Exhibit 10.3
OFFICE BUILDING LEASE
between
MERIDIAN ROCKVILLE PLAZA, LLC
LANDLORD
and
THE XXXXXX-XXXXX CORPORATION
TENANT
Dated July 10, 1998
OFFICE BUILDING LEASE
TABLE OF CONTENTS
Section Page
1. Introductory Provisions . . . . . . . . . . . . . . . . . . . . . . . . 1
(a) Fundamental Lease Provisions . . . . . . . . . . . . . . . . . . . 1
(b) References and Conflicts . . . . . . . . . . . . . . . . . . . . . 2
(c) Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Demised Premises . . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) Tenant's Proportionate Share . . . . . . . . . . . . . . . . . . . 3
3. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Lease Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) Certificate of Commencement. . . . . . . . . . . . . . . . . . . . 3
(c) Acceptance of Demised Premises . . . . . . . . . . . . . . . . . . 3
(d) Rule Against Perpetuities. . . . . . . . . . . . . . . . . . . . . 4
(e) Option to Extend . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Base Annual Rent . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Rent Commencement Date . . . . . . . . . . . . . . . . . . . . . . 5
(c) Additional Rent. . . . . . . . . . . . . . . . . . . . . . . . . . 5
(i) General . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(ii) Operating Expenses. . . . . . . . . . . . . . . . . . . . . . 5
(iii)Landlord's Enforcement Costs. . . . . . . . . . . . . . . . . 8
(iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(d) Additional Rent Estimates and Adjustments. . . . . . . . . . . . . 9
(e) Taxes on Tenant's Property . . . . . . . . . . . . . . . . . . . .10
(f) Payment of Rent. . . . . . . . . . . . . . . . . . . . . . . . . .10
(g) Survival of Rent Obligation. . . . . . . . . . . . . . . . . . . .10
5. Intentionally Deleted . . . . . . . . . . . . . . . . . . . . . . . . .10
6. Construction of Premises and Occupancy. . . . . . . . . . . . . . . . .11
7. Use of Demised Premises . . . . . . . . . . . . . . . . . . . . . . . .12
(a) Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
(b) Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
(i) Legal . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
(ii) Fire and Safety . . . . . . . . . . . . . . . . . . . . . . .12
(c) Environmental Protection . . . . . . . . . . . . . . . . . . . . .12
(d) Hazardous Waste Documentation. . . . . . . . . . . . . . . . . . .13
(e) Right to Inspect . . . . . . . . . . . . . . . . . . . . . . . . .13
(f) Right to Participate . . . . . . . . . . . . . . . . . . . . . . .13
(g) Tenant's Obligation. . . . . . . . . . . . . . . . . . . . . . . .13
(h) Termination Audit. . . . . . . . . . . . . . . . . . . . . . . . .13
(i) Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . .14
(j) Moving and Deliveries. . . . . . . . . . . . . . . . . . . . . . .14
(k) Excessive Floor Load . . . . . . . . . . . . . . . . . . . . . . .14
(l) Plumbing System. . . . . . . . . . . . . . . . . . . . . . . . . .14
(m) Existing Hazardous Waste . . . . . . . . . . . . . . . . . . . . .14
8. Rules and Regulations . . . . . . . . . . . . . . . . . . . . . . . . .14
1. Introductory Provisions . . . . . . . . . . . . . . . . . . . . . . . . 1
(a) Fundamental Lease Provisions . . . . . . . . . . . . . . . . . . . 1
(b) References and Conflicts . . . . . . . . . . . . . . . . . . . . . 2
(c) Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Demised Premises . . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) Tenant's Proportionate Share . . . . . . . . . . . . . . . . . . . 3
(c) Measurement of Demised Premises. . . . . . . . . . . . . . . . . . 3
3. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Lease Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) Certificate of Commencement. . . . . . . . . . . . . . . . . . . . 3
(c) Acceptance of Demised Premises . . . . . . . . . . . . . . . . . . 3
(d) Rule Against Perpetuities. . . . . . . . . . . . . . . . . . . . . 4
(e) Option to Extend . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Base Annual Rent . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Rent Commencement Date . . . . . . . . . . . . . . . . . . . . . . 5
(c) Additional Rent. . . . . . . . . . . . . . . . . . . . . . . . . . 5
(i) General. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(ii) Operating Expenses . . . . . . . . . . . . . . . . . . . . . 5
(iii) Landlord's Enforcement Costs . . . . . . . . . . . . . . . . 8
(iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(d) Additional Rent Estimates and Adjustments. . . . . . . . . . . . . 9
(e) Taxes on Tenant's Property . . . . . . . . . . . . . . . . . . . .10
(f) Payment of Rent. . . . . . . . . . . . . . . . . . . . . . . . . .10
(g) Survival of Rent Obligation. . . . . . . . . . . . . . . . . . . .10
5. Intentionally Deleted . . . . . . . . . . . . . . . . . . . . . . . . .10
6. Construction of Premises and Occupancy. . . . . . . . . . . . . . . . .10
7. Use of Demised Premises . . . . . . . . . . . . . . . . . . . . . . . .12
(a) Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
(b) Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
(i) Legal . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
(ii) Fire and Safety . . . . . . . . . . . . . . . . . . . . . . .12
(c) Environmental Protection . . . . . . . . . . . . . . . . . . . . .12
(d) Hazardous Waste Documentation. . . . . . . . . . . . . . . . . . .13
(e) Right to Inspect . . . . . . . . . . . . . . . . . . . . . . . . .13
(f) Right to Participate . . . . . . . . . . . . . . . . . . . . . . .13
(g) Tenant's Obligation. . . . . . . . . . . . . . . . . . . . . . . .13
(h) Termination Audit. . . . . . . . . . . . . . . . . . . . . . . . .13
(i) Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . .14
(j) Moving and Deliveries. . . . . . . . . . . . . . . . . . . . . . .14
(k) Excessive Floor Load . . . . . . . . . . . . . . . . . . . . . . .14
(l) Plumbing System. . . . . . . . . . . . . . . . . . . . . . . . . .14
(m) Existing Hazardous Waste . . . . . . . . . . . . . . . . . . . . .14
8. Rules and Regulations . . . . . . . . . . . . . . . . . . . . . . . . .14
9. Subletting and Assignment . . . . . . . . . . . . . . . . . . . . . . .14
(a) Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
(b) Subsidiaries and Corporate Transfers . . . . . . . . . . . . . . .15
(c) Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
(d) Subletting . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
(e) Required Information . . . . . . . . . . . . . . . . . . . . . . .15
(f) Fees; Documents. . . . . . . . . . . . . . . . . . . . . . . . . .16
(g) No Release . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
(h) Tenant Liability . . . . . . . . . . . . . . . . . . . . . . . . .16
(i) Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
10. Services and Utilities. . . . . . . . . . . . . . . . . . . . . . . . .16
(a) Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
(b) Interruption of Services . . . . . . . . . . . . . . . . . . . . .16
(c) Intentionally Deleted. . . . . . . . . . . . . . . . . . . . . . .17
(d) Separate Metering. . . . . . . . . . . . . . . . . . . . . . . . .17
(e) Excessive Heat Generation. . . . . . . . . . . . . . . . . . . . .17
(f) Intentionally Deleted. . . . . . . . . . . . . . . . . . . . . . .17
(g) Laboratory Waste . . . . . . . . . . . . . . . . . . . . . . . . .17
(h) Pest Control . . . . . . . . . . . . . . . . . . . . . . . . . . .18
11. Maintenance and Repairs . . . . . . . . . . . . . . . . . . . . . . . .18
(a) Tenant's Responsibility. . . . . . . . . . . . . . . . . . . . . .18
(b) Landlord's Responsibility. . . . . . . . . . . . . . . . . . . . .18
(c) ADA Notification . . . . . . . . . . . . . . . . . . . . . . . . .18
(d) Maintenance Program and Contracts. . . . . . . . . . . . . . . . .18
12. Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
(a) Landlord's Consent . . . . . . . . . . . . . . . . . . . . . . . .19
(b) Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
(c) Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . .19
(d) Removal of Alterations . . . . . . . . . . . . . . . . . . . . . .19
13. Signs and Advertisements. . . . . . . . . . . . . . . . . . . . . . . .19
14. Common Areas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
(a) Common Areas Defined . . . . . . . . . . . . . . . . . . . . . . .20
(b) Landlord's Control . . . . . . . . . . . . . . . . . . . . . . . .20
(c) Changes and Additions. . . . . . . . . . . . . . . . . . . . . . .20
15. Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
(a) Parking Rights . . . . . . . . . . . . . . . . . . . . . . . . . .20
(b) Intentionally Deleted. . . . . . . . . . . . . . . . . . . . . . .20
(c) Tenant's Parking Area. . . . . . . . . . . . . . . . . . . . . . .20
16. Surrender and Inspection. . . . . . . . . . . . . . . . . . . . . . . .21
(a) Surrender. . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
(b) Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
(c) Alterations. . . . . . . . . . . . . . . . . . . . . . . . . . . .21
(d) Fixtures and Personal Property Remaining . . . . . . . . . . . . .21
(e) Initial Improvements . . . . . . . . . . . . . . . . . . . . . . .21
17. Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
(a) Access to Building . . . . . . . . . . . . . . . . . . . . . . . .21
(b) Landlord's Access to Demised Premises. . . . . . . . . . . . . . .21
(c) Restricted Access. . . . . . . . . . . . . . . . . . . . . . . . .22
(d) Access System Credit . . . . . . . . . . . . . . . . . . . . . . .22
18. Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
(a) Personal Property. . . . . . . . . . . . . . . . . . . . . . . . .22
(b) Tenant's Liability . . . . . . . . . . . . . . . . . . . . . . . .22
(c) Criminal Acts of Third Parties . . . . . . . . . . . . . . . . . .22
(d) Tenant's Indemnity . . . . . . . . . . . . . . . . . . . . . . . .22
(e) Landlord's Indemnity . . . . . . . . . . . . . . . . . . . . . . .22
(f) Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
19. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
(a) Intentionally Deleted. . . . . . . . . . . . . . . . . . . . . . .23
(b) Coverages. . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
(i) Commercial General Liability. . . . . . . . . . . . . . . . .23
(ii) Broad Form Property . . . . . . . . . . . . . . . . . . . . .23
(iii)Workers' Compensation . . . . . . . . . . . . . . . . . . . .23
(iv) Additional Insurance. . . . . . . . . . . . . . . . . . . . .23
(c) Policy Requirements. . . . . . . . . . . . . . . . . . . . . . . .23
(d) No Limitation of Liability . . . . . . . . . . . . . . . . . . . .23
(e) Notice of Fire and Accident. . . . . . . . . . . . . . . . . . . .23
(f) Waiver of Subrogation. . . . . . . . . . . . . . . . . . . . . . .23
(g) Landlord's Insurance . . . . . . . . . . . . . . . . . . . . . . .23
20. Damage by Casualty. . . . . . . . . . . . . . . . . . . . . . . . . . .24
(a) Damage to Demised Premises . . . . . . . . . . . . . . . . . . . .24
(b) Substantial Damage . . . . . . . . . . . . . . . . . . . . . . . .24
(c) Tenant's Right of Termination. . . . . . . . . . . . . . . . . . .24
(d) Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . .24
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
21. Condemnation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
22. Defaults and Remedies . . . . . . . . . . . . . . . . . . . . . . . . .25
(a) Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
(b) Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
(c) Right of Landlord to Cure Tenant's Default . . . . . . . . . . . .27
(d) Intentionally Deleted. . . . . . . . . . . . . . . . . . . . . . .27
(e) Intentionally Deleted. . . . . . . . . . . . . . . . . . . . . . .27
(f) Landlord's Remedies Cumulative . . . . . . . . . . . . . . . . . .27
(g) Attorney's Fees. . . . . . . . . . . . . . . . . . . . . . . . . .27
(h) Mitigation of Damages. . . . . . . . . . . . . . . . . . . . . . .27
(i) Waiver of Distraint Rights . . . . . . . . . . . . . . . . . . . .28
23. Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
24. Lender Requirements . . . . . . . . . . . . . . . . . . . . . . . . . .28
(a) Subordination. . . . . . . . . . . . . . . . . . . . . . . . . . .28
(b) Attornment . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
(c) Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . .29
(d) Non-Disturbance. . . . . . . . . . . . . . . . . . . . . . . . . .29
(e) Financial Statements . . . . . . . . . . . . . . . . . . . . . . .29
(f) Assignment of Rents. . . . . . . . . . . . . . . . . . . . . . . .29
25. Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . .29
26. Tenant Holdover . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
(a) With Landlord Consent. . . . . . . . . . . . . . . . . . . . . . .30
(b) Without Landlord Consent . . . . . . . . . . . . . . . . . . . . .30
27. Intentionally Deleted . . . . . . . . . . . . . . . . . . . . . . . . .30
28. Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
29. Mechanics Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
30. Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
31. Postponement of Performance . . . . . . . . . . . . . . . . . . . . . .30
32. Landlord's Reserved Rights. . . . . . . . . . . . . . . . . . . . . . .31
33. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
34. Limitation of Landlord's Liability. . . . . . . . . . . . . . . . . . .31
35. Transfer of the Building. . . . . . . . . . . . . . . . . . . . . . . .31
36. Waiver of Counterclaim and Trial by Jury. . . . . . . . . . . . . . . .31
37. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
(a) Addresses for Notices. . . . . . . . . . . . . . . . . . . . . . .32
(b) Effective Date of Notice . . . . . . . . . . . . . . . . . . . . .32
38. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
39. Construction Allowance Offset . . . . . . . . . . . . . . . . . . . . .32
40. Miscellaneous Provisions. . . . . . . . . . . . . . . . . . . . . . . .32
(a) Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . .32
(b) Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
(c) No Partnership . . . . . . . . . . . . . . . . . . . . . . . . . .32
(d) No Representations by Landlord . . . . . . . . . . . . . . . . . .32
(e) Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
(f) Pronouns . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
(g) Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
(h) Landlord's Approval. . . . . . . . . . . . . . . . . . . . . . . .32
(i) Invalidity of Particular Provisions. . . . . . . . . . . . . . . .32
(j) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . .32
(k) Entire Agreement; Modification . . . . . . . . . . . . . . . . . .32
(l) Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
(m) Examination of Lease . . . . . . . . . . . . . . . . . . . . . . .33
(n) Recovery of Attorney's Fees. . . . . . . . . . . . . . . . . . . .33
(o) Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
(p) Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . .33
(q) Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . .33
41. Right of First Purchase Offer . . . . . . . . . . . . . . . . . . . . .33
42. Right of First Lease Offer. . . . . . . . . . . . . . . . . . . . . . .34
43. Expansion in Adjacent Building. . . . . . . . . . . . . . . . . . . . .35
44. Right of First Purchase Offer - Adjacent Building . . . . . . . . . . .36
45. Right of First Purchase Offer - Other Property. . . . . . . . . . . . .37
46. Package Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
47. Loading dock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
48. Fence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
49. Subordination of Lien . . . . . . . . . . . . . . . . . . . . . . . . .40
50. Satellite Dish. . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
EXHIBITS
Exhibit "A" Floor Plan of Demised Premises [SS2(a)]
Exhibit "B" Intentionally Deleted
Exhibit "C" Work Agreement [SS6(b)]
Exhibit "C" Schedule 1 Rules and Procedures for Contractors
Exhibit "D" Rules and Regulations [SS8]
Exhibit "E" Certificate of Commencement [SS3(b)]
Exhibit "F" Intentionally Deleted
Exhibit "G" NFPA 45 [SS7(b)]
Exhibit "H" Sketch Depicting the Other Property [SS42]
Exhibit "I" Tenant's Parking Area [SS15(c)]
Exhibit "J" Form of Non-Disturbance Agreement [SS24(g)]
Exhibit "K" I-3 Zoning Code Excerpt [SS6(g)]
Exhibit AL" The County Letter [SS7(a)]
LEASE
This Lease (the "Lease") is made this 10th day of July, 1998, between
Meridian Rockville Plaza, LLC, a Delaware limited liability company
("Landlord"), and The Xxxxxx-Xxxxx Corporation, a New York corporation
("Tenant").
WITNESSETH:
For and in consideration of the covenants herein contained and upon the
terms and conditions herein set forth, the parties agree as follows:
1. INTRODUCTORY PROVISIONS
(a) FUNDAMENTAL LEASE PROVISIONS. Certain Fundamental Lease Provisions
are presented in this Section in summary form solely to facilitate convenient
reference by the parties hereto:
1. DEMISED PREMISES 113,960 rentable square feet in the Building [See Section 2(a)]
2. BUILDING Building located at 00 Xxxx Xxxx Xxxxx, [See Section 2(a)]
Xxxxxxxxx, Xxxxxxxx 00000
3. RENTABLE AREA OF 113,960 rentable square feet, [See Section 2(a)]
DEMISED PREMISES measured in accordance with the BOMA
Standard Method of Floor Measurement
for Office Buildings most recently adopted
as of the date of this Lease (the "BOMA
Method")
4. PROPORTIONATE SHARE 100% [See Section 2(b)]
5. LEASE TERM Approximately ten and one-half (10.5) years [See Section 3(a)]
6. COMMENCEMENT DATE July 10, 1998 [See Section 3(a)]
7. EXPIRATION DATE December 31, 2008 [See Section 3(a)]
8. RENTAL AGENT The Meridian Group [See Section 4]
00000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
9. BASE ANNUAL RENT AND
BASE MONTHLY RENT [See Section 4(a)]
PERIOD BASE ANNUAL RENT BASE MONTHLY RENT
Date on which Tenant is obligated
to pay Base Annual Rent with respect $ 31,356.19
to the Phase I Premises until the Phase 2
Commencement Date
Subject to Section 4(b) of this Lease,
Phase 2 Commencement Date until 12/31/99 $157,223.00
1/1/00 - 12/31/00 $1,943,276.20 $161,939.69
1/1/01 - 12/31/01 $2,001,574.40 $166,797.88
1/1/02 - 12/31/02 $2,061,621.60 $171,801.81
1/1/03 - 12/31/03 $2,123,470.20 $176,955.86
1/1/04 - 12/31/04 $2,187,174.30 $182,264.53
1/1/05 - 12/31/05 $2,252,789.50 $187,732.46
1/1/06 - 12/31/06 $2,320,373.10 $193,364.42
Page 1
1/1/07 - 12/31/07 $2,389,984.20 $199,165.36
1/1/08 - 12/31/08 $2,461,683.70 $205,140.32
10. INTENTIONALLY DELETED
11. INTENTIONALLY DELETED
12. USE OF DEMISED PREMISES For uses permitted under I-3 Zoning in effect
in the City of Rockville, Maryland as of the date
of this Lease
13. INTENTIONALLY DELETED
14. INTENTIONALLY DELETED
15. INTENTIONALLY DELETED
16. INTENTIONALLY DELETED
17. INTENTIONALLY DELETED
18. ADDRESS FOR NOTICES The Xxxxxx-Xxxxx Corporation [See Section 37]
TO TENANT BEFORE 00 Xxxx Xxxx Xxxxx
XXXXXXXXX OF DEMISED Xxxxxxxxx, Xxxxxxxx 00000
PREMISES Attention: Controller
19. ADDRESS FOR NOTICES The Xxxxxx-Xxxxx Corporation [See Section 37]
TO TENANT AFTER 00 Xxxx Xxxx Xxxxx
XXXXXXXXX OF DEMISED Xxxxxxxxx, Xxxxxxxx 00000
PREMISES Attention: Controller
with a copy to:
Xxxxxx & Xxxxxx
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
20. ADDRESS FOR NOTICES Meridian Rockville Plaza, LLC [See Section 37]
TO LANDLORD c/o the Meridian Group
00000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxx
with a copy to:
Shulman, Rogers, Gandal, Pordy & Xxxxx, P.A.
Third Floor, 00000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx, Esquire
21. LEASING BROKER Xxxxxxxxx X. Xxxxx and Marc Magazine [See Section 38]
of Insignia Xxxxxx Xxxxxx and Xxxx X.
Xxxxxxxxxxxx and Xxxxx X. Xxxx of
Xxxxxx X. Xxxxxxx, Inc.
22. INTENTIONALLY DELETED
(b) REFERENCES AND CONFLICTS. References appearing in Section 1(a) are
intended to designate some of the other places in the Lease where additional
provisions applicable to the particular Fundamental Lease Provisions appear.
These references are for convenience only and shall not be deemed all inclusive.
Each reference in this Lease to any of the Fundamental Lease Provisions
contained in Section 1(a) shall be construed to incorporate all of the terms
provided for under such provisions, and such provisions shall be read in
conjunction with all other provisions of this Lease applicable thereto. If
there is any conflict between any of the Fundamental Lease Provisions set forth
in Section 1(a) and any other provisions of the Lease, the latter shall control.
Page 2
(c) EXHIBITS. The following drawings and special provisions are attached
hereto as exhibits and hereby made a part of this Lease:
Exhibit "A" Floor Plan of Demised Premises [SS2(a)]
Exhibit "B" Intentionally Deleted
Exhibit "C" Work Agreement [SS6(b)]
Exhibit "D" Rules and Regulations [SS8]
Exhibit "E" Certificate of Commencement [SS3(b)]
Exhibit "F" [Intentionally Deleted]
Exhibit "G" NFPA 45 [SS7(b)]
Exhibit "H" Sketch Depicting the Other Property [SS42]
Exhibit "I" Tenant's Parking Area [SS15(c)]
Exhibit "J" Form of Non-Disturbance Agreement [SS24(g)]
Exhibit "K" I-3 Zoning Code Excerpt [SS6(g)]
Exhibit "L" The County Letter [SS7(a)]
2. PREMISES.
(a) DEMISED PREMISES. Landlord hereby leases to Tenant, and Tenant hereby
rents from Landlord, the Demised Premises as specified in Section 1(a)(1)
located in the Building specified in Section 1(a)(2). The Demised Premises
shall consist of approximately the square footage of rentable floor space as
specified in Section 1(a)(3) and as shown on the floor plan attached hereto as
Exhibit "A".
(b) TENANT'S PROPORTIONATE SHARE. Tenant's Proportionate Share of certain
expenses hereinafter made payable to Landlord as Additional Rent is specified in
Section 1(a)(4). Said computation is based upon the ratio of the total rentable
area of the Demised Premises to the rentable area of the Building.
(c) MEASUREMENT OF DEMISED PREMISES. If Tenant disputes the rentable
square footage of the Demised Premises that is set forth in Section 1(a)3 of
this Lease, then, on or before the date that is sixty (60) days after the date
of this Lease, Tenant may provide Landlord with a rentable square footage figure
for the Demised Premises as determined by Tenant's architect in accordance with
the BOMA Method. Despite the foregoing, in the event that Tenant does not
provide Landlord with a written notice by the date which occurs sixty (60) days
after the date of this Lease (which notice disputes the amount of rentable
square feet contained in the Demised Premises and which is accompanied by a
rentable square footage figure, as determined by Tenant's architect in
accordance with the BOMA Method), then (i) the provisions of this Section 2(c)
shall be null and void and of no further force and effect, and (ii) the Demised
Premises shall be deemed for all purposes, to contain 113,960 rentable square
feet. If Landlord and Tenant are unable to mutually agree upon the rentable
square footage of the Demised Premises, Landlord and Tenant shall submit the
matter to an architect (the "Architect") mutually selected and equally paid for
by Landlord and Tenant. The Architect shall measure the Demised Premises in
accordance with the BOMA Method. The determination of the Architect shall be
conclusive and binding on Landlord and Tenant. All rentals, other charges and
the "Improvements Allowance" (as defined in Exhibit C) shall be adjusted in
accordance with the Landlord's and Tenant's agreement, or if the parties are
unable to so agree, in accordance with the Architect's determination of the
rentable square footage of the Demised Premises, and Landlord and Tenant shall
execute an amendment certifying the amended rentable square footage figure and
the rentals to be paid by Tenant hereunder and the amount of the Improvements
Allowance. Despite the foregoing, in the event that the rentable square footage
of the Demised Premises does not vary by more than two percent (2%) from the
rentable square footage specified in Section 1(a)3 of this Lease, there shall be
no adjustment of (i) the rental or other charges payable hereunder by Tenant, or
(ii) the Improvements Allowance.
3. TERM
(a) LEASE TERM. The term of this Lease (sometimes herein called the
"Lease Term") shall be the period commencing on the date Landlord delivers
possession of the Demised Premises to Tenant (the "Commencement Date") and,
subject to sooner termination as herein provided, ending on December 31, 2008
(the "Expiration Date"). Landlord shall deliver possession of the Demised
Premises to Tenant on the Commencement Date. The period commencing with the
Commencement Date and ending on the following December 31 shall constitute the
first "Lease Year" as such term is used herein. Each successive full twelve
(12) month period during the Lease Term shall constitute a "Lease Year". If
permission is given to Tenant to enter into the possession of the Demised
Premises prior to the Commencement Date in Section 1(a)(6), Tenant covenants and
agrees that such occupancy shall be deemed to be under all the terms, covenants,
conditions and provisions of this Lease and the Commencement Date will coincide
with the date of occupancy.
(b) CERTIFICATE OF COMMENCEMENT. Within fifteen (15) days after the
Commencement Date, Landlord and Tenant shall execute a Certificate of
Commencement in the form of Exhibit "E".
Page 3
(c) ACCEPTANCE OF DEMISED PREMISES. Subject to the provisions of Section
6 of this Lease, occupancy of the Demised Premises or any portion thereof by
Tenant or anyone claiming through or under Tenant for the conduct of Tenant's or
such other person's business therein shall be conclusive evidence that Tenant
and all parties claiming through or under Tenant (a) have accepted the Demised
Premises or such portion (i) as suitable for the purposes for which the Demised
Premises are leased hereunder, and (ii) as complying with all requirements of
Tenant with respect to the condition, order and repair thereof as required by
the terms of this Lease, (b) have accepted the common areas as being in a good
and satisfactory condition, and (c) have waived any defects (other than latent
defects) in the Demised Premises and the Building.
(d) RULE AGAINST PERPETUITIES. In the event that the Lease Term has not
commenced within three (3) years after the date specified as the Commencement
Date in Section 1(a)6 above, then this Lease shall automatically terminate at
the expiration of such three (3) year period, whereupon the parties shall
thereupon be relieved of any and all further liability hereunder.
(e) OPTION TO EXTEND.
(i) Provided that (a) this Lease shall be in full force and effect,
and (b) Tenant shall not then be in default, and (c) Tenant shall then be
occupying at least fifty percent (50%) of the rentable area of the Demised
Premises, Tenant shall have the right, at Tenant's sole option, to extend the
Lease for one (1) consecutive additional period of five (5) years (such
additional period being herein referred to as the "extension term", if
exercised, and included in the definition of the Lease Term). The extension
term shall be on the same terms, covenants and conditions as set forth herein
with respect to the original term of this Lease, except that the Base Annual
Rent payable during the extension term shall be determined pursuant to
subparagraph (ii) of this Section 3(e). In the event Tenant shall wish to
exercise such option to extend, it shall give written notice ("Initial Notice")
of its interest in exercising such option to Landlord, (x) not less than four
hundred fifty (450) days prior to the expiration of the then-current term (i.e.,
the original term) and (y) not more than five hundred forty-five (545) days
prior to the expiration of the then current term. If Tenant shall fail to
timely give such Initial Notice, Landlord shall be relieved of any and all
liability created by the grant of such option.
(ii) Upon Landlord's receipt of the Initial Notice, Landlord and
Tenant shall attempt to agree upon the then-prevailing fair market rent
[including any fees that may be payable for "Parking Rights" (as defined in
Section 15 below)] for the Demised Premises (the "Market Rent"). If Landlord
and Tenant are unable to agree upon the Market Rent within thirty (30) days
after Landlord's receipt of the Initial Notice, then Landlord and Tenant shall
employ the procedure and the timetable described below for the purpose of
computing the Market Rent for the Demised Premises and the Base Annual Rent
properly payable during the extension term. In the event Landlord and Tenant
are unable to agree upon the Market Rent payable during the extension term
within thirty (30) days of Landlord's receipt of Tenant's notice to extend, then
the Market Rent for the first Lease Year of the extension term shall be
determined by a board of three (3) disinterested real estate appraisers, one (1)
of whom shall be named by Landlord, one (1) by Tenant, and the two (2) so
appointed shall select a third. Said appraisers shall each be practicing
appraisers in Xxxxxxxxxx County, Maryland, specializing in the field of
commercial real estate, having no less than ten (10) years experience in such
field, recognized as ethical and reputable within their field, and certified as
MAI or an equivalent professional certification. Landlord and Tenant agree to
make their appointments promptly within ten (10) days after the expiration of
the thirty (30) day period, or sooner if mutually agreed upon. Within fifteen
(15) days after both such appraisers have been appointed, the two (2) appraisers
shall promptly select a third appraiser. Within fifteen (15) days after the
third appraiser is selected, each appraiser shall submit his or her
determination of said fair market rent. The Base Annual Rent for the first
Lease Year of the extension term shall be the greater of: (i) the average of
the three (3) determinations; provided, however, that if two of the appraisers
are within five percent (5%) of each other and the third appraiser is not within
five percent (5%) of either of the other two appraisals, then the average of the
two appraisals which are within five percent (5%) of each other shall be used;
or (ii) one hundred three percent (103%) of the Base Annual Rent payable during
the last Lease Year of the initial term of this Lease. In arriving at their
individual rate determinations, each appraiser shall consider and analyze all
the components of the Lease and apply them to current market factors. Landlord
and Tenant shall pay the fee of the appraiser selected by it and they shall
equally share the payment of the fee of the third appraiser. Notwithstanding
the foregoing, Landlord and Tenant may at any time after appointing the
appraisers, agree upon the Base Annual Rent payable during the extension term
and such mutual agreement shall supersede the appraisers' determinations.
Within ten (10) days after the determination of Market Rent by the three
appraisers, Tenant shall have the right to deliver a written notice (the
"Rescission Notice") to Landlord which rescinds Tenant's exercise of its
option to extend the Lease Term for a period of five years at Market Rent.
In the event that Tenant delivers to Landlord the Rescission Notice within
ten (10) days after the determination of the Market Rent by the three (3)
appraisers, then (i) Tenant shall be deemed to have never exercised its
option to extend the initial term of this Lease, (ii) the provisions of
Section 3(e) of this Lease shall be null and void and of no further force or
effect, and (iii) Landlord shall have the right to Lease the Demised Premises
to any party or parties for a term which commences immediately after the
expiration of the initial term of this Lease. In the event that Tenant fails
to deliver the Rescission Notice to Landlord prior to the expiration of the
applicable ten (10) day period, Tenant shall be deemed to have irrevocably
exercised its option to extend the initial term of this Lease for a period
of five (5) years, and the term of the Lease shall be automatically extended
for a period of five (5) years in accordance with the foregoing term of
Section 3(e) of the Lease.
Page 4
4. RENT.
(a) BASE ANNUAL RENT. The Base Annual Rent reserved hereunder shall be as
specified in Section 1(a)9 which shall be payable by Tenant to the Landlord
during each Lease Year of the Lease Term in equal monthly installments of Base
Monthly Rent each as specified in Section 1(a)9. Subject to the provisions of
Section 4(b) of this Lease, Tenant shall pay the monthly installments of Base
Annual Rent in advance, without notice or demand, and without set off, deduction
or abatement of any kind, on or before the first day of each and every calendar
month throughout the entire term of the Lease, at the office of the Rental Agent
specified in Section 1(a)(8), or to such other person or at such other address
as Landlord may designate by written notice to Tenant from time to time.
(b) RENT COMMENCEMENT DATE. It is expressly understood and agreed that
Tenant's obligation to pay Base Monthly Rent with respect to the portion of the
Demised Premises that is located on the first floor of the Building (such
portion shall hereafter be referred to as "Phase 1 Premises") will occur on a
different date than the date that Tenant's obligation to pay Base Monthly Rent
with respect to the balance of the space that Tenant is leasing in the Building
(i.e., the remaining portion of the Demised Premises that excludes the Phase 1
Premises shall hereafter be referred to as the "Phase 2 Premises" with respect
to which Tenant shall commence paying Rent on a floor by floor basis as
described below). Tenant's obligation to pay Base Monthly Rent with respect to
the Phase 1 Premises shall commence on the earlier to occur of the following
dates: (i) the date that Tenant shall have commenced beneficial use for
Tenant's business purposes of all or any portion of the Phase 1 Premises; (ii)
the date Tenant obtains an occupancy permit for the Phase 1 Premises; or (iii)
August 1, 1998. From and after the date of this Lease, Tenant, at its sole cost
and expense, shall use diligent and continuous efforts to obtain all permits
that are necessary for its occupancy of the Phase 1 Premises and Phase 2
Premises. Tenant's obligation to pay Base Monthly Rent with respect to each
floor (or portion thereof) which constitutes a portion of the Phase 2 Premises
shall commence on the earlier to occur of the following dates: (i) the date
that Tenant shall have commenced beneficial use for Tenant's business purposes
of all or more than twenty percent (20%) of the area of such floor within the
Phase 2 Premises; (ii) the date that "Tenant's Work" (as defined in Exhibit "C")
with respect to any such floor is substantially complete; or (iii) subject to
the provisions of Section 4(d) of Exhibit C hereto, December 31, 1998 (the
"Outside Date"). Until such time that the "Phase 2 Commencement Date" (as
defined below) has occurred, Base Monthly Rent shall be determined in accordance
with the foregoing provisions of this Section 4(b) based upon the following rent
per square foot for each portion of the Demised Premises: (i) lower level --
south side of the corridor (approximately 15,933 square feet) at the rate of
Fifteen and 50/100 Dollars ($15.50) per rentable square foot; (ii) lower level
-- north side of the corridor (approximately 5,000 square feet) at the rate of
Seven and 00/100 Dollars ($7.00) per rentable square foot; and (iii) floors 1-4
(approximately 93,027 square feet) at the rate of Seventeen and 25/100 Dollars
($17.25) per rentable square foot. Notwithstanding anything in this Lease to
the contrary, in no event shall Tenant's obligation to commence paying Base
Monthly Rent be extended beyond December 31, 1998. As used herein, (i) "Interim
Date" shall mean the date that Tenant has first commenced to pay Base Monthly
Rent with respect to any portion of the Phase 2 Premises, and (ii) "Phase 2
Commencement Date" shall mean the date that Tenant is obligated to pay Base
Monthly Rent with respect to the entire Phase 2 Premises. Landlord shall, in
good faith, use diligent and continuous efforts to complete the renovation of
the Building's lobby by September 30, 1998. Notwithstanding anything herein to
the contrary, the status of the completion of the lobby of the Building shall
not affect Tenant's obligation to pay Base Monthly Rent.
(c) ADDITIONAL RENT.
(i) GENERAL. Whenever it is provided by the terms of this Lease that
Tenant is required to make any payment to Landlord other than of Base Annual
Rent, such payment shall be deemed to be additional rent ("Additional Rent").
Unless otherwise expressly specified herein, Additional Rent shall be paid by
Tenant upon Tenant's receipt from Landlord of a statement showing the amount
owed. Additional Rent shall include, but not be limited to:
(ii) OPERATING EXPENSES. Throughout the Lease Term, Tenant agrees to
pay to Landlord, as Additional Rent, Tenant's Proportionate Share, as set forth
in Section 1(a)(4), of operating expenses. The term "operating expenses" shall
mean any and all expenses incurred by Landlord in connection with fulfilling its
obligations under Section 11(b) of this Lease, including but not limited to:
(1) wages and salaries of all employees engaged in the management, operation or
maintenance of the Building, including taxes, insurance and benefits relating
hereto; (2) all supplies and materials used in the operation or maintenance of
the Building (it being understood and agreed that any equipment or tool that
costs in excess of Two Thousand Five Hundred and No/100 Dollars ($2,500.00) that
is used by Landlord in the operation or maintenance of the Building shall be
amortized over the useful life of such item in accordance with generally
accepted accounting principles); (3) cost of all maintenance and service
agreements for the Building and the equipment therein, including but not limited
to controlled access and energy management services; (4) cost of all insurance
relating to the Building and common areas, including the cost of casualty,
liability and rent loss insurance applicable to the Building and Landlord's
personal property used in connection therewith; (5) general and special repairs
and maintenance; (6) management fees in the fixed amounts that are set forth in
Section 4(c)(iv) below; (7) legal, accounting, auditing and other professional
fees, to the extent not excluded from operating expenses pursuant to this
Section 4(c)(ii) below; (8) the cost of any additional services not provided to
the Building at the Commencement Date of the Lease Term, but thereafter provided
by Landlord in accordance with the terms of this Lease; (9) costs of cleaning
supplies; (10) costs of utility services such as electricity, gas, water and
sewage, to the extent
Page 5
incurred by Landlord in connection with performing services it is obligated to
perform under the terms of this Lease; (11) the cost of any capital improvements
or alterations made to the exterior common areas of the Building after the
Commencement Date that reduce other operating expenses (it being understood that
the amount expended on such capital item shall be commensurate with the
anticipated savings that will occur over the useful life of such item) or are
required under any governmental law or regulation that was not applicable to the
Building at the time it was constructed, such cost to be amortized over the
useful life of such capital improvement in accordance with generally accepted
accounting principles, together with interest on the unamortized balance at the
rate paid by Landlord on funds borrowed for the purposes of constructing said
capital improvements [or in the event that Landlord elects not to borrow funds
to construct such capital improvements, at the "prime rate" as such rate is set
forth in the WALL STREET JOURNAL (or a reasonably comparable publication in the
event the WALL STREET JOURNAL is no longer being published) as of the date the
expenditure was incurred]; (12) transportation district fees, parking district
fees, and the cost of other amenities required by law; (13) "real estate taxes"
(as hereinafter defined); (14) cost of providing trash and snow removal; (15)
cost of decoration of exterior common areas; (16) costs of landscaping; (17)
cost of maintenance and operation of the parking area; and (18) costs and fees
charged and/or assessed in connection with any business improvement district
that is applicable to the Building. Notwithstanding anything in this Lease to
the contrary, the preceding list is for definitional purposes only and shall not
impose any obligation upon Landlord to incur such expenses or provide such
services. Landlord shall not pass through to Tenant as an operating expense any
service or other obligation to be provided by Tenant pursuant to Section 11(a).
In the event that all or any of the services (or other obligations of Landlord,
including real estate taxes, which are to be passed through to Tenant as an
operating expense) that are being provided by Landlord are provided by
contractors or vendors who are providing such services (or such other
obligations) to other real property that is owned, operated or managed by
Landlord or any party that is related to or affiliated with Landlord, and the
same are being provided under a contract which includes the Building and such
other real property, then the cost of the same shall be allocated on a
proportionate square footage basis by Landlord between the Building and such
other real property [i.e., the amount of the cost of such service (or such other
obligation) that is allocated to the Building shall be a fraction, the numerator
of which shall be equal to the number of rentable square feet of area contained
in the Building, and the denominator of which shall be equal to the number of
rentable square feet of area contained in the other real property and in the
Building]. It is expressly understood and agreed that the cost of providing
services (or other obligations of Landlord which are to be passed through to
Tenant as an operating expense) to the Building and the "Adjacent Building" (as
defined in Section 43 below) under any contract which covers both the Building
and the Adjacent Building shall be allocated as follows: (x) 51.8% of the cost
shall be allocated to the Building; and (y) 48.2% of the cost shall be allocated
to the Adjacent Building. Operating expenses shall be reduced by all cash
discounts, trade discounts or quantity discounts received by Landlord or
Landlord's managing agent in the purchase of any goods, utilities or services in
connection with the prudent operation of the Building. If Landlord charges a
user fee for use of a building amenity or facility, then operating expenses
shall be deemed reduced by the amount of such fees. Despite the foregoing, in
no event shall operating expenses be reduced by any amount that is being charged
by Landlord or any parking operator in connection with any parking facilities.
Landlord shall diligently and in good faith pursue all insurance, breach of
warranty or other claims which would reasonably result in a reduction of
operating expenses. In no event shall Building tenants be required to pay, in
the aggregate, more than 100% of the actual operating expenses of the Building
for any calendar year, and Tenant shall not be required to pay more than 100% of
Tenant's Proportionate Share of the total operating expenses actually incurred
for any calendar year. "Operating expenses" shall not include any of the
following, except to the extent that such costs and expenses are included in
operating expenses as described above: costs of painting or decorating tenant
space; leasing brokerage commissions; interest and amortization of mortgages;
ground rent; or the costs of special services or utilities separately charged to
individual tenants of the Building. Despite the foregoing, operating expenses
shall also not include any of the following:
(a) all costs and expenses incurred by Tenant or any other
tenants of the Building and paid for or payable directly by Tenant or such other
tenants either to third parties or to Landlord under agreements for direct
payment or reimbursement for benefits or services;
(b) leasing commissions, attorneys' fees, costs, disbursements
and other expenses incurred in connection with negotiations or disputes with, or
leasing to, tenants or prospective tenants of the Building;
(c) salaries and benefits paid to officers and executives of
Landlord who are above the level of property manager;
(d) Interest, points, fees and principal payments on loans to
Landlord or secured by mortgages or deeds of trust covering the Building or the
Project or a portion thereof and other debt costs, if any, or amortization on
any mortgage or mortgages or any other debt instrument encumbering the Building
or the Project;
(e) rental under any ground lease or other underlying lease or
easement (it being expressly understood and agreed that vault rentals, if any,
shall be included in operating expenses);
(f) any marketing costs and expenses incurred in connection with
the marketing of the Building or any rentable space therein;
Page 6
(g) any expenses for repairs or maintenance which are actually
recovered under warranties and service contracts;
(h) legal expenses arising out of (i) the negotiation, review,
preparation or termination of leases, occupancy agreements, assignments of
leases or sublease agreements, (ii) the interpretation of leases or other
occupancy agreements, or assignment or sublease agreements (iii) the enforcement
of the provisions of any lease or other occupancy agreement affecting the
Building, including, without limitation this Lease, (iv) any action against a
present or former tenant or occupant under a lease or other occupancy agreement,
including, without limitation, eviction, distraint, levy and collection actions;
(i) costs in connection with a change in ownership or financing or
refinancing of the Building provided, however, such provision shall not limit
any "real estate taxes" (as defined below) from being included as operating
expenses;
(j) the cost of any item paid to any entity or person related to or
affiliated with Landlord to the extent such cost exceeds the amount payable for
such services at then existing market rates to unrelated persons or entities;
(k) deductions for income tax purposes attributable to depreciation
of the Building or any improvements on the land or the Building equipment;
(l) any cost incurred directly in connection with the investigation,
remediation, clean-up, containment, abatement or removal of Hazardous Materials
(as such term is hereinafter defined) present on, about, under or at the Project
on the date hereof, or which are stored, used or released by Landlord, its
employees or agents after the date hereof or which migrate onto the Project. As
used herein, the term "Hazardous Materials" includes any "hazardous substance"
as that term is defined in the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. SS9604 et seq.), as amended
("CERCLA") and any "hazardous waste" as that term is defined in the Resource
Conservation and Recovery Act (42 U.S.C. SS6901 et seq., as amended) ("RCRA")
(collectively, "Hazardous Materials");
(m) Costs incurred by Landlord which pursuant to the express terms of
any retail tenant's lease are payable by such retail tenant directly to a
utility company or other entity with respect to retail space in the Building;
(n) Costs and expenses incurred by Landlord associated with the
operation of the business of the legal entity or entities which constitute
Landlord (as opposed to operation of the Building), including, without
limitation, sale and financing matters, legal entity accounting, income taxation
matters, costs of selling, syndicating, financing, mortgaging or hypothecating
any of Landlord's interest in the Building or the Project, and disputes with
employees or persons who own an interest in Landlord;
(o) Wages, salaries or other compensation and benefits of any
off-site employees of Landlord or its managing agent, provided, however,
operating expenses shall include Landlord's reasonable allocation (based on time
spent in connection with the Building) of compensation paid for the wages,
salary, and other compensation and benefits paid to such employees, if off-site,
who are assigned part-time to the operation, management, maintenance, or repair
of the Building;
(p) Any other costs or expenses for which Landlord actually receives
reimbursement from any source (other than the payment of operating expenses),
including without limitation, insurance, condemnation awards or warranties, or
any cost or expense for which Landlord would have received reimbursement from an
insurance company had Landlord been insured as required under the terms of this
Lease;
(q) Any expenditures which under generally accepted accounting
principles are treated as capital expenditures, except as otherwise expressly
set forth in this Lease;
(r) Fines, penalties, late payment charges and interest arising from
the acts or inaction of Landlord or failure timely to make tax and/or other
payments;
(s) Capital costs incurred by Landlord for the repair of damage to
the Building, or for the restoration of all or any portion of the Building after
the occurrence of a casualty and any other costs reimbursable by insurance
proceeds or to the extent reimbursed by any other third party, together with
associated deductible amounts;
(t) Expenses resulting from the breach of this Lease by Landlord, or
the negligence of Landlord, its agents, contractors, employees, or other tenants
of the Building or the Project;
Page 7
(u) Fees for services rendered to the Building, the Project or the
common areas by entities controlled by or under common control with Landlord to
the extent such fees exceed the market rate payable for comparable services if
rendered by unrelated third parties, provided, however, that a management fee in
the amount set forth in Section 4(c)(iv) below shall be a permissible operating
expense;
(v) Charitable or political contributions, advertising and
promotional expenditures, including the costs of staging special events;
(w) Assessments to the extent paid in less than the maximum permitted
number of installments;
(x) Depreciation of the Building or the Project, or the fixtures or
equipment therein;
(y) The cost of services or other obligations performed by Landlord
to the extent Tenant is obligated to perform such services or other obligations
pursuant to Section 11(a) or Section 19;
(z) Except as provided for herein, the costs and expenses of
utilities provided to any property other than the Building;
(aa) The costs and expenses of bringing the Building, including the
common areas, into compliance with the ADA, to the extent the Building is not in
compliance with the ADA as of the date of this Lease;
(bb) The costs and expenses of causing the base building systems of
the Building to be Year 2000 Compliant (hereinafter defined);
(cc) In the event that Landlord provides any services to other
buildings that are located in the immediate vicinity of the Building, but
Landlord does not provide such services to the Building, the cost of such
services shall not be passed through to Tenant as an operating expense;
(dd) Any cost that Landlord is obligated to pay under Section 7(m) of
this Lease;
(ee) Any cost to remediate or remove Hazardous Materials that are
caused by occupants of the Adjacent Building; and
(ff) Costs incurred by Landlord in (x) suing any insurance company in
connection with damage to the Building, and/or (y) suing any governmental
authority in connection with a condemnation of the Building.
The term "real estate taxes" shall mean all taxes and assessments, general
and special, ordinary and extraordinary, foreseen and unforeseen, now or
hereafter assessed, levied or imposed upon the Building, and the land on which
it is built, including, without limitation, vault fees and charges, arena taxes,
front foot benefit charges and adequate public facility costs and assessments,
together with (i) any tax, assessment, or other imposition in the nature of a
real estate tax, (ii) any ad valorem tax on rent or any tax on income if imposed
in lieu of or in addition to real estate taxes and assessments, and (iii) any
taxes and assessments which may hereafter be substituted for real estate taxes,
including by way of illustration only, any tax, assessment or other imposition
(whether a business rental or other tax) now or hereafter levied for Tenant's
use or occupancy of or conduct of business at the Demised Premises, on Tenant's
improvements to or furniture, fixtures or equipment in the Demised Premises, or
imposed upon the rent payments. "Real estate taxes" shall also include all
costs incurred by Landlord in contesting the validity or amount of any such
taxes. Real estate taxes shall not include any federal, state or local tax on
income or any inheritance, estate, succession, transfer, recordation, gift,
franchise, corporation, unincorporated business, profit, excess profit, or
license fees, or any fines, penalties and/or interest on late payments of any
real estate taxes. Tenant shall not be responsible for more than twelve (12)
calendar months of Real Estate Taxes in any one (1) year.
In the event that Tenant requests that Landlord contest real estate taxes,
Landlord will, in good faith, consider such request and contest the amount of
such real estate taxes if, in Landlord's reasonable determination, there is a
reasonable likelihood of reducing the amount of real estate taxes payable with
respect to the Building, regardless of whether such contest will adversely
affect the real estate tax assessment on any other building that is located in
the immediate vicinity of the Building and which is owned or managed by
Landlord. In the event that Landlord contests real estate taxes with respect to
any period during which Tenant has paid to Landlord operating expenses, and in
connection with such contest, Landlord receives a refund of any real estate
taxes that were previously paid by Landlord with respect to such period, then
Landlord shall pay to Tenant, after deducting all costs and amounts incurred by
Landlord in connection with such tax contest, Tenant's share of such refund.
As of the date of this Lease, the Building and the Adjacent Building are
assessed as part of the same tax parcel. To the extent that the Building and
the Adjacent Building are not separately assessed for real estate tax purposes
in
Page 8
the future, the real estate taxes for the Building and the Adjacent Building
(including the land under each building, the exterior common areas and the
balance of the land which forms the tax parcel) shall be allocated as follows:
(i) 51.8% of the real estate taxes shall be allocated to the Building; and (ii)
48.2% of the real estate taxes shall be allocated to the Adjacent Building.
(iii) LANDLORD'S ENFORCEMENT COSTS. Additional Rent shall include
any and all expenses incurred by Landlord, including reasonable attorneys' fees,
for the collection of monies due from Tenant and the enforcement of Tenant's
obligations under the provisions of this Lease. When Landlord, at Tenant's
expense, performs an obligation of Tenant pursuant to the terms of this Lease,
the costs and expenses (including overhead) incurred by Landlord in performance
of such obligations shall be Additional Rent.
(iv) Landlord and Tenant agree that the management fees that are
payable by Tenant as a part of operating expenses shall be as follows:
PERIOD ANNUAL MANAGEMENT FEE MONTHLY MANAGEMENT FEE
07/1/98 - 12/31/98 ------------- $3,000.00
01/1/99 - 12/31/99 $67,663.75 $5,638.65
01/1/00 - 12/31/00 $69,693.66 $5,807.81
01/1/01 - 12/31/01 $71,784.47 $5,982.04
01/1/02 - 12/31/02 $73,938.00 $6,161.50
01/1/03 - 12/31/03 $76,156.15 $6,346.35
01/1/04 - 12/31/04 $78,440.83 $6,536.73
01/1/05 - 12/31/05 $80,794.05 $6,732.84
01/1/06 - 12/31/06 $83,217.87 $6,934.82
01/1/07 - 12/31/07 $85,714.41 $7,142.87
01/1/08 - 12/31/08 $88,285.84 $7,357.15
(d) ADDITIONAL RENT ESTIMATES AND ADJUSTMENTS.
(i) Within sixty (60) days after the date of this Lease,
Landlord shall deliver to Tenant an estimated budget of the operating expenses
for the first Lease Year of the Lease Term. Landlord and Tenant shall meet at a
mutually agreeable time to discuss the budget and Landlord shall, in good faith,
consider all of Tenant's requested changes to the budget. Thereafter, in order
to provide for current monthly payments of Additional Rent, Landlord shall (x)
submit to Tenant a "Proposed Budget" (as defined below) on an annual basis, and
(y) submit to Tenant prior to January 1st of each year a written statement of
Landlord's estimate of the amount described in Section 4(c)(ii) above, together
with the amount of Tenant's Additional Rent which is estimated to result
herefrom. Tenant shall pay each month one-twelfth (1/12th) of Tenant's
Proportionate Share of Landlord's estimate of the operating expenses pursuant to
Section 4(d)(ii). Landlord's annual estimate of increases in operating expenses
shall not exceed one hundred ten percent (110%) of the actual operating expenses
that were incurred for the Building during the prior calendar year unless
Landlord provides Tenant with reasonable evidence which would reasonably justify
such increase. Landlord may revise its estimate of operating expenses at any
time during a calendar year by written notice to Tenant, setting forth such
revised estimate and Tenant's Proportionate Share of the estimated operating
expenses. In such event, all monthly payments made by Tenant after such notice
shall be in an amount calculated on the basis of such revised estimate.
(ii) At least within thirty (30) days prior to the commencement
of the second (2nd) Lease Year, and at least thirty (30) days prior to the
beginning of each Lease Year thereafter during the Lease Term, Landlord shall
furnish to Tenant a detailed proposed budget ("Proposed Budget") of operating
expenses for the following twelve (12) month period. The Proposed Budget shall
contain a reasonably detailed description of the services Landlord (in its own
capacity or through affiliated entities or third party services providers) shall
provide to the Building, proposed purchases of materials, and anticipated real
estate taxes and other costs and expenses that Landlord expects to include in
operating expenses. Landlord shall provide to Tenant, within fifteen (15)
business days after Tenant's written request, such supporting documentation as
Tenant shall reasonably request for the purpose of verifying the reasonable
accuracy and general reasonableness of such Proposed Budget. Representatives of
Landlord and Tenant shall meet on a mutually agreeable date within thirty (30)
days
Page 9
after delivery of the Proposed Budget for the purpose of discussing Tenant's
requested changes to the Proposed Budget. Landlord shall, in good faith,
consider all of Tenant's requested changes to the Proposed Budget.
(iii) If payment of Additional Rent begins on a date other than
January 1st under this Lease, in order to provide for current payments of
Additional Rent through December 31st of that partial calendar year, Landlord
shall submit to Tenant a statement of Landlord's estimate of Tenant's Additional
Rent for that partial year, stated in monthly increments. Tenant shall make the
monthly incremental payments of estimated Additional Rent, together with its
installments of operating expenses.
(iv) Within one hundred twenty (120) days after the end of each
calendar year, Landlord will submit to Tenant a statement of the actual
operating expenses for the preceding calendar year. In the event that Landlord
fails to timely deliver such statement to Tenant, then Landlord shall deliver
such statement to Tenant on the earlier to occur of the following dates: (i)
the date that is fifteen (15) business days after the date that Tenant requests
such statement in writing, or (ii) as soon after the expiration of the one
hundred twenty (120) day period as is reasonably practicable. Tenant shall pay
Landlord, within thirty (30) days of Tenant's receipt of such statement,
Tenant's Proportionate Share of the excess, if any, of actual operating expenses
over the projected operating expenses. If the amount paid by Tenant during the
previous year exceeded Tenant's share of actual operating expenses for the year,
the excess shall be credited toward payment of the next installment of operating
expenses to be paid by Tenant after Tenant receives said statement from
Landlord. If the amount paid by Tenant during the last calendar year of the
Lease Term exceeds Tenant's share of actual operating expenses for such year,
Landlord shall pay Tenant the excess amount within thirty (30) days after
Landlord's submission to Tenant of the aforesaid operating expense statement for
such calendar year.
(v) Within one hundred twenty (120) days after receipt of
Landlord's statement showing actual figures for the year, Tenant shall have the
right to request a statement of operating expenses of the Building and copies of
real estate tax bills, which shall be supplied to Tenant within a reasonable
time after Tenant's written request. No such request shall extend the time for
payments as set forth in Section 4(c) or Section 4(d)(iii) above. Unless Tenant
asserts specific error(s) and supports such errors, in writing, within sixty
(60) days after Landlord has complied with Tenant's request, Tenant shall waive
the right to contest the statement of actual figures for the year submitted by
Landlord. If Tenant timely asserts specific error(s) and supports such errors,
in writing, and it shall be determined that there is an error in Landlord's
statement, Tenant shall be entitled to a credit for any overpayment.
(vi) Landlord shall retain the books and records substantiating
the operating expenses and real estate taxes for a period of at least one (1)
year from the date Landlord submits a statement of such operating expenses and
real estate taxes to Tenant. In addition to Tenant's rights under Section
4(e)(iv), Landlord shall, upon Tenant's written request which shall be made no
later than ninety (90) days after receipt of Landlord's statement of the
operating expenses pursuant to Sections 4(d)(iii) and 4(d)(iv) above, permit
Tenant and/or Tenant's certified public accountant to inspect and audit
Landlord's records pertaining to Landlord's calculation of operating expenses;
provided, however, that Tenant shall not be entitled to delay any payment under
this Lease during the pendency of any such inspection or audit. Such inspection
or audit shall be made at a time and date specified in Tenant's request for
same, which date shall in no event be less than fifteen (15) days after
Landlord's receipt of Tenant's request for the same. Despite the foregoing, as
an express condition of Tenant's certified public accountant conducting such
inspection or audit, Tenant and Tenant's certified public accountant shall
certify in writing to Landlord that such certified public accountant (i) is
being compensated by Tenant on an hourly basis to conduct such audit, and (ii)
is not being compensated, in whole or in part, on a contingency basis or a
percentage of savings basis. Tenant shall bear all costs of any such
inspection. Tenant shall keep the results of any such audit confidential,
except to the extent (x) reasonably required to be revealed in any legal action
between Landlord and Tenant relating to operating expenses, or (y) as may be
required by law. Despite the foregoing, in the event such audit discloses that
Landlord has overstated the operating expenses for the Building during any
calendar year, (i) Landlord shall, within thirty (30) days thereafter, refund
such overpayment to Tenant, and (ii) by more than ten percent (10%), Landlord
shall pay to Tenant interest at the annual rate of twelve percent (12%) on the
amount of such overpayment.
(e) TAXES ON TENANT'S PROPERTY. Tenant shall be liable for, and shall
pay before delinquency, all taxes levied against any personal property or
trade fixtures placed by Tenant in or about the Demised Premises. Tenant
shall have the right to (i) contest any such taxes, provided that Tenant
posts such reasonable security as Landlord or its mortgagee may request in
connection with such protest, or (ii) pay such taxes under protest in
accordance with the last sentence of this Section 4(e). If any such taxes on
Tenant's personal property or trade fixtures are levied against Landlord or
Landlord's property, or if the assessed value of the Demised Premises is
increased by the inclusion therein of a value placed upon such personal property
or trade fixtures of Tenant, and if Landlord, after written notice to Tenant,
pays the taxes based upon such increased assessments (which Landlord shall have
the right to do regardless of the validity thereof, but under protest if
requested by Tenant), Tenant shall upon demand repay to Landlord a sum equal to
the taxes levied against Landlord or the portion of such taxes resulting from
such increase in the assessment; provided that, in any such event, Tenant shall
have the right, at Tenant's sole cost and expense, to bring suit to recover the
amount of any such taxes so paid under protest, and any amount so recovered
shall belong to Tenant.
Page 10
(f) PAYMENT OF RENT. Any rent payable for a portion of a month shall be
prorated based upon a thirty (30) day calendar month. Any Base Annual Rent or
Additional Rent which is not paid within five (5) days after the same is due
shall bear interest at eighteen percent (18%) per annum or the highest legal
rate, whichever is lower, from the due date until the date received by Landlord.
No payment by Tenant or receipt by Landlord of lesser amounts of rent than those
herein stipulated shall be deemed to be other than on account of the earliest
unpaid stipulated rent. No endorsement or statement on any check or any letter
accompanying any check or payment as rent shall 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 pursue any other remedy
provided in this Lease. In addition, in the event Base Annual Rent or
Additional Rent is not paid within five (5) days of its due date, Landlord, at
its sole option, may assess a late charge equal to five percent (5%) of the Base
Monthly Rent or Additional Rent, as applicable, as liquidated damages for the
additional administrative charges incurred by Landlord as a result of such late
payment. Despite the foregoing, Landlord shall waive such late charge on the
first (1st) two (2) occasions during any twelve (12) month period in which
Tenant does not timely pay Base Annual Rent or Additional Rent, provided that
Tenant pays such installment of Base Annual Rent or Additional Rent to Landlord
within ten (10) days after the date Tenant receives notice that such amount is
past due. If Landlord receives from Tenant two or more returned or "bounced"
checks in any twelve (12) month period, Landlord may require all future rent by
cashier's or certified check.
(g) SURVIVAL OF RENT OBLIGATION. The obligation of Tenant with respect to
the payment of Additional Rent shall survive the termination of this Lease or
assignment thereof.
5. INTENTIONALLY DELETED.
6. CONSTRUCTION OF PREMISES AND OCCUPANCY.
(a) Landlord, at its expense, shall take all steps necessary to cause the
Building and the common areas (including, without limitation, all Building
bathrooms, all Building stairwell door hardware, all elevators and elevator
lobbies, the main lobby, all fire and safety systems that are located in the
existing elevator lobby and in the main lobby of the Building, and all areas of
ingress to and egress from the Building) to comply with Title III of the
Americans with Disabilities Act of 1990, as amended, 42 U.S.C. SS 12101, et seq.
(together with regulations promulgated pursuant thereto, the "ADA"); provided,
however, that to the extent any non-compliance is a result of the use or
occupancy of the Demised Premises or any action or inaction of Tenant, then such
compliance work shall be completed by Tenant at Tenant's cost. Tenant, at its
sole cost and expense, shall be solely responsible for taking any and all
measures which are required to cause the Demised Premises to comply with the ADA
(including means of ingress and egress thereto) and the business conducted
therein. Any Alterations made or constructed by Tenant for the purpose of
complying with the ADA or which otherwise require compliance with the ADA shall
be done in accordance with this Lease; provided, that Landlord's consent to such
Alterations shall not constitute either Landlord's assumption, in whole or in
part, of Tenant's responsibility for compliance with the ADA, or representation
or confirmation by Landlord that such Alterations comply with the provisions of
the ADA. Landlord shall renovate the bathrooms that are located in the Building
so that the bathroom facilities that are located in the Building will be in
compliance with the ADA. Landlord and Tenant shall, in good faith, coordinate
with each other in connection with the performance of Landlord's work under this
Section 6(a) and Tenant's Work. Landlord shall use diligent efforts to cause
all work to be performed by Landlord under this Section 6(a) to be completed by
October 31, 1998.
(b) Landlord, at its expense, shall renovate the main lobby of the
Building in a manner consistent with first class office buildings located in the
Rockville, Maryland vicinity. Landlord has provided Tenant with conceptual
design plans for the renovation of the lobby. Landlord shall, in good faith,
consider all reasonable changes that Tenant requests be made to such conceptual
design plans, provided in no event shall Landlord be required to incorporate any
such changes to the extent that such changes would increase the cost of making
such renovations unless Tenant agrees in writing to pay the increased cost.
Landlord shall, in good faith, use diligent efforts to cause such lobby
renovation to be substantially completed within ninety (90) days after the date
that Landlord and Tenant have mutually agreed upon the construction drawings for
such renovation.
(c) Landlord, at its expense, shall perform, or cause to be performed, the
following improvements to the common areas of the exterior of the Building: (i)
landscape the exterior common areas of the Building in accordance with plans
approved by Tenant; (ii) seal all paved areas surrounding the Building, (iii)
restripe the parking lot; (iv) provide adequate lighting for the exterior of the
Building; and (v) repair any damage that exists in the exterior of the Building
and in the parking areas. Landlord shall use diligent efforts to cause all work
to be performed under this Section 6(c) to be completed by October 31, 1998.
(d) Upon delivery of the Demised Premises to Tenant (i) the loading dock
roll up doors will be in good working order, and (ii) the base building systems
for the Building (i.e., elevators, life safety equipment, electrical system,
plumbing systems, hot water heaters, chillers, pumps and related central
heating, ventilation and air conditioning system to include balancing of central
airshafts) shall be in good working order with preventive maintenance up to date
and shall be Year 2000 Compliant. "Year 2000 Compliant" with respect to any
base building system shall mean that, on and after January 1, 2000, such system
will continue to operate in good working order without the requirement that any
additional expenditure be made
Page 11
to retrofit, update or otherwise repair or replace such system due to a
malfunction or design flaw that would impair such system solely by reason of the
change from the year 1999 to the year 2000.
(e) Landlord's work that is described in this Section 6 ("Landlord's
Work") shall be performed in a good and workmanlike manner in accordance with
good construction practices.
(f) Tenant, at Tenant's sole cost and expense, shall cause the "Tenant's
Work" (as defined in Exhibit C) to be performed in accordance with the
provisions of the Work Agreement that is attached to and made a part hereof as
Exhibit C.
(g) Tenant shall be responsible for obtaining all permits or licenses
necessary for its lawful occupancy of the Demised Premises, including, without
limitation, a Use and Occupancy permit for the Demised Premises. This
requirement shall not relieve Tenant of its liability for Base Annual Rent from
the Rent Commencement Date in the event all of said permits have not been
acquired prior thereto. Notwithstanding the foregoing, Landlord represents and
warrants to Tenant that as of the date of this Lease, the Building is zoned I-3.
A description of the uses permitted under the I-3 zoning as of the date of this
Lease, as set forth in the Rockville, Maryland, zoning codes, is attached to and
made a part of this Lease as Exhibit K.
(h) Except as expressly provided to the contrary in this Section 6, Tenant
is leasing the Demised Premises in its "as-is" condition as of the date of this
Lease. In the event that the Demised Premises cannot, at the commencement of
the Lease, be lawfully used for general office purposes (as opposed to Tenant's
specific purposes) as a result of the Demised Premises failing to be in
compliance with any applicable governmental law, then Tenant shall cause the
necessary work to be performed to the Demised Premises so that it can lawfully
be used for general office purposes. Tenant shall pay the first Fifty Thousand
and No/100 Dollars ($50,000.00) of the cost of making such alterations or
repairs and, subject to the sentence which immediately follows this sentence,
Landlord shall pay all actual, reasonable and out-of-pocket costs that are
incurred by Tenant in excess of Fifty Thousand and No/100 Dollars ($50,000.00)
in making such repairs and alterations. To the extent that any such alterations
or repairs are required as a result of Tenant's use of the Demised Premises for
uses other than office purposes, or as a result of alterations or improvements
that Tenant is making to the Demised Premises, then, Tenant, at Tenant's sole
cost, shall perform such alterations or repairs.
(i) Landlord and Tenant shall, within sixty (60) days after the date of
this Lease, jointly inspect the Building and prepare a punchlist of those items
of work to be performed by Landlord under Section 6(d) of this Lease which
remain unfinished as of the date of such inspection. Landlord shall, in good
faith, use commercially reasonable efforts to complete the items that are set
forth on the punchlist within thirty (30) days after the date of the punchlist.
In addition, Landlord and Tenant shall, within thirty (30) days after completion
of each and every other item of Landlord's Work to be completed pursuant to this
Section 6, jointly inspect such work and prepare a punchlist of those items of
work which remain unfinished as of the date of such inspection. Landlord shall,
in good faith, use commercially reasonable efforts to complete the items set
forth on such punchlist within thirty (30) days after the date of such
punchlist.
7. USE OF DEMISED PREMISES.
(a) USE. Tenant may use and occupy the Demised Premises for the purposes
specified in Section 1(a)(12) and for no other purposes whatsoever. Tenant
shall not use or permit the Demised Premises to be used for any other purpose or
purposes without the prior written consent of Landlord, which consent may be
granted or withheld in Landlord's reasonable discretion. Attached to and made a
part hereof as Exhibit L hereto are the following: (i) a letter dated July 6,
1998 (the "Use Permit Letter") from Xxxxxx Xxxxxx Block, Assistant City Attorney
for the City of Rockville, Maryland to Xxxxxxxx X. Xxxxxx, Esquire; and (ii) a
letter dated June 5, 1998 (the "Initial Letter"), from Xxxxxx Xxxxxx Block,
Assistant City Attorney for the City of Rockville, Maryland to Xxxxxxx Komiers,
Esquire. The Initial Letter and the Use Permit Letter (collectively, the
"County Letter") state that there is an existing use permit (No. U-279-83) (the
"Use Permit") which governs the permitted use of the Building. Notwithstanding
anything in this Lease to the contrary, (i) Tenant acknowledges that Landlord
has not made any representations to Tenant as to whether Tenant's intended
use(s) of the Building complies with the Use Permit, and (ii) Tenant shall not
use the Demised Premises (or any portion thereof) or permit any party to use the
Demised Premises (or any part thereof) for any purpose which would (x) violate
the Use Permit, or (y) violate any applicable governmental law, code, rule,
statute, regulation or order. Upon Tenant's request, Landlord shall (at no cost
to Landlord) cooperate with Tenant in connection with any reasonable
modifications that Tenant desires that the City of Rockville make to the Use
Permit, provided such modifications are consistent with the zoning of the
Building.
(b) COMPLIANCE. Subject to the provisions of Section 6 of this Lease,
Tenant shall, at Tenant's sole expense, (i) comply with all laws, orders,
ordinances, and regulations of federal, state, county, and municipal authorities
having jurisdiction over the Demised Premises, (ii) comply with any directive,
order or citation made pursuant to law by any public officer requiring abatement
of any nuisance or which imposes upon Landlord or Tenant any duty or obligation
arising from Tenant's occupancy or use of the Demised Premises or from
conditions which have been created by or at the request or insistence of Tenant,
or required by reason of a breach of any of Tenant's obligations hereunder or by
or through other fault of Tenant; (iii) comply with all insurance requirements
applicable to the Demised Premises; and (iv) cause the Demised
Page 12
Premises to comply with the ADA. If Tenant receives notice of any such
directive, order, citation or of any violation of any law, order, ordinance,
regulation or any insurance requirement, Tenant shall promptly notify Landlord
in writing of such alleged violation and furnish Landlord with a copy of such
notice. In furtherance of the foregoing, and provided Tenant shall first have
obtained Landlord's prior written consent in accordance with the provisions of
Section 12 of the Lease (which Tenant agrees to promptly request), Tenant shall,
at Tenant's sole cost and expense, make such changes, alterations, renovations
or modifications to the Demised Premises in accordance with the provisions of
Section 12 of the Lease (except for structural repairs) which are necessitated
or required by any such law, ordinance, rule, regulation, directive or insurance
requirement.
(i) LEGAL. Tenant shall not use or permit the Demised Premises or
any part thereof to be used in violation of any present or future applicable
law, regulation or ordinance, or of the certificate of occupancy issued for the
Building or the Demised Premises, and shall immediately discontinue any use of
the Demised Premises which is declared by any governmental authority having
jurisdiction to be in violation of law or said certificate of occupancy. Tenant
shall refrain from and discontinue such use immediately upon receipt of written
notice from Landlord.
(ii) FIRE AND SAFETY. Tenant agrees that any increases of fire
insurance premiums on the Building or contents caused by the occupancy of Tenant
and any expense or cost incurred in consequence of negligence or the willful
action of Tenant, Tenant's employees, agents, servants, invitees, or licensees
shall be deemed Additional Rent and paid as accrued. Tenant covenants to
Landlord that throughout the entire Lease Term Tenant's use of the Demised
Premises shall be in compliance with NFPA 45 - "Standard on Fire Protection for
Laboratories Using Chemicals" 1996 Edition ("NFPA 45"), a copy of which is
attached to and made a part hereof as Exhibit "G".
(c) ENVIRONMENTAL PROTECTION. Tenant and Tenant's employees and agents
shall not dispose of any hazardous waste ("hazardous waste"), as such term is
used in the RESOURCE CONSERVATION AND RECOVERY ACT, 40 CFR, Parts 260-262, the
COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT OF 1980,
or in any other federal, state or local law governing hazardous waste, as such
laws may be amended from time to time (hereinafter collectively referred to as
the "Act"), at, upon, under or within the Demised Premises or the Building or
into the plumbing or sewer or water system servicing the Demised Premises and/or
the Building, nor shall Tenant, its agents or employees cause or permit the
discharge, spillage, uncontrolled loss, seepage or filtration of any hazardous
waste at, upon, under or within the Demised Premises or the Building or into the
plumbing or sewer or water system servicing the same. All hazardous waste that
is located in the Demised Premises shall be used, stored, kept and disposed of
by Tenant in accordance with the Act. Prior to the date that Tenant occupies
any portion of the Demised Premises, Tenant will provide Landlord with (x) a
material safety data sheet (a "MSDS") for each chemical that Tenant will use
and/or store in the Demised Premises and (y) a site map indicating where each
chemical will be stored and/or used in the Demised Premises. Tenant shall, on a
semi-annual basis, provide Landlord with an updated site map. Prior to
introducing any new chemical into the Demised Premises, Tenant shall provide
Landlord with a MSDS for such chemical. Throughout the Lease Term, Tenant shall
(x) on a quarterly basis, check the acid neutralization tanks that are to be
located in the Demised Premises (it being understood and agreed that if
operations indicate a need for more frequent review of the neutralization tanks,
Tenant shall check the neutralization tanks more frequently), (y) keep the
neutralization tanks in a clean and good working condition, and (x) within
fifteen (15) days after the end of each quarter, provide Landlord with a copy of
the log (the "Neutralization Log") which shows the maintenance history of each
neutralization tank. Subject to the provisions of Section 12 below, Tenant
shall, at its sole cost, cause the air system serving the Demised Premises to be
modified to provide that (i) the air that enters the laboratory portion of the
Demised Premises will not be introduced into the air which enters the balance of
the Building, including the non-laboratory portions of the Demised Premises, or
into the air which enters into any adjacent building, (ii) the air in the
laboratory portion of the Demised Premises will be under negative pressure, and
(iii) in the event such negative pressure system is not working properly, an
alarm will go off which notifies Tenant of such failure. All deliveries and
removal of hazardous waste and chemicals into, and out of, the Demised Premises,
as applicable, shall be accomplished by Tenant through the loading dock and the
freight elevator(s) serving the Building. Tenant shall comply in all respects
with the requirements of the Act and related regulations.
(d) HAZARDOUS WASTE DOCUMENTATION. Tenant shall promptly notify and
provide Landlord with true, correct, complete and legible copies of all of the
following environmental items related to the Demised Premises that may be filed
or prepared by or on behalf of, delivered to, or served upon Tenant or Tenant's
agents: Neutralization Logs, MSDS, disposal manifests, reports filed pursuant
to self-reporting requirements or any applicable law or this Lease, permit
applications, permits, monitoring reports, community exposure warnings and any
notices, orders, reports, notices, listings, complaints, pleadings, plans and
correspondence (even those that may be characterized as confidential) relating
to the use, discharge, generation, release, disposal, investigation, clean-up,
remediation and abatement of hazardous waste. In the event of a release of any
hazardous waste in, on or about the Demised Premises, Tenant shall promptly
provide Landlord with copies of all reports and correspondence with or from all
governmental agencies, authorities or any other person relating to the release.
(e) RIGHT TO INSPECT. Subject to the provisions of Section 17
below, Landlord and its agents, shall have the right, upon reasonable prior
notice, but not the obligation, to inspect, investigate, sample or monitor the
Demised Premises, at any reasonable time and from time to time, to determine
whether Tenant is in compliance with the terms of this Section 7. If Tenant is
not in compliance, Landlord shall so notify Tenant and such notice shall specify
a reasonable period of time within
Page 13
which Tenant must cure its breach of its obligation to comply with the terms of
this Section 7. In the event that Tenant fails to comply with the terms of this
Section 7 within the period of time set forth in Landlord's notice, as
aforesaid, Landlord shall have the right but not the obligation (in addition and
not in limitation of any other right or remedy) to immediately enter the Demised
Premises and discharge Tenant's obligations hereunder. Any sum reasonably
incurred shall be due and payable by Tenant upon demand as Additional Rent.
(f) RIGHT TO PARTICIPATE. Landlord shall have the right, but not the
obligation, to join and participate in support of Tenant and at Tenant's
expense, in any proceedings or actions initiated against Tenant in connection
with claims or causes of actions related to the use, storage, generation,
release, transportation, or disposal of hazardous waste, in, on, from or about
the Demised Premises.
(g) TENANT'S OBLIGATION. Tenant hereby agrees that it is and shall be
fully responsible for all costs, expenses or liabilities (including, but not
limited to, those incurred by Landlord) which may occur from Tenant's use,
storage, disposal, release, spill, discharge or emissions of hazardous waste by
Tenant whether or not the same may be permitted by this Lease. Tenant shall
defend, indemnify and hold harmless Landlord, from and against any claims,
demands, administrative orders, judicial orders, penalties, fines, liabilities,
settlements, damages, costs or expenses (including, without limitation, costs of
investigation of site conditions, any clean-up, remediation, removal or
restoration work, loss or restriction on use of rentable space or of any amenity
of the Demised Premises, reasonable attorneys' fees, court costs and litigation
expenses) of whatever kind or nature arising out of, or in any way related to
the use, storage, disposal, release, discharge, spill or emissions of any
hazardous waste.
(h) TERMINATION AUDIT. Approximately sixty (60) days prior to the
expiration of the Lease Term, Landlord, at Tenant's sole cost, shall cause an
environmental audit and physical assessment report (the "Environmental Audit")
to be prepared with respect to the Demised Premises by an independent, qualified
reputable engineer or consultant. If such Environmental Audit reveals that
Tenant, or any agent, contractor, employee or invitee of Tenant has caused there
to be present any Hazardous Materials in, on or about the Demised Premises or
the soil and ground water thereunder, then, Tenant shall, at its sole cost,
perform all remedial work required by appropriate governmental agencies.
Furthermore, if Tenant is unable to complete such remedial operations prior to
the Lease expiration or termination date, Landlord shall grant Tenant an access
easement for the purpose of Tenant conducting additional environmental testing
and/or remediation operations, at Tenant's expense. Upon notice to Tenant,
Landlord may elect that Tenant do either or a combination of both of the
following acts:
(i) Tenant may remain in exclusive possession of the affected portion
of the Demised Premises for the period of time that Tenant, acting diligently
and in good faith, determines to be reasonably necessary to perform
investigation and/or remediation to the extent required by governmental agencies
having jurisdiction over the Demised Premises. During such period of
possession, Tenant shall not use the Demised Premises for the purpose of
conducting business, it being understood and agreed that such possession shall
be for the sole purpose of performing investigation and/or remediation as set
forth above. Tenant shall pay Landlord as compensation a monthly amount equal
to the amount of Base Monthly Rent and Additional Rent paid under this Lease
immediately prior to termination or expiration of the Lease, payable in advance;
or
(ii) In the event that Landlord and Tenant reasonably determine that
the Demised Premises can be used by Landlord or a tenant in a commercially
reasonable manner, Tenant shall have access to the Demised Premises at no cost
for such period of time that Landlord and Tenant determine to be necessary to
perform investigations and/or remediation; in such event, Tenant shall attempt
to minimize interruptions of any business of Landlord or any tenant on the
Demised Premises.
(i) INDEMNIFICATION. Tenant shall indemnify, defend, protect and hold
harmless Landlord from and against all costs, expenses, liabilities, losses,
damages, injunctions, suits, fines, penalties, claims, and demands, including
reasonable attorneys' fees, arising out of any violation of or default in the
covenants of (x) this Section 7 and (y) Section 10(g) below. The provisions of
Sections 7(b), (c), (d), (e), (f), (g), (h) and (l) of this Lease, and the
provisions of Section 10(g) below, shall survive the expiration of the Lease
Term.
(j) MOVING AND DELIVERIES. No freight, furniture or other bulky matter of
any description shall be received into the Building or carried in the elevators,
except at times and by routes authorized by Landlord. Tenant shall give
Landlord at least forty-eight (48) hours telephonic notice prior to moving any
freight, furniture or other bulky material into or out of the Building. All
moving of furniture, material and equipment shall be under the direct control
and supervision of Landlord, who shall, however, not be responsible for any
damage to or charges for moving same. Tenant shall promptly remove from the
public areas within or adjacent to the Building any of Tenant's property
delivered or deposited there, and shall be responsible for any damage to the
Building or the Demised Premises caused by its moving and deliveries. The
foregoing provisions of this Section 7(j) shall not be applicable unless
Landlord has either subleased a portion of the Demised Premises from Tenant or
Landlord has recaptured a portion of the Demised Premises.
Page 14
(k) EXCESSIVE FLOOR LOAD. Tenant will not, without Landlord's prior
written approval, install in the Demised Premises any fixtures, equipment or
machinery that will place a load upon the floor exceeding the designed floor
load capacity. Notwithstanding the foregoing, Landlord shall not unreasonably
withhold, condition or delay its consent to any alteration required to increase
the floor load capacity of any floor of the Building to accommodate Tenant's
needs. Tenant shall be liable for all damage done to the Building by installing
or removing a safe or any other article of Tenant's office equipment, or
machinery or fixtures or other personal property or due to its being in the
Demised Premises. Landlord may repair any such damage at Tenant's expense, and
Tenant shall pay the cost therefor to Landlord upon demand, as Additional Rent.
(l) PLUMBING SYSTEM. Tenant shall not use any materials in the Demised
Premises or dispose of any materials in the drains, plumbing and pipes which
serve the Demised Premises and/or the Building (collectively, the "Plumbing
System"), which would in any manner harm the Plumbing System or any part
thereof. Tenant shall be liable for all damage done to the Plumbing System, to
the Building and/or to the surrounding environment which is caused by Tenant's
disposal of any materials in the Plumbing System.
(m) EXISTING HAZARDOUS WASTE. Landlord, at its sole cost and expense,
shall be responsible for the removal or encapsulation of Hazardous Materials
located in, on, around or under the Building or the Project prior to the date of
this Lease. Tenant shall have no obligation to investigate, remediate, clean
up, or remove any Hazardous Material which migrates onto the land on which the
Building is located, provided, however, if Tenant or Tenant's contractors,
agents or employees cause such hazardous waste to be located on any land which
neighbors, adjoins or is in the vicinity of the Building, and such Hazardous
Materials migrate onto the land on which the Building is located, then Tenant
shall be responsible for remediating and removing such hazardous waste.
8. RULES AND REGULATIONS. Tenant covenants on behalf of itself, its
employees, agents, contractors, licensees and invitees to comply with the rules
and regulations set forth in Exhibit "D", which is attached hereto and made a
part hereof (the "Rules and Regulations"). Landlord shall have the right, in
its sole discretion, to make reasonable additions and amendments to the Rules
and Regulations from time to time and Tenant covenants that Tenant, its
employees, agents, contractors, licensees and invitees will comply with
additions and amendments to the Rules and Regulations upon Landlord's provision
to Tenant of a written copy of the same. Any default by Tenant, or any other
party set forth above, of any of the provisions of the Rules and Regulations as
set forth on Exhibit "D" or as amended, from time to time, shall be considered
to be a default under the terms of this Lease. Nothing contained in this Lease
shall be construed to impose upon Landlord any duty or obligation to enforce the
Rules and Regulations, or any amendments or additions thereto, against any other
tenant, and Landlord shall have no liability to Tenant or any other party for
violations of the Rules and Regulations by any party whatsoever. If there is
any inconsistency between this Lease and the Rules and Regulations, the Lease
shall govern.
9. SUBLETTING AND ASSIGNMENT.
(a) CONSENT. Tenant will not sublet the Demised Premises or any part
thereof or transfer possession or occupancy thereof to any person, firm or
corporation, or transfer or assign this Lease, without the prior written consent
of Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding the foregoing, it shall not be unreasonable for
Landlord to withhold its consent on the basis that (i) the proposed assignee's
or subtenant's net worth and/or net income is not consistent with the
creditworthiness standards that are applied in evaluating proposed assignees and
proposed subtenants by owners of first class office buildings located in the
Rockville, Maryland vicinity, or (ii) the proposed assignee or subtenant is a
party by whom any suit or action could be defended on the grounds of sovereign
immunity, or (iii) the proposed assignee's or subtenant's proposed use of the
Demised Premises is not in keeping with the provisions of Section 1(a)12 of this
Lease, or (iv) in the event that the proposed assignee or sublessee will be
using the applicable portion of the Demised Premises for laboratory purposes,
such party does not have substantial experience in managing and operating a
laboratory facility which is similar to the laboratory facility that is then
located in the Demised Premises. Tenant shall not, without the prior written
consent of the Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed, grant any franchise, concession, license or permit
arrangement with respect to the Demised Premises or any portion thereof. No
subletting or assignment hereof shall be effected by operation of law unless
with the prior written consent of Landlord, to the extent that such consent is
otherwise required by the terms of this Lease. Despite the foregoing, Tenant
shall have no right to enter into a leasehold mortgage or any other type of
financing arrangement which would encumber the Lease without obtaining
Landlord's prior consent, which consent shall be withheld or granted by Landlord
in the exercise of its sole and absolute discretion. A sale, transfer,
assignment or other conveyance of a general partnership interest in Tenant, if
Tenant is a partnership or joint venture, or a transfer of more than a fifty
percent (50%) stock interest, if Tenant is a corporation, shall be an assignment
for purposes hereof.
(b) SUBSIDIARIES AND CORPORATE TRANSFERS. Notwithstanding anything to the
contrary contained in this Lease, Tenant (and any party to whom Tenant, in
accordance with the terms of this Lease has assigned its entire interest under
this Lease), may, upon thirty (30) days prior notice to Landlord, assign its
entire interest under this Lease or sublet all or any portion of the Demised
Premises to a wholly owned corporation or entity or controlled subsidiary or
parent of Tenant or to any successor to Tenant by purchase, merger,
consolidation or reorganization (hereinafter collectively referred to as
Page 15
"Corporate Transfer") without the consent of Landlord, provided (i) Tenant is
not then in default under this Lease; (ii) if such proposed Transferee is a
successor to Tenant by purchase, said proposed Transferee shall acquire all or
substantially all of the stock or assets of Tenant's business or, if such
proposed Transferee is a successor to Tenant by merger, consolidation or
reorganization, the continuing or surviving corporation shall own all or
substantially all of the assets of Tenant; and (iii) such proposed transferee
assumes all the obligations of Tenant hereunder. Tenant shall give Landlord
written notice at least thirty (30) days prior to the effective date of such
Corporate Transfer. As used herein, the term "controlled subsidiary" shall mean
a corporation the stock of which is at least fifty-one percent (51%) owned by
Tenant (in the case of a corporation whose stock is not publicly traded) or a
corporation the stock of which is at least twenty percent (20%) owned by Tenant
(in the case of a corporation whose stock is publicly traded). The sale or
transfer of stock of Tenant (or any successor) on any national stock exchange
(i.e., American Stock Exchange, New York Stock Exchange and NASDAQ, or any
successor to any of the foregoing) shall not be deemed an assignment of this
Lease. Notwithstanding anything in this Lease to the contrary, any assignment
or subletting shall (i) be on a form reasonably acceptable to Landlord and (ii)
shall be subject to the terms of this Lease. Tenant shall not modify, extend or
amend a sublease previously consented to by Landlord without obtaining
Landlord's consent thereto.
(c) ASSIGNMENT. In the event Tenant desires to assign this Lease, Tenant
shall give to Landlord written notice of Tenant's desire to do so, which notice
shall be accompanied by the "Required Information" (as hereinafter defined).
Within sixty (60) days of receipt of said notice and the Required Information,
Landlord shall have the right to terminate this Lease on a date to be agreed
upon by Landlord and Tenant. In the event that Landlord elects to so terminate
the Lease, then Landlord shall deliver to Tenant a notice of termination.
Tenant shall have the right, exercisable within ten (10) days after the date
that Landlord delivers such termination notice, to rescind Tenant's notice of
its desire to assign this Lease. In the event that Tenant timely delivers such
rescission notice, (i) Tenant shall be deemed to have withdrawn its notice of
its intent to assign the Lease, and (ii) Landlord shall have no right to
terminate this Lease on such occasion. Despite the foregoing, Landlord shall
have no right to terminate this Lease in connection with an assignment of this
Lease under Section 9(b) of this Lease. In the event of any subsequent
assignment of this Lease which is not governed by the provisions of
Section 9(b) of this Lease, the provisions of Section 9(c) of this Lease shall
be applicable to such assignment.
(d) SUBLETTING. In the event Tenant desires to sublet all or any part of
the Demised Premises, Tenant shall give to Landlord written notice of Tenant's
desire to do so, which notice shall be accompanied by the Required Information.
Within thirty (30) days of receipt of said notice and Required Information,
Landlord shall have the right (i) with Tenant's consent, to terminate this Lease
and to enter into a new lease with Tenant for that portion of the Demised
Premises Tenant desires to retain, upon terms to be mutually agreed upon; or
(ii) to sublease from Tenant at the same rental rate then being paid by Tenant
and subsequently to relet that portion of the Demised Premises that Tenant
desires to relinquish. If Landlord exercises its right to terminate this Lease
or to sublet a portion of the Demised Premises, Tenant agrees that Landlord
shall have access to the Demised Premises thirty (30) days prior to the
effective termination or sublease commencement date to show the same to
prospective tenants. Despite the foregoing, Landlord shall not have the right
to recapture any proposed space which Tenant desires to sublease unless the
rentable square footage of such space, when aggregated with the rentable square
footage that Tenant is then subleasing in the Building, would equal or exceed
fifty percent (50%) of the rentable square footage that Tenant is then leasing
in the Building. Despite the foregoing, Landlord shall have no right to
recapture from Tenant, or to sublease from Tenant, any portion of the Demised
Premises that is either being subleased by Tenant pursuant to the express
provisions of Section 9(b) of this Lease, or is being subleased by Tenant for a
term that (when aggregated with all renewal or extension options) does not
exceed three (3) years. In the event of any subsequent subletting of any
portion of the Demised Premises, such subletting shall be subject to the
provisions of Section 9(d) hereof.
(e) REQUIRED INFORMATION. If Tenant should desire to assign this Lease or
sublet the Demised Premises (or any part thereof), Tenant shall give Landlord
written notice no later than fifteen (15) days in advance of the proposed
effective date of such proposed assignment or sublease, which notice shall
specify the following information (such information shall be collectively
referred to as the "Required Information"): (i) the name, current address and
business of the proposed assignee or sublessee, (ii) the amount and location of
the space within the Demised Premises proposed to be so subleased, (iii) the
proposed effective date and duration of the assignment or subletting, and (iv)
the proposed rent and other consideration to be paid to Tenant by such assignee
or sublessee. Tenant also shall promptly supply Landlord with financial
statements and other information as Landlord may reasonably request to evaluate
the proposed assignment or sublease.
(f) FEES; DOCUMENTS. Tenant agrees to reimburse Landlord for reasonable
legal fees and any other reasonable expenses and costs incurred by Landlord in
connection with any proposed assignment or subletting, which costs and expenses
in no event shall exceed $1,000 for any proposed assignment or subletting.
Tenant shall deliver to Landlord copies of all documents executed in connection
with any proposed assignment or subletting, which documents shall be in form and
substance reasonably satisfactory to Landlord and which documents, (i) in the
case of a permitted assignment, shall require such assignee to assume
performance of all terms of this Lease on Tenant's part to be performed, and
(ii) in the case of permitted subletting, shall require such sublessee to comply
with all terms of this Lease on Tenant's part to be performed. No acceptance by
Landlord of any Base Monthly Rent or any other sum of money from any assignee,
sublessee or other category of transferee shall be deemed to constitute
Landlord's consent to any assignment, sublease, or transfer.
Page 16
(g) NO RELEASE. Any attempted assignment or sublease by Tenant in
violation of the terms and provisions of this Section 9 shall be void and shall
constitute a material breach of this Lease. In the event Landlord consents to
any assignment or sublease on one occasion, such consent shall not affect
Tenant's obligation to comply with the provisions of Section 9 of this Lease
with respect to any future assignment or sublease.
(h) TENANT LIABILITY. In the event of any subletting of all or any
portion of the Demised Premises or assignment of this Lease by Tenant, with or
without Landlord's consent, Tenant shall remain primarily liable to Landlord for
the payment of the rent stipulated herein and for the performance of all other
covenants and conditions contained herein.
(i) PROFIT. If any sublease or assignment (whether by operation of law or
otherwise, including without limitation an assignment pursuant to the provisions
of the Bankruptcy Code or any other insolvency law) provides that the subtenant
or assignee thereunder is to pay any amount in excess of the rental and other
charges due under this Lease, then whether such excess be in the form of an
increased monthly or annual rental, a lump sum payment, payment for the lease of
Tenant's fixtures, leasehold improvements, furniture and other personal
property, or any other form (and if the subleased or assigned space does not
constitute the entire Demised Premises, the existence of such excess shall be
determined on a pro-rata basis), Tenant shall pay to Landlord fifty percent
(50%) of any "Profit" (as defined below) applicable to the sublease or
assignment, which amount shall be paid by Tenant to Landlord as additional rent
upon such terms as shall be specified by Landlord and in no event later than ten
(10) days after any receipt thereof by Tenant. "Profit" shall be defined as the
difference between (i) any and all consideration received by Tenant in the
aggregate from any assignment of the Lease and/or subletting of the Demised
Premises, and (ii) the sum of (A) the rent and charges due to Landlord from
Tenant under the terms of this Lease, (B) Tenant's reasonable attorneys' fees
and brokerage costs in connection with such assignment or subletting, (C)
Tenant's actual and reasonable cost of performing alterations to the Demised
Premises in connection with such assignment or subletting, (D) the actual and
reasonable amount of any rent abatement that is granted in connection with such
assignment or subletting, (E) the actual and reasonable amount of improvement
allowance that is paid in connection with such assignment or subletting, and (F)
to the extent that leasehold improvements that were actually paid by Tenant with
respect to the premises in question exceed the "Improvements Allowance" (as
defined in Exhibit C) (and if the subleased or assigned space does not
constitute the entire Demised Premises, the existence of such excess shall be
determined on a pro-rata basis), the unamortized excess cost of such leasehold
improvements, which amortization shall be calculated in equal installments on a
monthly basis during the initial term of this Lease. Acceptance by Landlord of
any payments due under this Section shall not be deemed to constitute approval
by Landlord of any sublease or assignment, nor shall such acceptance waive any
rights of Landlord hereunder. Landlord shall have the right to inspect and
audit Tenant's books and records relating to any sublease or assignment.
Notwithstanding anything to the contrary in this Lease, this Section 9 shall not
be applicable to an assignment of the Lease (whether by operation of law or
otherwise) or a subletting of the Demised Premises by Tenant to a wholly-owned
subsidiary or a controlled subsidiary or parent; provided, however, in no event
shall Tenant enter into an assignment of this Lease or subletting of any portion
of the Demised Premises to a wholly-owned subsidiary or a controlled subsidiary
or parent as part of a "step transaction" for the purpose of avoiding or
circumventing the provisions of Section 9(i) of this Lease.
(j) In the event Tenant assigns this Lease to any party in accordance with
the terms of this Lease, (i) such assignee shall for purposes of this Lease, be
the "Tenant", and (ii) The Xxxxxx-Xxxxx Corporation (and any successor thereto)
shall remain fully liable for the performance of Tenant's obligations under this
Lease.
10. SERVICES AND UTILITIES.
(a) CHARGES. Tenant shall throughout the Lease Term, and any extension
thereof, be entirely responsible for the expenses of the business conducted in
the Demised Premises. Such expenses shall include, but are not limited to, all
costs and expenses paid or incurred by Tenant in connection with the ownership,
cleaning, management, and operation of its business conducted in the Building,
which costs shall, subject to the provisions of Section 11(b) of this Lease,
include, but not be limited to heating, cooling, and ventilating the Building,
including maintenance, repair of such mechanical equipment; water, gas and
electric consumption; janitorial service; insurance as hereinafter defined; and
all other utility costs and other costs as herein provided.
(b) INTERRUPTION OF SERVICES. Landlord shall have the right to cause an
interruption in services and/or utilities provided to the Building only in the
event that such interruption is reasonably necessary for Landlord to perform its
obligations under the terms of this Lease, and provided that (i) Landlord give
Tenant at least forty eight (48) hours' prior written notice of such
interruption, (ii) Tenant shall have the right to prescribe the time of day
during which Landlord may cause such interruption, (iii) such interruption shall
in no event continue for more than twelve (12) consecutive hours, and (iv)
Landlord shall not unreasonably interfere with Tenant's use and enjoyment of the
Demised Premises or with the conduct of Tenant's business. In no event shall
Landlord be liable to Tenant for any such interruption or failure in the supply
of any utilities to the Demised Premises. Despite the foregoing, in the event
that (i) as a result of Landlord's negligence or intentional misconduct the
services to be provided by Landlord under Section 10(a) of this Lease shall not
be furnished for more than five (5) consecutive days, and (ii) Tenant, in its
reasonable business judgment, determines that it is unable to use and occupy the
Demised Premises (or any part thereof) as a result thereof, then commencing on
the sixth (6th) day that such services are not being provided the Base Annual
Rent Tenant is obligated to pay hereunder shall xxxxx with respect to that
Page 17
part of the Demised Premises which Tenant does not use and occupy. Such
abatement shall immediately cease on the date that such services are restored.
In the event that any such failure to furnish such services is caused by
Tenant's acts or omissions, Tenant shall not be entitled to an abatement of Base
Annual Rent. In the event of a failure of Landlord to perform any repairs or
maintenance required to be performed by Landlord under this Lease [which failure
would cause an interruption in essential services being provided to the Demised
Premises (i.e., electricity, water, sewer, heating, ventilating and air
conditioning)], and if such failure is not cured by Landlord within a reasonable
period after Landlord is first given notice of such failure by Tenant, Tenant
may deliver to Landlord and to Landlord's lender(s) written notice stating that
Tenant intends to perform such repair or maintenance. Prior to Tenant
undertaking any action to cure or remedy such event or condition, Tenant shall
first allow Landlord and Landlord's lender(s) ten (10) business days following
receipt by Landlord and Landlord's lender(s) of such written notice to cure or
remedy the event or condition specified in Tenant's notice; provided, however,
that if such event or condition cannot be cured within the ten (10) day business
period, such period shall be extended for a reasonable additional time, so long
as Landlord or Landlord's lender(s) commence to cure such event or condition
within the ten (10) business day period and proceed diligently thereafter to
effect such cure. If Landlord or Landlord's lender(s) fail to cure or remedy
such event or condition within such time period, then Tenant may cure or remedy
such event or condition and deliver an invoice to Landlord for the reasonable
and actual out-of-pocket costs and expenses incurred by Tenant therefor.
Landlord shall pay to Tenant the amount of such invoice within thirty (30) days
after delivery by Tenant, and the amount of such invoice, when paid by Landlord,
shall be included within operating expenses. In the event of an interruption in
utility services that are being provided to the Demised Premises, upon Tenant's
request, Landlord shall, at Tenant's cost, cooperate with Tenant to attempt to
cause such utility company to provide such utility services to the Demised
Premises.
(c) INTENTIONALLY DELETED.
(d) SEPARATE METERING. Tenant shall cause the utilities to be supplied to
the Building to be separately metered to record Tenant's consumption of
electricity and other utilities. Tenant agrees to pay the costs of all
utilities directly to the utility companies providing services to Tenant
promptly upon demand therefor.
(e) EXCESSIVE HEAT GENERATION. Landlord shall not be liable for any
failure to maintain comfortable atmospheric conditions in all or any portion of
the Demised Premises, due to heat generated by any equipment or machinery
installed by Tenant (with or without Landlord's consent) that exceeds generally
accepted engineering design practices for normal office purposes. If Tenant
desires additional cooling to offset excessive heat generated by such equipment
or machinery, Tenant shall pay for auxiliary cooling equipment and its operating
costs, including without limitation electricity, gas, oil and water, or for
excess electrical consumption by the existing cooling system, as appropriate.
(f) INTENTIONALLY DELETED.
(g) LABORATORY WASTE. Tenant shall comply, at its sole cost and expense,
with all orders, requirements and conditions now or hereafter imposed by any
ordinances, laws, orders and/or regulations (hereinafter collectively called
"regulations") of any governmental body having jurisdiction over the Demised
Premises or the Building, whether required of Landlord or otherwise, regarding
the collection, sorting, separation and recycling of waste products, garbage,
chemicals, refuse and trash (hereinafter collectively called "waste products"),
including, but not limited to, the separation of such waste products into
receptacles reasonably approved by Landlord and the removal of such receptacles
in accordance with any collection schedules prescribed by such regulations.
Notwithstanding anything herein to the contrary, (i) Landlord shall have no
obligation to accept from Tenant any waste products that are generated in
connection with the use of the Demised Premises for laboratory purposes, and
(ii) Tenant shall arrange for laboratory waste product collection, at Tenant's
sole cost and expense, utilizing a contractor reasonably satisfactory to
Landlord who is federally licensed, which waste product collection shall be in
accordance with all applicable governmental laws, codes, rules, regulations,
orders and statutes. Tenant shall pay all costs, expenses, fines, penalties
and/or damages that may be imposed on Landlord or Tenant by reason of Tenant's
failure to comply with any such regulations. Tenant shall maintain at the
Demised Premises copies of all bills of lading, transportation manifests,
disposal certificates and other evidence of disposal of such waste products in
accordance with all applicable governmental laws, rules, codes, orders and
regulations and shall provide Landlord with a copy of same upon Landlord's
demand. Landlord shall permit Tenant to maintain an appropriate container for
laboratory waste and other hazardous materials near the Loading Dock area, which
container shall be stored in a locked and secure area. Tenant shall maintain
such container in accordance with all applicable laws and regulations.
(h) PEST CONTROL. On or before August 1, 1998, Landlord, at its sole cost
and expense, shall cause a pest control company to initially service the
Building. After such initial servicing of the Building, Tenant shall be
obligated to provide such services with respect to the interior of the Demised
Premises in accordance with the terms of this Lease, and Landlord shall be
obligated to provide such services with respect to the exterior common areas of
the Building.
11. MAINTENANCE AND REPAIRS.
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(a) TENANT'S RESPONSIBILITY. Subject to the provisions of Section 11(b)
below, Tenant shall be responsible for the full cost of all maintenance and
repair of the Building and Building systems (including, without limitation, the
mechanical, electrical, plumbing, life safety, and heating, ventilating and air
conditioning system), including the doors, interior glass, floors, interior
walls, ceilings, and equipment and fixtures located in the Building and any
pipes, wires, and conduits located in or traversing the Building which serve the
Building. All repairs and maintenance required to be performed by Tenant shall
be made or performed as soon as reasonably practicable upon the occurrence of
the necessity therefor, and shall be made or performed in a first class manner,
using first class materials, by a contractor approved by Landlord and bonded
unless waived by Landlord, and shall be made or performed in accordance with (i)
all laws and all applicable governmental codes and requirements, and (ii)
insurance requirements. Tenant, at its sole expense, will throughout the term
of this Lease obtain and keep in force a maintenance contract with a qualified
service company to regularly inspect and perform maintenance services to the (i)
elevators that serve the Building, and (ii) the heating, ventilating and air
conditioning system that serves the Building. Tenant shall furnish Landlord
with a copy of said maintenance contract(s), and of renewals or replacements
thereof. Tenant shall also be responsible for causing its laboratory waste (but
not ordinary trash) to be removed from the Demised Premises and disposed of in
accordance with all applicable laws and regulations. If Tenant refuses after
written notice from Landlord to commence and complete repairs or maintenance
necessary to satisfy the provisions of this Section, the Landlord may, but shall
not be required to, make and complete said repairs or maintenance and Tenant
shall pay the cost therefor (including overhead) to Landlord upon demand, as
Additional Rent. Tenant shall perform its obligations under Section 11(a) of
this Lease, in a first class manner which is consistent with how other buildings
that are located in Rockville, Maryland, and which are comparable to the
Building, are maintained and repaired.
(b) LANDLORD'S RESPONSIBILITY. Landlord shall maintain the foundation,
roof and exterior walls of the Building and the exterior common areas (i.e.,
parking lot, landscaping, sidewalks, and exterior lighting) in good condition
and repair, and shall promptly replace all exterior glass in the event of
breakage. In addition, Landlord shall be responsible for collection and
disposal of Tenant's trash (excluding laboratory waste and hazardous materials),
pest control with respect to the exterior of the Project, and snow and ice
removal. Such maintenance and services shall be performed in a first class
manner which is consistent with how owners of other buildings that are located
in Rockville, Maryland, and which are comparable to the Building, perform such
maintenance. Subject to the provisions of this Section 11(b), Landlord, at its
sole cost and expense (and not as an operating expense) shall be obligated to
replace (i) any broken exterior glass windows, which shall include both the
inner and exterior pane (but not any interior glass, which interior glass shall
be Tenant's obligation to maintain, repair and replace), and (ii) the base
Building elevators (excluding any elevator that Tenant installs in the Building)
and the base Building chillers (excluding any heating, ventilating or air
conditioning equipment or systems that Tenant installs in the Building) to the
extent that the same cannot be repaired on a commercially reasonable basis
(i.e., it would be commercially reasonable to replace rather than expend the
funds to repair such item). In the event any such replacement is required as a
result of Tenant's willful misconduct, or as a result of Tenant's failure to
maintain any such elevator or chiller in accordance with how owners of other
first-class buildings that are located in Rockville, Maryland maintain elevators
and chillers, then Tenant, at Tenant's sole cost and expense, shall be obligated
to perform such replacement. In the event that Tenant or any agent, employee or
contractor of Tenant breaks any exterior glass window, then Tenant, at Tenant's
sole cost, shall be responsible for replacing such exterior glass window.
(c) ADA NOTIFICATION. Within twenty (20) days after receipt, Tenant or
Landlord, as the case may be, shall advise the other party in writing, and
provide copies of (as applicable) any notices alleging violation of the ADA or
any environmental law relating to any portion of the Building or of the Demised
Premises, any claims made or threatened in writing regarding noncompliance with
the ADA or such environmental law and relating to any portion of the Building or
of the Demised Premises, or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with the ADA or
environmental law and relating to any portion of the Building or of the Demised
Premises.
(d) MAINTENANCE PROGRAM AND CONTRACTS. Tenant shall establish, on an
annual basis, and implement a cleaning, maintenance and repair program for the
Building, which program shall be subject to Landlord's reasonable approval on an
annual basis. Tenant shall enter into and furnish to Landlord within sixty (60)
days after the date of this Lease, and at least thirty (30) days prior to the
commencement of each Lease Year thereafter, the following: (i) a heating,
ventilating and air conditioning contract which covers all heating, ventilating
and air conditioning equipment and systems which serve the Building, including,
without limitation, the chillers, and all supplemental equipment and systems
which may be installed by Tenant in accordance with the terms of this Lease;
(ii) an elevator contract which covers all elevators that are located in the
Building, including any elevator that may be installed by Tenant in accordance
with the terms of this Lease; (iii) an electrical preventative maintenance
contract which includes the switch gear; (iv) a fire alarm and life safety
system contract; (v) a pest control contract; and (vi) such other maintenance
and preventative contracts with respect to the Building as Landlord may, from
time to time, reasonably require. All such contracts, and the contractors who
are performing the same, shall be subject to Landlord's prior written approval,
which approval shall not be unreasonably withheld.
12. ALTERATIONS.
(a) LANDLORD'S CONSENT. Tenant will not make any alterations,
installations, changes, replacements, additions or improvements, structural or
otherwise (collectively, "Alterations") in or to the Demised Premises or any
part thereof, without
Page 19
the prior written consent of Landlord. Despite the foregoing, Tenant shall be
permitted to make cosmetic changes to the interior (i.e., painting and
carpeting) of the Demised Premises without obtaining Landlord's consent,
provided the same do not affect the structure, the Building systems or the
exterior of the Building. Subject to the provisions of Section 12(d) and
Section 16 of this Lease, all Alterations made to, or installed by or for Tenant
in, the Demised Premises shall be and remain Landlord's property (excluding case
work, furniture, personal property, telephone and telecommunications systems and
equipment, computer systems and equipment, fire suppression equipment,
laboratory equipment, moveable trade fixtures and all other items of Tenant's
equipment, whether or not affixed to the Building) and shall not be removed
without Landlord's written consent. Any construction up-gradings required by
any governmental authority as a result of said Alterations, either in the
Demised Premises or in any other part of the Building, will be paid for by
Tenant. Tenant shall not install any equipment of any nature whatsoever which
may adversely affect the structure of the Building, or which may necessitate any
changes, replacements or additions to the water system, plumbing system, heating
system, air-conditioning system or the electrical system of the Demised
Premises, without the prior written consent of Landlord, which consent shall not
be unreasonably withheld, conditioned or delayed. Notwithstanding anything
herein to the contrary, Tenant shall not make any Alterations to the exterior of
the Building without obtaining Landlord's prior written consent, which consent
may be withheld in the exercise of Landlord's sole and absolute discretion. In
the event that Landlord grants its consent to any Alterations, Tenant shall pay
all costs to make such changes, replacements or additions. Upon completion of
any such Alterations, Tenant shall deliver to Landlord as-built plans which
reflect such Alterations, which as-built plans shall be on "CAD". Any approved
Alterations shall be made by licensed and bonded contractors and mechanics
approved by Landlord, in accordance with (i) the applicable laws and ordinances
of any public authority having jurisdiction over the Building, (ii) the building
code and zoning regulations of any such authority, (iii) plans and
specifications that have been approved by Landlord in writing, and (iv) any
rules and regulations established from time to time by the Underwriters
Association of the local area. Prior to commencing construction of any approved
Alterations, Tenant shall obtain any necessary building permits and shall
deliver copies of such permits to Landlord. Tenant shall pay to Landlord, upon
ten (10) days notice, as Additional Rent, Landlord's reasonable and actual
out-of-pocket costs of reviewing the proposed Alteration.
(b) LIENS. In making any approved Alterations, Tenant shall promptly pay
all contractors, materialmen and laborers, so as to minimize the possibility of
a lien attaching to the Building, or attaching to any portion of the real
property on which said Building is located. Should any such lien be filed,
Tenant shall bond against or discharge the same within thirty (30) days after
the said filing. If Tenant shall fail to bond against or discharge any such
lien within such thirty (30) day period, then Landlord may, at its option,
discharge such lien at Tenant's expense in which event Tenant shall reimburse
Landlord for all costs (including legal expenses) of discharging such lien upon
demand, as Additional Rent.
(c) INDEMNIFICATION. Tenant will defend, indemnify and hold Landlord
harmless from and against any and all expenses, liens, claims or damages,
including attorneys' fees, for injury to person or property which may or might
arise, directly or indirectly, by reason of the making of any Alterations. If
any Alteration requiring Landlord's consent is effected without the prior
written consent of Landlord, Landlord may remove or correct the same and Tenant
shall be liable for any and all expenses of this work. All rights given to
Landlord herein shall be in addition to any other right or remedy of Landlord
contained in this Lease.
(d) REMOVAL OF ALTERATIONS. In the event that Tenant desires to know
whether Landlord will require Tenant to remove any Alterations from the Demised
Premises at the expiration of the Lease Term, then, at the time Tenant delivers
a written request to Landlord which requests Landlord's approval of such
Alterations, Tenant shall have the right to deliver to Landlord a notice which
specifically requests that Landlord advise Tenant whether Landlord will require
Tenant to remove such proposed Alterations at the expiration of the Lease Term.
In the event that Landlord receives such a written request, and in the event
that Landlord is willing to grant its consent to such Alterations, Landlord
shall advise Tenant, in writing, at the time the Alterations are approved,
whether or not Tenant will be required to remove the same at the expiration of
the Lease Term.
13. SIGNS AND ADVERTISEMENTS.
(a) Except as provided in the last sentence of this Section 13(a) and
except as provided in Sections 13(b) and 15(c) below, no sign, advertisement or
notice shall be inscribed, painted, affixed or displayed on any part of the
outside or the inside of the Building, or inside of the Demised Premises where
it may be visible from outside or from the public areas of the Building, except
with Landlord's prior written consent, and then only in such location, number,
size, color and style (i.e., Building standard lettering) as is authorized by
Landlord. If any such sign, advertisement or notice is exhibited without first
obtaining Landlord's written consent, Landlord shall have the right to remove
same, and Tenant shall be liable for any and all expenses incurred by Landlord
in connection with said removal. Tenant may install signage on the interior of
the Demised Premises without obtaining Landlord's consent, provided such signage
is not visible from the exterior of the Building.
(b) Subject to the provisions of this Section 13(b), Tenant, at Tenant's
sole cost and expense, shall have the right to erect and maintain its company
name and/or logo: (i) on the roof of the Building (the "Roof Sign"), and (ii)
on a monument sign (the "Monument Sign"). The size, location, color, design,
method of installation, and method of illumination (if applicable) of the Roof
Sign and the Monument Sign shall be subject to: (i) Landlord's prior written
consent,
Page 20
and (ii) all applicable governmental rules, codes, orders, laws, and statutes
(collectively, the "Governmental Laws"). Tenant, at Tenant's sole cost and
expense, shall maintain the Roof Sign and the Monument Sign in a first-class
manner in accordance with the Governmental Laws.
14. COMMON AREAS.
(a) COMMON AREAS DEFINED. In this Lease, "common areas" means all areas,
facilities and improvements provided, from time to time, in the Building for the
mutual convenience and use of tenants or other occupants of the Building, their
respective agents, employees, and invitees and shall include, if provided, but
shall not be limited to, the lobbies and hallways, the public restrooms,
stairwells, the parking areas and facilities, access roads, driveways, retaining
walls, sidewalks, walkways, landscaped areas, and exterior lighting facilities.
(b) LANDLORD'S CONTROL. Landlord shall, as between Landlord and Tenant,
at all times during the term of the Lease have the sole and exclusive control,
management and direction of the exterior common areas, and may at any time and
from time to time during the term exclude and restrain any person from use or
occupancy thereof, excepting, however, Tenant and other tenants of Landlord and
bona fide invitees of either who make use of said areas in accordance with the
rules and regulations established by Landlord from time to time with respect
thereto. Subject to Tenant's Parking Rights, the rights of Tenant in and to the
common areas shall at all times be subject to the rights of others to use the
same in common with Tenant, and it shall be the duty of Tenant to keep all of
said areas free and clear of any obstructions created or permitted by Tenant or
resulting from Tenant's operation. Landlord may at any time and from time to
time close all or any portion of the common areas to make repairs or changes or
to such extent as may, in the opinion of Landlord, be necessary to prevent a
dedication thereof or the accrual of any rights to any person or to the public
therein, to close temporarily any or all portions of the said areas to
discourage non-customer parking, and to do and perform such other acts in and to
said areas as, in the exercise of good business judgment, Landlord shall
determine to be advisable with a view to the improvement of the convenience and
use thereof by tenants, their employees, agents, and invitees. In exercising
its rights under this Section 11(b), Landlord shall use reasonable efforts to
minimize any disruption of Tenant's business.
(c) CHANGES AND ADDITIONS. Landlord reserves the right at any time and
from time to time, as often as Landlord deems desirable, without incurring any
liability to Tenant or otherwise affecting Tenant's obligations under this
Lease, make changes, alterations, additions, improvements, repairs, relocations
or replacements in or to the Building and the fixtures and equipment thereof, as
well as in or to the street entrances, halls, passages, stairways and other
common facilities thereof, and, upon prior notice to Tenant, to change the name
by which the Building is commonly known and/or the Building's address. Landlord
may from time to time, after obtaining Tenant's prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed, install,
use, maintain, repair and replace pipes, ducts, conduits, wires and appurtenant
meters and equipment for service to other parts of the Building, above the
ceiling surfaces, below the floor surfaces, within the walls and in the central
core areas, and to relocate any pipes, ducts, conduits, wires and appurtenant
meters and equipment included in the Demised Premises which are located in the
Demised Premises or located elsewhere outside the Demised Premises, and to
expand and/or build additional stories on the Building. Despite the foregoing,
subject to all Applicable Laws, and subject to the provisions of Section 21
below, in exercising Landlord's rights under this Section 14(c), (i) Landlord
shall, in good faith, use reasonable efforts to minimize any interference with
the operations of Tenant's business at the Demised Premises, and (ii) in no
event shall Landlord reduce the number of "Parking Rights" (as defined in
Section 15(a) below). Nothing contained herein shall be deemed to relieve
Tenant of any duty, obligation or liability with respect to making any repair or
improvement or complying with any law, order or requirement of any government or
other authority and nothing contained herein shall be deemed or construed to
impose upon Landlord any obligation, responsibility or liability whatsoever, for
the care, supervision or repair of the Building, or any part thereof, other than
as expressly provided in this Lease.
15. PARKING.
(a) PARKING RIGHTS. Landlord shall make available (or cause to be made
available) to Tenant at all times during the Lease Term three and seven-tenths
(3.7) monthly parking contracts for every one thousand (1,000) square feet of
rentable area of the Demised Premises to park an automobile (collectively, the
"Parking Rights") in the parking facilities for the Building (the "Parking
Facilities"). Subject to the provisions of Section 15(c) below, Parking Rights
shall (i) be assigned in a manner reasonably acceptable to Tenant, and (ii) be
on a self-park basis.
(b) INTENTIONALLY DELETED.
(c) TENANT'S PARKING AREA. The parties intend that the parking spaces
that are designated as "Tenant's Parking Area" on Exhibit I hereto (the
"Tenant's Parking Area") shall be designated for the use of Tenant and its
invitees, employees and contractors. It is expressly understood that Landlord
and its employees and contractors may park their vehicles in the Tenant's
Parking Area during those periods of time that Landlord or its employees and
contractors are performing their obligations under this Lease, provided,
however, that in no event shall Landlord and its employees and contractors
simultaneously use an unreasonably excessive number of parking spots in Tenant's
Parking Area. Subject to the following
Page 21
provisions of this Section 15(c), Tenant, at Tenant's sole cost and expense,
shall have the right to (i) designate a reasonable number of the parking spaces
that are located in Tenant's Parking Area as being reserved, and (ii) erect
signage which indicates such parking spaces as being reserved. The size,
location, color, design, content and method of installation of such signage
shall be subject to (i) Landlord's prior written consent, and (ii) the
Governmental Laws. Tenant, at Tenant's sole cost and expense, shall maintain
such signage in a first-class manner in accordance with the Governmental Laws.
Notwithstanding anything in this Lease to the contrary, Landlord shall have no
obligation to monitor or police the parking of vehicles within the Tenant's
Parking Area.
16. SURRENDER AND INSPECTION.
(a) SURRENDER. Subject to the provisions of Sections 12(d) and 16(e) of
this Lease, upon the Expiration Date or other termination of the term of this
Lease, Tenant shall quit and surrender the Demised Premises to the Landlord in
as good order and condition as when received, ordinary wear and tear excepted,
and Tenant shall remove all of its case work, fixtures, machinery, laboratory
equipment and other personal property from the Demised Premises by the
Expiration Date or other termination of this Lease. Tenant's obligation to
observe or perform this covenant shall survive the expiration or other
termination of this Lease. To the extent any machinery or laboratory equipment
is affixed to the Building, Tenant agrees to repair any damage to the Building
caused by the removal of such machinery and equipment.
(b) INSPECTION. Tenant shall have the right to be present at time of
final inspection of the Demised Premises to determine if any damages were done
thereto, if Tenant notifies Landlord by certified mail of its intention to move,
date of moving and new address. The notice of Tenant's desire to be present at
the final inspection of the Demised Premises shall be given at least fifteen
(15) days prior to the date of moving. Upon receipt of such notice, Landlord
shall notify Tenant of time and date when the Demised Premises are to be
inspected. The inspection shall occur within five (5) days before or five (5)
days after Tenant's date of moving, said inspection date to be designated by
Landlord. Tenant shall be deemed to have been advised of its rights under this
Section by execution of this Lease.
(c) ALTERATIONS. Subject to the provisions of Sections 12(d) and 16(e) of
this Lease, (i) all Alterations, including, without limitation, wall-to-wall
carpet, blinds, draperies and drapery accessories, to or within the Demised
Premises (whether made with or without Landlord's consent), shall remain upon
the Demised Premises and be surrendered with the Demised Premises at the
expiration of the Lease Term, and (ii) should Landlord elect that any
Alterations made by Tenant upon the Demised Premises be removed at the
expiration of the Lease Term, the same shall be removed by Tenant, at Tenant's
sole cost and expense. Notwithstanding the foregoing, Tenant shall have the
right to remove upon expiration of the Lease Term case work, furniture, personal
property, telephone and telecommunications systems and equipment, computer
systems and equipment, fire suppression equipment, laboratory equipment,
moveable trade fixtures and all other items of Tenant's equipment, whether or
not affixed to the Building. To the extent that, upon expiration of the Lease
Term, Tenant does not remove Alterations which it is obligated to remove,
Landlord shall have the right to cause same to be removed at Tenant's sole cost
and expense. Tenant agrees to reimburse Landlord for the cost of such removal.
(d) FIXTURES AND PERSONAL PROPERTY REMAINING. If Tenant does not remove
Tenant's furniture, equipment, machinery, trade fixtures, floor coverings and
all other items of personal property of every kind and description from the
Demised Premises prior to the Expiration Date, then Tenant shall be conclusively
presumed to have conveyed the same to Landlord under this Lease as a xxxx of
sale without further payment or credit by Landlord to Tenant.
(e) INITIAL IMPROVEMENTS . Notwithstanding anything herein to the
contrary, Tenant shall have no obligation to remove the following improvements
and/or Alterations that are being performed to the Building as part of Tenant's
Work: (i) the elevator that is being installed by Tenant in the Building; (ii)
extra electrical capacity that is being added to the Building; (iii) the two (2)
chillers (and two (2) air handler units) that are being installed on the roof,
provided each such chiller is independently capable of providing heating,
ventilating and air conditioning for the entire fourth (4th) floor of the
Building, for use as general office purposes; (iv) back-up generator; and (v)
fiber optic cable.
17. ACCESS.
(a) ACCESS TO BUILDING. Tenant shall have access to the Building
twenty-four (24) hours per day, seven (7) days per week, by means of a key or an
electronic controlled access system, which system shall be installed by Tenant.
(b) LANDLORD'S ACCESS TO DEMISED PREMISES. Upon reasonable prior notice,
Landlord, its agents, employees and contractors shall have the right to enter
the Demised Premises at all reasonable times (a) to make inspections or to make
repairs to the Demised Premises or other premises as Landlord may deem
necessary; (b) to exhibit the Demised Premises to prospective tenants during the
last twelve (12) months of the Lease Term; and (c) for any purpose whatsoever
relating to the safety, protection or preservation of the Building. To the
extent that any such entry is made in a situation that is not an emergency, at
Tenant's option, Tenant shall have the right to provide a representative of
Tenant to accompany Landlord in connection with any such entry. Landlord shall
use reasonable efforts to minimize interference to Tenant's business when making
repairs. In the event of an emergency, Landlord or its designees shall be
permitted to enter the Demised Premises
Page 22
unaccompanied and without notice; provided that Landlord shall have, prior to
such entry, used reasonably diligent efforts under the circumstances to have a
Tenant representative accompany Landlord or its designee, Landlord hereby
acknowledging that Tenant's use of the Demised Premises includes the use of the
Demised Premises for laboratory purposes. Landlord shall at all times retain a
key with which to unlock all of the doors in the Demised Premises. If an
emergency necessitates immediate access to the Demised Premises, Landlord may
use whatever force is necessary to enter the Demised Premises and any such entry
to the Demised Premises shall not constitute a forcible or unlawful entry to the
Demised Premises, an unlawful detainer of the Demised Premises, or an eviction
of Tenant from the Demised Premises, or any portion thereof. Any access by
Landlord or its agents and invitees hereunder (excluding access in the event of
an emergency) shall be subject to compliance with such reasonable
confidentiality and security procedures as are reasonably imposed on Tenant's
business operations and Tenant's standard operating procedures. Landlord
reserves the right, after consultation with Tenant, to stop service of a
Building system when necessary by reason of accident or emergency.
(c) RESTRICTED ACCESS. No additional locks, other devices or systems,
including without limitation alarm systems, which would restrict access to the
Building shall be placed upon any doors without the prior written consent of
Landlord.
(d) ACCESS SYSTEM CREDIT. Landlord shall provide Tenant with an allowance
of Thirteen Thousand and 00/100 Dollars ($13,000.00) (the "Access System
Allowance") toward the cost of installing an access system for the Building.
Despite the foregoing, subject to the terms of the sentence which immediately
follows this sentence, in the event the cost of the access system that is
installed by Tenant exceeds the amount of the Access System Allowance, then
Tenant shall bear the entire amount of such excess cost. Landlord, at its cost,
shall install walls and entry doors between the basement service corridor and
the elevator lobby.
18. LIABILITY.
(a) PERSONAL PROPERTY. All personal property of Tenant in the Demised
Premises or in the Building shall be at the sole risk of Tenant. Landlord and
its agents shall not be liable for any damage thereto, unless such damage is
directly attributable to the willful or negligent acts of Landlord, its agents
or employees. Landlord and its agents shall not be liable for any accident or
damage to property of Tenant resulting from the use or operation of elevators or
of the heating, cooling, electrical or plumbing apparatus, unless caused by and
due to the willful or negligent acts of Landlord, its agents or employees.
Landlord shall not, in any event, be liable for damages to property resulting
from water, steam or other causes. Tenant hereby expressly releases Landlord
and its agents from any liability incurred or claimed by reason of damage to
Tenant's property.
(b) TENANT'S LIABILITY. Any and all injury, breakage or damage of any
type whatsoever to the Demised Premises or to other portions of the Building,
arising from any act or omission of Tenant or its agents, employees, licensees,
invitees or contractors, shall be repaired by Landlord at the sole expense of
Tenant. Tenant shall reimburse Landlord for the costs such repairs within five
(5) business days of receipt of written notice from Landlord of such costs.
This provision shall be construed as an additional remedy granted to Landlord
and not in limitation of any other rights and remedies which Landlord may have
in said circumstances. Tenant shall reimburse Landlord for all expenses,
damages or fines, incurred or suffered by Landlord by reason of any breach,
violation or nonperformance by Tenant, or its agents, servants, or employees, of
any covenant or provision of this Lease or the Rules and Regulations promulgated
by Landlord hereunder from time to time, or by reason of damage to persons or
property caused by moving property of or for Tenant in or out of the Building,
or by the installation or removal of furniture or other property of or for
Tenant, or by reason of or arising out of the carelessness, negligence or
improper conduct of Tenant, or its agents, servants, employees, invitees or
licensees.
(c) CRIMINAL ACTS OF THIRD PARTIES. Landlord shall not be liable in any
manner to Tenant, its agents, employees, licensees or invitees for any injury or
damage to Tenant, Tenant's agents, employees, licensees or invitees or their
property caused by the criminal or intentional misconduct of third parties. All
claims against Landlord for any such damage or injury are hereby expressly
waived by Tenant, and Tenant hereby agrees to hold harmless and indemnify
Landlord from all such damages and the expense of defending all claims made by
Tenant's agents, contractors, employees, licensees or invitees arising out of
such acts.
(d) TENANT'S INDEMNITY. Tenant shall indemnify Landlord, Landlord's
Rental Agent, and their respective agents and employees and save them harmless
from and against any and all claims, actions, damages, liabilities and expense
in connection with loss of life, personal injury and/or damage to property
arising from or out of any occurrence in, upon or at the Demised Premises, or
the occupancy or use by Tenant of the Demised Premises or any part thereof, or
occasioned wholly or in part by any act or omission of the Tenant, its agents,
contractors, employees, invitees or licensees. In the event that Landlord,
Landlord's Rental Agent, or their respective agents or employees shall, without
fault on its or their part, be made a party to any litigation commenced by or
against Tenant, then Tenant shall protect and hold the same harmless and shall
pay all costs, expenses and reasonable attorneys' fees incurred or paid in
connection with such litigation.
Page 23
(e) LANDLORD'S INDEMNITY. Landlord hereby agrees to indemnify and hold
Tenant harmless from and against any cost, damage, claim, liability or expense
(including reasonable attorneys' fees) incurred by or claimed against Tenant as
a result of, or arising from, the negligence or willful misconduct of Landlord,
its employees and agents, and not resulting from the negligence or willful
misconduct of Tenant and its agents, officers, directors and employees; provided
however that, in no event shall Landlord be liable for any punitive or
consequential damages suffered by Tenant as a result of any act or omission by
Landlord.
(f) SURVIVAL. The provisions of Section 18 shall survive the expiration
or sooner termination of this Lease.
19. INSURANCE.
(a) [Intentionally deleted]
(b) COVERAGES. Tenant shall have issued, pay the premiums therefor, and
maintain in full force and effect during the Lease Term:
(i) COMMERCIAL GENERAL LIABILITY. A commercial general liability
insurance policy or policies protecting the Landlord and Tenant in the amount of
(x) Five Million and No/100 Dollars ($5,000,000.00) combined, single limit
coverage for bodily injury or property damage, which amount may be increased
from time to time by the Landlord in its reasonable determination, and (y) Five
Hundred Thousand and 00/100 Dollars ($500,000.00) fire legal liability coverage,
which amount may be increased from time to time by Landlord in its reasonable
discretion;
(ii) BROAD FORM PROPERTY. Broad form property insurance, including
theft, vandalism and malicious mischief, written at replacement cost value and
with replacement cost endorsement, covering all leasehold improvements installed
in the Demised Premises by Tenant or at Tenant's request and all of Tenant's
personal property in the Demised Premises (including, without limitation,
inventory, trade fixtures, floor coverings, furniture and other property
removable by Tenant under the provisions of this Lease);
(iii) WORKERS' COMPENSATION. If and to the extent required by law,
workers' compensation and employer's liability or similar insurance in form and
amounts required by law; and
(iv) ADDITIONAL INSURANCE. Such additional insurance as any mortgagee
of the Building may require.
(c) POLICY REQUIREMENTS. All insurance required of Tenant under this
Lease shall be issued by insurance companies authorized to do business in the
jurisdiction where the Building is located. Such companies shall have a
policyholder rating of at least "A" and be assigned a financial size category of
at least "Class XII" as rated in most recent edition of "Best's Key Rating
Guide" for insurance companies. The insurance required of Tenant under Section
19(a)(i) hereof shall insure performance by Tenant of the indemnity provisions
of Section 18 hereof and shall contain an assumed contractual liability
endorsement that refers expressly to this Lease. All insurance required of
Tenant under this Lease shall: (i) be written as primary policy coverage and
non-contributing with respect to any coverage which Landlord may carry (it being
understood and agreed that any insurance that Landlord may carry shall be excess
insurance); (ii) name Landlord, Landlord's Rental Agent and any mortgagee of the
Building as additional insureds, as their respective interests may appear
(except with respect to workers' compensation insurance), and (iii) contain an
endorsement for cross liability and severability of interests. Each policy
shall contain an endorsement requiring thirty (30) days' written notice from the
insurance company to Landlord before cancellation or any change in the coverage,
scope or amount of any policy. Each policy, or a certificate showing it is in
effect, together with evidence of payment of premiums, shall be deposited with
Landlord at the commencement of the Lease Term, and renewal certificates or
copies of renewal policies shall be delivered to Landlord at least thirty (30)
days prior to the expiration date of any policy.
(d) NO LIMITATION OF LIABILITY. Neither the issuance of any insurance
policy required under this Lease nor the minimum limits specified herein shall
be deemed to limit or restrict in any way Tenant's liability arising under or
out of this Lease.
(e) NOTICE OF FIRE AND ACCIDENT. Tenant shall give Landlord immediate
notice in case of fire, theft, or accidents in the Demised Premises, and in case
of fire, theft or accidents in the Building if involving Tenant, its agents,
employees or invitees.
(f) WAIVER OF SUBROGATION. Landlord and Tenant mutually covenant and
agree that each party, in connection with any all-risk property insurance
policies required to be furnished in accordance with the terms and conditions of
this Lease, or in connection with any all-risk property insurance policies which
they obtain insuring such insurable interest as Landlord or Tenant may have in
its own properties, whether personal or real, shall expressly waive any right of
subrogation on the part of the insurer against the Landlord (and any mortgagee
requested by Landlord) or Tenant as the same may be applicable, which right to
the extent not prohibited or violative of any such policy is hereby expressly
waived, and Landlord
Page 24
and Tenant each mutually waive all right of recovery against each other, their
agents, or employees for any loss, damage or injury of any nature whatsoever to
property for which either party is required by this Lease to carry insurance.
(g) LANDLORD'S INSURANCE. Landlord shall maintain in full force and
effect throughout the Lease Term (a) a commercial general liability insurance
policy in the amount of Five Million and No/100 Dollars ($5,000,000.00) combined
single limit for bodily injury or property damage, and (b) property insurance
with respect to the Building in an amount equal to the full replacement value of
the Building. All insurance required of Landlord under this Lease shall be
issued by insurance companies authorized to do business in Maryland. Such
companies shall have a policyholder rating of at least "A" and be assigned a
financial size category of at least "Class XII" as rated in the most recent
edition of "Best Key Rating Guide" for insurance companies. Upon Tenant's
written request, Landlord shall provide Tenant with a certificate of insurance
evidencing that Landlord is maintaining such insurance. Upon Tenant's written
request, Landlord and Tenant shall discuss in good faith whether it makes sense
for economic reasons for Tenant to provide the insurance that is required under
this Section 19(g).
20. DAMAGE BY CASUALTY.
(a) DAMAGE TO DEMISED PREMISES. If the Demised Premises shall be damaged
by fire or other casualty, then, except as otherwise provided in subparagraphs
(b), (c), (d) and (e) hereof, Landlord, at Landlord's expense, shall promptly
restore the Demised Premises, and Tenant, at Tenant's sole expense, shall
promptly restore all leasehold improvements installed in the Demised Premises or
in, on, or about the Building by Tenant or at Tenant's request (including,
without limitation, any improvements, Alterations or modifications to the
Demised Premises and/or Building that are made by, or on behalf of, Tenant after
the date of this Lease) and its own furniture, furnishings, trade fixtures and
equipment. Landlord shall not be liable for any delay which may arise by reason
of adjustment of insurance on the part of Landlord, or on account of labor
problems, or any other cause beyond Landlord's reasonable control, or for any
inconvenience, interruption or injury to the business of Tenant resulting from
such damage, or in any delay in repairing such damage. If the damage or
destruction is such as to make the Demised Premises or any substantial part
thereof untenantable, and provided that such damage or destruction is not due in
whole or part to the act or omission of Tenant or Tenant's agents, employees or
invitees, the Base Annual Rent and operating expenses shall xxxxx
proportionately (based on proportion of the number of square feet rendered
untenantable to the total number of square feet of the Demised Premises), from
the date of the damage or destruction until the date the Demised Premises has
been restored by Landlord.
(b) SUBSTANTIAL DAMAGE. If the Demised Premises are substantially damaged
or are rendered substantially untenantable by fire or other casualty, or if
Landlord's architect certifies that the Demised Premises cannot be repaired
within one hundred eighty (180) working days of normal working hours,
said period commencing with the start of the repair work, or if more than
fifty percent (50%) of the gross leasable area of the Building is rendered
untenantable, then Landlord may, within ninety (90) days after such fire
or other casualty, terminate this Lease by giving Tenant a notice in
writing of such decision, and thereupon the term of this Lease shall expire by
lapse of time upon the third day after such notice is given, and Tenant shall
vacate the Demised Premises and surrender the same to Landlord. Upon the
termination of this Lease under the conditions hereinbefore provided, Tenant's
liability for Base Annual Rent and Additional Rent, to the extent not abated
under Section 20(a) of this Lease, shall cease as of the date of such
termination.
(c) TENANT'S RIGHT OF TERMINATION. In the event (i) the Demised Premises
is damaged by fire or other casualty, (ii) such damage was not caused by Tenant
or any of its subtenants, assignees, contractors, agents or employees, and (iii)
such damage is not capable of being repaired within three hundred sixty-five
(365) days of the date of the damage, or is not repaired within three hundred
sixty-five (365) days after the date of the damage, then Tenant shall have the
right, exercisable upon written notice to Landlord within ten (10) days after
the date that Tenant is notified by Landlord that the Demised Premises is not
capable of being repaired within such three hundred sixty-five (365) day period,
or within ten (10) days after the expiration of such three hundred sixty-five
(365) day period, as applicable, to terminate this Lease. In the event that
Tenant timely delivers such notice of termination to Landlord, then, unless
Landlord, within thirty (30) days after its receipt of such termination notice,
delivers the Demised Premises (excluding those improvements that Tenant is
responsible to restore pursuant to Section 20(a) above) to Tenant in
substantially the same condition that existed immediately prior to such damage,
then this Lease shall terminate and the parties shall be relieved of all further
liability hereunder. In the event Tenant fails to timely exercise such
termination right, Tenant shall be deemed to have irrevocably waived its right
to terminate this Lease on account of such damage.
(d) INSURANCE PROCEEDS. The proceeds payable under all casualty insurance
policies maintained by Landlord on the Demised Premises shall belong to and be
the property of Landlord, and Tenant shall not have any interest in such
proceeds. Tenant agrees to look to Tenant's casualty insurance policies for the
restoration and replacement of all of the improvements installed in the Demised
Premises by Tenant or at Tenant's request and Tenant's fixtures, equipment and
furnishings in the Demised Premises, and in the event of termination of this
Lease, for any reason, following any such damage or destruction, Tenant shall
promptly assign to Landlord or otherwise pay to Landlord, upon Landlord's
request, the proceeds of said insurance and such other additional funds so that
the total amount assigned and/or paid by Tenant to Landlord shall be sufficient
to restore (whether or not any such restoration is actually to occur) all
improvements, fixtures,
Page 25
equipment and furnishings (excepting only Tenant's trade fixtures, equipment,
and furnishings) existing therein immediately prior to such damage or
destruction. Notwithstanding anything to the contrary in this Section 20 or in
any other provision of this Lease, any obligation (under this Lease or
otherwise) of Landlord to restore all or any portion of the Demised Premises
shall be subject to Landlord's receipt of approval of the same by the
mortgagee(s) of Landlord (and any other approvals required by applicable laws),
as well as receipt from any such mortgagee(s) of such fire and other hazard
insurance policy proceeds as may have been assigned to any such mortgagee; it
being agreed that if Landlord has not received such approval(s) and proceeds
within one hundred and eighty (180) days after any such casualty, then Landlord
shall have the option to terminate this Lease, at any time thereafter, upon
notice to Tenant.
(e) Notwithstanding anything set forth in this Section 20 to the contrary,
in the event that, during the final twelve (12) months of the Lease Term, the
Demised Premises is damaged and thirty-five (35%) or more of the Demised
Premises is thereby rendered untenantable or not reasonably usable, either party
may, by notice to the other within thirty (30) days after the occurrence of such
damage, elect to terminate this Lease. If either party elects to terminate this
Lease, this Lease shall terminate on the thirtieth (30th) day after the date the
termination notice is so delivered to the non-terminating party.
21. CONDEMNATION.
(a) Landlord shall give Tenant notice of the commencement of any
condemnation or eminent domain proceeding affecting the Demised Premises
promptly following Landlord's receipt of written notice thereof. In the event
the whole of the Demised Premises, or thirty-five percent (35%) or more of the
Demised Premises, shall be taken for any public or quasi-public purpose by any
lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or sold under threat of such taking, Tenant or
Landlord may terminate this Lease effective as of the date possession is
required to be surrendered to said authority.
(b) In the event of a partial taking of the Building for any public or
quasi-public purpose by any lawful power or authority by exercise of right of
appropriation, condemnation, or eminent domain, or in the event the Building is
sold to prevent such taking, then without regard as to whether any portion of
the Demised Premises occupied by Tenant was so taken, Landlord may elect to
terminate this Lease as of such taking if such taking is, in the reasonable
discretion of Landlord, of a material nature such as to make it uneconomical to
continue this Lease in effect.
(c) In the event this Lease terminates in connection with a taking, rent
shall be apportioned as of the date that possession is required to be
surrendered to the governmental authority. Tenant shall not assert any claim
against Landlord or the taking authority for any compensation arising out of or
related to such taking or sale in lieu thereof. In the event of any taking or
sale in lieu thereof, Landlord shall be entitled to receive the entire amount of
any award without deduction for any estate or interest of Tenant and Tenant
hereby assigns to Landlord all of Tenant's rights, title and interest in and to
any such award. If this Lease is not terminated, the Base Annual Rent and
Additional Rent payable by Tenant pursuant to Section 4 shall be adjusted (based
on the ratio that the number of square feet of rentable area taken from the
Demised Premises bears to the number of rentable square feet in the Demised
Premises immediately prior to such taking) as of the date possession is required
to be surrendered to said authority. Nothing contained in this Section shall be
deemed to give Landlord any interest in any award made to Tenant for the taking
of personal property and fixtures belonging to Tenant, as long as such award is
made in addition to and separately stated from any award made to Landlord for
the Demised Premises and the Building. Landlord shall have no obligation to
contest any taking.
(d) If, upon any taking of the nature described in this Section 21, this
Lease continues in effect, the Landlord shall promptly proceed to restore the
Demised Premises, the Building and the Project to substantially their same
condition prior to such partial taking. To the extent such restoration is
feasible (as determined by Landlord in its sole discretion), the Rent shall be
abated proportionately based upon the extent to which Tenant's use of the
Demised Premises has decreased on the basis of the percentage of the rental
value of the Demised Premises after such taking and the rental value of the
Demised Premises prior to such taking and taking into account the different
rental values for the laboratory, warehouse and office portions of the Demised
Premises.
22. DEFAULTS AND REMEDIES.
(a) DEFAULT. Each of the following shall be deemed a default by Tenant
and a breach of this Lease:
(i) A failure by Tenant to pay when due Base Annual Rent or
Additional Rent herein reserved, which failure continues for a period of ten
(10) days after written notice;
(ii) An assignment of this Lease or subletting of the Demised
Premises in violation of Section 9; and
(iii) A failure by Tenant in the observance or performance of any
other term, covenant, agreement or condition of this Lease on the part of Tenant
to be observed or performed, including the Rules and Regulations, after thirty
(30) days written notice from Landlord identifying the specific failure or
violation, provided, however, that in the event the
Page 26
violation identified is incapable of being cured within such thirty (30) day
period for reasons which are beyond the reasonable control of Tenant, then such
thirty (30) day cure period shall be extended for an additional reasonable
amount of time necessary for Tenant to effect such cure, as long as Tenant
proceeds diligently to effect such cure upon its receipt of Landlord's written
notice;
(iv) A failure by Tenant in the performance of any obligation under
Section 19 hereof;
(v) An Event of Bankruptcy as defined in Section 23;
(vi) Tenant's causing or permitting the Demised Premises to be
vacant or an abandonment of the Demised Premises;
Notwithstanding anything to the contrary in Section 22(a)(i) of this Lease,
(x) Landlord shall not be required to give Tenant more than two (2) such notices
during any twelve (12) month period, and (y) upon the occurrence of the third
(3rd) failure by Tenant during any such twelve (12) month period to pay Base
Annual Rent or Additional Rent when due, Tenant shall automatically be deemed in
default of this Lease.
(b) REMEDIES. Upon default by Tenant of any of the terms or covenants of
this Lease, Landlord shall be entitled to remedy such default as follows:
(i) Landlord shall have the right, immediately or at any time
thereafter, without further notice to Tenant, to enter the Demised Premises,
without terminating this Lease or being guilty of trespass, and do any and all
acts as Landlord may deem necessary, proper or convenient to cure such default,
for the account and at the expense of Tenant, and Tenant agrees to pay to
Landlord as Additional Rent all damage and/or expense incurred by Landlord in so
doing.
(ii) Landlord shall have the right to enter upon and take
possession of the Demised Premises without terminating this Lease, with or
without legal process, and remove Tenant, any occupant and any property
therefrom, using such force as may be necessary, without being guilty of
trespass and without relinquishing any right of Landlord against Tenant, and, if
Landlord elects, relet the Demised Premises on such terms as Landlord deems
commercially reasonable.
(iii) Landlord shall have the right to terminate this Lease and
Tenant's right to possession of the Demised Premises and, with or without legal
process, take possession of the Demised Premises and remove Tenant, any occupant
and any property therefrom, using such force as may be necessary, without being
guilty of trespass and without relinquishing any right of Landlord against
Tenant.
(iv) Landlord may elect by written notice to Tenant to be
indemnified for loss of rent by a lump sum payment representing the then present
value of the amount of rent and additional charges which would have been paid in
accordance with this Lease for the remainder of the Lease Term minus the then
present value of the aggregate fair market rent and additional charges payable
for the Demised Premises for the remainder of the Lease Term (if less than the
rent and additional charges payable hereunder), estimated as of the date of the
termination, and taking into account reasonable projections of vacancy and time
required to re-lease the Demised Premises. [For the purposes of calculating the
rent which would have been paid hereunder for the lump sum payment calculations
described hereto and in Section 22(b)(v) below, the last full year's
additional charges under Sections 4(c) and 4(d) is to be deemed constant for
each year thereafter. The Federal Reserve discount rate (or equivalent) shall
be used in calculating present values.] Should the parties be unable to agree
on a fair market rent, the matter shall be submitted, upon the demand of either
party, to the Washington, D.C. office of the American Arbitration Association
("AAA"), with a request for arbitration in accordance with the rules of the AAA
by a single arbitrator who shall be an MAI appraiser with at least ten (10)
years experience as an appraiser of major office buildings in Rockville,
Maryland. The parties agree that a decision of the arbitrator shall be
conclusive and binding upon them. If, at the end of the Lease Term, the rent
which Landlord has actually received from the Demised Premises is less than the
aggregate fair market rent estimated as aforesaid, Tenant shall thereupon pay
Landlord the amount of such difference.
(v) Landlord may elect to recover, and Tenant shall thereupon pay,
as liquidated damages under this Section 22(b), an amount equal to the sum of:
(i) [the lesser of: (A) the aggregate of the Base Annual Rent under Section 4(a)
and additional charges under Sections 4(c) and 4(d) for the balance of the Lease
Term had it not been terminated, and (B) the aggregate Base Annual Rent and
additional charges under Sections 4(c) and 4(d) that would have been payable
under this Lease during the twelve (12) month period that immediately follows
the termination date]; (ii) the amount of Base Annual Rent and additional
charges of any kind accrued and unpaid at the time of termination; and (iii)
the amount of any recovery by Landlord under the foregoing provisions of this
Section 22(b) to the time of payment of such liquidated damages [but reduced by
any amounts of reimbursement under the first sentence of Section 22(b)(vi)].
Notwithstanding anything herein to the contrary, liquidated damages hereunder
shall not be in lieu of any claims for reimbursement under clauses (A) and (B)
of the first sentence of Section 22(b)(vi) of this Lease.
Page 27
(vi) Landlord shall be entitled to recover damages from Tenant in
an amount equal to the Base Annual Rent and Additional Rent which is due and
payable hereunder as of the date of such default, together with the amount
herein covenanted to be paid as Base Annual Rent and Additional Rent during the
remainder of the term, together with (A) all expenses of any proceedings
(including, but not limited to, reasonable legal expenses and attorneys' fees)
which may be necessary in order for Landlord to recover possession of the
Demised Premises, and (B) the expenses of re-renting of the Demised Premises
(including, but not limited to, any commissions paid to any real estate agent,
advertising expense and the costs of such alterations, repairs, replacements and
decoration or re-decoration as Landlord, in its sole judgment, considers
advisable and necessary for the purpose of re-renting the Demised Premises).
Landlord shall in no event be liable in any way whatsoever for failure to
re-rent the Demised Premises or, in the event that the Demised Premises are
re-rented, for failure to collect the rent thereof under such re-renting. No
act or thing done by Landlord shall be deemed to be an acceptance of a surrender
of the Demised Premises, unless Landlord shall execute a written agreement of
surrender with Tenant. Tenant's liability hereunder shall not be terminated by
the execution of a new lease of the Demised Premises by Landlord. In the event
Landlord does not exercise its option to accelerate the payment of Base Annual
Rent as provided in Sections 20(b)(iv) and (v) above, then Tenant agrees to
pay to Landlord, upon demand, the amount of damages herein provided after the
amount of such damages for any month shall have been ascertained; provided,
however, that any expenses incurred by Landlord shall be deemed to be a part of
the damages for the month in which they were incurred. Separate actions may be
maintained each month or at other times by Landlord against Tenant to recover
the damages then due, without waiting until the end of the Lease Term to
determine the aggregate amount of such damages. Tenant hereby expressly waives
any and all notices (other than those notices specially outlined in this Lease)
to cure or vacate or to quit the Demised Premises provided by current or future
law. TENANT HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS OF REDEMPTION GRANTED BY
OR UNDER ANY PRESENT OR FUTURE LAWS IN THE EVENT OF TENANT BEING EVICTED OR
BEING DISPOSSESSED FOR ANY CAUSE, OR IN THE EVENT OF LANDLORD OBTAINING
POSSESSION OF THE DEMISED PREMISES BY REASON OF THE DEFAULT BY TENANT OF ANY OF
THE COVENANTS AND CONDITIONS OF THIS LEASE. If, under the provisions hereof,
applicable summary process shall be served, and a compromise or settlement
therefor shall be made, such action shall not be constituted as a waiver by
Landlord of any breach of any covenant, condition or agreement herein contained.
(c) RIGHT OF LANDLORD TO CURE TENANT'S DEFAULT. If Tenant defaults in the
making of any payment to any third party, or doing any act required to be made
or done by Tenant relating to the Demised Premises, then Landlord may, but shall
not be required to, make such payment or do such act. The amount of any
resulting expense or cost to Landlord, including reasonable attorneys' fees,
with interest thereon at the rate of eighteen percent (18%) per annum or the
highest legal rate, whichever is lower, accruing from the date paid by Landlord,
shall be paid by Tenant to Landlord and shall constitute Additional Rent
hereunder, due and payable by Tenant upon receipt of a written statement of
costs from Landlord. The making of such payment or the doing of such act by
Landlord shall not operate to cure Tenant's default, nor shall it prevent
Landlord from the pursuit of any remedy to which Landlord would otherwise be
entitled.
(d) INTENTIONALLY DELETED.
(e) INTENTIONALLY DELETED.
(f) LANDLORD'S REMEDIES CUMULATIVE. All rights and remedies of Landlord
herein enumerated shall be cumulative. In the event of any breach by Tenant of
any of the covenants or provisions of this Lease, then, regardless of whether
the Lease Term has commenced, this Lease has been terminated, or Landlord has
recovered possession of the Demised Premises, Landlord shall have the right of
injunction and the right to invoke any remedy allowed at law or in equity, and
mention in this Lease of any particular remedy shall not preclude Landlord from
any other remedy at law or in equity.
(g) ATTORNEY'S FEES. In the event that Landlord incurs any fees or
expenses to enforce the provisions of this Lease, including, without limitation,
attorneys' fees and litigation costs, then Tenant shall pay to Landlord such
fees and expenses on demand as Additional Rent.
(h) MITIGATION OF DAMAGES.
(i) Both Landlord and Tenant shall each use commercially
reasonable efforts to mitigate any damages resulting from a default of the other
party under this Lease.
(ii) Landlord's obligation to mitigate damages after a default by
Tenant under this Lease shall be satisfied in full if Landlord undertakes to
lease the Demised Premises to another tenant (a "Substitute Tenant") in
accordance with the following criteria: (a) Landlord shall have no obligation
to solicit or entertain negotiations with any other prospective tenants for the
Demised Premises until Landlord obtains full and complete possession of the
Demised Premises including, without limitation, the final and unappealable legal
right to relet the Demised Premises free of any claim of Tenant; (b) Landlord
shall not be obligated to offer the Demised Premises to a prospective tenant
when other premises in the Building suitable for that prospective tenant's use
are (or soon will be) available; (c) Landlord shall not be obligated to lease
the Demised Premises to a Substitute Tenant for a rental less than the current
fair market rental then prevailing for similar
Page 28
uses in comparable buildings in the same market area as the Building, nor shall
Landlord be obligated to enter into a new lease under other terms and conditions
that are unacceptable to Landlord under Landlord's then current leasing policies
for comparable space in the Building; (d) Landlord shall not be obligated to
enter into a lease with any proposed tenant whose use would: (1) violate any
restriction, covenant or requirement contained in the lease of another tenant of
the Building; (2) adversely affect the reputation of the Building; or (3) be
incompatible with the operation of the Building as a first class building; (e)
Landlord shall not be obligated to enter into a lease with any proposed
Substitute Tenant which does not have, in Landlord's reasonable opinion,
sufficient financial resources or operating experience to operate the Demised
Premises in a first class manner; (f) Landlord shall not be required to expend
any amount of money to alter, remodel or otherwise make the Demised Premises
suitable for use by a proposed Substitute Tenant unless: (1) Tenant pays any
such sum to Landlord in advance of Landlord's execution of a substitute lease
with such tenant (which payment shall not be in lieu of any damages or other
sums to which Landlord may be entitled as a result of Tenant's default under
this Lease); or (2) Landlord, in Landlord's sole discretion, determines that any
such expenditure is financially justified in connection with entering into any
such substitute lease.
(iii) Upon compliance with the above criteria regarding the
releasing of the Demised Premises after a default by Tenant, Landlord shall be
deemed to have fully satisfied Landlord's obligation to mitigate damages under
this Lease and under any law or judicial ruling in effect on the date of this
Lease or at the time of Tenant's default, and Tenant waives and releases, to the
fullest extent legally permissible, any right to assert in any action by
Landlord to enforce the terms of this Lease, any defense, counterclaim, or
rights of set off or recoupment respecting the mitigation of damages by
Landlord, unless and to the extent Landlord maliciously or in bad faith fails to
act in accordance with the requirements of this Section 22(h).
(iv) Tenant's right to seek damages from Landlord as a result of a
default by Landlord under the Lease shall be conditioned on Tenant taking all
actions reasonably required, under the circumstances, to minimize any loss or
damage to Tenant's property or business, or to any of Tenant's officers,
employees, agents, invitees, or other third parties that may be caused by any
such default of Landlord.
(i) WAIVER OF DISTRAINT RIGHTS. Landlord hereby waives all statutory or
common law liens or rights of distraint available under applicable law.
23. BANKRUPTCY.
(a) The following shall be Events of Bankruptcy under this Lease: (i)
Tenant's becoming insolvent, as that term is defined in Title 11 of the United
States Code (the "Bankruptcy Code"), or under the insolvency laws of any state,
district, commonwealth or territory of the United States (the "Insolvency
Laws"); (ii) The appointment of a receiver or custodian for any or all of
Tenant's property or assets, or the institution of a foreclosure action upon any
of Tenant's real or personal property; (iii) The filing of a voluntary petition
under the provisions of the Bankruptcy Code or Insolvency Laws; (iv) The filing
of an involuntary petition against Tenant as the subject debtor under the
Bankruptcy Code or Insolvency Laws, which either (A) is not dismissed within
sixty (60) days of filing, or (B) results in the issuance of an order for relief
against the debtor; or (v) Tenant's making or consenting to an assignment for
the benefit of creditors or a common law composition of creditors.
(b) Upon occurrence of an Event of Bankruptcy, Landlord shall have all
rights and remedies available to Landlord pursuant to Section 22 and pursuant to
the Bankruptcy Code and the Insolvency Laws; provided, however, that while a
case in which Tenant is the subject debtor under the Bankruptcy Code is pending,
Landlord shall not exercise its rights and remedies pursuant to Section 22 so
long as (i) the Bankruptcy Code prohibits the exercise of such rights and
remedies, and (ii) Tenant or its Trustee in Bankruptcy (hereinafter referred to
as "Trustee") (A) cures all defaults under this Lease, (B) compensates Landlord
for monetary damages incurred as a result of such defaults, including reasonable
attorneys' fees, (C) provides adequate assurance of future performance on the
part of Tenant as debtor in possession or on the part of the assignee tenant;
and (D) complies with all other requirements of the Bankruptcy Code.
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24. LENDER REQUIREMENTS.
(a) SUBORDINATION. Subject to the provisions of Section 24(d) hereof,
this Lease is subject and subordinate to any mortgage, deed of trust, ground
lease, master lease (each such mortgage or deed of trust shall hereinafter be
referred to as the "Deed of Trust") which hereafter affects the real property of
which the Demised Premises form a part, and to all renewals, modifications,
consolidations, replacements and extensions thereof. In the event that this
Lease becomes subordinate to any such Deed of Trust, this Lease shall not have
priority to (i) the prior right, claim and lien of such mortgages in, to and
upon any award or other compensation heretofore or hereafter to be made for any
taking by eminent domain of any part of the Demised Premises, and to the right
of disposition thereof in accordance with the provisions of the said mortgages,
(ii) the prior right, claim and lien of such mortgages in, to and upon any
proceeds payable under all policies of fire and rent insurance upon the Demised
Premises and to the right of disposition thereof in accordance with the terms of
the said mortgages, and (iii) any lien, right, power or interest, if any, which
may have arisen or intervened in the period between the recording of the
mortgages and the execution of this Lease, or any lien or judgment which may
arise any time under the terms of this Lease. In the event that this Lease
becomes subordinate to any Deed of Trust hereafter affecting the real property
of which the Demised Premises form a part, Tenant agrees to execute and deliver,
within fifteen (15) days after Landlord's written request, such further
instrument or instruments confirming such subordination as shall be desired by
Landlord or by any ground lessor, mortgagee or proposed mortgagee. Tenant shall
be liable for any loss incurred by Landlord resulting from Tenant's failure to
timely execute and deliver any instrument requested by Landlord confirming such
subordination, and shall reimburse Landlord for the amount of any such loss upon
demand, as Additional Rent. Tenant further agrees that, at the option of the
holder of any mortgage or of the trustee under any deed of trust affecting the
real property of which the Demised Premises form a part, this Lease may be made
superior to said mortgage or first deed of trust by the insertion therein of a
declaration that this Lease is superior thereto, with such exceptions as to
proceeds of insurance and takings or other matters as such holder or trustee may
specify.
(b) ATTORNMENT. Subject to the provisions of Section 24(d) hereof, in the
event any proceedings are brought for the foreclosure of, or in the event of
exercise of the power of sale under, any deed of trust to secure debt given by
Landlord and covering the Demised Premises, the party secured by any such deed
of trust shall have the right to recognize this Lease and, in the event of any
foreclosure sale under such deed of trust, this Lease shall continue in full
force and effect at the option of the party secured by such deed of trust or the
purchaser under any such foreclosure sale. If such party elects to recognize
this Lease, then (x) Tenant shall attorn to the purchaser upon any such
foreclosure or sale and recognize such purchaser as the owner and landlord under
this Lease, and (y) such party, as landlord: (i) shall recognize Tenant's rights
to continue to occupy the Demised Premises and exercise and enjoy all of its
rights hereunder, and so long as Tenant complies with the terms and provisions
of this Lease; (ii) shall not be bound by payments of Base Annual Rent or
Additional Rent more than one (1) month in advance of their due date; (iii)
shall have no obligation for the return of any security deposit not actually
received by such party; (iv) shall not be bound by any amendment or modification
to the Lease to which such party has not consented in writing; (v) shall not be
subject to any claim, defense or set off which could be asserted against any
predecessor Landlord; and (vi) shall have no liability for any default by any
predecessor Landlord, other than liability for defaults under the Lease and then
only to the extent that such defaults exist on or after the date such party
comes into possession of or acquires fee simple title to the Building of record.
(c) NOTICE OF DEFAULT. Tenant agrees to give any mortgagee(s) and/or
trust deed holder(s), by certified or registered mail, postage prepaid, return
receipt requested, a copy of any notice of any failure by Landlord to fulfill
any of its obligations under this Lease, provided that prior to such notice
Tenant has been notified in writing (by way of notice of assignment of rents and
leases, or otherwise) of the addresses of such mortgagee(s) and/or trust deed
holder(s). Tenant further agrees that the mortgagee(s) and/or trust deed
holder(s) shall have such time as may be necessary to cure such failure as long
as any mortgagee(s) and/or trust deed holder(s) has commenced and is diligently
pursuing the remedies necessary to cure such failure (including, but not limited
to, time to take possession and/or commence foreclosure proceedings, if
necessary, to effect such cure). Notwithstanding anything herein to the
contrary, so long as any mortgagee(s) and/or trust deed holder(s) has commenced
and is diligently pursuing the remedies necessary to cure such failure
(including, but not limited to, taking possession and/or commencing foreclosure
proceedings, if necessary, to effect such cure), Tenant shall have no right to
terminate this Lease as a result of any such failure by Landlord.
(d) NON-DISTURBANCE. Landlord represents that as of the date of this
Lease, the Building is not encumbered by any mortgage, deed of trust, ground
lease or master lease. In the event that in the future Landlord encumbers the
Building with a Deed of Trust, Tenant shall not be obligated to subordinate its
interest under this Lease to such Deed of Trust unless and until, the holder of
such First Trust executes and delivers, for the benefit of Tenant, a
commercially reasonable non-disturbance agreement. Notwithstanding anything
herein to the contrary, Tenant hereby agrees that the form of non-disturbance
agreement that is attached to and made a part hereof as Exhibit J is a
commercially reasonable form of non-disturbance agreement, and if such form of
non-disturbance agreement is executed and delivered to Tenant by the holder of a
First Trust, Tenant shall be obligated to subordinate its interest under this
Lease to the lien of such First Trust.
(e) FINANCIAL STATEMENTS. In the event that (i) Tenant ceases filing
quarterly and annual financial information with the Securities and Exchange
Commission, or (ii) such information is not freely available to the general
public, Tenant
Page 30
shall, from time to time thereafter, upon not less than fifteen (15) days prior
written notice by Landlord, deliver to Landlord such quarterly and annual
financial statements of Tenant as Landlord may reasonably request. As used in
Section 24(e), "Tenant" shall mean The Xxxxxx-Xxxxx Corporation and each
successor-in-interest to The Xxxxxx-Xxxxx Corporation. To the extent that any
such information is included in the consolidated financial statements of The
Xxxxxx-Xxxxx Corporation, then Tenant shall not be obligated to provide any
separate financial statements (other than the consolidated statements).
(f) ASSIGNMENT OF RENTS. If, at any time and from time to time, Landlord
assigns this Lease or the rents payable hereunder to the holder of any mortgage
or deed of trust on the Demised Premises or the Building, or to any other party
for the purpose of securing financing (the holder of any such mortgage and any
other such financing party are referred to herein as the "Financing Party"),
whether such assignment is conditional in nature or otherwise, the following
provisions shall apply:
(i) Such assignment to the Financing Party shall not be deemed an
assumption by the Financing Party of any obligations of Landlord hereunder
unless such Financing Party shall, by written notice to Tenant, specifically
otherwise elect.
(ii) Except as provided in (i) above, the Financing Party shall be
treated as having assumed Landlord's obligations hereunder [subject to Sections
24(b) and 34 of this Lease] only upon foreclosure of its mortgage or deed of
trust (or voluntary conveyance by deed in lieu thereof) and the taking of
possession of the Demised Premises from and after foreclosure.
(iii) Tenant hereby agrees to enter into such agreements or
instruments as may, from time to time, be requested in confirmation of the
foregoing.
25. ESTOPPEL CERTIFICATES. Tenant agrees, at any time and from time to time,
upon not less than ten (10) business days prior written notice by Landlord, to
execute, acknowledge and deliver to Landlord a written estoppel certificate (a)
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications, stating the nature of same), (b) stating the
Commencement Date of the Lease Term, (c) stating the amounts of Base Annual Rent
and Additional Rent and the dates to which the Base Annual Rent and Additional
Rent have been paid by Tenant, (d) stating the amount of any Security Deposit,
(e) stating whether or not to the best knowledge of Tenant, Landlord is in
default in the performance of any covenant, agreement or condition contained in
this Lease, and, if so, specifying each such default of which Tenant may have
knowledge, (f) stating that Tenant has no right to set off and no defense
against payment of the Base Annual Rent or Additional Rent, (g) stating the
address to which notices to Tenant should be sent, and (h) certifying such other
matters as may be requested by Landlord. Any such certificate delivered
pursuant hereto may be relied upon by an owner of the Building, any prospective
purchaser of the Building, any mortgagee or prospective mortgagee of the
Building or of Landlord's interest therein, or any prospective assignee of any
such mortgage. Failure to deliver the aforesaid certificate within the five (5)
days shall be conclusive upon Tenant for the benefit of Landlord and any
successor to Landlord that this Lease is in full force and effect and has not
been modified except as may be represented by the party requesting the
certificate. Tenant shall be liable for any loss incurred by Landlord resulting
from Tenant's failure to timely execute and deliver any estoppel certificate
requested by Landlord, and shall reimburse Landlord for the amount of any such
loss upon demand, as Additional Rent.
26. TENANT HOLDOVER.
(a) WITH LANDLORD CONSENT. If Tenant continues, with the knowledge and
written consent of Landlord obtained at least thirty (30) days prior to the
expiration of the Lease Term, to remain in the Demised Premises after the
expiration of the Lease Term, and in that event, Tenant shall, by virtue of this
agreement become a tenant by the month at Base Monthly Rent which is one hundred
three percent (103%) of the Base Monthly Rent applicable to the last month of
the Lease Term, and otherwise subject to the terms, covenants and conditions
herein specified, commencing said monthly tenancy with the first day next after
the end of the Lease Term.
(b) WITHOUT LANDLORD CONSENT. In the event that Tenant, without the
consent of Landlord, shall hold over the expiration of the term hereby created,
then Tenant shall become a tenant of sufferance only, at a monthly rent which is
one hundred fifty percent (150%) of the Base Monthly Rent applicable to the last
month of the Lease Term, and otherwise subject to the terms, covenants and
conditions herein specified. Tenant expressly agrees to hold Landlord harmless
from all loss and damages, direct and consequential, which Landlord may suffer
in defense of claims by other parties against Landlord arising out of the
holding over by Tenant, including, without limitation, attorneys' fees which may
be incurred by Landlord in defense of such claims. Acceptance of rent by
Landlord subsequent to the expiration of the Lease Term shall not constitute
consent to any holding over. Landlord shall have the right to apply all payment
received after the expiration date of this Lease toward payment for use and
occupancy of the Demised Premises subsequent to the expiration of the Lease Term
and toward any other sums owed by Tenant to Landlord. Landlord, at its option,
may forthwith re-enter and take possession of the Demised Premises without
process, or by any legal process in force.
Page 31
27. INTENTIONALLY DELETED.
28. QUIET ENJOYMENT. Subject to the terms of this Lease, so long as Tenant
shall observe and perform all the covenants and agreements binding on it
hereunder Tenant shall at all times during the term herein granted, peacefully
and quietly have and enjoy possession of the Demised Premises without any
encumbrance or hindrance or molestation by Landlord, except as provided for
elsewhere under this Lease.
29. MECHANICS LIENS. Tenant will not permit to be created or to remain
undischarged any lien, encumbrance or charge (arising out of any work done or
materials or supplies furnished, or claimed to have been done or furnished, by
any contractor, mechanic, laborer or materialman or any mortgage, conditional
sale, security agreement or chattel mortgage, or otherwise by or for Tenant)
which might be or become a lien or encumbrance or charge upon the Building or
any part thereof or the income therefrom. Tenant will not suffer any other
matter or thing whereby the estate, rights and interests of Landlord in the
Building or any part thereof might be impaired. If any lien, or notice of lien
on account of an alleged debt of Tenant or any notice of contract by a party
engaged by Tenant or Tenant's contractor to work on the Demised Premises shall
be filed against the Building or any part thereof, Tenant, within ten (10) days
after notice of the filing thereof, will cause the same to be discharged of
record by payment, deposit, bond, order of a court of competent jurisdiction or
otherwise. If Tenant shall fail to cause such lien or notice of lien to be
discharged within the period aforesaid, then, in addition to any other right or
remedy, Landlord may, but shall not be obligated to, discharge the same either
by paying the amounts claimed to be due or by procuring the discharge of such
lien by deposit or by bonding proceedings and in any such event Landlord shall
be entitled, if Landlord so elects, to compel the prosecution of an action for
the foreclosure of such lien by the lienor and to pay the amount of the judgment
in favor of the lienor with interest, costs and allowances. Any amount so paid
by Landlord and all costs and expenses, including reasonable attorneys' fees,
incurred by Landlord in connection therewith, shall constitute Additional Rent
payable by Tenant under this Lease and shall be paid by Tenant to Landlord on
demand. Nothing herein contained shall obligate Tenant to pay or discharge any
lien created by Landlord.
30. TIME. Landlord and Tenant acknowledges that time is of the essence in the
performance of any and all obligations, terms, and provisions of this Lease.
31. POSTPONEMENT OF PERFORMANCE. In the event that either party hereto shall
be delayed or hindered in or prevented from the performance of any act required
hereunder by reason of strikes, labor troubles, inability to procure labor or
materials, failure of power, restrictive governmental laws or regulations,
riots, insurrection, war, acts of God, fire or other casualty or other reason of
a similar or dissimilar nature beyond the reasonable control of the party
delayed in performing work or doing acts required under the terms of this Lease,
then performance of such act shall be excused for the period of the delay and
the period for the performance of any such act shall be extended for a period
equivalent to the period of such delay. The provisions of this Section shall
not operate to excuse Tenant from the prompt payment of Base Annual Rent or
Additional Rent or from surrendering the Demised Premises, and shall not operate
to extend the term of this Lease. Delays or failures to perform resulting from
lack of funds shall not be deemed delays beyond the reasonable control of a
party.
32. LANDLORD'S RESERVED RIGHTS. The Landlord reserves the rights to show the
Demised Premises to prospective tenants or brokers during the last three hundred
sixty (360) days of the term of this Lease; to show the Demised Premises to
prospective purchasers at all reasonable times provided that prior notice is
given to Tenant in each case and that Tenant's use and occupancy of the Demised
Premises shall not be materially inconvenienced by any such action of Landlord;
and to place and maintain a "FOR RENT" sign reasonably acceptable to Tenant on
the doors or in the windows of the Demised Premises during the last three
hundred sixty (360) days of the term of this Lease. Notwithstanding the
foregoing, Tenant shall have the right to deny access to prospective purchasers
and tenants (other than purchasers and tenants who have entered into a written
letter of intent, or a contract, or a lease to purchase or lease the Demised
Premises, as applicable) to sensitive and/or secure areas of the Demised
Premises as designated by Tenant.
33. NO WAIVER. No provision of this Lease shall be deemed to have been waived
by Landlord, unless such waiver be in writing signed by Landlord. No waiver by
Landlord of any breach by Tenant of any of the terms, covenants, agreements, or
conditions of this Lease shall be deemed to constitute a waiver of any
succeeding breach thereof, or a waiver of any breach of any of the other terms,
covenants, agreements, and conditions herein contained. No custom or practice
which may occur or develop between the parties in connection with the terms of
this Lease shall be construed to waive or lessen Landlord's right to insist upon
strict performance of the terms of this Lease, without a written notice thereof
from Landlord to Tenant. No employee of Landlord or of Landlord's agents shall
have any authority to accept the keys of the Demised Premises prior to
termination of the Lease, and the delivery of keys to any employee of Landlord
or Landlord's agents shall not operate as a termination of the Lease or a
surrender of the Demised Premises. The receipt by Landlord of any payment of
Base Annual Rent or Additional Rent with knowledge of the breach of any covenant
of this Lease shall not be deemed a waiver of such breach. The failure of
Landlord to enforce any of the Rules and Regulations made a part of this Lease,
or hereafter adopted, against Tenant or any other tenant in the Building shall
not be deemed a waiver of any such Rules and Regulations.
34. LIMITATION OF LANDLORD'S LIABILITY. In consideration of the benefits
accruing hereunder, Tenant and all successors and assigns of Tenant covenant and
agree that in the event of any actual or alleged failure, breach or default
hereunder by
Page 32
Landlord: (a) the sole and exclusive remedy shall be against the interest of
Landlord in the Building; (b) neither Landlord nor (if Landlord is a
partnership) any partner of Landlord nor (if Landlord is a corporation) any
shareholder of Landlord, nor Rental Agent specified in Section 1(a)8 hereof nor
(if Rental Agent is a partnership) any partner of Rental Agent nor (if Rental
Agent is a corporation) any shareholder of Rental Agent shall be personally
liable with respect to any claim arising out of or related to this Lease; (c) no
partner or shareholder of Landlord nor any partner or shareholder of Rental
Agent shall be sued or named as a party in any suit or action (except as may be
necessary to secure jurisdiction of Landlord); (d) no service of process shall
be made against any partner or shareholder of Landlord nor against any partner
or shareholder of Rental Agent (except as may be necessary to secure
jurisdiction of Landlord); (e) any judgment granted against any partner or
shareholder of Landlord or against any partner or shareholder of Rental Agent
may be vacated and set aside at any time as if such judgment had never been
granted; and (f) these covenants and agreements are enforceable both by Landlord
and also by any partner or shareholder of Landlord and by any partner or
shareholder of Rental Agent.
35. TRANSFER OF THE BUILDING. In the event of the sale or other transfer of
Landlord's right, title and interest in the Demised Premises or the Building
(except in the case of a sale-leaseback financing transaction in which Landlord
is the lessee), Landlord shall transfer and assign to such purchaser or
transferee all amounts of pre-paid Base Annual Rent. Tenant shall have no right
to terminate this Lease nor to xxxxx Base Annual Rent nor to deduct from, nor
set-off, nor counterclaim against Base Annual Rent because of any sale or
transfer (including, without limitation, any sale-leaseback) by Landlord or its
successors or assigns). In the event of the transfer and assignment by Landlord
of its interest in this Lease, and the transferee's agreement to assume
Landlord's obligations under this Lease, Landlord shall thereby be released from
any further responsibility hereunder, and Tenant agrees to look solely to such
successor in interest of the Landlord for performance of such obligations. The
term "Landlord" as used in this Lease shall mean the owner of the Building, at
the time in question. In the event of a transfer (whether voluntary or
involuntary) by such owner of its interest in the Building, such owner shall
thereupon be released and discharged from all covenants and obligations of the
Lease thereafter accruing, but such covenants and obligations shall be binding
during the Lease Term upon each new owner for the duration of such owner's
ownership. Upon any sale or other transfer as above provided (other than a
sale-leaseback), or upon any assignment of Landlord's interest herein [except as
provided in Section 24(f)], it shall be deemed and construed conclusively,
without further agreement between the parties, that the purchaser or other
transferee or assignee has assumed and agreed to perform the obligations of
Landlord thereafter accruing.
36. WAIVER OF COUNTERCLAIM AND TRIAL BY JURY. LANDLORD AND TENANT WAIVE THEIR
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY
EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON ANY MATTERS WHATSOEVER ARISING
OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND
TENANT, TENANT'S USE OF OR OCCUPANCY OF THE DEMISED PREMISES, AND ANY EMERGENCY
STATUTORY OR ANY OTHER STATUTORY REMEDY. TENANT SHALL NOT INTERPOSE ANY
COUNTERCLAIM OR COUNTERCLAIMS OR CLAIMS (EXCEPT THOSE MANDATORY COUNTERCLAIMS
THAT WOULD BE WAIVED IF NOT RAISED) FOR SET-OFF, RECOUPMENT OR DEDUCTION OF BASE
ANNUAL RENT OR ADDITIONAL RENT IN A SUMMARY PROCEEDING FOR NONPAYMENT OF BASE
ANNUAL RENT OR ADDITIONAL RENT OR OTHER ACTION OR SUMMARY PROCEEDING BASED ON
TERMINATION, HOLDOVER OR OTHER DEFAULT IN WHICH LANDLORD SEEKS REPOSSESSION OF
THE DEMISED PREMISES FROM TENANT.
37. NOTICES.
(a) ADDRESSES FOR NOTICES. All notices required or desired to be given
hereunder by either party to the other shall be in writing and be given in
person, by reputable overnight carrier which provides receipt of delivery, or by
certified or registered mail and addressed as specified in Section 1(a). Either
party may, by like written notice, designate a new address to which such notices
shall be directed.
(b) EFFECTIVE DATE OF NOTICE. Notice shall be deemed to be effective when
delivered in person or by Federal Express, or when delivery is refused, or three
(3) days after mailing, unless otherwise stipulated herein.
38. BROKERS. Landlord and Tenant each represents and warrants to the other
that it has not employed any brokers in connection with this Lease transaction,
except the brokers named in Section 1(a)(21). Said brokers shall be paid a
brokerage commission pursuant to a separate agreement between Landlord and said
brokers, and Landlord and Tenant each shall indemnify and hold harmless the
other from and against any claims for brokerage or other commission arising by
reason of a breach by the indemnifying party of the aforesaid representation and
warranty.
39. CONSTRUCTION ALLOWANCE OFFSET. In the event that Landlord fails to
disburse any applicable portion of the "Improvements Allowance" (as defined in
Exhibit C) to Tenant within thirty (30) days after the date that such amount is
payable to Tenant under Exhibit C, then, provided Landlord has not delivered a
written notice to Tenant within such thirty (30) day period which, in good
faith, disputes that the applicable portion for the Improvements Allowance is
payable, then, Tenant shall have the right, upon five (5) days notice to
Landlord, to deduct such unpaid portion of the Improvements Allowance from the
next installment(s) of Base Monthly Rent then coming due hereunder.
Page 33
40. MISCELLANEOUS PROVISIONS.
(a) GOVERNING LAW. The laws of the jurisdiction in which the Building is
located shall govern the validity, performance and enforcement of this Lease.
(b) SUCCESSORS. All rights, remedies and liabilities herein given to or
imposed upon either of the parties hereto, shall extend to their respective
heirs, executors, administrators, successors and assigns. This provision shall
not be deemed to grant Tenant any right to assign this Lease or to sublet the
Demised Premises.
(c) NO PARTNERSHIP. Nothing contained in this 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 the parties other than that
of Landlord and Tenant.
(d) NO REPRESENTATIONS BY LANDLORD. Neither Landlord nor any employee or
agent of Landlord has made any representations or promises with respect to the
Demised Premises or the Building except as herein expressly set forth, and no
rights, privileges, easements or licenses are granted to Tenant except as herein
expressly set forth.
(e) EXHIBITS. It is agreed and understood that any Exhibits referred to
herein, and attached hereto, form an integral part of this Lease and are hereby
incorporated by reference.
(f) PRONOUNS. Feminine or neuter pronouns shall be substituted for those
of the masculine form, and the plural shall be substituted for the singular
number, in any place or places herein in which the content may require such
substitution or substitutions. Landlord and Tenant herein for convenience have
been referred to in neuter form.
(g) CAPTIONS. All section and paragraph captions herein are for the
convenience of the parties only, and neither limit nor amplify the provisions of
this Lease.
(h) LANDLORD'S APPROVAL. Whenever Landlord's consent or approval is
required under the terms of this Lease, Landlord may grant or deny such consent
or approval in its sole discretion unless otherwise specified herein.
(i) INVALIDITY OF PARTICULAR PROVISIONS. If any term or provision of this
Lease or applications thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remaining terms and provisions of this
Lease, or the application of such term or provision to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term and provision of this Lease shall be valid and
enforced to the fullest extent permitted by law.
(j) COUNTERPARTS. This Lease may be executed in several counterparts, but
all counterparts shall constitute one and the same legal document.
(k) ENTIRE AGREEMENT; MODIFICATION. This Lease and all Exhibits hereto
contain all the agreements and conditions made between the parties and may not
be modified orally or in any other manner than by an agreement in writing,
signed by the parties hereto.
(l) AUTHORITY. Landlord and Tenant hereby covenant each for itself, that
it has full right, power and authority to enter into this Lease upon the terms
and conditions herein set forth. If Tenant signs as a corporation, each of the
persons executing this Lease on behalf of Tenant does hereby covenant and
warrant that Tenant is a duly authorized and existing corporation, qualified to
do business in the jurisdiction in which the Demised Premises is located, that
the corporation has full right and authority to enter into this Lease, and that
each and both of the persons signing on behalf of the corporation were
authorized to do so. If Tenant signs as a partnership, each of the persons
executing this Lease on behalf of Tenant does hereby covenant and warrant that
Tenant is a duly formed and validly existing partnership, that the partnership
has full right and authority to enter into this Lease, and that each of the
persons signing on behalf of the partnership were authorized to do so.
(m) EXAMINATION OF LEASE. Submission of this Lease for examination or
signature by Tenant shall not constitute reservation of or option for Lease, and
the same shall not be effective as a Lease or otherwise until execution and
delivery by both Landlord and Tenant.
(n) RECOVERY OF ATTORNEYS' FEES. In the event of any action or proceeding
brought by either party against the other under this Lease, the prevailing party
shall be entitled to recover from the other party the fees of its attorneys in
such action or proceeding in such amount as the court may judge to be reasonable
for such attorney's fees.
Page 34
(o) COVENANTS. The parties hereto agree that all the provisions of this
Lease are to be construed as covenants and agreements as though the words
importing such covenants and agreements were used in each separate provision
hereof.
(p) INTERPRETATION. Although the printed provisions of this Lease were
drawn by Landlord, this Lease shall not be construed for or against Landlord or
Tenant, but this Lease shall be interpreted in accordance with the general tenor
of the language in an effort to reach the intended result.
(q) CONFIDENTIALITY. As used herein, "Confidential Information" shall
mean any information or documentation furnished to Landlord by Tenant pursuant
to the terms of this Lease and which is reasonably designated by Tenant as being
confidential, or any confidential information or confidential documentation that
Landlord otherwise obtains in connection with its rights to access the Demised
Premises under this Lease. Landlord shall not disclose any Confidential
Information to any third party other than (i) in connection with any legal
dispute between Landlord and Tenant (i.e., as part of a court pleading, or as
part of an examination of a witness or as part of any oral argument), and (ii)
as required by law. To the extent such action does not involve a legal dispute
between Landlord and Tenant, in the event that Landlord is required in any
proceeding to disclose any Confidential Information, Landlord shall give Tenant
immediate oral notice of such request so that Tenant may challenge such
disclosure requirement or seek a protective order. To the extent such action
does not involve a legal dispute between Landlord and Tenant, Landlord shall
cooperate with Tenant in seeking the same. Landlord agrees that money damages
would not be a sufficient remedy for any breach of this confidentiality
provision, and that in addition to all other remedies, Tenant shall be entitled
to seek injunctive relief as a remedy for any such breach. The terms of this
Section 40(q) shall survive the expiration or earlier termination of this Lease.
41. RIGHT OF FIRST PURCHASE OFFER.
(a) In the event that (i) Landlord, in the exercise of its sole and
absolute discretion, elects to sell the Building, (ii) this Lease shall be in
full force and effect, (iii) Tenant shall not then be in default under this
Lease, and (iv) Tenant shall be then occupying at least fifty percent (50%) of
the Demised Premises, then, prior to offering to sell the Building to any party,
Landlord shall deliver to Tenant a written contract which contains the terms and
conditions upon which Landlord is willing to sell the Building. In the event
that Tenant desires to purchase the Building (including, for purposes of this
Section 41, the underlying land and adjacent land upon which parking spaces can
be located so that the parking for the Building complies with applicable law),
Landlord and Tenant shall thereafter, negotiate in good faith for a period of
thirty (30) days after the date of delivery of such contract, the terms and
conditions upon which the parties would be willing to enter into an agreement
for the purchase and sale of the Building. In the event that Landlord and
Tenant agree on the terms and conditions of an agreement of purchase and sale of
the Building during such thirty (30) day period, the parties shall, in good
faith, during the same thirty (30) day period, attempt to execute and deliver a
contract containing such agreed upon terms and conditions (such fully executed
contract shall hereinafter be referred to as the "Executed Contract"). Such
Executed Contract shall provide for the payment by Tenant to Landlord of five
percent (5%) of the purchase price that is set forth in the Executed Contract,
which payment shall be (i) non-refundable, and (ii) in immediately available
federal funds. Notwithstanding anything herein to the contrary, in the event
that Landlord and Tenant do not execute and deliver the Executed Contract within
the applicable thirty (30) day period, and Landlord thereafter sells the
Building within twelve (12) months thereafter, then, subject to the provisions
of Section 41(c) and Section 41(g) below, (i) the provisions of this Section 41
shall be null and void and of no further force or effect, and (ii) Landlord
shall have no further obligation to offer to sell the Building or any portion
thereof to Tenant. In the event that Landlord does not sell the Building within
such twelve (12) month period, then, subject to the provisions of Section 41(g)
below, the provisions of this Section 41 shall again be in full force and
effect.
(b) In the event that Landlord and Tenant execute and deliver the
Executed Contract prior to the expiration of the thirty (30) day period, then,
Landlord shall sell the Building to Tenant, and Tenant shall purchase the
Building from Landlord, in accordance with the terms of the Executed Contract.
(c) In the event that (i) Landlord and Tenant do not execute and deliver
the Executed Contract within the applicable thirty (30) day period and (ii) at
the expiration of such period, Landlord markets the Building for a stated price
or a price range, then prior to marketing the Building for such stated price or
at such price range, Landlord shall advise Tenant, in writing (the "Market Price
Offer"), of the stated price or price range at which Landlord intends to
initially market the Building. Upon Tenant's receipt of the Market Price Offer,
Landlord and Tenant shall negotiate in good faith for a period of five (5) days
the terms and conditions upon which Landlord would be willing to sell the
Building to Tenant, and Tenant would be willing to purchase the Building from
Landlord. In the event that Tenant and Landlord agree in writing on the terms
and conditions on which Landlord would sell the Building to Tenant and Tenant
would purchase the Building from Landlord within five (5) days after the date
that Landlord delivers the Market Price Offer to Tenant, then the provisions of
Section 41(d) below shall be applicable. Notwithstanding anything herein to the
contrary, in the event that Landlord and Tenant do not agree, in writing, on the
terms and conditions upon which Landlord would sell the Building to Tenant, and
Tenant would purchase the Building from Landlord, prior to the expiration of the
applicable five (5) day period, then (i) the provisions of Section 41 of this
Lease shall be null and void and of no further force and effect, and (ii)
Landlord shall have the right to sell the Building to any party or parties,
including Tenant. Notwithstanding the foregoing, in the event that
Page 35
Landlord does not sell the Building within twelve (12) months after the
expiration of such five (5) day period, then, subject to the provisions of
Section 41(g) below, this Section 41 shall again be of full force and effect.
(d) In the event that Landlord and Tenant agree, in writing, within five
(5) days after the date that Landlord delivers the Market Price Offer to Tenant,
on the terms and conditions upon which Landlord would sell the Building to
Tenant, and Tenant would purchase the Building from Landlord, then prior to the
expiration of such five (5) day period, Landlord and Tenant shall enter into a
written contract, which contract shall contain the terms and conditions (the
"Sales Terms") which the parties have previously agreed to in writing during the
five (5) day period. If Landlord and Tenant shall execute and deliver the
contract within the applicable five (5) day period, and Tenant shall
simultaneously therewith, pay to Landlord, in immediately available federal
funds, a non-refundable payment equal to five percent (5%) of the purchase price
(the "Downpayment"), then Landlord shall sell to Tenant, and Tenant shall
purchase from Landlord, the Building in accordance with the terms of such
contract. In the event that Tenant fails to either execute the contract within
the applicable five (5) day period, or fails to deliver to Landlord the
Downpayment within the applicable five (5) day period, then (i) the provisions
of Section 41 shall be null and void and of no further force or effect, and (ii)
Landlord shall have the right to sell the Building to any party or parties,
including Tenant. Notwithstanding the foregoing, in the event that Landlord does
not sell the Building within twelve (12) months after the expiration of such
five (5) day period, then, subject to the provisions of Section 41(g) below,
this Section 41 shall again be of full force and effect.
(e) Notwithstanding anything herein to the contrary, if upon expiration of
the applicable thirty (30) day period, the Landlord markets the Building, but
such initial marketing does not contain a stated price or price range, but
instead requests that interested parties submit a bid or offer that contains the
purchase price that such party is willing to pay to purchase the Building, then,
subject to the provisions of Section 41(g) below, Landlord shall solicit a bid
from Tenant and the provisions of Sections 41(c) and (d) shall not be applicable
to any sale that takes place within twelve (12) months following the expiration
of such thirty (30) day period, and Landlord shall have the right to sell the
Building to any party or parties, including Tenant.
(f) Notwithstanding anything herein to the contrary, the provisions of
this Section 41 shall be subject and subordinate to the lien of any mortgage or
deed of trust which may in the future encumber the Building.
(g) Notwithstanding anything herein to the contrary, in the event that
prior to the date that occurs twelve (12) months after the date that Tenant's
right of first negotiation lapses under this Section 41 Landlord enters into a
contract to sell the Building to another party, and such sale is consummated
within one hundred eighty (180) days thereafter, the provisions of this Section
41 shall be of no further force or effect.
42. RIGHT OF FIRST LEASE OFFER.
(a) As of the date of this Lease, (i) there exists a parcel of real
property which is located adjacent to the land underlying the Building, which
real property is more particularly depicted on the drawing which is attached to
and made a part of this Lease as Exhibit "H" (such real property shall
hereinafter be referred to as the "Other Property"), and (ii) Landlord does not
own the Other Property. In the event that Landlord or any affiliate of Landlord
(each of whom shall be referred to as the "Landlord" for purposes of this
Section 42), acquires the Other Property, then the provisions of this Section 42
shall be applicable to such Other Property.
(b) In the event that (i) Landlord, in the exercise of its sole and
absolute discretion, elects to lease at least fifty thousand (50,000) square
feet or more of rentable area (such rentable area shall hereinafter be referred
to as the "Available Space") that will be located in one (1) or more buildings
to be situated on the Other Property, (ii) this Lease shall be in full force and
effect, (iii) Tenant shall not then be in default under this Lease, (iv) Tenant
shall be then occupying at least fifty percent (50%) of the Demised Premises,
and (v) Landlord and a potential occupant of the Available Space shall have
exchanged written offers or proposals with respect to the Available Space (I.E.,
one party has delivered a written offer or proposal to the other party and the
other party has responded in writing to such offer or proposal), and the
responding offer or proposal (such responding offer or proposal shall
hereinafter be referred to as the "Responding Offer") sets forth a base rent
that is within twenty (20%) of the base rent that is set forth in the initial
offer or proposal, then, prior to leasing the Available Space to any party,
Landlord shall deliver to Tenant a written notice (the "Leasing Offer"), which
contains the terms and conditions upon which Landlord is willing to lease the
Available Space to Tenant. In the event that Tenant desires to lease the
Available Space, then Landlord and Tenant shall, in good faith, for a period of
ten (10) days after the delivery of the Leasing Offer, negotiate the terms and
conditions upon which the parties would be willing to enter into a lease with
respect to the Available Space. In the event that Landlord and Tenant are
unable to agree on such terms within such ten (10) day period, then, provided
that Landlord actually enters into a lease with respect to the Available Space
(or any part thereof) within twelve (12) months after the date of the Leasing
Offer, the provisions of this Section 42 shall be null and void and of no
further force or effect, and Landlord shall have no further obligation to offer
to lease to Tenant the Available Space. By way of illustration, in the event
that (i) the Responding Offer were to describe the Available Space as being two
hundred thousand (200,000) square feet of rentable area, and (ii) Tenant desired
to lease the Available Space, then Tenant would be
Page 36
obligated to lease the entire two hundred thousand (200,000) square feet of
rentable area (in whole and not in part) on terms and conditions that are
mutually acceptable to Landlord and Tenant.
(c) In the event that during the applicable ten (10) day period Landlord
and Tenant agree upon the terms and conditions of a lease with respect to the
Available Space, then, for ten (10) days after the expiration of such ten (10)
day period, Tenant and Landlord shall, in good faith, negotiate the final terms
and conditions of a lease with respect to the Available Space, which lease shall
contain the terms and conditions negotiated by Landlord and Tenant pursuant to
Section 42(b). Notwithstanding anything herein to the contrary, if the parties
shall fail to execute and deliver a lease which contains the terms and
conditions of such lease within such ten (10) day period, then Landlord shall
have the right, at Landlord's option, to offer to lease and to lease such
Available Space (or any portion thereof) to others upon such terms and
conditions as shall be acceptable to Landlord.
(d) As used in this Section 42, "Landlord" shall be deemed to include
Meridian Rockville Plaza, LLC ("Meridian"), any party that is affiliated with or
related to Meridian, and any party that succeeds to Landlord's interest under
the Lease. In the event that Meridian sells the Building, the provisions of
this Section 42 shall survive with respect to Meridian and any party that is
related to or affiliated with Meridian. Notwithstanding anything herein to the
contrary, the provisions of this Section 42 shall be subject and subordinate to
the lien of any mortgage or deed of trust which may in the future encumber the
Other Property.
43. EXPANSION IN ADJACENT BUILDING.
(a) Provided that Tenant is not then in default and is then in occupancy
of at least fifty percent (50%) of the Demised Premises at the time of an
"Offer" (as hereinafter defined) and at the time of the commencement of the
Lease Term as to the "Expansion Space" (as hereinafter defined), then during the
Lease Term, Tenant shall have the right to receive from Landlord, prior to the
leasing of said Expansion Space by Landlord to any party other than the occupant
of such space pursuant to an Initial Lease [as defined in Section 43(e)], an
offer to lease the Expansion Space (the "Offer"). "Expansion Space" means only
that office space which is located in the building located at 00 Xxxx Xxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the "Adjacent Building") and which has been
previously leased by Landlord (or an affiliate of, or related party to,
Landlord) to another tenant, as said space may become available for lease after
the expiration or termination of the Initial Lease with respect thereto
(including all extensions and renewal terms which are expressly contained in any
such Initial Lease for such space). The Expansion Space shall be offered to and
accepted (if at all) by Tenant on the terms and conditions that are set forth in
the Offer, or on such other terms and conditions that Landlord and Tenant have
mutually agreed upon, in writing, prior to the date which occurs twenty (20)
calendar days after the date that Landlord delivers the Offer.
(b) In the event that Tenant desires to lease the Expansion Space, then
Landlord and Tenant shall, in good faith, for a period of twenty (20) days after
the date that Landlord delivers the Offer to Tenant, negotiate the terms and
conditions upon which the parties would be willing to enter into a lease with
respect to the Expansion Space. In the event that Landlord and Tenant agree, in
writing, within twenty (20) calendar days after the date that Landlord delivers
the Offer to Tenant, on the terms and conditions which Landlord will lease to
Tenant, and Tenant will lease from Landlord, the Expansion Space, then the
provisions of Section 43(c) shall be applicable. Notwithstanding anything
herein to the contrary, if Landlord and Tenant do not mutually agree, in
writing, within twenty (20) calendar days after the date that Landlord delivers
the Offer to Tenant, upon the terms and conditions which Landlord will lease the
Expansion Space to Tenant, and Tenant will lease the Expansion Space from
Landlord, then Landlord shall be free to offer to lease and to lease such
Expansion Space to others, and, provided that Landlord enters into a lease
agreement with respect to the Expansion Space (or any part thereof) within
twelve (12) months after such twenty (20) day period, Tenant's right to lease
said Expansion Space shall be void and of no force or effect until the next time
that such space becomes available after having been leased by Landlord, and
Landlord may lease said Expansion Space (or any part thereof) to others upon
such terms and for such periods as shall be acceptable to Landlord.
(c) In the event that Landlord and Tenant agree, in writing, within twenty
(20) days after the date that Landlord delivers the Offer to Tenant, on the
terms and conditions (the "Expansion Terms") which Landlord will lease to
Tenant, and Tenant will lease from Landlord, the Expansion Space, then Landlord
and Tenant shall negotiate all of the terms and conditions of a lease setting
forth the Expansion Terms within twenty (20) days after Landlord and Tenant
agree on the Expansion Terms. Notwithstanding anything herein to the contrary,
if the parties shall fail to execute and deliver a lease which contains the
Expansion Terms prior to the expiration of such twenty (20) day period, then
Landlord shall have the right to lease such Expansion Space (or any part
thereof) to others upon such terms and conditions as shall be acceptable to
Landlord.
(d) During the period that any Offer is outstanding, Landlord may proceed
with negotiations with prospective tenants other than Tenant with respect to any
or all of the Expansion Space in question, provided that Landlord may only enter
into unconditional leases with respect to any such Expansion Space upon
complying with all of the terms and
Page 37
conditions regarding Tenant's right of offer, as set forth in this Section 43.
Tenant may only lease each Expansion Space hereunder in whole but not in part.
(e) Landlord and Tenant acknowledge that, as of the date of this Lease,
the Adjacent Building is vacant, and Landlord is in the process of identifying
potential tenants for the Adjacent Building. Each lease of space in the
Adjacent Building shall be referred to herein as an "Initial Lease." The term
"Initial Lease" shall not include any later amendments or modifications to such
lease, but shall include all rights, remedies and options (including extension,
renewal and expansion rights and options) of the tenants under those Initial
Leases. Notwithstanding anything herein to the contrary, all rights granted to
Tenant pursuant to this Section 43 with respect to the Adjacent Building shall
be subject and subordinate to the express terms of any expansion, renewal or
option rights set forth in the Initial Leases.
(f) The provisions of this Section 43 shall be applicable during the Lease
Term and during any extension or renewal of the Lease Term that is entered into
by Landlord and Tenant.
44. RIGHT OF FIRST PURCHASE OFFER - ADJACENT BUILDING.
(a) In the event that (i) Landlord, in the exercise of its sole and
absolute discretion, elects to sell the Adjacent Building, (ii) this Lease shall
be in full force and effect, (iii) Tenant shall not then be in default under
this Lease, and (iv) Tenant shall be then occupying at least fifty percent (50%)
of the Demised Premises, then, prior to offering to sell the Adjacent Building
to any party, Landlord shall deliver to Tenant a written contract which contains
the terms and conditions upon which Landlord is willing to sell the Adjacent
Building. In the event that Tenant desires to purchase the Adjacent Building
(including, for purposes of this Section 44, the underlying land and adjacent
land upon which parking spaces can be located so that the parking for the
building complies with applicable law), Landlord and Tenant shall thereafter,
negotiate in good faith for a period of thirty (30) days after the date of
delivery of such contract, the terms and conditions upon which the parties would
be willing to enter into an agreement for the purchase and sale of the Adjacent
Building. In the event that Landlord and Tenant agree on the terms and
conditions of an agreement of purchase and sale of the Adjacent Building during
such thirty (30) day period, the parties shall, in good faith, during the same
thirty (30) day period, attempt to execute and deliver a contract containing
such agreed upon terms and conditions (such fully executed contract shall
hereinafter be referred to as the "Adjacent Building Executed Contract"). Such
Adjacent Building Executed Contract shall provide for the payment by Tenant to
Landlord of five percent (5%) of the purchase price that is set forth in the
Adjacent Building Executed Contract, which payment shall be (i) non-refundable,
and (ii) in immediately available federal funds. Notwithstanding anything
herein to the contrary, in the event that Landlord and Tenant do not execute and
deliver the Adjacent Building Executed Contract within the applicable thirty
(30) day period, and Landlord thereafter sells the Adjacent Building within
twelve (12) months thereafter, then, subject to the provisions of Section 44(c)
and Section 44(g) below, (i) the provisions of this Section 44 shall be null and
void and of no further force or effect, and (ii) Landlord shall have no further
obligation to offer to sell the Adjacent Building or any portion thereof to
Tenant. In the event that Landlord does not sell the Adjacent Building within
such twelve (12) month period, then, subject to the provisions of Section 44(g)
below, the provisions of this Section 44 shall again be in full force and
effect.
(b) In the event that Landlord and Tenant execute and deliver the
Adjacent Building Executed Contract prior to the expiration of the thirty (30)
day period, then, Landlord shall sell the Adjacent Building to Tenant, and
Tenant shall purchase the Adjacent Building from Landlord, in accordance with
the terms of the Adjacent Building Executed Contract.
(c) In the event that (i) Landlord and Tenant do not execute and deliver
the Adjacent Building Executed Contract within the applicable thirty (30) day
period and (ii) at the expiration of such period, Landlord intends to market the
Adjacent Building for a stated price or a price range, then prior to marketing
the Adjacent Building for such stated price or at such price range, Landlord
shall advise Tenant, in writing (the "Adjacent Building Market Price Offer"), of
the stated price or price range at which Landlord intends to initially market
the Adjacent Building. Upon Tenant's receipt of the Adjacent Building Market
Price Offer, Landlord and Tenant shall negotiate in good faith for a period of
five (5) days the terms and conditions upon which Landlord would be willing to
sell the Adjacent Building to Tenant, and Tenant would be willing to purchase
the Adjacent Building from Landlord. In the event that Tenant and Landlord
agree in writing on the terms and conditions on which Landlord would sell the
Adjacent Building to Tenant and Tenant would purchase the Adjacent Building from
Landlord within five (5) days after the date that Landlord delivers the Adjacent
Building Market Price Offer to Tenant, then the provisions of Section 44(d)
below shall be applicable. Notwithstanding anything herein to the contrary, in
the event that Landlord and Tenant do not agree, in writing, on the terms and
conditions upon which Landlord would sell the Adjacent Building to Tenant, and
Tenant would purchase the Adjacent Building from Landlord, prior to the
expiration of the applicable five (5) day period, then (i) the provisions of
Section 44 of this Lease shall be null and void and of no further force and
effect, and (ii) Landlord shall have the right to sell the Adjacent Building to
any party or parties, including Tenant. Notwithstanding the foregoing, in the
event that Landlord does not sell the Adjacent Building within twelve (12)
months after the expiration of such five (5) day period, then, subject to the
provisions of Section 44(g) below, this Section 44 shall again be of full force
and effect.
Page 38
(d) In the event that Landlord and Tenant agree, in writing, within five
(5) days after the date that Landlord delivers the Adjacent Building Market
Price Offer to Tenant, on the terms and conditions which Landlord would sell the
Adjacent Building to Tenant, and Tenant would purchase the Adjacent Building
from Landlord, then prior to the expiration of such five (5) day period,
Landlord and Tenant shall enter into a written contract, which contract shall
contain the terms and conditions (the "Adjacent Building Sales Terms") which the
parties have previously agreed to in writing during the five (5) day period. If
Landlord and Tenant shall execute and deliver the contract within the applicable
five (5) day period, and Tenant shall simultaneously therewith, pay to Landlord,
in immediately available federal funds, a non-refundable payment equal to five
percent (5%) of the purchase price (the "Adjacent Building Downpayment"), then
Landlord shall sell to Tenant, and Tenant shall purchase from Landlord, the
Adjacent Building in accordance with the terms of such contract. In the event
that Tenant fails to either execute the contract within the applicable five (5)
day period, or fails to deliver to Landlord the Adjacent Building Downpayment
within the applicable five (5) day period, then (i) the provisions of Section 44
shall be null and void and of no further force or effect, and (ii) Landlord
shall have the right to sell the Adjacent Building to any party or parties,
including Tenant. Notwithstanding the foregoing, in the event that Landlord does
not sell the Adjacent Building within twelve (12) months after the expiration of
such five (5) day period, then, subject to the provisions of Section 44(g)
below, this Section 44 shall again be of full force and effect.
(e) Notwithstanding anything herein to the contrary, if upon expiration of
the thirty (30) day period following the applicable thirty (30) day period
Landlord markets the Adjacent Building, but such initial marketing does not
contain a stated price or price range, but instead requests that interested
parties submit a bid or offer that contains the purchase price that such party
is willing to pay to purchase the Adjacent Building, then, Landlord shall
solicit a bid from Tenant and subject to the provisions of Section 44(g) below,
the provisions of Sections 41(c) and (d) shall not be applicable to any sale
that takes place within twelve (12) months following the expiration of such
thirty (30) day period, and Landlord shall have the right to sell the Adjacent
Building to any party or parties, including Tenant.
(f) Notwithstanding anything herein to the contrary, the provisions of
this Section 44 shall be subject and subordinate to the lien of any mortgage or
deed of trust which may in the future encumber the Adjacent Building.
(g) Notwithstanding anything herein to the contrary, in the event that
prior to the date that occurs twelve (12) months after the date that Tenant's
right of first negotiation lapses under this Section 44, Landlord enters into a
contract to sell the Adjacent Building to another party, and such sale is
consummated within one hundred eighty (180) days thereafter, the provisions of
this Section 44 shall be of no further force or effect.
45. RIGHT OF FIRST PURCHASE OFFER - OTHER PROPERTY.
(a) In the event that (i) Landlord, in the exercise of its sole and
absolute discretion, elects to sell the Other Property, (ii) this Lease shall be
in full force and effect, (iii) Tenant shall not then be in default under this
Lease, and (iv) Tenant shall be then occupying at least fifty percent (50%) of
the Demised Premises, then, prior to offering to sell the Other Property to any
party, Landlord shall deliver to Tenant a written contract which contains the
terms and conditions upon which Landlord is willing to sell the Other Property.
In the event that Tenant desires to purchase the Other Property (including, for
purposes of this Section 45, the underlying land and adjacent land upon which
parking spaces can be located so that the parking for the building complies with
applicable law), Landlord and Tenant shall thereafter, negotiate in good faith
for a period of thirty (30) days after the date of delivery of such contract,
the terms and conditions upon which the parties would be willing to enter into
an agreement for the purchase and sale of the Other Property. In the event that
Landlord and Tenant agree on the terms and conditions of an agreement of
purchase and sale of the Other Property during such thirty (30) day period, the
parties shall, in good faith, during the same thirty (30) day period, attempt to
execute and deliver a contract containing such agreed upon terms and conditions
(such fully executed contract shall hereinafter be referred to as the "Other
Property Executed Contract"). Such Other Property Executed Contract shall
provide for the payment by Tenant to Landlord of five percent (5%) of the
purchase price that is set forth in the Other Property Executed Contract, which
payment shall be (i) non-refundable, and (ii) in immediately available federal
funds. Notwithstanding anything herein to the contrary, in the event that
Landlord and Tenant do not execute and deliver the Other Property Executed
Contract within the applicable thirty (30) day period, and Landlord thereafter
sells the Other Property within twelve (12) months thereafter, then, subject to
the provisions of Section 45(c) and Section 45(g) below, (i) the provisions of
this Section 45 shall be null and void and of no further force or effect, and
(ii) Landlord shall have no further obligation to offer to sell the Other
Property or any portion thereof to Tenant. In the event that Landlord does not
sell the Other Property within such twelve (12) month period, then subject to
the provisions of Section 45(g) below, the provisions of this Section 45 shall
again be in full force and effect.
(b) In the event that Landlord and Tenant execute and deliver the Other
Property Executed Contract prior to the expiration of the thirty (30) day
period, then, Landlord shall sell the Other Property to Tenant, and Tenant shall
purchase the Other Property from Landlord, in accordance with the terms of the
Other Property Executed Contract.
(c) In the event that (i) Landlord and Tenant are unable to agree on the
terms and conditions of the contract within the applicable thirty (30) day
period, and (ii) at the expiration of such period, Landlord intends to market
the Other Property for a stated price or a price range, then prior to marketing
the Other Property for such stated price or at such price range, Landlord shall
advise Tenant, in writing (the "Other Property Market Price Offer"), of the
stated price or price range at
Page 39
which Landlord intends to initially market the Other Property. Upon Tenant's
receipt of the Other Property Market Price Offer, Landlord and Tenant shall
negotiate in good faith for a period of five (5) days the terms and conditions
upon which Landlord would be willing to sell the Other Property to Tenant, and
Tenant would be willing to purchase the Other Property from Landlord. In the
event that Tenant and Landlord agree in writing on the terms and conditions on
which Landlord would sell the Other Property to Tenant and Tenant would purchase
the Other Property from Landlord within five (5) days after the date that
Landlord delivers the Other Property Market Price Offer to Tenant, then the
provisions of Section 45(d) below shall be applicable. Notwithstanding anything
herein to the contrary, in the event that Landlord and Tenant do not agree, in
writing, on the terms and conditions upon which Landlord would sell the Other
Property to Tenant, and Tenant would purchase the Other Property from Landlord,
prior to the expiration of the applicable five (5) day period, then (i) the
provisions of Section 45 of this Lease shall be null and void and of no further
force and effect, and (ii) Landlord shall have the right to sell the Other
Property to any party or parties, including Tenant. Notwithstanding the
foregoing, in the event that Landlord does not sell the Other Property within
twelve (12) months after the expiration of such five (5) day period, then,
subject to the provisions of Section 45(g) below, this Section 45 shall again be
of full force and effect.
(d) In the event that Landlord and Tenant agree, in writing, within five
(5) days after the date that Landlord delivers the Other Property Market Price
Offer to Tenant, on the terms and conditions which Landlord would sell the Other
Property to Tenant, and Tenant would purchase the Other Property from Landlord,
then prior to the expiration of such five (5) day period, Landlord and Tenant
shall enter into a written contract, which contract shall contain the terms and
conditions (the "Other Property Sales Terms") which the parties have previously
agreed to in writing during the five (5) day period. If Landlord and Tenant
shall execute and deliver the contract within the applicable five (5) day
period, and Tenant shall simultaneously therewith, pay to Landlord, in
immediately available federal funds, a non-refundable payment equal to five
percent (5%) of the purchase price (the "Other Property Downpayment"), then
Landlord shall sell to Tenant, and Tenant shall purchase from Landlord, the
Other Property in accordance with the terms of such contract. In the event that
Tenant fails to either execute the contract within the applicable five (5) day
period, or fails to deliver to Landlord the Other Property Downpayment within
the applicable five (5) day period, then (i) the provisions of Section 45 shall
be null and void and of no further force or effect, and (ii) Landlord shall have
the right to sell the Other Property to any party or parties, including Tenant.
Notwithstanding the foregoing, in the event that Landlord does not sell the
Other Property within twelve (12) months after the expiration of such five (5)
day period, then, subject to the provisions of Section 45(g) below, this Section
45 shall again be of full force and effect.
(e) Notwithstanding anything herein to the contrary, if upon expiration of
the applicable thirty (30) day period, the Landlord markets the Other Property,
but such initial marketing does not contain a stated price or price range, but
instead requests that interested parties submit a bid or offer that contains the
purchase price that such party is willing to pay to purchase the Other Property,
then Landlord shall solicit a bid from Tenant and, subject to the provisions of
Section 45(g) below, the provisions of Sections 41(c) and (d) shall not be
applicable to any sale that takes place within twelve (12) months following the
expiration of such thirty (30) day period, and Landlord shall have the right to
sell the Other Property to any party or parties, including Tenant.
(f) As used in this Section 45, "Landlord" shall be deemed to include
Meridian Rockville Plaza, LLC ("Meridian"), any party that is affiliated with or
related to Meridian, and any party that succeeds to Landlord's interest under
the Lease. In the event that Meridian sells the Building, the provisions of
this Section 45 shall survive with respect to Meridian and any party that is
related to or affiliated with Meridian. Notwithstanding anything herein to the
contrary, the provisions of this Section 45 shall be subject and subordinate to
the lien of any mortgage or deed of trust which may in the future encumber the
Other Property.
(g) Notwithstanding anything herein to the contrary, in the event that
prior to the date that occurs twelve (12) months after the date that Tenant's
right of first negotiation lapses under this Section 45, Landlord enters into a
contract to sell the Other Property to another party, and such sale is
consummated within one hundred eighty (180) days thereafter, the provisions of
this Section 45 shall be of no further force or effect.
(h) Tenant shall cooperate (at no cost to Tenant) with Landlord's efforts
in acquiring the Other Property and shall exclusively work with Landlord in
obtaining the Other Property. Tenant shall not compete with Landlord in
acquiring the Other Property or in acquiring any interest in the Other Property.
Tenant shall not "team" or joint venture with any other party to purchase or
lease the Other Property or any part thereof.
46. PACKAGE SALE.
(a) In the event that (i) Landlord has delivered to Tenant a notice under
Sections 41 and/or 44, and/or 45 of this Lease which stated that Landlord
intended to sell, as part of the same transaction (the "Package Transaction"),
two (2) or more of the following properties: the Building, the Adjacent Building
and the Other Property, (ii) Landlord and Tenant did not enter into and deliver
a contract to purchase and sell the applicable properties within the applicable
time frame provided for under such Sections of the Lease, (iii) the applicable
properties that Landlord desired to sell were not sold to another party, and
(iv) Landlord, in the exercise of its sole and absolute discretion, either
elects to market only one (1) of such
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properties that was formerly a part of the Package Transaction or Landlord
elects to market two (2) or more of the Building, the Adjacent Building and/or
the Other Property, and at least one (1) of such properties was not a part of
the Package Transaction (the property or properties that Landlord elects, in its
sole discretion, to so market under the foregoing provisions of this Section 46
shall hereinafter be referred to as the "Available Property"), then the
provisions of Section 46(b) below shall be applicable.
(b) In the event that (i) the provisions of Section 46 are applicable,
(ii) this Lease shall be in full force and effect, (iii) Tenant shall not then
be in default under this Lease, and (iv) Tenant shall be then occupying at least
fifty percent (50%) of the Demised Premises, then, prior to offering to sell the
Available Property to any party, Landlord shall deliver to Tenant a written
contract which contains the terms and conditions upon which Landlord is willing
to sell the Available Property. In the event that Tenant desires to purchase
the Available Property (including, for purposes of this Section 46, the
underlying land and adjacent land upon which parking spaces can be located so
that the Available Property complies with applicable law), Landlord and Tenant
shall thereafter, negotiate in good faith for a period of five (5) days after
the date of delivery of such contract, the terms and conditions upon which the
parties would be willing to enter into an agreement for the purchase and sale of
the Available Property. In the event that Landlord and Tenant agree on the
terms and conditions of an agreement of purchase and sale of the Building during
the same five (5) day period, the parties shall, in good faith, during such five
(5) day period, attempt to execute and deliver a contract containing such agreed
upon terms and conditions (such fully executed contract shall hereinafter be
referred to as the "Available Property Executed Contract"). Such Available
Property Executed Contract shall provide for the payment by Tenant to Landlord
of five percent (5%) of the purchase price that is set forth in the Available
Property Executed Contract, which payment shall be (i) non-refundable, and (ii)
in immediately available federal funds. Notwithstanding anything herein to the
contrary, in the event that Landlord and Tenant do not execute and deliver the
Available Property Executed Contract prior to the expiration of the five (5) day
period provided for above, and Landlord thereafter sells the Available Property
within twelve (12) months thereafter, then, subject to the provisions of Section
46(f) below, (i) the provisions of this Section 46 shall be null and void and of
no further force or effect, and (ii) Landlord shall have no further obligation
to offer to sell the Available Property or any portion thereof to Tenant. In
the event that Landlord does not sell the Available Property within such twelve
(12) month period, then, subject to the provisions of Section 46(f) below, the
provisions of this Section 46 shall again be in full force and effect.
(c) In the event that Landlord and Tenant execute and deliver the
Available Property Executed Contract prior to the expiration of the five (5) day
period, then, Landlord shall sell the Available Property to Tenant, and Tenant
shall purchase the Available Property from Landlord, in accordance with the
terms of the Available Property Executed Contract.
(d) In the event that Landlord and Tenant agree, in writing, within five
(5) days after the date that Landlord delivers the contract for the Available
Property, on the terms and conditions which Landlord would sell the Available
Property to Tenant, and Tenant would purchase the Available Property from
Landlord, then prior to the expiration of such five (5) day period, Landlord and
Tenant shall enter into a written contract, which contract shall contain the
terms and conditions (the "Available Property Sales Terms") which the parties
have previously agreed to in writing during the five (5) day period. If Landlord
and Tenant shall execute and deliver the contract within the applicable five (5)
day period, and Tenant shall simultaneously therewith, pay to Landlord, in
immediately available federal funds, a non-refundable payment equal to five
percent (5%) of the purchase price (the "Available Property Downpayment"), then
Landlord shall sell to Tenant, and Tenant shall purchase from Landlord, the
Available Property in accordance with the terms of such contract. In the event
that Tenant fails to either execute the contract within the applicable five (5)
day period, or fails to deliver to Landlord the Available Property Downpayment
within the applicable five (5) day period, then (i) the provisions of Section 46
shall be null and void and of no further force or effect, and (ii) Landlord
shall have the right to sell the Available Property to any party or parties,
including Tenant. Notwithstanding the foregoing, in the event that Landlord does
not sell the Available Property within twelve (12) months after the expiration
of such five (5) day period, then, subject to the provisions of Section 46(f)
below, this Section 46 shall again be of full force and effect.
(e) Notwithstanding anything herein to the contrary, the provisions of
this Section 46 shall be subject and subordinate to the lien of any mortgage or
deed of trust which may in the future encumber the Building.
(f) Notwithstanding anything herein to the contrary, in the event that
prior to the date that occurs twelve (12) months after the date that Tenant's
right of first negotiation lapses under this Section 46 Landlord enters into a
contract to sell the Available Property to another party, and such sale is
consummated within one hundred eighty (180) days thereafter, the provisions of
this Section 46 shall be of no further force or effect.
(g) Notwithstanding anything herein to the contrary, in the event of any
conflict between the terms of Sections 41, 44 and/or 45 of this Lease and the
terms of Section 46 of this Lease, the terms of Section 46 of this Lease shall
govern and control (i.e., if Landlord is obligated to provide Tenant with a
written notice under this Section 46 with respect to any Available Property,
Landlord shall not be required to also send Tenant a written notice under
Sections 41, 44 or 45 of this Lease, and Tenant's right of first negotiation
with respect to such property on such occasion shall be governed by the
provisions of this Section 46).
Page 41
47. LOADING DOCK.
(a) Tenant acknowledges that the loading dock that is located in the
Building serves as the only loading dock for both the Building and the Adjacent
Building. Landlord hereby grants to Tenant the right to use the loading dock
twenty four (24) hours per day, seven (7) days per week, during the Lease Term,
provided, however, the loading dock shall be available for the reasonable use of
tenants and occupants (and their agents, contractors, employees, and delivery
personnel) of the Adjacent Building during the hours of 8:00 a.m. through 6:00
p.m., Monday through Friday (the "Standard Hours") (except for legal holidays).
In addition, Tenant shall make the loading dock available for use by contractors
providing janitorial or char services to the Adjacent Building during periods
that are reasonably acceptable to Landlord and Tenant on Monday through Friday
of each week (the "Char Service Hours") and Tenant shall make the loading dock
available at other times for reasonable periods of time upon receiving at least
twenty-four (24) hours' prior notice. In the event that Landlord requests that
the loading dock be made available on a regular basis for use by the tenants
and/or occupants of the Adjacent Building for hours that exceed the Standard
Hours and the Char Service Hours, then (i) Tenant shall employ security
personnel who will supervise access to the loading dock during such hours, (ii)
Landlord shall reimburse Tenant for Tenant's reasonable, out-of-pocket costs of
employing such security personnel for such after-hours usage and (iii) operating
expenses that are charged to Tenant under this Lease shall not include any
amount that is payable by Landlord under this sentence.
(b) Landlord and Tenant have agreed to make certain improvements in the
Building in the areas adjacent to, and in the vicinity of the loading dock, so
that occupants and tenants of the Adjacent Building (and their agents,
contractors, employees and delivery personnel) will not have access to the
Demised Premises.
(c) Throughout the Lease Term, Tenant, at Tenant's sole cost and expense,
shall employ security personnel who will supervise access to the loading dock on
a non-discriminatory basis. Such security personnel shall be physically present
at the loading dock area during the hours of 8:00 a.m. through 6:00 p.m., Monday
through Friday (except for legal holidays) and during the Char Service Hours.
To the extent that access to the loading dock is requested by Landlord or any
party acting by or through Landlord, including, without limitation, occupants
and tenants of the Adjacent Building, during any hours other than are set forth
above, the cost of employing security personnel to supervise such access shall
be borne by the party who requests such access (i.e., if a tenant of the
Adjacent Building moves into the Building on a Sunday, the cost of the security
personnel who supervises such move shall be borne by such tenant).
(d) The security personnel that is so employed by Tenant shall have no
obligation to receive or account for any merchandise, equipment or property that
is delivered, or is intended for delivery, to the Adjacent Building.
(e) Landlord and Tenant shall, in good faith, cooperate with each other in
connection with the use of such loading dock.
48. FENCE. Tenant has advised Landlord that Tenant intends to install a fence
around a portion of the exterior of the Building which limits access to certain
exterior entrances to the Building (i.e., the entrances to the Building which
are located on the lower level of the Building near the cafeteria that is
located in the Building). Tenant, at Tenant's sole cost and expense, shall have
the right to install such fence, provided (a) the size, color, height, design,
location, method of installation of, and plans and specifications for, such
fence shall be subject to Landlord's prior written approval, and (b) such fence
is installed and maintained by Tenant in a first class manner in accordance with
all Governmental Laws.
49. SUBORDINATION OF LIEN. Upon Tenant's prior written request, Landlord
agrees to subordinate its interest in any equipment, trade fixtures or personal
property of Tenant that is located in the Demised Premises to the lien of any
bona fide equipment lease or bona fide financing arrangement.
50. SATELLITE DISH.
(a) Subject to the satisfaction of all the conditions in this Section,
Tenant shall have the right to install in an area designated by Landlord on the
roof of the Building a satellite dish antenna, together with the cables
extending from such antenna to the Demised Premises. Tenant shall not be
entitled to install such an antenna (i) which is greater than 3.5 meters in
diameter, (ii) which is more than ten (10) feet in height, (iii) if such
installation would adversely affect (or in a manner that would adversely affect)
any warranty with respect to the roof, (iv) (A) if such installation would
adversely affect (or in a manner that would adversely affect) the structure or
any of the building systems of the Building, or (B) without Landlord's prior
written consent, if such installation would require (or in a manner that would
require) any structural alteration to the Building, (v) if such installation
would violate (or in a manner that would violate) any applicable federal, state
or local law, rule or regulation, (vi) unless sufficient room therefor exists at
the time of the proposed installation, (vii) unless Tenant has obtained at
Tenant's expense, and has submitted to Landlord copies of, all permits and
approvals relating to such antenna and such installation, (viii) unless such
antenna is white or of a beige or lighter color (or is otherwise appropriately
screened), (ix) unless such antenna is installed, at Tenant's sole cost and
expense, by a qualified contractor chosen by Tenant and approved in advance by
Landlord, which approvals shall not be unreasonably withheld, conditioned or
delayed, (x) to the extent that the installation and/or use of said antenna and
related equipment would interfere with any existing tenant of the Building's
Page 42
use of its telecommunication equipment, and (xi) unless Tenant obtains
Landlord's prior consent to the manner in which such installation work is to be
done. All plans and specifications concerning such installation shall be
subject to Landlord's prior written approval, which approval shall not be
unreasonably withheld, conditioned or delayed.
(b) Tenant shall not have access to any such antenna without Landlord's
prior written consent, which consent shall be granted to the extent necessary
for Tenant to perform its maintenance obligations hereunder and only if Tenant
is accompanied by Landlord's representative (if Landlord so requests).
(c) At all times during the Lease Term, Tenant shall maintain said antenna
in good condition and in a manner that avoids interference with or disruption to
Landlord and other tenants of the Building. At the expiration or earlier
termination of the Lease Term (of if Tenant discontinues use of such antenna),
Tenant shall remove such antenna and related equipment from the Building.
(d) Upon ten (10) days' prior written notice to Tenant, Landlord shall
have the right to require Tenant to relocate the antenna, if in Landlord's
opinion such relocation is necessary or desirable. Any such relocation shall be
performed by Tenant at Tenant's expense, and in accordance with all of the
requirements of this Section. Nothing in this Section shall be construed as
granting Tenant any line of sight easement with respect to such satellite dish
antenna; provided, however, that if Landlord requires that such antenna be
relocated in accordance with the preceding two (2) sentences, then Landlord
shall use reasonable efforts to provide either (a) the same line of sight for
such antenna as was available prior to such relocation, or (b) a line of sight
for such antenna which is functionally equivalent to that available prior to
such relocation.
(e) In granting Tenant the right hereunder, Landlord makes no
representation as to the legality of such antenna or its installation. If any
federal, state, county, regulatory or other authority requires the removal or
relocation of such antenna, Tenant shall remove or relocate such antenna at
Tenant's sole cost and expense, and Landlord shall under no circumstances be
liable to Tenant therefor.
(f) Tenant shall indemnify and hold Landlord harmless from and against all
costs, damages, claims, liabilities and expenses (including reasonable
attorneys' fees) suffered by or claimed against Landlord, directly or
indirectly, based on, arising out of or resulting from any act or omission with
respect to the installation, use, operation, maintenance, repair or disassembly
of such antenna and related equipment.
IN WITNESS WHEREOF, the parties have executed this Lease the day and year
first above written.
WITNESS/ATTEST: LANDLORD:
MERIDIAN ROCKVILLE PLAZA, LLC, a
Maryland limited liability company
By: By: (SEAL)
-------------------------------- -------------------------------
Title: Title:
----------------------------- ----------------------------
Date:
------------------------------
WITNESS/ATTEST: TENANT:
THE XXXXXX-XXXXX CORPORATION,
a New York corporation
By: By: (SEAL)
-------------------------------- -------------------------------
Title: Title:
----------------------------- ----------------------------
Date:
------------------------------
Page 43
SECRETARY'S CERTIFICATE
(Corporate Tenant)
I, _____________________________, Secretary of The Xxxxxx-Xxxxx
Corporation, a New York corporation, do hereby certify that the foregoing and
annexed Lease was executed and delivered pursuant to and in strict conformity
with, the provisions of a resolution of the Board of Directors of said
(professional) corporation (association) passed at a regularly called meeting of
said Board of Directors, and that a quorum was present at said meeting (or
adopted by unanimous written consent of said Board of Directors, in lieu of a
meeting), in conformity with the laws of the state of incorporation of said
corporation.
------------------------------------
Secretary
Date:
-------------------------------
[Corporate Seal]
Page 44