Additional Space (the "Tenant
Improvement Allowance"). Tenant, at its option, to be exercised by delivery of
written notice to Landlord prior to the Expansion Date, may also receive an
additional allowance of Five Dollars ($5.00) per rentable square foot contained
within the Additional Space (the "Additional Allowance"), subject to the
provisions of Paragraph 5 of the Amendment.
The Tenant Improvement Allowance and Additional Allowance may be used
for construction of the Additional Space, space planning, architectural and
engineering costs, design fees, construction management fees and permitting
fees. The Tenant Improvement Allowance and Additional Allowance (if applicable)
shall be paid to Tenant or its designee as the construction of the Tenant Work
progresses and in proportion to the completion of such work, subject to
retainage as provided for below. Each payment to Tenant or its designee shall be
made within thirty (30) days after written request for payment by Tenant (such
request not to be made more often than monthly), provided that (a) Landlord's
Representative shall have the right to inspect the Tenant Work performed within
that period and Landlord shall have the right to withhold payment for any
defective or incomplete work noted, and (b) all progress payments in connection
with the Tenant Work shall be subject to a ten percent (10%) retainage by
Landlord until fifty (50%) of the Tenant Work has been completed and a five
percent (5%) retainage by Landlord until Substantial Completion of the Tenant
Work has occurred, provided that there shall be no such retainage for payment of
design, engineering or permitting expenses. Each request for payment shall be
accompanied by (i) a copy of the invoice or paid receipt in the case of
permitting expenses, (ii) the General Contractor's requisition for payment to
Tenant in the case of construction work, setting forth in reasonable detail the
costs of the Tenant Work incurred to the date of such submission and the amount
of those costs paid to date, and (iii) for all costs other than permitting
expenses, mechanics lien waivers duly executed by all parties supplying labor,
materials, or services with respect to the Tenant Work, waiving all claims for
mechanics' or materialmens' liens for all work, materials, or services furnished
to the Building except for the work, materials, or services which are the
subject of the current request for payment. All payments of the Tenant
Improvement Allowance or Additional Allowance made by Landlord to Tenant shall
be deemed to have been made in trust, for application only to the Construction
Costs. At Landlord's option, all checks may be made jointly payable to Tenant
and the General Contractor or other party furnishing labor, materials, or
services for the Tenant Work, as the case may be. The costs subject to payment
from the Tenant Improvement Allowance and Additional Allowance (if applicable)
shall not include any interest or other costs of financing or any overhead
charge, construction management fee, or other fee to Tenant or any affiliate of
Tenant. Landlord shall not be bound to pay any invoices beyond amount of the
Tenant Improvement Allowance and Additional Allowance (if applicable). Upon
Substantial Completion of the Tenant Work and provided that no Event of Default
exists under the Lease (and no event has occurred and is continuing which would
constitute an Event of Default upon the giving of notice or the passage of
time), the retainage held back by Landlord from the Tenant Improvement Allowance
and Additional Allowance (if applicable) shall be paid to Tenant and if the
total Construction Costs are less than the Tenant Improvement Allowance, the
balance of the Tenant Improvement Allowance shall be credited by Landlord to the
first installment or installments of Basic Rent coming due under the Amendment
until the Tenant Improvement Allowance is exhausted. If the total costs of the
Tenant Work are in excess of the Tenant Improvement Allowance and Additional
Allowance (if applicable), the excess costs shall be borne solely by Tenant.
Landlord agrees to waive any management, supervisory or inspection fees relating
to the Tenant Work.
5. Removal of Specialized Tenant Improvements. Tenant Work which Landlord
reasonably determines is specialized to Tenant's use and occupancy of the
Building (as opposed to any items described as a Base Building Improvement or
any usual office improvements such as Gypsum Board, partitions, ceiling grids
and tiles, fluorescent lighting panels, Building standard doors and carpeting)
shall, at the election of Landlord, exercised by written notice to Tenant at the
time of its approval of such Tenant Work, be removed by Tenant at its expense
before the expiration of the Term. Any other Tenant Work not so elected by
Landlord to be removed shall remain within the Building and be surrendered on
the Expiration Date or earlier date of termination of this Amendment as the
property of Landlord without disturbance, molestation or injury. If Landlord
requires the removal of all or part of the specialized Tenant Work, Tenant, at
its expense, shall repair any damage to the Building caused by such removal. If
Tenant fails to remove any specialized Tenant Work upon Landlord's request made
consistent with the above provisions, then Landlord may (but shall not be
obligated to) remove the same and the cost of such removal and repair of any
damage caused by the same, together with any and all damages which Landlord may
suffer and sustain by reason of the failure of Tenant to remove the same, shall
be charged to Tenant and paid upon demand. Upon failure of Tenant to make such
payment, Landlord may draw upon the Security Deposit for the payment. This
Section shall survive termination of the Lease (as amended by the Amendment).
SCHEDULE 1 TO WORK AGREEMENT
BUILDING SHELL DEFINITION - CROWN POINTE II
Landlord, at its sole cost and expense, shall provide the Additional Space to
Tenant in an "air conditioned" shell state ("Building Shell"), which is defined
as follows:
A. FLOORS: Concrete floor surface to be ready to receive tenant finishes.
X. XXXXX: Perimeter walls, core walls, bulkheads, etc., to be sheetrocked
and finished to receive finish paint or wallcovering.
C. WINDOWS: Window xxxxx, mullions and trim to be complete, installed and
finished. Window blinds to be supplied and bagged for protection.
D. ELEVATOR LOBBY: All lobby features to be complete and installed
including, but not limited to, elevator door frames, thresholds, call
buttons, lights, trash receptacles, and code required signage. All
lobby alarm systems including, but not limited to, detectors,
annunciators, bells, pull stations, lights, flashers, firehouse
cabinets, extinguishers, etc., to be installed and complete.
E. CORE AREA: All core area spaces, including closets, toilet rooms, etc.,
to be complete and finished per code. Hallways are not included, except
that Landlord shall construct a fire corridor (as shown on Exhibit "A"
hereto) to include all fire and life safety requirements.
F. PLUMBING: All wetstack plumbing systems to be complete and ready for
connection of Tenant added plumbing work.
G. ELECTRICAL: All main systems and floor systems to be complete,
including, but not limited to, breaker panels, disconnects,
transformers, etc., requiring further work for operation or occupancy
except distribution from floor panels. Landlord will provide
approximately 150 amps of 208V electrical power to the main service in
Tenant's proposed electrical closet as shown on the floor plan attached
hereto as Exhibit "A".
H. MECHANICAL SYSTEMS: Mechanical system to be entirely complete up to and
including main trunk duct, VAV boxes and connection of flex duct to VAV
boxes. Base Building shell includes 33 VAV boxes on the first floor and
34 VAV boxes on the second floor. Additional VAV boxes are at Tenant's
expense. Distribution downstream of VAV's, fan boxes or other air
control systems by Tenant.
I. SPRINKLERS: Sprinkler main loop to be in place with heads up turned
with a density of 1 head per 250 S.F.
J. ALARMS, AND LIFE SAFETY SYSTEMS: All Building tenant alarm circuits,
emergency circuits, equipment, fixtures and trim to be available per
code for a shell building. Distribution by Tenant. Building systems
shall be adequate to support typical ADA and code required alarm
components.
SCHEDULE 2 TO WORK AGREEMENT
LANDLORD'S
CONSTRUCTION RULES AND REGULATIONS
The following rules and regulations are made a part of the terms and conditions
of this Agreement.
1. No smoking, eating or drinking are allowed in the building or directly
outside of the building; except in work area, contractor office or
areas specifically designated by Landlord. Workers will not litter
while at the job site. All related litter must be disposed of daily.
2. No loud music is allowed in the construction areas. Doors to spaces on
occupied floors shall be closed at all times.
3. Areas under construction, as well as storage areas, and all unoccupied
space are to be kept clean and orderly. They are to be secured when
unattended.
4. Contractor is to use only designated areas for working, loading and
unloading, trash containment and removal.
5. Construction personnel are confined to those areas in which related
work is in progress. They will not be allowed to congregate on grounds.
6. The area around the trash dumpster and parking areas are to be kept
clean by contractor.
7. Contractor must use an approved vendor for all roof work to maintain
roof warranty.
8. No alcoholic beverages, etc. allowed on the property.
9. Construction personnel are prohibited to travel on landscaped areas.
10. No owner supplied material is to leave the job site.
11. Contractor's failure to remove material or clean up work area will
result in Landlord performing the work, and holding the Contractor
liable for such costs.
12. All/any burning, welding, hammer or core drilling, and any other
extremely noisy or messy jobs must be prearranged through the
management office prior to doing the work and will only be permitted
before 7:30 a.m. and after 6:00 p.m.
13. Under no circumstances will any work be performed on the base building
MEP system or life support systems without prior approval of the
management office (i.e., Fire Sprinkler System, Smoke Detector System,
Water Supply System, Sanitary/Storm System, Main Electrical
Distribution System, etc.). All equipment rooms must be attended at all
times during work. If the area is left unattended, it is to be secured.
14. All fire alarm inspections must be scheduled 48 hours in advance, and
coordinated through Landlord. Inspections must be conducted before 7:30
a.m. or after 6:00 p.m. on weekdays only. Any inspections scheduled for
the weekends are subject to the engineer's salary at 1.5 times his
regular pay with a four (4)- hour minimum.
15. The general contractor will provide a qualified representative for the
full duration of his or any of his subcontractors' daily activities
within the building. This representative will be equipped with a pager.
16. Identification will be required for all construction personnel.
17. All work, material delivery and building access before 7:30 a.m. or
after 6:00 p.m. and on weekends or holidays must be coordinated with
the building management three (3) days in advance.
18. All construction personnel shall park in the area designated by
Landlord.
19. Any contractor acting in a less than professional manner will be
removed from the project and prohibited future access (i.e., use of
profanity).
20. Contractor is responsible for securing all materials and tools as well
as that of its subcontractor.
21. All blueprints and change orders must be furnished to and approved by
Landlord.
22. No work will be accepted as complete or final without a final punchlist
and inspection approval by Landlord.
23. Contractor and all employees, as well as subcontractors and their
employees, must be properly trained and certified for work they
perform.
24. Prior to the commencement of construction, a certificate of insurance
with a general aggregate sum of $2,000,000.00 must be issued to
Landlord, naming Landlord as additional insured.
25. All tenant keying must meet our base building requirements. Landlord
will provide the responsible party with the necessary confidential
information. Advance notice of all keying specifications must be
submitted to Landlord.
26. All penetrations into the slab that are more than 3/4" must be x-rayed.
Landlord must be notified in advance of any x-rays being performed on
the premises. These x-rays can only be scheduled when the building is
closed.
27. The property's trash dumpster may NOT be used for construction
purposes. Any special arrangements must be coordinated with ---
Landlord.
28. All cosmetic detail changes or upgrades to existing perimeter columns
and walls will be at the sole expense of the general contractor.
29. It is the general contractor's responsibility to cover all smoke
detector devices located in a construction area prior to commencing
work daily. Landlord will uncover all devices at the end of each day.
Landlord will fine the general contractor if fire alarms are
accidentally activated due to their negligence.
30. The general contractor must submit a lighting schedule and an air
balance report to Landlord prior to the completion of construction.
31. Prior to the completion of the punchlist, the general contractor must
furnish Landlord with as-built drawings and any extra materials for
future repairs and maintenance of the space.
32. Landlord reserves the right to amend or rescind the Construction Rules
and Regulations at our sole discretion without prior notice.
BREACH OF ANY OF THE ABOVE RULES AND REGULATIONS MAY RESULT IN THE PERSON OR
CONTRACTOR INVOLVED BEING TERMINATED FROM WORKING IN THE BUILDING. NO CONTRACTOR
OR ITS SUBCONTRACTORS SHALL BE PERMITTED TO START WORK UNTIL THE APPROPRIATE
CERTIFICATES OF INSURANCE HAVE BEEN SUBMITTED AND APPROVED BY LANDLORD.
