Exhibit 10.28
AGREEMENT OF LEASE
BY AND BETWEEN
CONSORTIUM ONE--ANNAPOLIS, LLC
A MARYLAND LIMITED COMPANY
(LANDLORD)
AND
USinternetworking, INC.
A DELAWARE CORPORATION
(Tenant)
AGREEMENT OF LEASE
THIS AGREEMENT OF LEASE is made and entered into this 3rd day of April
1998 by and between CONSORTIUM ONE--ANNAPOLIS, LLC, a Maryland limited
company, hereinafter referred to as "Landlord" and USinternetworking, INC., a
corporation organized and existing under the law of Delaware, hereinafter
referred to as "Tenant".
W I T N E S S E T H:
- - - - - - - - - -
1. PREMISES. In consideration of the rent hereinafter reserved and of
the covenants hereinafter contained, Landlord does hereby lease to Tenant,
and Tenant hereby leases from Landlord, that certain office space consisting
of: (i) the entire Third (3rd) Floor of the Building, as defined below,
consisting of the agreed size of 12,290 rentable square feet of office space;
and (ii) the entire Fourth (4th) Floor of the Building, as defined below,
consisting of 11,970 rentable square feet, all of which as shown on the floor
plans attached hereto as Exhibit A-1 and A-2 respectively, and designated as
Xxxxx 000 xxx Xxxxx 000 respectively, which space is hereinafter referred to
as the "Premises". The agreed aggregate square footage of the Premises is
approximately 24,260 rentable square feet. The term "Building" shall mean 000
Xxxxxxx Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx (the "Building"). Landlord
expressly reserves the right to change the name of the Building; however, in
the event of any such change, Landlord shall provide Tenant with thirty (30)
days advance notice of such change.
2. TERM.
2.1. The term of this Lease shall commence on the date of full
execution hereof by the parties (the "Commencement Date") and shall terminate
at 12:00 o'clock midnight on the last day of the calendar month which
completes Sixty (60) full months of tenancy hereunder. Notwithstanding the
foregoing, and provided Tenant is not otherwise in default of its obligations
hereunder, Basic Rent shall be due commencing on the Rent Commencement Date
as defined at Section 3.1 below.
2.2. After commencement of the Lease Term delivery of possession,
Landlord and Tenant will execute a Confirmation of Lease Certificate, in
accordance with the form attached hereto as Exhibit "B."
3. RENT.
3.1. Commencing on April 1, 1998 (the "Rent Commencement Date")
Tenant covenants and agrees to pay to Landlord annual Basic Rent (at the rate
of $22.00 per square foot) in the amount of Five Hundred Thirty Three
Thousand Seven Hundred Twenty and 00/100 Dollars ($533,720.00), payable in
equal monthly installments of Forty Four Thousand Four Hundred Seventy Six
and 67/100 Dollars ($44,476.67), (the "Monthly Rent") in advance on the first
day of the month during the term of the Lease, less any credits granted by
Landlord pursuant to Section 3.8 below.
2
3.2. The Monthly Rent and all additional rent as provided for under
this Lease shall be paid promptly when due, in cash or by check, in lawful
money of the United States, without notice or prior demand and without
deduction, diminution, abatement, counterclaim or setoff of any amount or for
any reason whatsoever, payable to LANDLORD, C/O THE XXXXXXXXX COMPANIES,
AGENT 0000 X XXXXXX, X.X., XXXXX 000, XXXXXXXXXX, X.X. 00000 or to such other
person and place as may be designated by notice in writing from Landlord to
Tenant from time to time. If Tenant shall present to Landlord more than twice
during the term of this Lease checks or drafts not honored by the institution
upon which they are issued, then Landlord reserves its rights to require that
future payments of rent and additional rent and other sums thereafter payable
be made by certified or cashier's check.
3.3. Other remedies for non-payment notwithstanding, any
installment of rent which is not paid within seven (7) days after the due
date shall be subject, at Landlord's option each month, to a late charge
equal to five percent (5%) of the amount due, which shall be payable as
additional rent. Any installment of Basic Rent or additional rent not paid
within thirty (30) days from the date due shall accrue interest at the rate
of twelve percent (12%) per annum (but in no event at a rate higher than the
maximum rate allowed by law) until paid in full, which interest shall be
deemed additional rent hereunder.
3.4. No payment by Tenant or receipt by Landlord of a lesser amount
than the monthly installments of rent herein stipulated shall be deemed to be
other than on account of the stipulated rent nor shall any endorsement or
statement on any check or any letter accompanying any check or payment as
rent be deemed an accord and satisfaction, and Landlord may accept such check
for payment without prejudice to Landlord's right to recover the balance of
such rent or pursue any other remedy provided in this Lease.
3.5. (a) Simultaneously with the execution of this Lease by Tenant,
Tenant shall deposit with Landlord the sum of Four Hundred Thousand and
00/100 Dollars ($400,000.00), as an additional security deposit in the form
of a Letter of Credit (or a cash deposit to be replaced thereafter by a
Letter of Credit) substantially in the form attached hereto Exhibit E, (the
"Letter of Credit"), which shall not bear interest to Tenant. The Letter of
Credit shall be security for the payment and performance by Tenant of all
Tenant's obligations, covenants, conditions and agreements under this Lease up
through and including December 31, 1999. In the event of any default by
Tenant under the Lease beyond any applicable cure and grace period, or
failure by Tenant to provide landlord with any evidence of extensions of said
credit until December 31, 1999 within 30 days of the expiration of the
initial term of said Letter of Credit, Landlord may immediately draw down on
the Letter of Credit without requirement of notice to Tenant. Landlord shall
have the right, but shall not be obligated, to apply all or any portion of
the Letter of Credit to cure any default by Tenant under the Lease, in which
event Tenant shall be obligated to promptly deposit with Landlord the amounts
necessary to restore the Letter of Credit to its original amount. In the
event Tenant fails to perform its obligations hereunder and Landlord
exercises its rights, the Letter of Credit shall not be deemed liquidated
damages and Landlord may apply the Letter of Credit to reduce Landlord's
damages. Any such application of the Letter of Credit shall not preclude
Landlord from recovering from Tenant all additional damages incurred by
Landlord. In the event of the sale of the Building or the sale or other
transfer of Landlord's interest in the Building, Landlord shall have the
right to transfer the Letter of Credit to the purchaser or transferee,
3
in which event Tenant shall look only to the new Landlord for the return of the
Letter of Credit and Landlord shall thereupon be released from all liability to
Tenant for the return of the Letter of Credit.
(b) On or before January 1, 2000, Tenant shall deposit with
Landlord the amount of Forty Four Thousand Seven Hundred Seventy Six and
67/100 Dollars ($44,776.67) which shall be held by Landlord (the "Security
Deposit") as security for the faithful performance by Tenant of all of the
terms, covenants and conditions of this Lease to be kept and performed by
Tenant during the Lease Term. If Tenant defaults with respect to any
provisions of this Lease, including but not limited to the provisions
relating to rent, in addition to Landlord's other remedies hereunder,
Landlord may (but shall not be required to) use, apply or retain all or any
part of the Security Deposit for the payment of any rent or other sum in
default, or to compensate Landlord for any loss or damage which Landlord may
suffer by reason of Tenant's default. If any portion of said deposit is so
used or applied, Tenant, within five (5) days after demand therefor, shall
deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to its original amount, and Tenant's failure to do so shall be a
material breach of this Lease. Said deposit shall not bear interest to
Tenant, unless so required by an applicable provision of law, and shall be
paid to Tenant at the end of the Lease Term, if Tenant is not in default. In
the event Tenant fails to perform its obligations and take possession of the
Premises on the Commencement Date provided for herein, the Security Deposit
shall not be deemed liquidated damages and Landlord may apply the Security
Deposit to reduce Landlord's damages. Any such application of the Security
Deposit shall not preclude Landlord from recovering from Tenant all
additional damages incurred by Landlord. Notwithstanding anything to the
contrary contained in this Lease, prior to any such application, Landlord
shall provide Tenant with ten (10) days written notice of default and intent
to apply the Security Deposit. Within thirty (30) days after the expiration
of the term hereof (as same may be renewed or extended), and provided that
Tenant is not in default under the terms of this Lease, Landlord shall return
the Security Deposit to Tenant, less such portion thereof as Landlord shall
have retained to cure any default by Tenant with respect to any of tenant's
obligations, covenants, conditions or agreements under the Lease. In the
event of the sale of the Building or the sale or other transfer of Landlord's
interest in the Building, Landlord shall have the right to transfer the
Security Deposit to the purchaser or transferee, in which event Tenant shall
look only to the new landlord for the return of the Security Deposit and
Landlord shall thereupon be released from all liability to Tenant for the
return of the Security Deposit. Notwithstanding anything to the contrary set
forth in this Section 3.5, in the event Tenant is not in default of any
provision of this Lease beyond any applicable cure and grace period, Landlord
shall upon tender of the Security Deposit release the Letter of Credit.
3.7. Tenant's pro rata share of increases in Operating Expenses, as
defined in Article 6, is agreed to be Forty One and 33/100 percent (41.33%).
3.8. Notwithstanding anything to the contrary contained in this
Article 3, provided Tenant is not in default of its obligations hereunder
beyond any applicable cure and grace period, Landlord shall provide Tenant
with a rent credit in the aggregate amount of $302,906.68 (the "Rent Credit")
which shall be offset by Tenant in twenty-one (21) equal monthly installments
of $14,424.13 against each month's Monthly Rent commencing on the Rent
Commencement Date
4
up through and including Monthly Rent owing for December, 1999. Thereafter,
commencing with the Monthly Rent due on January 1, 2000, Tenant covenants and
agrees to pay to Landlord the full Basic Rent, as adjusted pursuant to
Article 5, absent any credits and offsets of any kind. In the Event of any
Default by Tenant of its obligations under this Lease, Landlord reserves the
right to seek a repayment of this Rent Credit as additional damages in addition
to all other amounts owed under the Lease.
4. USE OF PREMISES.
4.1. Tenant covenants to use the Premises only to carry on the
business of general computer programming and central computer facility,
general office use and for no other purpose, subject to and in accordance
with all applicable zoning and other zoning and other governmental
regulations. Tenant, at its own expense, shall comply with and promptly carry
out all orders, requirements or conditions, imposed by the ordinances, laws
and regulations of all of the governmental authorities having jurisdiction
over the Premises, which are occasioned by or required in the conduct of
Tenant's business within the Premises and to obtain all licenses, permits and
the like required to permit Tenant to occupy the Premises.
4.2. Tenant accepts the Premises from Landlord in "As Is"
condition, except to the extent specifically provided in Exhibit D of this
Lease.
4.3. Tenant shall not permit the Premises, or any part thereof, to
be used for any disorderly, unlawful or hazardous purpose, nor as a source of
annoyance or embarrassment to Landlord or other tenants, nor for any purpose
other than hereinbefore specified, nor for the manufacture of any commodity
therein, without the prior written consent of Landlord.
5. RENT ADJUSTMENT. The first "Lease Year" shall be the period beginning
with the Commencement Date if it is the first day of a calendar month, or if
it is not, then on the first day of the calendar month next succeeding the
Commencement Date and ending twelve (12) months thereafter, with each
succeeding "Lease Year" to be the twelve (12) month period commencing with
the anniversary of the Commencement Date. Effective on the first day of each
successive Lease Year, so long as this Lease remains in effect, the Basic
Rent set forth in Article 3.01 shall be increased on an annual basis by three
percent (3%) of the amount of the Basic Rent which was in effect for the
Lease Year immediately preceding the Lease Year for which the adjustment is
being made, and Tenant thereafter covenants to pay Landlord, during each
ensuing Lease Year such now adjusted Basic Rent.
6. OPERATING EXPENSES--ESCALATION.
6.1. Following the end of each Comparison Year, Tenant shall pay to
Landlord, Additional Rent, within thirty (30) days after receipt of a
statement of the amount thereof, Tenant's pro rata share, as specified in
Paragraph 3.7, of the amount of the increase, if any, of the Operating
Expenses, including Real Estate Taxes for the Comparison Year over the Base
Year. If the system of real estate taxation shall be altered or varied and
any new tax or levy shall be levied or imposed on said land, Building and
improvements, and/or Landlord, in substitution for real estate taxes
5
presently levied or imposed on immovables in the jurisdiction where the Building
is located, then any such new tax or levy shall be included within the term
"Real Estate Taxes."
6.2. For purposes of this Article: (a) The term "Operating
Expenses" shall mean any and all expenses incurred by Landlord in connection
with the operation, maintenance and repair of the Building including, but not
limited to the following: Real Estate Taxes, as defined below, and
impositions, general and special, of whatever kind or description levied
against the Building, electricity, fuel, water, sewer, gas, oil and other
utility charges (except to the extent separately submetered pursuant to
Paragraph 8.2 below); security; pest control; cleaning of windows and
exterior curtain walls; janitorial services; trash and snow removal;
landscaping and repair and maintenance of grounds; salaries, wages, and
benefits for employees of Landlord engaged in the operation, maintenance or
repair of the Building, including benefits, payroll taxes and worker's
compensation insurance; license fees, casualty and liability insurance;
building or cleaning supplies; uniforms and dry cleaning service; supplies,
repairs, replacements and other expenses for maintaining and operating the
Building; the cost, including interest, amortized over its useful life or
payback period of any capital improvement made to the Building which is
required under any governmental law or regulation that was not applicable to
the Building at the time it was constructed or of installation of any device
or other equipment which improves the operating efficiency of any system
within the Building and thereby reduces operating expenses; service or
management contracts with independent contractors, general overhead;
administrative expenses; management fees; telephone, telegraph and
stationery. (b) The term "Base Year" shall mean the calendar year 1998. (c)
the term "Comparison Year" shall mean the period of twelve months commencing
on January 1st of each year and ending on December 31st of each year.
6.3. Operating Costs for each calendar year shall be those actually
incurred, provided, however, that if the Building was not at least ninety
five percent (95%) occupied during the entire calendar year, the Operating
Costs shall be adjusted to project the Operating Costs as if the building was
ninety five percent (95%) occupied. in computing the Operating Costs for any
year in which the occupancy level of the Building does not average at least
ninety five percent (95%), the actual cost of all Operating Costs which
fluctuate with the level of occupancy of the Building, (the "Fluctuating
Expenses") including, by way of example and not as a limitation, janitorial
services, maintenance contracts, management fees and utility services, shall
be adjusted by dividing the actual cost of such items by the percentage of
average occupancy of the Building for that year (i.e., if the Building
averaged 50% occupancy, the actual cost of the Fluctuating Expenses would be
divided by.50 to determine the adjusted cost of these items). This adjusted
cost for Fluctuating Expenses would then be multiplied by ninety five percent
(95%) and the resulting product would be added to ninety-five percent (95%)
of the cost of the non-fluctuating expenses to determine the applicable
Operating Expenses for that calendar year. Landlord shall submit to Tenant a
statement of the aforesaid determination, including Tenant's pro rata share
of any increase.
6.4. For purposes of this Article: (a) The term "Real Estate Taxes"
means all taxes, rates and assessments, general and special, levied or
imposed with respect to the land, Building and improvements constructed
thereon including all taxes, rates and assessments, general and special,
levied or imposed for school, public betterment and/or general or local
improvements. (b) The term "Base Real Estate Taxes" means the assessed value
of said land, Building and improvements, multiplied by the then current rate,
for the fiscal year 1997/1998. (c) The term "Real
6
Estate Tax Year" means each successive twelve month period following and
corresponding to the period in respect of which the Base Real Estate Taxes are
established, irrespective of the period or periods which may from time to time
in the future be established by competent authority for the purposes of levying
or imposing real estate taxes. (d) Reasonable expenses incurred by Landlord in
obtaining or attempting to obtain a reduction of any Real Estate Taxes shall be
added to and included in the amount of any such Real Estate Taxes. Real Estate
Taxes which are being contested by Landlord shall nevertheless be included for
purposes of the computation of the liability of Tenant under paragraph 6.1
hereof; provided, however, that in the event that Tenant shall have paid any
amount of increased rent pursuant to this Article 6 and Landlord shall
thereafter receive a refund of any portion of any Real Estate Taxes on which
such payment shall have been based, Landlord shall pay to Tenant the appropriate
portion of such refund. Landlord shall have no obligation to contest, object or
litigate the levying or imposition of any Real Estate Taxes and may settle,
compromise, consent to, waive or otherwise determine in its discretion any Real
Estate Taxes without consent or approval of Tenant.
6.5. Nothing contained in this Article 6 shall be construed at any
time to reduce the rents payable pursuant to Articles 3 and 5 of this Lease.
6.6. If the termination date of this Lease shall not coincide with
the end of a Comparison Year, then in computing the amount payable under this
Article 6 for the period between the commencement of the applicable
Comparison Year in question and the termination date of this Lease, the
amount that would have been due from Tenant for the full year, if Tenant had
been a tenant for the entire Comparison Year, shall be pro-rated over the
portion of the Comparison Year that Tenant is a tenant in the Building.
Tenant's obligation to pay increased Operating Expenses under this Article 6
for the final period of the Lease (as well as for any earlier period not paid
as of the expiration of the Lease) shall survive the expiration of the term
of this Lease.
6.7. As soon as practicable after the first day of January next
following the Commencement Date of this Lease, and as soon as practicable
after each first day of January thereafter during the term of the Lease,
Landlord shall submit to Tenant a statement of Landlord's estimate of the
amount by which Operating Expenses for the Comparison Year are expected to
exceed the amount of the Operating Expenses for the Base Year. Commencing
with the first day of the month immediately following the delivery of such
statement, Tenant will pay to Landlord, as additional rent and with the
Monthly Rent, one twelfth (1/12th) of Tenant's Proportionate Share of such
excess of estimated Operating Expenses over Operating Expenses for the Base
Year, together with any arrearage in said excess estimated Operating Expenses
accruing since January 1 of that calendar year. Tenant shall continue to make
payment of one twelfth (1/12) of Tenant's Proportionate Share of such excess
estimated Operating Expenses monthly thereafter, on or before the first day
of each calendar month, until the amount of such payment is next adjusted
after January 1st of the following calendar year for increases in the amounts
of Tenant's Proportionate Share of Operating Expenses as provided for herein.
Landlord reserves the right, throughout the term of this Lease, to require
that Tenant pay each month in advance, as additional rent, one-twelfth of
Tenant's estimated annual obligation under this Article 6. Such payments
shall in no way limit Tenant's annual obligation. If the total of such
monthly installments paid is less than Tenant's total obligation, Tenant
shall promptly pay the difference upon receipt of Landlord's statement. Any
overpayment shall be credited to Tenant's obligation for the next succeeding
period.
7
6.8. Within thirty (30) days after the delivery of the Annual
Operating Expense Statement (including any such statement delivered after the
expiration of the term of this Lease), Tenant shall pay to Landlord an amount
equal to (i) Tenant's Proportionate Share of the increase, if any, in the
actual amount of Operating Expenses for the Comparison Year over the Base
Operating Expenses (ii) less the aggregate amount of any monthly payments
toward additional rent made by Tenant during such calendar year and
attributed to the estimated increases in Operating Expenses for such calendar
year. If the aggregate amount of such payments for estimated increases in
Operating Expenses paid by Tenant during such calendar year exceeds Tenant's
Proportionate Share of the actual increases in Operating Expenses, the excess
shall be credited toward payment of the next installments) of estimated
Operating Expense payments required from Tenant pursuant to Section 6.6,
above.
7. REPAIRS AND MAINTENANCE.
7.1. Subject to the provisions hereinafter contained with regard to
damage by fire, Tenant accepts the Premises as being in good and sanitary
order and agrees to maintain the Premises in good order and will suffer no
waste thereto. Tenant shall repair, maintain and preserve the Premises during
the term of this Lease at its sole cost and expense, reasonable use and wear
excepted.
7.2. Landlord shall make structural repairs to the Building
necessary for safety and tenantability, and shall bear the cost thereof
unless required by any act or neglect of Tenant, its agents, employees or
invitee. Landlord shall make such other repairs to the Premises and Building
as may be necessary or desirable in Landlord's judgment, and the cost of such
repairs shall be included in the Operating Expenses. Tenant agrees to report
immediately in writing to Landlord any defective condition in or about the
Premises known to Tenant which Landlord is required to repair, and a failure
to report shall make Tenant liable for any expense, damage or liability
resulting from such defects.
7.3. Landlord reserves the right at any time and from time to time,
as often as Landlord deems desirable, without the same constituting an actual
or constructive eviction and without incurring any liability to Tenant or
otherwise affecting Tenant's obligations under this Lease, to make such
changes, alterations, additions, improvements, repairs, relocations or
replacements in or to the Building (including the Premises if required by any
applicable law or regulation) and the fixtures and equipment thereof, as well
as in or to the street entrances, halls, passages, stairways and other common
facilities thereof, and to change the name by which the Building is commonly
known and/or the Building's address. Landlord reserves the right from time to
time to 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 Premises
which are located in the Premises or located elsewhere outside the Premises,
and to expand the Building. Nothing contained herein shall be deemed to
relieve Tenant of any duty, obligation or liability with respect to making
any repair, replacement or improvement or complying with any law, order or
requirement of any government or other authority and nothing contained herein
shall be deemed not
8
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.
8. LANDLORD'S SERVICES.
8.1. Landlord covenants and agrees that it shall maintain the
Building in a manner consistent with other Class A office buildings located
in the Annapolis Metropolitan area and shall furnish, between the hours of
8:00 A.M. and 6:00 P.M. Monday through Friday of each week, except holidays
recognized by the U.S. Government, without additional charge: (a) heat and
air conditioning to maintain the Premises at a reasonably adequate
temperature; (b) electricity for lighting purposes and operation of ordinary
office equipment, including computers, telephone equipment, supplemental
HVAC, and other equipment installed in the Premises as of the Commencement
Date excluding such other equipment requiring heavier than normal office use
of electricity, as provided for in paragraph 8.2; (c) elevator service; (d)
janitor and char services; and (e) twenty four (24) hour access to the
Building via a "Kastle type" card system. Overtime HVAC may be available by
prior arrangement with Landlord, and Tenant will be billed at the prevailing
rate then being charged by the utility company, plus Landlord's actual cost
of providing same (including but not limited to engineering costs and an
overhead factor of fifteen percent (15%)). It being understood and agreed,
however, that Landlord shall not be liable in any way for any damage or
inconvenience caused by the cessation or interruption of such heating,
air-conditioning, electricity, elevator, janitor or char service occasioned
by fire, accident, strikes, necessary maintenance, alterations or repairs, or
other causes beyond Landlord's control and Tenant shall not be entitled to
any abatement or reduction of rent by reason thereof. Notwithstanding the
foregoing, Landlord expressly disclaims any representations or warranties of
any kind including but not limited to fitness for a particular purpose that
the present electrical, HVAC and telephone communication systems are
satisfactory for the contemplated use by Tenant of the Premises.
8.2. (a) Tenant shall separately meter and pay, at its sole and
absolute expense, for all electric utility costs incurred in connection with
its use and occupancy of the Premises, including without limitation, the cost
of installing, servicing and maintaining all inside or outside wiring or
lines, meters or submeters, transformers, poles, air-conditioning and heating
costs, or the cost of any other equipment necessary for the Premises.
(b) Tenant shall pay all wiring and utility costs occasioned
by eletrodata processing machines, telephone equipment, fiber optic
equipment, computers and other extraordinary equipment not found in modern
offices of higher than normal electrical consumption which are necessary for
a 24-hour central computing networking facility, including without
limitation, the cost of installing, servicing and maintaining any special or
additional inside or outside wiring or lines, meters or submeters,
transformers, poles, air-conditioning costs, or the cost of any other
equipment necessary for the contemplated power usage of the Premises as a
twenty four hour computing facility.
8.2. Landlord, its agents, employees or contractors may enter the
Premises at all reasonable times and in a reasonable manner, without
diminution in the Monthly Rent payable by Tenant, to examine, inspect, or
protect same, to supply janitor service and any other service to be
9
provided by Landlord to Tenant hereunder, to exhibit the Premises to prospective
lenders, purchasers and tenants, and to alter, improve or repair the Premises or
any other portion of the Building. Upon delivery of one (1) day's written notice
to Tenant, Landlord, in order to carry out any construction, maintenance or
repair work deemed necessary by Landlord to the Premises or Building, may erect
scaffolding and other structure where reasonably required by the character of
the work to be performed, provided that Landlord shall use reasonable efforts to
perform its work in a manner that will minimize any interference with the
business of Tenant. Tenant shall furnish Landlord, at all times, with a key to
unlock all of the doors in the Premises, and Landlord shall have the right to
use such keys or any other means which Landlord may deem proper to open said
doors in an emergency. No provision of this Lease shall be construed as
obligating Landlord to perform any repairs, alterations or decorations, except
as otherwise expressly agreed herein to be performed by Landlord. Landlord shall
use reasonable efforts to minimize interference to Tenant's business when making
repairs or installations, but Landlord shall not be required to perform same at
a time other than during normal working hours.
8.3. In the event of an emergency, Landlord may enter the Premises
without notice and make whatever repairs are necessary to protect the
Premises or the Building without any liability whatsoever resulting from such
entry.
9. TENANT'S AGREEMENT.
9.1. Tenant covenants and agrees: (a) not to obstruct or interfere
with the rights of other tenants, or injure or annoy them or those having
business with them or conflict with them, or conflict with the fire laws or
regulations, or with any insurance policy upon said Building or any part
thereof, or with any statutes, rules or regulations now existing or
subsequently enacted or established by the local, state or federal
governments and Tenant shall be answerable for all nuisances caused or
suffered on the Premises, or caused by Tenant in the Building, or parking
facilities, or on the approaches thereto; (b) not to place a load on any
floor exceeding the floor load which such floor was designed to carry in
accordance with the plans and specifications of the Building, and not to
install, operate or maintain in the Premises any unsafe or heavy item of
equipment, without obtaining Landlord's prior written consent (c) not to
strip or overload, damage or deface the Premises, hallways, stairways,
elevators, parking facilities or other public areas of the Building, or the
fixtures therein or used therewith, nor to permit any hole to be made in any
of the same; (d) not to suffer or permit any trade or occupation to be
carried on or use made of the Premises which shall be unlawful, noisy,
offensive, or injurious to any person or property, or such as to increase the
danger of fire or affect or make void or voidable any insurance on the
Building, or which may render any increased or extra premium payable for such
insurance, or which shall be contrary to any law or ordinance, rule or
regulation from time to time established by any public authority; (e) not to
move any furniture or equipment into or out of the Premises except at such
times and in such manner as Landlord may from time to time designate; (f) not
to place upon the interior or exterior of the Building, or any window or any
part thereof or door of the Premises, any placard, sign, lettering, window
covering or drapes, except such and in such place and manner as shall have
been first approved in writing by Landlord and to use building standard
signage on its suite entry door, which shall be installed at Tenant's cost;
(g) to park vehicles only in the area from time to time designated by
Landlord; (h) to conform to all rules and regulations from time to time
established by the appropriate insurance rating organization and to all rules
and regulations from
10
time to time established by Landlord, including those attached as Exhibit "C"
hereto; (i) to be responsible for the cost of removal of Tenant's bulk trash
during occupancy and move-out; (j) not to conduct nor permit in the Premises
either the generation, treatment, storage or disposal of any hazardous wastes
or toxic substances of any kind shall include, but not be limited to
substances defined as "hazardous substances" or "toxic substances" in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 U.S.C. Section 9061 ET SEQ.; Hazardous Materials
Transportation Act, 49 U.S.C. Section 1802; and Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Section 6901 ET SEQ. and any other substances
considered hazardous, toxic or the equivalent pursuant to any other
applicable laws and in the regulations adopted and publications promulgated
pursuant to said laws or any other present or future federal, state, county
or local laws or regulations concerning environmental protection, including,
without limitation, any material or substance which is (i) defined or listed
as a "hazardous waste," "extremely hazardous waste," "restricted hazardous
waste," "hazardous material," "pollutant" or "contaminant" under any law,
(ii) petroleum or a petroleum derivative, (iii) a flammable explosive, (iv) a
radioactive material, (v) a polychlorinated biphenyl, or (vi) asbestos or an
asbestos derivative) or future federal, state, county or local laws or
regulations concerning environmental protection, and shall prohibit its
assignees and sublessees and its and their employees, agents and contractors
(collectively: "Permitees") from doing so; and Tenant shall indemnify, defend
and hold Landlord and its agents and partners harmless from all loss; costs,
foreseeable and unforeseeable, direct or consequential; damages; liability;
fines; prosecutions; judgments; litigation; and expenses, including but not
limited to, clean-up costs, court costs and reasonable attorneys' fees
arising out of any violation of the provisions of this Article by Tenant, or
its employees, agents, representatives and invitees.
9.2. Tenant shall be liable for and shall pay when due all taxes
levied against any personal property or trade fixtures placed by Tenant in or
about the Premises. 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 Premises is increased by the inclusion therein of a
value placed upon such personal property or trade fixtures of Tenant, then
Tenant shall pay to Landlord, as additional rent, the amount of such taxes or
assessments within five (5) days of Landlord's written request for such
payment. In any such event, Tenant shall have the right, at Tenant's sole
cost and expense, to bring suit in the Landlord's name to recover the amount
of any such taxes so paid under protest, and any amount so recovered shall
belong to Tenant.
10. ALTERATIONS.
11
10.1. Any and all Tenant Work, as evidenced in the Tenant Work
Schedule attached hereto as Exhibit "D", alterations or improvements shall be
constructed by Tenant at its sole cost and expense in conformance with all
relevant terms and conditions set forth in this Lease. Tenant acknowledges
that Landlord shall bear no liability for damages of any kind to Tenant in
connection with the Tenant Work, except to the extent caused by the gross
negligence and willful misconduct. Tenant further covenants and agrees that
no Tenant Work specifically including any demolition undertaken in connection
therewith may be commenced until the satisfaction of the following conditions
precedent: (i) submission by Tenant to Landlord of final Building Plans and
specifications (the "Plans"); (ii) delivery to Landlord of copies of all
permits and licenses necessary for the Tenant Work; (iii) proof of insurance
for all contractors and subcontractors as provided for in 10.2 below; (iv)
evidence that Tenant has contracted to utilize Union contractors and
subcontractors based upon such proof and documentation satisfactory to
Landlord in its reasonable discretion; (v) approval by Landlord of the Plans;
and (vi) satisfaction of all remaining conditions set forth in Section 10.2.
Upon Landlord's reasonable request during construction and upon completion of
the Tenant Work, Tenant shall provide Landlord with evidence of all lien,
waivers and releases from all contractors and subcontractors.
10.2. Tenant shall not paint the Premises or make any alterations,
additions, or other improvements in or to the Premises or install any
equipment of any kind that will require any alterations or additions or
affect the use of the Building's water system, heating system, plumbing
system, HVAC system, or electrical system, or install any telephone antennae
on the roof, in the windows, or upon the exterior of the Premises, without
the prior written consent of Landlord. If any such alterations or additions
are made by Tenant without Landlord's consent, Landlord may correct or remove
them and Tenant shall be liable for any and all costs and expenses incurred
in the correction or removal of such work. All plans and specifications for
any such work shall be prepared by Tenant at Tenant's expense and shall
thereafter be submitted to Landlord for review. All alterations and additions
to the Premises shall be performed by Landlord, or Landlord's contractor
unless Landlord shall otherwise agree in writing. If any alterations or
additions with Landlord's consent are not performed by Landlord or its
contractor, Tenant shall nevertheless pay Landlord a fee of ten percent of
the total cost of the work to be performed, payable five percent prior to the
beginning of the work and the remaining five percent upon completion of the
work. This fee is to compensate Landlord for coordinating Tenant's
contractor's use of the Building's systems and for access to the electrical,
mechanical and telephone closets, as necessary. As a further condition of
Landlord's consent to the use of Tenant's contractor, Tenant or Tenant's
contractor must evidence to Landlord certain criteria including but not
limited to: (a) insurance coverage to include: (i) worker's compensation
coverage and (ii) public liability and property damage Insurance in the
amount of not less than One Million Dollars ($1,000,000.00) in the aggregate;
(b) lien waivers for such contractor or other persons; (c) specified
completion performance and/or lien indemnity bonds and insurance; and (d) an
acknowledgement by the contractor that such work is being performed for
Tenant who is not the owner of the Building but a tenant. All work with
respect to such alterations and additions shall be done, at Tenant's sole
expense, in a good and workmanlike manner and diligently prosecuted to
completion to the end that Premises shall at all times be a complete unit
except during the period necessarily required for such work. Tenant covenants
and agrees that all Alterations contracted for by Tenant shall be performed
in full compliance with all laws, ordinances, regulations and requirements of
all governmental and quasi-governmental authorities having jurisdiction.
Landlord shall not be liable for any damages or
12
losses caused by Tenant's contractors, and Tenant agrees to pay any and all
expenses, reasonable attorneys' fees, claims for and damages to persons or
property which may arise directly or indirectly by reason of making any
Alterations.
10.3. Tenant shall not permit a mechanic's lien(s) to be placed
upon the Premises, the Building as a result of any alterations or
improvements made by it and agrees, if any such lien be filed on account of
the acts of Tenant, promptly to pay the same. In the event Tenant fails to
pay any such lien, it may be paid by Landlord and the cost charged to Tenant
as additional rent under this Lease. Tenant hereby expressly recognizes that
in no event shall it be deemed an agent of Landlord and no contractor of
Tenant shall by virtue of its contract be entitled to assert any lien against
the Building. If any mechanic's lien, whether final, interlocutory or
otherwise, is filed against the Premises or the Building for work claimed to
have been furnished to Tenant, such mechanic's lien shall be discharged by
Tenant, at its sole cost and expense, within five (5) days from receipt of
notice of such lien, either by the satisfaction in full of the lien or by
filing any bond required by law to fully discharge the lien. If Tenant shall
fail to discharge any such mechanic's lien, Landlord may, at its option,
discharge the same the treat the cost thereof, together with any other costs
or expenses incurred by Landlord, including reasonable attorneys' fees, as
additional rent, due and payable upon receipt by Tenant of a written
statement of costs from Landlord. It is hereby expressly agreed that such
discharge of any mechanic's lien by Landlord shall not be deemed to waive or
release Tenant from its default under the Lease for failing to discharge the
same.
10.4. All alterations or additions shall become a part of the
realty and surrendered to Landlord upon the expiration or termination of this
Lease, unless Landlord shall at the time of its approval of such work require
removal or restoration on the part of Tenant as a condition of such approval.
All Alterations, Pre-occupancy Tenant Work, approved Tenant Work,
decorations, additions or improvements upon the Premises, made by either
party shall become and remain the property of Landlord. Provided this Lease
is not in default by Tenant, Landlord may, by written notice to Tenant,
permit Tenant to remove at its sole expense, without causing material damage
to the Premises and the Building, any fixtures, property or Alterations
installed by Tenant, which Tenant has not been granted any credit or
allowance by Landlord. Tenant shall repair any damage to the Premises arising
from such removal or, at Landlord's option, shall pay to Landlord all
Landlord's reasonable costs of such repair.
10.5. Any further changes, modifications, alterations or additional
work within the premises shall be at Tenant's sole cost and expense. Tenant
shall be responsible for all costs and compliance with any permit required by
the applicable federal, county and/or state codes in connection with the
Alterations, including any requirements of the Americans With Disabilities
Act (42 U.S.C. Section 120101 ET. SEQ.).
10.6. Business machines and mechanical equipment belonging to
Tenant, which cause noise, vibration or other types of interference that may
be transmitted to the structure of the Building or to any space therein to
such a degree as to be objectionable to Landlord or to any tenant in the
Building, shall be installed and maintained by Tenant, at its sole expense,
on vibration eliminators or other devices sufficient to eliminate such noise,
vibration or interference.
13
10.7. Subject to the terms and conditions of this Article 10 and
9.1 above, Landlord hereby consents to Tenant's installation, for no
additional rent, one (1) diesel generator (the "Generator") upon such portion
of the exterior common area of the Building as reasonably requested by Tenant
and consented to by Landlord, in its reasonable discretion conditioned upon,
amongst other things, the installation of a "shed" over the Generator to be
used to minimize any unappealing characteristics of the Generator. The
Generator will be located in such area, as established by Landlord in its
reasonable discretion, and in such a manner that the visibility and aesthetic
character of the Generator will be minimized from the front of the Building
and not otherwise detract from the appearance of the Building. The
installation of the Generator will be subject to the following provisions:
(a) Tenant at its own expenses, shall install such
Generator, in accordance with all the applicable codes of the appropriate
governing authority and using licensed and bonded contractors.
(b) The installation of the Generator and use shall not
interfere with any existing equipment of the Landlord or other tenants of the
Building; Provided, however, if Tenant is unable to eliminate the inference
at a reasonable cost to Tenant and to Landlord's reasonable satisfaction, and
Landlord elects to require the removal of the Generator, then Tenant shall
remove same.
(c) Tenant shall be responsible for all costs and expense
related to installing, maintaining, repairing, replacing and removing the
Generator including but not limited to regulatory approval and compliance
(including costs of Landlord's attorneys fees if necessary), liability,
property casualty insurance (at market levels) plus other insurance as from
time to time reasonably specified by Landlord;
(d) The Generator shall be installed and maintained at
Tenant's sole risk of loss and no claim shall be made shall be made against
Landlord by Tenant, or by any agent or servant of Tenant for any injury, loss
or damage to the Generator or to any person performing work on the Generator
unless due to the negligence or willful misconduct of Landlord, its agents or
employees. In no event shall Landlord be liable to Tenant for any
consequential damages sustained by Tenant arising out of the loss or damage
to the Generator;
(e) Tenant shall save Landlord and Landlord's Agent
harmless and indemnified from all loss, damage, liability or expense of any
kind, incurred, suffered or claimed by any person whomsoever, including but
not limited to Landlord, its Agent, and other tenants of the Building, for
any damage or injury to any persons or property from any cause whatsoever
relating to the Generator unless due to the gross negligence or willful
misconduct of Landlord, its agents or employees;
(f) Tenant shall obtain, at its sole cost and expense, all
necessary permits and regulatory approval from the applicable government
and/or regulatory agencies for the operation of the Generator.
(g) That the Generator shall be deemed to be an Alteration
and subject to the express provisions of Article 10, except that no
additional consent shall be required and so long as
14
no default exits and remains uncured beyond any applicable cure and grace period
Tenant may remove the Generator at its sole cost and expense and thereafter
restore the common area to the condition as of the Commencement Date;
10.8. Further, and subject to the terms of this Article 10, Tenant
is hereby authorized, at its sole cost and expense to install a "Battery
Powered Backup System" (the "Battery Pack") within the Premises which shall
be maintained by Tenant at its sole risk of loss. Tenant shall be required to
pay for all additional installation, connection, utilities, maintenance and
repairs caused by such Battery Pack. Tenant further covenants and agrees that
any installation of such Battery Pack will be removed if it causes any
disturbance to the quiet enjoyment of any other tenant in the Building. And,
Tenant shall be permitted, provided no event of default exists and remains
uncured beyond any applicable cure and grace period, to remove the Battery
Pack at the expiration of the Lease Term.
10.9 (a) The Premises shall be delivered to Tenant on the Effective
Date in "as is" condition existing as of the date of this Lease. Any and all
Tenant Work shall be constructed by Tenant at its sole cost and risk of loss,
and in conformance with all relevant terms and conditions set forth in the
Lease. Landlord shall bear no liability for any damages to Tenant relating to
any Alterations.
(b) The Alterations shall include but not be limited to
demolition of the third (3rd) floor, the installation of partitions, wall
finishes, raised floor computing room, window coverings, electrical system,
and lighting, and any space planning, architectural and engineering plans in
connection therewith all of which shall be subject to Landlord's prior
written approval.
11. HOLD HARMLESS.
11.1. Excepting any damage caused by Landlord's gross negligence or
willful misconduct, Landlord shall not be liable for any damage to, or loss
of, personal property in the Premises belonging to Tenant, its employees,
agents, visitors, licensees or other persons in or about the Premises, or for
damage or loss suffered by the business of Tenant, from any cause whatsoever,
including, without limiting the generality thereof, such damage, or loss
resulting from fire, steam, smoke, electricity, gas, water, rain, ice or
snow, which may leak or flow from or into any part of the Premises, or from
the breakage, leakage, obstruction or other defects of the pipes, wires,
appliances, plumbing, air-conditioning or lighting fixtures of the same,
whether the said damage or injury results from conditions arising upon the
Premises or upon other portions of the Building of which the Premises are a
part, or from other sources. Landlord shall not be liable in any manner to
Tenant, its agents, employees, invitees or visitors for any injury or damage
to Tenant, Tenant's agents, employees, invitees or visitors, or their
property, caused by the criminal or intentional misconduct, or by any act or
neglect of third parties or of Tenant, Tenant's agents, employees, invitees
or visitors, or of any other tenant of the Building. Tenant covenants that no
claim shall be made against Landlord by Tenant, or by any agent or servant of
Tenant, or by others claiming the right to be in the Premises or in the
Building through or under Tenant, for any injury, loss or damage to the
Premises or to any person or property occurring upon the Premises from any
cause other than the gross negligence or willful misconduct of Landlord. In
no event shall Landlord be liable to Tenant for any consequential damages
sustained by Tenant arising out of the loss or
15
damage to any property of Tenant.
11.2. Tenant covenants and agrees to save Landlord and Landlord's
Agent harmless and indemnified from all loss, damage, liability or expense of
any kind, incurred, suffered or claimed by any person whomsoever, or for any
damage or injury to any persons or property from any cause whatsoever, by
reason of the use or occupancy by Tenant, its agents, employees, invitees or
visitors of the Premises, or of the Building, or the parking facilities or
any other common element not caused by the gross negligence or willful
misconduct of Landlord.
11.3. It is understood that employees of Landlord are prohibited as
such from receiving any packages or other articles delivered to the Building
for Tenant and that should any such employee receive any such packages or
articles, he or she in so doing shall be the agent of Tenant and not of
Landlord.
12. LIEN ON TENANT'S PROPERTY.
12.1. Landlord shall have a lien for the payment of the rent
aforesaid upon all of the goods, wares, chattels, fixtures, furniture and
other personal property of Tenant which may be in or upon the Premises.
Tenant hereby specifically waives any and all exemptions allowed by law; and
such lien may be enforced on the nonpayment of any installment of rent by the
taking and selling of such property in the same manner as in the case of
chattel mortgages on default thereunder, said sale to be made upon ten days
notice served upon Tenant by posting upon the Premises or by leaving same at
his place of residence; or such lien may be enforced in any other lawful
manner at the option of the Landlord.
12.2. Provided Tenant is not in default of this Lease, Tenant, at
its sole expense, shall remove all articles of personal property and all
business and trade fixtures, machinery and equipment, furniture and movable
partitions installed by Tenant ("Tenant's Property") at the expiration,
surrender or earlier termination of the Lease. Tenant shall repair any damage
caused by such removal to the condition of the Premises as of the
Commencement Date. Tenant's obligation to repair any damage to the Premises
caused by such removal shall survive the expiration or earlier termination of
the Lease term. If Tenant, for any reason whatsoever, shall fail to remove
all of its effects from the Premises upon termination or expiration of this
Lease, Landlord, at its option, may remove same in any manner that Landlord
shall choose, and store said effects, at Tenant's sole expense, without
liability to Tenant for loss thereof. Tenant agrees to pay Landlord as
Additional Rent, upon demand, any and all reasonable expenses incurred in
such removal, including court costs and reasonable attorneys' fees and
reasonable storage charges on such effects for any length of time that the
same shall be in Landlord's possession, custody or control, in addition,
Landlord, at its option and pursuant to the laws of the jurisdiction in which
this Building is located, may sell said effects, or any of them, at private
sale and without legal process, for such price as Landlord may obtain and
apply the proceeds of such sale against any amounts due under this Lease from
Tenant to Landlord and against the expenses incidental to the removal and
sale of said effects.
13. INSURANCE.
13.1. Tenant shall, at its cost and expense, obtain and maintain at
all times during
16
the term of this Lease, for the protection of Landlord and Tenant, Public
Liability Insurance (Comprehensive General Liability or Commercial General
Liability) including Contractual Liability Insurance, with a combined personal
injury and property damage limit of not less than Five Hundred Thousand Dollars
($500,000.00) each occurrence and not less than One Million Dollars
($1,000,000.00) in the aggregate, insuring against all liability of Tenant and
its authorized representatives arising out of and in connection with Tenant's
use or occupancy of the Premises. Landlord and Landlord's Agent shall be named
as additional insureds.
13.2. Tenant shall, at its cost and expense, obtain and maintain at
all times during the term of this Lease, fire and extended coverage insurance
on the Premises and its contents, including any leasehold improvements made
by Tenant, in an amount sufficient so that no coinsurance penalty shall be
invoked in case of loss.
13.3. Tenant shall increase its insurance coverage, as required,
but not more frequently than each year if, in the opinion of Landlord or the
mortgagee of Landlord, the amount of public liability and property damage
insurance coverage at that time is not adequate.
13.4. All insurance required under this Lease shall be issued by
insurance companies licensed to do business in the jurisdiction where the
Building of which the Premises is a part is located. Such companies shall
have a policyholder rating of at least "A" and be assigned a financial size
category of at least "Class VIII" as rated in the most recent edition of
"Best's Key Rating Guide" for insurance companies. Each policy shall contain
an endorsement requiring thirty 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, and renewal certificates or
copies of renewal policies shall be delivered to Landlord at least thirty
days prior to the expiration date of any policy.
13.5. Landlord and Tenant, for themselves and their respective
successors in interest, each waive the right of subrogation for all risk of
loss or damage to property of the other located in the Premises, regardless
whether such loss or damage is caused by the negligence of either party. Any
willful or malicious action on the part of either party voids this waiver.
Landlord and Tenant shall each obtain and maintain endorsements to their
respective insurance policies containing such a mutual waiver of the right of
subrogation. This waiver of subrogation does not extend to claims which are
required to be covered by Tenant's contractor's insurance required under
Paragraph 10.01, above.
14. ASSIGNMENT & SUBLETTING.
14.1. Tenant shall not assign, transfer, mortgage or encumber this
Lease or sublet the Premises without obtaining the prior written consent of
Landlord, which shall not be unreasonably withheld nor shall any assignment
or transfer of this Lease be effectuated by operation of law or otherwise
without the prior written consent of Landlord. Consent shall not be
unreasonably withheld or delayed; excepting however, Tenant shall not assign
this Lease, sublet the Premises, or permit occupancy or use of the Premises
or any part thereof by another party or parties, without giving Landlord
fifteen (15) days written notice of proposed assignment or
17
proposed subletting of all or any part of the Premises. The consent by Landlord
to any assignment, transfer, or subletting to any party other than Landlord
shall not be construed as a waiver or release of Tenant from the terms of any
covenant or obligation under this Lease, nor shall the collection or acceptance
of rent from any such assignee, transferee, subtenant or occupant constitute a
waiver or release of Tenant from any covenant or obligation contained in this
Lease, nor shall such assignment or subletting be construed to relieve Tenant
from obtaining the consent in writing of Landlord to any further assignment or
subletting. In the event that Tenant defaults hereunder, Tenant hereby assigns
to Landlord the rent due from any subtenant of Tenant and hereby authorizes each
such subtenant to pay said rent directly to Landlord.
14.2. Any transfer of a cumulative total of more than twenty-five
percent (25%) of any legal and/or beneficial interest in Tenant (regardless
of whether Tenant is a corporation, partnership or other entity), after the
date hereof, whether to one or more persons or entities, whether at one or
more different times, and whether voluntarily, by operation of law, or
otherwise, shall be deemed as assignment of this Lease within the meaning of
Article 14.
14.3. In the event a portion of the Premises is subleased, Tenant
shall continue to pay Basic Rent as provided in Paragraph 3.01 above, and, in
addition, Tenant shall be required to pay to Landlord during each month of
the term of the sublease, and within five (5) days of receipt of rent from
subtenant, fifty percent (50%) of the amount of payable by such subtenant in
excess of the amount of Basic Rent payable by Tenant hereunder with respect
to that portion of the sublet Premises.
14.4 Notwithstanding anything to the contrary contained in this
Section 14, commencing upon the approval by Landlord of an acceptable form of
sublease, Tenant shall be authorized to sublease a portion of the Premises on
the Fourth Floor to Xxxx Xxxxxx, Inc. ("Xxxxxx"). Except for Xxxxxx'x rights
against Tenant as a subtenant, Xxxxxx shall not be granted any possessory,
occupancy or similar interest in and to the Premises by virtue of their
subtenancy. Xxxxxx is bound to comply with all terms of this Lease concerning
use and occupancy of the Premises and the conduct of their business therein.
No act or omission by Xxxxxx shall constitute an excuse of performance for
any of Tenant's obligations hereunder. In the event that the Lease is
terminated, surrendered or rejected, then the Xxxxxx subtenancy shall by
deemed terminated and they will be required to immediately vacate the
Premises.
15. LANDLORD'S RIGHT OF ACCESS.
15.1. Landlord may, at any time during Tenant's occupancy during
reasonable business hours, enter either to view the Premises or to show the
same to others, or to facilitate repairs to the Building, or to introduce,
replace, repair, alter or make new or change existing connections from any
fixtures, pipes, wires, ducts, conduits or other construction therein, or
remove, without being held responsible therefor, placards, signs, lettering,
window or door coverings and the like not expressly consented to by Landlord.
15.2. If Tenant shall carpet over the access panels of the
underfloor duct system in the floor of the Premises (if applicable), Landlord
is hereby authorized and permitted to cut such carpeting to reach the ducts
in such panels in order to make any necessary connections therefrom to
18
service other parts of the Building. Landlord shall have the carpeting
restitched in a workmanlike manner and Tenant agrees to reimburse Landlord for
the cost of such cutting and restitching.
15.3. Landlord may within sixty days next preceding the expiration
of the term, enter the Premises free from hindrance or control of Tenant to
show the Premises to prospective tenants at times which will not unreasonably
interfere with Tenant's business. If Tenant shall vacate the Premises during
the last month of the term of this Lease, Landlord shall have the
unrestricted right to enter the same after Tenant's moving to commence
preparations for the succeeding tenant or for any other purpose whatever,
without affecting Tenant's obligation to pay rent for the full term.
16. FIRE CLAUSE.
16.1. If the Premises shall be damaged by fire or other casualty
insured against by Landlord's fire and extended coverage insurance policy
covering the Building, and the Premises can be fully repaired, in Landlord's
opinion, within one hundred and eighty (180) days from the date of such
damage, Landlord, at Landlord's expense, shall repair such damage; provided,
however, Landlord shall have no obligation: (a) to repair any damage to, or
to replace, Tenant's non-Preoccupancy Tenant Work standard tenant
improvements or any other property located in the Premises; (b) to repair if
such damage occurs during the last year of the lease term (excluding any
renewal option which is unexercised at the date of such damage); or (c) to
repair if the mortgagee does not allow the insurance proceeds to be used for
such purposes. Except as otherwise provided herein, until the repairs to the
Premises are substantially completed, the Monthly Base Rent shall xxxxx
pro-rata based on the part of the Premises which is unusable by Tenant. No
compensation or rent deduction shall be made for inconvenience, annoyance or
injury to business. If, however, the Premises are rendered wholly
untenantable by fire or other cause as determined by the Fire Xxxxxxxx for
Xxxx Arundel County, Maryland or such other duly authorized governmental
individual or entity having jurisdiction over said matters, and Landlord
shall decide not to rebuild the same, or if the entire Building be so damaged
that Landlord shall decide to demolish it or not to rebuild it, then or in
any of such events, Landlord may, at its option, cancel and terminate this
Lease by giving Tenant notice in writing, within sixty (60) days of the
occurrence of the event causing the damage, of its intention to cancel this
Lease, whereupon the term of this Lease shall terminate upon the thirtieth
(30th) day after such notice is given and Tenant shall vacate the Premises
and surrender the same to Landlord. In no event shall Landlord be liable to
Tenant except to the extent provided in this Article 16, and without limiting
the foregoing, Landlord shall not be responsible for consequential damages,
lost profits or any damage to Tenant's personal property.
16.2. Effective upon any termination of this Lease and the
surrender of the Premises by Tenant under any of the provisions of this
Article 16, the parties shall be released thereby and neither party shall
have any further liability to the other for any matters arising under this
Lease, except for rent, violations regarding Hazardous Materials and other
items which accrued prior to the effective date of termination and are then
unpaid or which this Lease provides shall survive its termination.
16.3. It is hereby understood that if Landlord is obligated or
elects to repair or restore as herein provided, Landlord shall be obligated
to make repairs or restoration only of those
19
portions of the Building and the Premises which were originally provided at
Landlord's expense, and the repair and restoration of items not provided at
Landlord's expense shall be the obligation of Tenant. In no event shall Landlord
be obligated to repair or restore any trade fixture, furnishings, equipment or
personal property belonging to Tenant.
17. CONDEMNATION.
17.1. This Lease shall be terminated and the rental payable
hereunder shall be abated to the date of such termination in either of the
two following events, namely: (a) the forcible leasing or condemnation of the
Premises, Building or any part thereof by any competent authority under right
of eminent domain for any public or quasi-public use or purpose; and (b) the
condemnation by competent authority under right of eminent domain for any
public or quasi-public use or purpose of twenty-five percent or more of the
Building in which the Premises are located. The forcible leasing by any
competent authority of any portion of the Building other than the Premises
shall have no effect upon this Lease. In case of any taking or condemnation,
whether or not the term of this Lease shall cease and terminate, the entire
award shall be the property of Landlord, and Tenant hereby assigns to
Landlord all its right, title and interest in and to any such award. Tenant,
however, shall be entitled to claim, prove and receive in the condemnation
proceeding such awards as may be allowed for fixtures and other equipment
installed by it, but only if such awards shall be made by the Court in
addition to the award made by it to Landlord for the land and improvements or
part thereof so taken.
18. DEFAULTS AND REMEDIES.
18.1. It is hereby mutually covenanted and agreed that: (a) if
Tenant shall fail to make any payment of Basic Rent or Additional Rent, or
keep and perform each and every covenant, condition and agreement herein
contained on the part of Tenant to be kept and performed; or (b) if Tenant
shall abandon or evidence any intention to abandon all or any portion of the
Premises; or (c) if the estate hereby created shall be taken by execution or
other process of law; or (d) if Tenant shall (i) generally not pay Tenant's
debts as such debts become due, (ii) become insolvent (iii) make an
assignment for the benefit of creditors, (iv) file, be the entity subject to,
or acquiesce in a petition in any court (whether or not filed by or against
Tenant pursuant to any statute of the United States or any state and whether
or not for a trustee, custodian, receiver, agent, or other officer for Tenant
or for all or any portion of Tenant's property) in any proceeding whether
bankruptcy, reorganization, composition, extension, arrangement, insolvency
proceedings, or otherwise; or (e) violate any term or condition of Article 10
above; then, and in each and every such case, from thenceforth and at all
times thereafter, at the sole option of Landlord, Tenant's right of
possession shall thereupon cease and terminate, and Landlord shall be
entitled to the possession of the Premises and to remove all persons and
property therefrom and to reenter the same without further demand of rent or
demand of possession of the Premises, either with or without process of law
and without becoming liable to prosecution therefore, any notice to quit or
of intention to reenter being hereby expressly waived by Tenant. In the event
of such reentry or retaking by Landlord, Tenant shall nevertheless remain in
all events liable and answerable for the full rental to the date of retaking
or reentry, and Tenant shall also be and remain answerable in damages for the
deficiency or loss of rent as well as all related expenses which Landlord may
thereby sustain in respect to the balance of the term; and in such case
Landlord reserves full power, which is hereby acceded to by Tenant, to let
said Premises for
20
the benefit of Tenant, in liquidation and discharge in whole or in part, as the
case may be, of the liability of Tenant under the terms and provisions of this
Lease, and such damages and related expenses, at the option of Landlord, may be
recovered by it at the time of the retaking and reentry, or in separate actions,
from time to time, as Tenant's obligation to pay rent would have accrued if the
term had continued, or from time to time, as said damages and related expenses
shall have been made more easily ascertainable by relettings of the Premises, or
such action by Landlord may, at the option of Landlord, be deferred until the
expiration of the term, in which latter event the cause of action shall not be
deemed to have accrued until the date of the termination of said term.
18.2. The provisions of this Article 18 are subject to the
Bankruptcy Laws of the United States which may, in certain cases, limit the
rights of Landlord to enforce some of the provisions of this Article in
proceedings thereunder. To the extent that limitations exist by virtue
thereof, the remaining provisions hereof shall not be affected thereby but
shall remain in full force and effect. The provisions of this Article 18
shall be interpreted in a manner which reserves Landlord's rights to
terminate this Lease in each and every instance, and to the fullest extent
and at the earliest moment that such termination is permitted under the
federal bankruptcy laws, it being of prime importance to the Landlord to deal
only with Tenants who have, and continue to have, a strong degree of
financial strength and financial stability.
18.3. All rents received by Landlord in any reletting after
Tenant's default shall be applied, first to the payment of such expenses as
Landlord may have incurred in recovering possession of the Premises and in
reletting the same (including brokerage fees), second to the payment of any
costs and expenses incurred by Landlord, either for making the necessary
repairs (including fitting up the space for such reletting) to the Premises
or in curing any default on the part of the Tenant of any covenant or
condition herein made binding upon Tenant, and last, any remaining rent shall
be applied toward the payment of rent due from Tenant under the terms of this
Lease, together with interest and penalties as defined in Article 3.04, and
Tenant expressly agrees to pay any deficiency then remaining. Landlord shall
in no event be liable in any way whatsoever (nor shall Tenant be entitled to
any setoff) for Landlord's failure to relet the Premises, and Landlord, at
its option, may refrain from terminating Tenant's right of possession, and in
such case may enforce against Tenant the provisions of this Lease for the
full term thereof.
18.4. In the event Tenant defaults in the performance of any of the
terms, covenants, agreements or conditions contained in this Lease and
Landlord places in the hands of an attorney or collection agency the
enforcement of all or any part of this Lease, the collection of any rent due
or to become due or recovery of the possession of the Premises, Tenant agrees
to pay to Landlord as Additional Rent Landlord's costs of collection and
enforcement, including reasonable attorney's fees, whether suit is actually
filed or not, architect's fees and real estate broker's fees.
18.5. To the fullest extent permitted by law, and notwithstanding
any further or additional remedies afforded Landlord in this Lease, at law or
in equity, in the event Tenant, for two (2) or more consecutive months, is in
default of its obligations under this Lease, and such default remains uncured
at the expiration of applicable notice and cure periods, if any, Landlord may
accelerate and declare to be immediately due, and Tenant agrees to pay to
Landlord promptly upon receipt of written demand therefor, all sums which
would otherwise be due from Tenant to Landlord throughout the remainder of
the term of this Lease, including any renewal period for
21
which Tenant is then obligated discounted at a rate equal to two (2) points
below the one (1) year United States Treasury Note rate in effect as of the date
of acceleration (i.e. if the one year United States Treasury Note rate is 8%,
the discount rate is 6%). Such sums shall include but not be limited to Monthly
Rent, costs of Pre-occupancy Tenant Work and any sums, charges, expenses and
costs of any kind or nature identified in this Lease as additional rent. In the
event of any such acceleration by Landlord and payment by Tenant, if Landlord
shall relet the Premises or any part thereof (the parties expressly
acknowledging that Landlord shall be under no such obligation to relet the
Premises), Landlord shall, on an annual basis, within sixty (60) days of the end
of each calendar year, provide Tenant with an accounting of all sums received by
Landlord as rent or otherwise from any such reletting. If the accelerated amount
collected by Landlord from Tenant for the relevant period, together with the sum
actually collected from the follow-on tenant for that period, exceed the amount
to which Landlord would otherwise have been entitled under this Lease absent the
acceleration provided for in this Section, Landlord shall reimburse Tenant for
such excess up to the accelerated amount actually paid by Tenant for the
relevant period. Notwithstanding the foregoing, Tenant shall not be entitled to
any such excess sums unless and until Landlord has been fully reimbursed for any
and all expenses or any party thereof, with such expenses to include but not be
limited to brokerage fees, reasonable attorneys' fees, advertising costs,
build-out costs incurred to restore the Premises to first class rentable
condition for the replacement tenant.
19. SUBORDINATION CLAUSE. This Lease shall be subject and subordinate at
all times to the lien of any mortgage or deed of trust encumbrance or
encumbrances which may now or which may at any time hereafter be made upon
the Building of which the Premises is a part or upon Landlord's interest
therein. This clause shall be self operative, and no further instrument of
subordination shall be required to effect the subordination of this Lease.
Nonetheless, in confirmation of such subordination, Tenant shall execute and
deliver such further instrument or instruments subordinating this Lease to
the lien of any such mortgage or deed of trust, encumbrance or encumbrances
as shall be desired by any mortgagee or party secured or proposed mortgagee
or party proposed to be secured, and Tenant hereby appoints Landlord the
attorney-in-fact of Tenant, irrevocably, to execute and deliver any such
instrument or instruments for Tenant. if the interests of Landlord under this
Lease shall be transferred by reason of foreclosure or other proceedings for
enforcement of any mortgage or deed of trust on the Premises or Building,
Tenant shall be bound to the transferee at the option of the transferee,
under the terms, covenants and conditions of this Lease for the balance of
the term remaining, including any extensions or renewals, with the same force
and effect as if the transferee were Landlord under this Lease, and, if
requested by transferee, Tenant agrees to attorn to the transferee as its
Landlord.
20. SURRENDER OF POSSESSION. Tenant covenants, at the expiration or
other termination of this Lease, to remove all goods and effects from the
Premises not the property of Landlord, remove all non-standard alterations
and restore the Premises to its initial state, unless Landlord has agreed in
writing to allow such alterations to remain, all at Tenant's expense, and to
yield up to Landlord the Premises and all keys, gate cards, security cards,
locks and other fixtures connected therewith in good repair, order and
condition in all respects, reasonable wear and use thereof and damage by fire
or other casualty, not caused by Tenant's act or neglect, only excepted. A
fee of Twenty-five and 00/100 Dollars ($25.00) each shall be charged for
parking passes and security cards not returned to Landlord.
22
21. TENANT HOLDING OVER.
21.1. If Tenant shall not immediately surrender possession of the
Premises at the termination of this Lease, Tenant shall become a tenant from
month-to-month, provided rent shall be paid to and accepted by Landlord, in
advance, at one hundred fifty percent (150%) of the rate of rental payable
hereunder just prior to the expiration of this Lease but unless and until
Landlord shall accept such rental from Tenant, Landlord shall continue to be
entitled to retake or recover possession of the Premises as hereinbefore
provided in case of default on the part of Tenant, and Tenant shall be liable
to Landlord for any loss or damage it may sustain by reason of Tenant's
failure to surrender possession of the Premises immediately upon the
expiration of the term hereof. Tenant hereby agrees that all the obligations
of Tenant and all rights of Landlord applicable during the term of this Lease
shall be equally applicable during such period of subsequent occupancy,
whether or not a month-to-month tenancy shall have been created as aforesaid.
Tenant shall be entitled to thirty (30) days' written notice to quit the
Premises, except in the event of non-payment of the modified Monthly Rent or
additional rent, or any other default by Tenant of its obligations under this
Lease, in which event Tenant shall not be entitled to any notice to quit, the
usual thirty (30) days' notice to quit being hereby expressly waived.
Acceptance by Landlord of rent after such expiration or earlier termination
date shall not constitute a holdover hereunder or result in a renewal of the
Lease Term.
21.2. In the event that Tenant shall hold over after the expiration
of the term of the Lease or any approved extension period thereof, and if
Landlord shall desire to regain possession of the Premises promptly at the
expiration of the term of this Lease or the extension period, then at any
time prior to Landlord's acceptance of modified Monthly Rent from Tenant as a
month-to-month tenant hereunder, Landlord, at its option, may forthwith
re-enter and take possession of the Premises: a) without process; and b) by
any legal process available in the jurisdiction in which the Building is
located.
21.3. If Tenant fails to surrender the Premises upon the expiration
of this Lease despite demand to do so by Landlord, Tenant shall indemnify and
hold Landlord harmless from all injury, loss, claims, expenses and liability,
including without limitation, any claim made by any succeeding tenant and any
reasonable attorneys' fees, founded on or resulting from such failure to
surrender. In addition, Tenant shall be liable to Landlord for any damages
incurred by Landlord due to its inability to timely regain possession of the
Premises, including but not limited to contract damages for which Landlord
might to liable to a follow-on tenant or any economic losses, costs, expenses
or other damages, including reasonable attorneys' fees, incurred by Landlord
due to Tenant's failure to timely surrender possession of the Premises.
22. ESTOPPELS. Tenant shall, without charge therefor, at any time and
from time to time, within five days after request by Landlord, execute,
acknowledge and deliver to Landlord a written estoppel certificate certifying
to Landlord, any mortgagee, assignee of a mortgagee, or any purchaser of the
Building, or any other person designated by Landlord, as of the date of such
estoppel certificate: (a) that Tenant is in possession of the Premises; (b)
that this Lease is unmodified and in full force an effect (or if there have
been modifications, that the Lease is in full force and effect as modified
and setting forth such modification); (c) whether or not there are then
23
existing any set-offs or defenses against the enforcement of any right or remedy
of Landlord, or any duty or obligation of Tenant hereunder (and, if so,
specifying the same in detail); (d) the amount of the Basic Rent and the dates
through which Basic Rent and additional rent have been paid; (e) that Tenant has
no knowledge of any then uncured defaults on the part of Landlord under this
Lease (or if Tenant has knowledge of any such uncured defaults, specifying the
same in detail); (f) that Tenant has no knowledge of any event having occurred
that authorizes the termination of this Lease by Tenant (or if Tenant has such
knowledge, specifying the same in detail); (g) the amount of any security
deposit held by Landlord; and (h) such reasonable other information requested by
mortgagor. Failure to deliver the certificate within ten 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 b represented by the party requesting the certificate. If Tenant fails to
deliver the certificate within the ten (10) days after request, Tenant by such
failure irrevocably constitutes and appoints Landlord as its special
attorney-in-fact to execute and deliver the certificate to any third party.
23. MISCELLANEOUS.
23.1. The term "Tenant" shall include legal representatives,
successors and assigns. All covenants herein made binding upon Tenant shall
be construed to be equally applicable to and binding upon its agents,
employees and others claiming the right to be in the Premises or in the
Building through or under Tenant.
23.2. If more than one individual, firm, or corporation shall join
as Tenant, singular context shall be construed to be plural wherever
necessary and the covenants of Tenant shall be the joint and several
obligations of each party signing as Tenant and when the parties signing as
Tenant are partners, shall be the obligation of the firm and of the
individual members thereof.
23.3. No waiver, breach or failure to act to enforce any covenant,
condition or agreement herein contained shall operate as a waiver of the
covenant, condition or agreement itself, or of any subsequent breach thereof.
23.4. Notwithstanding anything to the contrary contained in this
Lease, Tenant shall look only to Landlord's ownership interest in the
Building for satisfaction of Tenanfs remedies for the collection of a
judgment (or other judicial process) requiring the payment of money by
Landlord in the event of any default by Landlord hereunder, and no other
property or assets of the partners, general or limited, or principals of
Landlord, disclosed or undisclosed, shall be subject to levy, execution or
the enforcement procedure for the satisfaction of Tenant's remedies under or
with respect to this Lease, the relationship of Landlord and Tenant hereunder
or Tenant's use or occupancy of the Premises. If any provision of this Lease
either expressed or implied obligates Landlord not to unreasonably withhold
its consent or approval, an action for declaratory judgment or specific
performance will be Tenant's sole right and remedy in any dispute as to
whether Landlord has breached such obligation.
23.5. TENANT AND LANDLORD EXPRESSLY AGREE THAT THERE ARE AND SHALL
BE NO IMPLIED WARRANTIES OF MERCHANTABILITY, HABITABILITY,
24
FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER KIND ARISING OUT OF THIS LEASE,
AND THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET FORTH IN
THIS LEASE.
23.6. Feminine or neuter pronouns shall be substituted for those of
the masculine form and the plural shall be substituted for the singular,
wherever the context shall require. It is also agreed that no specific words,
phrases or clauses herein used shall be taken or construed to control, limit
or cut down the scope or meaning of any general words, phrases or clauses
used in connection therewith.
23.7. This Lease shall likewise be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns. This provision shall not be deemed
to grant Tenant any right to assign this Lease or sublet the Premises or any
part thereof other than as provided in Article 14 hereof.
23.8. It is understood and agreed by and between the parties hereto
that this Lease contains the final and entire agreement between said parties,
and that they shall not be bound by any terms, statements, conditions or
representations, oral or written, express or implied, not herein contained.
This Lease may not be modified orally or in any manner other than by written
agreement signed by the parties hereto.
24. BROKERS. Landlord and Tenant, each on their respective behalf hereby
certify that no person or company has provided services as a broker, agent,
finder or assisted in the negotiations of this Lease other than Pinnacle
Realty Management Company and Mackenzie Commercial Real Estate Services, LLC
(collectively the "Brokers") who shall be compensated by separate agreement
with Landlord. It is understood that each party agrees to indemnify the other
for any claim, including attorneys' fees asserted by any person or company
other than the aforesaid Broker(s) purporting to act on its behalf in
providing services as a broker, agent or finder in connection with this Lease.
25. NOTICES AND DEMANDS. All notices required or permitted hereunder
shall be in writing and shall be deemed to have been given if upon delivery
or refusal for delivery by personal delivery, one business day after deposit
with recognized courier (i.e. Federal Express, Purolator, Express Mail, etc.)
or three days after deposit by United States certified or registered mail,
postage prepaid, return receipt requested, at the following addresses or to
such other addresses as the parties hereto may designate in writing from time
to time:
LANDLORD:
c/o The Xxxxxxxxx Companies
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn.: Director of Property Management
With a copy to:
25
Xxxxx X. Xxxxxxx, Esq.
XXXXX & XXXXXXX, LLP
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
TENANT:
000 Xxxxxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn.: Xx. Xxxxxxxxxxx X. XxXxxxxx
With a copy to:
Xxx Xxxxxxx, Esq.
Xxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, X.X. 00000
26. QUIET ENJOYMENT. Landlord covenants and agrees that so long as
Tenant is not in default of any term, condition or covenant of this Lease
beyond any applicable cause and grace period, Tenant may peaceably and
quietly enjoy the Premises hereby demised, subject, nevertheless, to the terms
and conditions of this Lease and to any mortgages and deeds of trust
hereinbefore mentioned.
27. WAIVER OF TRIAL BY JURY. Landlord and Tenant each agree to and they
hereby DO WAIVE 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 or occupancy of the Premises
and/or any claim of injury or damage, and any statutory remedy.
28. GOVERNING LAW. This Lease shall be construed and governed by the
laws of the state in which the Premises are located. Should any provision of
this Lease and/or its conditions be illegal or not enforceable under the laws
of said state, it or they shall be considered severable, and the Lease and
its conditions shall remain in force and be binding upon the parties as
though the said provision had never been included.
29. PARKING. Tenant shall have the right to utilize the Building's
facilities on a nonexclusive basis with other tenants of the Building, upon
such terms and conditions as may from time to time be established by
Landlord. It is understood and agreed that Landlord assumes no
responsibility, and shall not be held liable, for any damage or loss to any
automobiles parked in the parking facilities or to any personal property
located therein, or for any injury sustained by any person in or about the
parking facilities.
30. TIME. Time is of the essence with respect to the performance of
every provision of this Lease in which time or performance is a factor.
26
31. CORPORATE AUTHORITY.
(A) If Tenant is a corporation, each of the persons executing this
Lease on behalf of Tenant does hereby covenant and warrant that (a) Tenant is
a duly authorized and a validly existing corporation under the laws of the
State of Delaware and duly qualified to do business in the State of Maryland,
(b) the corporation has full right and authority to enter into this Lease,
and (c) each person executing this Lease on behalf of the corporation is
authorized to do so.
32. NO REPRESENTATIONS. Tenant acknowledges that neither Landlord nor
any agent or employee of Landlord has made any representations or warranties
with respect to the Premises or the Building or with respect to the
suitability of same for the conduct of Tenant's business.
33. RIGHT OF FIRST OFFER.
Subject to any pre-existing rights of any other tenants in the
Building, Tenant, at its option, shall have the right of first offer to lease
the remaining space in the Building which becomes available for lease, from
time to time, during the original term of the Lease or any Renewal Term,
subject to the following terms and conditions:
33.01 Provided Tenant is not in default under any of its
obligations under the Lease, Landlord shall not lease, or enter into any
lease agreement regarding said newly available space (the "Offer Space")
without first providing Tenant with an offer to lease such Offer Space for
the remainder of Tenant's lease term and/or remaining option term. Such offer
shall be made in writing to Tenant. Tenant shall have five (5) business days
from receipt of such offer to accept or reject it. Time is of the essence in
the exercise of Tenant's first offer rights. Tenant must accept and lease the
entire space then available, and may not elect to lease less than the entire
amount of space which is available. In the event Tenant accepts the offer,
Tenant shall have an additional ten (10) business days to execute a lease or
lease amendment for such space. In the event that Tenant does not exercise
its first offer rights or timely execute such lease or amendment, Landlord
may thereafter lease the Offer Space to any tenant on any terms Landlord
deems acceptable.
33.02 The rental rates for the Offer Space shall be the market
rental rate per square foot for existing occupants in the Building. In no
event, however, shall market rate be less than the escalated rent to be paid
by Tenant in the Lease Year next following Tenant's election.
33.03 Unless otherwise expressly provided for hereinabove, any
Offer Space leased by Tenant shall become part of the Premises upon the
delivery of said space to Tenant. The term "Premises" shall thereafter be
deemed to include both the Premises as previously existing and the Offer
Space, and the Offer Space shall be subject to all terms and conditions of
this Lease. The lease term of the Offer Space shall be concurrent with and
expire at the end of the remaining term for the Premises, including any
Renewal Term opted for by Tenant.
33.04 The exercise by Tenant of its option to lease any Offer Space
shall be final and Tenant, after the exercise of said option, cannot rescind,
limit or modify same except as
27
expressly provided for herein. Tenant, immediately upon exercising any option,
shall be deemed to have leased the subject space at the rent stated and for the
term provided for in this Section, subject to all the conditions and provisions
of, and Tenant's obligations under, the Lease.
34. FINANCIAL REPORTS. Simultaneously with the delivery of an executed
copy of this Lease and thereafter within two (2) business days after any
request in conjunction with a notice of offer set forth in Section 33 or
reasonable request by Landlord, above, Tenant will furnish Tenant's most
recent audited financial statements (including any notes to them) to
Landlord, or, if no such audited statements have been prepared, such other
financial statements (and notes to them) as may have been prepared by an
independent certified public accountant or, failing those, Tenant's
internally prepared financial statements. Tenant will discuss its financial
statements with Landlord and will give Landlord access to Tenant's books and
records in order to enable Landlord to verify the financial statements.
Landlord will not disclose any aspect of Tenant's financial statements that
Tenant designates to Landlord as confidential except (i) to Landlord's
lenders or prospective purchasers of the project, (ii) in litigation between
Landlord and Tenant; and (iii) if required by court order.
35. ADDENDA. Exhibit A "Floor Plan," Exhibit B "Confirmation of Lease,"
Exhibit C "Rules and Regulations" and Exhibit D "Tenant Work" are attached
hereto and made a part hereof.
28
IN WITNESS WHEREOF, Landlord has hereunto set its hand and seal, or has
caused its name to be hereunto subscribed and Tenant has hereunto set its
hand and seal, or has caused its corporate name to be hereunto subscribed and
its corporate seal to be hereunto affixed and attested by its duly authorized
officers, as the case may be, as of the day and year first above written.
WITNESS: LANDLORD:
CONSORTIUM ONE--ANNAPOLIS, LLC
By: Consortium One, LP
Its: Managing Member
By: Millbank Capital Partners, L.L.C.
General Partner
By: Xxxxxxxxx Millbank Capital Partners, L.L.C.
Its: Managing Member
[ILLEGIBLE] /s/ Xxxx X. Xxxxxxxxx
------------------- ----------------------------------------------
By: Xxxx X. Xxxxxxxxx
Its: Managing Member
ATTEST: TENANT:
USinternetworking, INC.
[ILLEGIBLE] /s/ Xxxxxxxxxxx X. XxXxxxxx
------------------- ----------------------------------------------
By: Xxxxxxxxxxx X. XxXxxxxx
Its: Chairman and Chief Executive Officer
29
EXHIBIT A
3RD FLOOR
[FLOOR PLAN GRAPHIC] 12,290 SI
4TH FLOOR
[FLOOR PLAN GRAPHIC] 11,970 SL
EXHIBIT B
CERTIFICATE CONFIRMING LEASE COMMENCEMENT DATE
THIS CERTIFICATE CONFIRMING THE LEASE COMMENCEMENT DATE is attached to
and made a part of the Lease Agreement dated the 3rd day of April 1998, by
and between CONSORTIUM ONE--ANNAPOLIS, LLC (as "Landlord"), and
USinternetworking, INC. (as "Tenant").
The construction and finish of the demised premises has been
satisfactorily completed by Landlord in accordance with Exhibit "A."
The Lease Commencement Date is April 1, 1998.
The Rent Commencement Date is April 1, 1998.
The lease termination date is March 31, 2003.
WITNESS: LANDLORD:
CONSORTIUM ONE--ANNAPOLIS, LLC
By: Consortium One, LP
Its: Managing Member
By: Millbank Capital Partners, L.L.C.
General Partner
By: Xxxxxxxxx Millbank Capital Partners, L.L.C.
Its: Managing Member
[ILLEGIBLE] /s/ Xxxx X. Xxxxxxxxx
------------------- -----------------------------------------------
By: Xxxx X. Xxxxxxxxx
Its: Managing Member
ATTEST: TENANT:
USinternetworking, INC.
[ILLEGIBLE] /s/ Xxxxxxxxxxx X. XxXxxxxx
------------------- -----------------------------------------------
By: Xxxxxxxxxxx X. XxXxxxxx
Its: Chairman and Chief Executive Officer
30
EXHIBIT D
TENANT WORK
This Exhibit D is made a part of the Office Lease Agreement dated the
3rd day of April, 1998, by and between CONSORTIUM ONE--ANNAPOLIS, LLC, (as
"Landlord") and USinternetworking, INC. (as "Tenant") for space located at on
the Third (3rd) and Fourth (4th) Floors of the Building known as 000 Xxxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
1. Completion of Premises
Tenant shall, on a one-time basis at its sole cost and expense,
subject to final pricing perform the items of work (the "Tenant Work"): in
accordance with the pricing schedule plans and specifications set forth on
Exhibit D-1 to be attached hereto and incorporated herein upon approval by
Landlord.
2. Tenant shall be permitted to install at its sole expense (including
permit costs if any) and risk of loss approved signage in the upper corner on
the exterior of the Building in a design submitted by Tenant and approved by
Landlord in its sole and absolute discretion.
WITNESS: LANDLORD:
CONSORTIUM ONE--ANNAPOLIS, LLC
By: Consortium One, LP
Its: Managing Member
By: Millbank Capital Partners, L.L.C.
General Partner
By: Xxxxxxxxx Millbank Capital Partners, L.L.C.
Its: Managing Member
[ILLEGIBLE] /s/ Xxxx X. Xxxxxxxxx
------------------- ------------------------------------------------
By: Xxxx X. Xxxxxxxxx
Its: Managing Member
ATTEST: TENANT:
USinternetworking, INC.
[ILLEGIBLE] /s/ Xxxxxxxxxxx X. XxXxxxxx
------------------- ------------------------------------------------
By: Xxxxxxxxxxx X. XxXxxxxx
Its: Chairman and Chief Executive Officer
31
EXHIBIT C
RULES AND REGULATIONS
1. Landlord agrees to furnish Tenant with ____ keys without charge.
Additional keys shall be furnished at a nominal charge. Tenant shall
not change locks or install additional locks on doors without prior
written consent of Landlord. Tenant shall not make or cause to be made
duplicates of keys without prior approval of Landlord. All keys to the
Premises shall be surrendered to Landlord upon termination of this
Lease.
2. Tenant shall refer all contractor's representatives and installation
technicians rendering any service for Tenant at the Premises to
Landlord before performance of any contractual service. Tenant's
contractors and installation technicians shall comply with Landlord's
rules and regulations pertaining to construction and installation. This
provision shall apply to all work performed on or about the Premises
including installation of telephones, telegraph equipment, electrical
devices and attachments and installations of any nature affecting
floors, walls, woodwork, trim, windows, ceilings and equipment or any
other physical portion of the Premises.
3. Tenant shall not at any time occupy any part of the Premises as
sleeping or lodging quarters.
4. Tenant shall not place, install or operate on the Premises or in any
part of the Building any engine, stove or machinery, conduct mechanical
operations, xxxx thereon or therein or place or use in or about the
Premises any explosives, gasoline, kerosene, oil, acids, caustics,
flammable explosives or hazardous material without written consent of
Landlord.
5. Landlord shall not be responsible for lost or stolen personal property,
equipment, money or jewelry from the Premises regardless of whether or
not such loss occurs when the area is locked against entry.
6. No dogs, cats, fowl or other animals shall be brought into or kept in
or about the Premises.
7. Employees of Landlord shall not receive or carry messages for or to any
Tenant or other person nor shall they render free or paid services to
any Tenant, its agents, employees or invitees.
8. None of the parking, plaza, recreation or lawn areas, entries,
passages, doors, elevators, hallways or stairways shall be locked or
obstructed with any rubbish, litter, trash or material of any nature
which would be placed, emptied or thrown into these areas by Tenant's
agents, employees or invitees at any time.
9. The water closets and other water fixtures shall not be used for any
purpose other than those for which they were constructed. Any damage
resulting to them from misuse or by the defacing of any part of the
Building shall be borne by the person who shall occasion it. No
32
person shall waste water by interfering with the faucets or otherwise.
10. No person shall disturb occupants of the Building by the use of any
radios, record players, tape recorders, musical instruments, the making
of unseemly noises or any other unreasonable use.
11. Nothing shall be thrown out of the windows of the Building or down the
stairways or other passages.
12. Tenant, its employees, agents and invitees shall park their vehicles
only in those parking areas designated by Landlord. Tenant shall
furnish Landlord within five days after taking possession of the
Premises state automobile license numbers of all Tenant's vehicles.
Tenant shall notify Landlord of any changes within five days after such
change occurs. Tenant shall not leave any vehicle at the Building in a
state of disrepair including without limitation, flat tires, out of
date inspection stickers or license plates. If Tenant, its employees,
agents or invitees park their vehicles in areas other than the
designated parking areas or leave any vehicle in a state of disrepair,
Landlord, after giving written notice to Tenant of such violation,
shall have the right to remove such vehicle at Tenant's expense.
13. Parking in a parking garage shall be in compliance with all parking
rules and regulations including any sticker or other identification
system established by Landlord or the garage operator. Failure to
observe the rules and regulations shall terminate Tenant's right to use
the parking garage and subject the vehicle in violation to removal
and/or impoundment. No termination of parking privileges or removal of
a vehicle shall create any liability on Landlord or be deemed to
interfere with Tenant's right to possession of the Premises. Vehicles
must be parked entirely within the stall lines and all directional
signs, arrows and posted speed limits must be observed. Parking is
prohibited in areas not striped for parking, in aisles, where "No
Parking" signs are posted, on ramps, in cross hatched areas and in
other areas as may be designated by Landlord or the garage operator.
Parking stickers or other forms of identification supplied by Landlord
shall remain the property of Landlord and not the property of Tenant
and are not transferable. Every person is required to park and lock his
vehicle. All responsibility for damage to vehicles or persons is
assumed by the owner of the vehicle or its driver.
14. Movement of furniture or office supplies and equipment, in or out of
the Building, dispatch or receipt by Tenant of any merchandise or
materials which requires use of elevators or stairways, or movement
through the Building entrances or lobby shall be restricted to hours
designated by Landlord. All such movement shall be under the
supervision of Landlord and carried out in the manner agreed to between
Tenant and Landlord by prearrangement. Such prearrangement will include
determination by Landlord of time, method and routing of movement and
limitations imposed by safety or other concerns which may prohibit any
article, equipment or any other item from being brought into the
Building. Tenant shall indemnify Landlord against all risks and claims
of damage to person and property arising in connection with any said
movement.
15. Landlord shall not be liable for any damages from the stoppage of
elevators for necessary or
33
desirable repairs or improvements or delays of any sort in connection
with the elevator service.
16. Tenant shall not lay floor covering within the Premises without written
approval of Landlord. The use of cement or other similar adhesive
materials not easily removed with water is expressly prohibited.
17. Tenant agrees to cooperate and assist Landlord in the prevention of
canvassing, soliciting and peddling within the Building.
18. Landlord reserves the right to exclude from the Building between the
hours of 6:00 p.m. and 8:00 a.m. on weekdays, Saturday, Sunday and
holidays recognized by the U.S. Government, all persons who are not
known to the Building or security personnel and who do not present a
pass signed by Tenant. Tenant shall be responsible for all persons for
whom he supplies a pass.
19. It is Landlord's desire to maintain in the Building the highest
standard of dignity and good taste consistent with comfort and
convenience for all Tenants. Any action or condition not meeting this
high standard should be reported directly to Landlord. Your cooperation
will be mutually beneficial and sincerely appreciated.
20. Landlord reserves the right to make such other and further reasonable
rules and regulations as in its judgement may from time to time be
necessary for the safety, care and cleanliness of the Premises and for
the preservation of good order therein.
21. Please be advised that the building will be closed this year in
observance of the following holidays:
Memorial Day _______________________
Independence Day _______________________
Labor Day _______________________
Thanksgiving Day _______________________
Christmas Day _______________________
New Year's Day _______________________
When the holiday falls on a Saturday, Friday will be observed.
When the holiday falls on a Sunday, Monday will be observed.
00
XXXXXXX X
, 0000
Consortium One--Annapolis, LLC
c/o the Xxxxxxxxx Companies
0000 X Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Dear Sir(s):
We hereby issue in your favor this Letter of Credit in the amount of
S400,000 which is available by your draft(s) on us at _______________ bearing
the clause "Drawn under _________________ Bank Letter of Credit No. ____________
___________" accompanied by the following documents:
1. The original Letter of Credit.
2. A written, notarized statement executed by a managing member of
Consortium One Annapolis, LLC, a Maryland limited liability company
("Landlord"), that the Tenant is in default beyond the expiration
of the applicable notice and grace periods (specifying the default
and amount, if any due) under:
That certain Lease Agreement dated ___________,1998 between
Landlord and USinternetworking, INC. ("Tenant") with respect
to that certain leasable area of 24,260 square feet located
at 000 Xxxxxxx Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx.
This Letter of Credit shall expire on December 31, 1999. It is a
condition of this Letter of Credit that it shall be deemed automatically
extended without amendment for one (1) year from the present or any future
expiration date unless thirty (30) days prior to such expiration date you are
notified by registered letter that we elect not to consider this Letter of
Credit for any such additional period.
If this Letter of Credit is to be cancelled before the expiration date
herein (as extended from time to time), the original of the Letter of Credit
and a statement executed by the Managing Member of Consortium One--Annapolis,
LLC requesting cancellation must be returned to us at the address above.
This Letter of Credit is subject to the Uniform Customs and Practice for
Documentary Credits (1983 revision), International Chamber of Commerce
Publication No. 400.
______________________ Bank
By:________________________
RENEWAL OPTION ADDENDUM
This Renewal Option Addendum, is made this ____ day of March, 1998, by
and between CONSORTIUM ONE--ANNAPOLIS, LLC (as "Landlord"), and
USinternetworking, INC. (as "Tenant"), and modifies that certain Lease
between Landlord and Tenant (the "Lease") of even date herewith for the
leasing by Tenant of the agreed upon 23,940 square feet of space in the
office building known as 000 Xxxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the
"Building").
In consideration of TENANT signing the Lease, and to induce TENANT to
execute the Lease, the parties hereby agree that TENANT, at its option, may
renew this Lease for one (1) additional three (3) year term (the "Renewal
Tenn"), with the Renewal Term commencing immediately upon the expiration of
the original term of the Lease, subject to the following terms and conditions:
(1) TENANT must deliver to LANDLORD written notice of its intention
to exercise its option for the Renewal Term not less than three hundred sixty
(360) days before the expiration of the original Lease Term. Time is of the
essence in the exercise of this option and TENANT's failure to timely deliver
such written notice renders such renewal option null and void, and any rights
which TENANT otherwise might have had with respect to such option shall be
deemed waived.
(2) Annual Rent for the first Lease Year of the First Renewal Term
shall be set at one hundred percent (100%) of the market rate ("Market Rate")
for similar space similarly located and prevailing at the time of
commencement of the Renewal Term. Market Rate shall be the gross, per foot
charge for similar space then prevailing, without reduction for "free" rent,
buildout allowances or any other tenant concessions from time to time
available in the market. Annual Rent for each succeeding Lease Year of the
Renewal Term shall be equal to the Annual Rent paid for the immediately
preceding Lease Year, increased by three percent (3%). The Market Rate shall
be determined by an independent real estate broker, working for an
independent company which shall be defined as a company not controlling,
controlled or under common control of LANDLORD, designated by LANDLORD at its
cost and expense, with at least seven (7) years experience in leasing office
space in the Annapolis, Maryland metropolitan area. If the Market Rate for
any reason is not determined as of the commencement date of the Renewal Term,
the parties agree that TENANT shall pay as Annual Rent for the first Lease
Year of the Renewal Term, until such time as the Annual Rent for the Renewal
Term shall be determined as provided for above, an amount equal to one
hundred fifty percent (150%) of the Annual Rent in effect for the last Lease
Year of the initial term of the Lease. Upon the determination of the Market
Rate, LANDLORD and TENANT shall adjust the amount payable for such interim
period. In the event the amount actually paid by TENANT as Annual Rent during
said interim period is less than the amount actually due as Annual Rent for
said period based on the determination of the Market Rate as provided for
above, TENANT shall pay any such deficit to LANDLORD as additional rent
within ten (10) days of the date of determination of the Annual Rent for the
Renewal Term. In the event the amount actually paid by TENANT as Annual Rent
during said interim period is greater than the amount actually due as Annual
Rent for said period, any such excess shall be credited towards the next
payment(s) of Monthly Rent due under the Lease. In no event, however, shall
the Annual Rent for the first Lease Year of the
Renewal Term be less than the Annual Rent for the last Lease Year of the Initial
Term of the Lease.
(3) TENANT may exercise its renewal option and continue to occupy
the Leased Premises during the Renewal Term only in the event TENANT is not
in default of any of its obligations under this Lease at the time it
exercises the renewal option and on the date the Renewal Term commences.
(4) During the Renewal Term, all provisions, terms and conditions of
the Lease not inconsistent with this Addendum (i.e., additional rent,
escalations in rent, contribution for increases in Operating Expenses, default
provisions, indemnifications, etc.) shall continue in full force, with the
Renewal Term being substituted for the original term of the Lease in determining
TENANT's obligations thereunder.
(5) TENANT may not renew the Lease for less than the entire space then
leased by TENANT in the Building.
(6) The exercise by TENANT of its option for the Renewal Term as
provided in Section 1, above, shall be final and TENANT, after the exercise of
said option, cannot rescind, limit or modify same. TENANT, immediately upon its
exercise of the renewal option, shall be liable for the performance of all of
TENANT's obligations under the Lease, as modified by this Addendum, through the
expiration of the Renewal Term.
(7) All defined terms used in this Addendum shall have the meaning
provided in the Lease. Except as specifically modified by this Addendum, the
Lease shall continue in full force and effect, subject to all its terms,
provisions and conditions.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, LANDLORD and TENANT have caused this Renewal
Option Addendum to be signed in their names by their duly authorized
representatives and delivered as their act and deed, intending to be legally
bound by its terms and provisions.
WITNESS: LANDLORD:
CONSORTIUM ONE--ANNAPOLIS, LLC
By: Consortium One, LP
Its: Managing Member
By: Millbank Capital Partners, L.L.C.
General Partner
By: Xxxxxxxxx Millbank Capital Partners, L.L.C.
Its: Managing Member
[ILLEGIBLE] /s/ Xxxx X. Xxxxxxxxx
------------------- ---------------------------------------------------
By: Xxxx X. Xxxxxxxxx
Its: Managing Member
ATTEST: TENANT:
USinternetworking, INC.
[ILLEGIBLE] /s/ Xxxxxxxxxxx X. XxXxxxxx
------------------- ---------------------------------------------------
By: Xxxxxxxxxxx X. XxXxxxxx
Its: Chairman and Chief Executive Officer