LEASE AGREEMENT
between
HARBOR EAST PARCEL G - OFFICE, LLC
(as Landlord)
and
SYLVAN LEARNING SYSTEMS, INC.
(as Tenant)
Dated: August 24, 1995
Table of Contents
Page
----
1. Definitions ........................................................... 1
2. Completion of Leased Premises ......................................... 10
2A. Lease Commencement Date ............................................... 10
3. Rent and Additional Charges ........................................... 11
4. Common Areas .......................................................... 16
5. Services and Utilities ................................................ 16
6. Use of Leased Premises ................................................ 22
7. Care of Leased Premises and Building .................................. 25
8. Rules and Regulations ................................................. 27
9. Tenant's Alterations .................................................. 27
10. Name of Building; Tenant's Signs ...................................... 31
11. Tenant's Insurance .................................................... 32
12. Landlord's Insurance .................................................. 35
13. Damage by Fire or Other Casualty ...................................... 36
14. Condemnation .......................................................... 40
15. Assignment and Subletting ............................................. 41
16. Default Provisions .................................................... 43
17. Security Deposit ...................................................... 47
18. Bankruptcy Termination Provision ...................................... 48
19. Landlord May Perform Tenant's Obligations ............................. 49
20. Subordination ......................................................... 49
21. Attornment ............................................................ 51
22. Quiet Enjoyment ....................................................... 52
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23. Right of Access to Leased Premises .................................... 52
24. Limitation on Landlord's Liability .................................... 53
25. Estoppel Certificates ................................................. 55
26. Surrender of Leased Premises .......................................... 55
27. Holding Over .......................................................... 55
28. Arbitration ........................................................... 56
29. Parking ............................................................... 56
30. Transfer of Landlord's Interest ....................................... 58
31. Leasing Commissions ................................................... 58
32. Recordation ........................................................... 59
33. Commercial Purposes ................................................... 59
34. General Provisions .................................................... 59
35. Options to Extend Term ................................................ 62
36. Expansion Options ..................................................... 66
37. Roof Options .......................................................... 67
38. Security Plan ......................................................... 67
39. Tenant's Allowance .................................................... 68
40. City Approvals ........................................................ 68
41. Tenant's Right to Terminate ........................................... 68
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EXHIBITS
A Floor Plan of Leased Premises
B Construction Agreement
C Cleaning Specifications
D Rules and Regulations
E Determination of Net Rentable Area
F Description of Land
G Security Plan
H Signage
I Area Plan
J Commission Agreement
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LEASE AGREEMENT
THIS LEASE AGREEMENT is made this __ day of August, 1995, between (i)
HARBOR EAST PARCEL G - OFFICE, LLC, a Maryland limited liability company
(hereinafter referred to as "Landlord"), and (ii) SYLVAN LEARNING SYSTEMS, INC.
a Maryland corporation (hereinafter referred to as "Tenant").
WITNESSETH: Subject to the terms of this Lease, which, except for the
payment of Rent and Additional Charges, shall be effective as of and from the
date hereof, Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the Leased Premises, for the Term.
1. Definitions.
(a) General Interpretive Principles. For purposes of this Lease, except as
otherwise expressly provided or unless the context otherwise requires, (i) the
terms defined in this Section have the meanings assigned to them in this Section
and include the plural as well as the singular, and the use of any gender herein
shall be deemed to include the other genders; (ii) accounting terms not
otherwise defined herein have the meanings assigned to them in accordance with
generally accepted accounting principles; (iii) references herein to "Sections,"
"subsections," "paragraphs" and other subdivisions without reference to a
document are to designated Sections, subsections, paragraphs and other
subdivisions of this Lease; (iv) a reference to a subsection without further
reference to a Section is a reference to such subsection as contained in the
same Section in which the reference appears, and this rule shall also apply to
paragraphs and other subdivisions; (v) the words "herein," "hereof," "hereunder"
and other words of similar import refer to this Lease as a whole and not to any
particular provision; and (vi) the word "including" means "including, but not
limited to."
(b) Definitions. As used in this Lease the following words and phrases
shall have the meanings indicated:
Additional Charges: All amounts (including the Parking Fees set forth in
Section 29) payable by Tenant to Landlord under this Lease other than Basic
Rent. All Additional Charges shall be deemed to be additional rent and all
remedies applicable to the non-payment of Basic Rent shall be applicable
thereto.
Additional Insureds: Any Mortgagee of the Land or the Building, or both,
and, if Landlord is a lessee of the Land or the Building, or both, the fee
owner.
Advance Rent: $45,833 representing the estimated Basic Rent for the first
full month of the Term after the Lease Commencement Date, which Tenant shall pay
to Landlord upon execution of this Lease and which Landlord shall credit against
the corresponding monthly installment of Basic Rent.
Affiliate: When used with respect to a Person, any corporation,
partnership, joint venture, trust or individual controlled by, under common
control with, or which controls such Person (the term "control" for these
purposes shall mean the ability, whether by the ownership of shares or other
equity interests, by contract or otherwise, to elect a majority of the directors
of a corporation, to make management decisions on behalf of, or independently to
select the managing partner of, a partnership, or otherwise to have the power
independently to remove and then select a majority of those individuals
exercising managerial authority over an entity, and control shall be
conclusively presumed in the case of the ownership of fifty (50%) or more of the
equity interests).
Alterations: Tenant Work and any alterations, installations, improvements,
additions, renovations or physical changes to the Leased Premises (other than
Tenant Work) made by or on behalf of Tenant or any Person claiming through or
under Tenant before or after the Lease Commencement Date.
Basic Rent: For each Lease Year, an amount equal to the product obtained by
multiplying the Rentable Area by the Rent per Square Foot for such Lease Year.
Building: The office building located on the Land, which has a mailing
address of 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
Building Rentable Area: The total net rentable area in the Building, as
determined by Landlord's architect from the architectural plans for the
Building, without field measurement, in accordance with the provisions of
Exhibit E to this Lease is approximately 120,000 square feet.
Business Days: All days except Saturdays after 1 p.m., Sundays and Legal
Holidays.
Common Areas: All areas, spaces and improvements within the Building and on
the Land which are provided by Landlord, without a separate charge, for the
non-exclusive convenience and use of the tenants of the Building and their
agents, employees and invitees, including public elevators, lobbies, corridors,
escalators, stairways and stairwells, public restrooms and comfort stations,
truck loading areas and entrances and exits designated by Landlord for ingress
and egress.
Default Interest Rate: A fluctuating rate per annum equal to the lesser of
(i) the sum of (x) the prime rate of NationsBank, N.A., said prime rate to
change from time to time as and when the change is announced as being effective,
and (y) three
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percent (3%), or (ii) the maximum rate of interest chargeable under applicable
law, if any, with respect to the applicable payment.
Event of Default: As defined in Section 16(a) as an event of default.
Floor: A floor of the Building located above the foundation slab or above a
below-grade area which is designated as a cellar or a basement. The term "Floor"
preceded by a number shall mean the indicated floor of the Building.
Hazardous Substances: The term shall include (i) any "hazardous
substances," "pollutants" or "Contaminants" as those terms are defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended: (ii) regulated substances and material described in the Resource
Conservation and Recovery Act, as amended, other federal, state or local laws
seeking to prevent pollution or contamination of land, air or water, and any
regulations thereunder; (iii) any "hazardous substance" as defined by the laws
of the State of Maryland, as amended; (iv) any oil, petroleum products or
byproducts, as defined by the laws of the State of Maryland, as amended; (v)
asbestos; (vi) polycholorinated biphensyls; and (vii) other materials defined or
identified as dangerous, unsafe or hazardous (at or above statutory or
regulatory levels), in any Legal Requirements governing the use, storage or
disposition of such materials.
Initial After-Hours HVAC Rate: $25 per hour per floor for the first Lease
Year.
Initial Calendar Year: The calendar year in which the Operating Expense
Commencement Date occurs.
Insurance Requirements: The usual and customary provisions and requirements
of all policies of fire, property damage and liability insurance from time to
time maintained by Landlord, and all rules and regulations promulgated by any
Board of Fire Insurance Underwriters or fire insurance rating organization,
applicable from time to time to the Building, the Land or the Parking
Facilities.
Land: The parcel of real property described in Exhibit F to this Lease.
Landlord: The landlord named herein and any subsequent owner or lessee,
from time to time, of Landlord's interest in the Land and/or the Building during
the period of such owner's or lessee's ownership.
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Landlord's Notice Address: 000 X. Xxxx Xxxxxx, Xxxxxxxxx, XX, 00000.
Lease: This Lease Agreement, as amended from time to time, and all
Exhibits, Riders and Addenda attached hereto.
Lease Commencement Date: October 1, 1996, except as otherwise provided in
Section 2A of this Lease.
Lease Year: The period commencing on the Lease Commencement Date and ending
on the last day of the month which completes 12 full calendar months after the
Lease Commencement Date, and each 12 month period thereafter commencing on the
first day after the end of the immediately preceding Lease Year, except that the
last Lease Year shall end on the last day of the Term.
Leased Premises: The area located on the 4th and 5th Floor of the Building,
and designated as Suites 400 and 500. The Leased Premises are outlined on the
floor plan attached as Exhibit A to this Lease consisting of the number of
square feet determined by Landlord's architect consistent with Exhibit E.
Leasehold Estate: Tenant's interest in the Leased Premises pursuant to this
Lease.
Leasing Broker: Xxxxxx Corporate Real Estate.
Legal Holidays: New Years Day, Independence Day, Labor Day, Thanksgiving
Day, Christmas Day, and Memorial Day.
Legal Requirements: All laws, statutes, ordinances, orders, rules,
regulations and requirements, including all mandatory energy conservation
requirements applicable to the Building, of all federal, state and municipal
governments, and the appropriate agencies, officers, departments, boards and
commissions thereof, whether now or hereafter in force, applicable to the Land,
the Building, the Parking Facilities and the Leased Premises, or any part
thereof; all applicable local, State and Federal laws and regulations relating
to the use on, storage in, and the removal from, the Land and/or the Building of
hazardous or toxic material, petro-chemical products or asbestos or products
containing asbestos; notices from a Mortgagee of the Building as to the manner
of use or occupancy or the maintenance, repair or condition of the Leased
Premises and/or the Building; and all covenants, conditions and restrictions of
record affecting the use or occupancy of the Building.
Minor Alterations: Alterations which do not affect the Common Areas, the
structural elements of the Building, the exterior appearance of the Building, or
the operating efficiency of the
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Building, and which in the aggregate, do not exceed 820,000 per project in cost.
constitute Minor Alterations.
Mortgage: Any mortgage, deed of trust or other security instrument of
record creating an interest in or affecting title to the Land or the Building,
or both, or any part thereof, including a leasehold mortgage or subleasehold
mortgage, and any and all renewals, modifications, consolidations or extensions
of any such instrument; Mortgagee shall mean the holder or beneficiary of any
Mortgage.
Operating Expense Commencement Date: Lease Commencement Date.
Operating Expenses: The aggregate of all reasonable and customary costs and
expenses incurred on an accrual basis by Landlord in connection with the
management, operation, maintenance, repair, cleaning, safety and administration
of the Leased Premises, the Building and the Land, including employees' wages,
salaries, welfare and pension benefits, other fringe benefits and payroll taxes
for on-site employees; Real Estate Taxes; telephone service; painting of Common
Areas; exterminating service; detection and security services; sewer rents and
charges; premiums for fire and casualty, liability, workmen's compensation,
sprinkler, water damage and other insurance; repairs and maintenance; building
supplies; uniforms and dry cleaning; snow removal; the cost of obtaining and
providing electricity, water and other public utilities; trash removal;
janitorial and cleaning supplies; cleaning and janitorial services; landscaping
maintenance; window cleaning; service contracts for the maintenance of
elevators, boilers, HVAC and other mechanical, plumbing and electrical
equipment; sales and use taxes payable in connection with tangible personal
property and services purchased for the management, operation, maintenance,
repair, cleaning, safety and administration of the Land and the Building;
accounting fees relating to the determination of Operating Expenses and
Operating Expense Increases and the preparation of statements required by
tenants' leases; management fees, whether or not paid to any Person having an
interest in or under common ownership with Landlord; fees paid in connection
with the challenge of any proposed assessment which would result in an increase
in the Real Estate Taxes, provided however, that Landlord shall only pursue such
challenges if it reasonably expects the resulting savings to exceed the cost of
such challenge; purchase and installation of indoor plants in the Common Areas;
purchase and installation of additional landscaping not included in the original
landscaping plan for the Building and replacement or substitute landscaping; and
all other expenses now or hereafter reasonably and customarily incurred in
connection with the operation, maintenance, and management of Peer Group
Buildings. If Landlord makes an expenditure for a capital improvement to the
5
Land or the Building, whether by installing energy conservation or labor-saving
devices to reduce Operating Expenses, to comply with Legal Requirements or
otherwise, and if, under generally accepted accounting principles, such
expenditure is not a current expense, then, except as otherwise provided in the
next sentence, the cost thereof shall be amortized over a period equal to the
useful life of such improvement, determined in accordance with generally
accepted accounting principles, and the amortized cost allocated to each
calendar year during the Term, together with an imputed interest amount
calculated on the unamortized portion thereof using an interest rate equal to
the prime rate of NationsBank, N.A. at the time of the expenditure, shall be
treated as an Operating Expense. The cost of all repairs, replacements and
improvements required to maintain the Building as a first-class office building,
other than those related to structural or building systems or those excluded
below, shall be treated as an Operating Expense even if the cost would otherwise
be classified as a capital expenditure under generally accepted accounting
principles. Refunds of Real Estate Taxes (reduced by Landlord's reasonable
expenses in obtaining such refunds), amounts payable by tenants of the Building
for after-hours heating or air- conditioning and for excess electrical usage,
recoveries of expenses and other separate charges made to tenants of the
Building for special services and (to the extent that Operating Expenses include
the cost of any repair or reconstruction work) the amount of any insurance
recoveries (net of the costs of collection), all determined on an accrual basis,
shall be credited against Operating Expenses in computing the amount thereof.
Operating Expenses shall not include financing or mortgage costs; depreciation
expense: advertising for vacant space or building promotion; leasing
commissions; executive salaries; the cost of tenant improvements; ground rent;
or legal fees for leasing vacant space in the Building or enforcing Landlord's
rights under leases with tenants for space in the Building. In addition,
Operating Expenses shall not include the following:
(i) fees for licenses and permits obtained by or for Landlord in
connection with any non-office use activity by a tenant within the
Building, such as retail or commercial uses;
(ii) management fees paid to Affiliates of Landlord or other related
Persons, provided however, that such fees can be included in Operating
Expenses to the extent they are negotiated as arm's length arrangements;
(iii) expenses not generally treated as operating expenses under
generally accepted accounting principles except as specifically set forth
above;
(iv) any repairs or improvements made (A) by third parties to correct
defects in prior construction, (B) to bring the
6
Building in compliance with Legal Requirements applicable prior to the
Lease Rental Commencement Date or (C) to cure Landlord's default under the
terms of this Lease or any other space lease with a tenant in the Building;
(v) increases in salary and benefits to employees of Landlord which
are in excess of the prevailing increases within downtown Baltimore:
(vi) expenses properly treated as indirect corporate or office
overhead for other sites under generally accepted principles of office
building management;
(vii) costs or renovating, decorating or improving space for tenants
or other occupants of the building, or vacant space:
(viii) expenses in connection with services provided to tenants which
are not consistent with services provided to all other tenants;
(ix) interest and penalties on taxes, utility bills and other costs
due to Landlord's negligence; and
(x) fees paid to Tenant or other tenants in the Building as
reimbursement for audit expenses incurred due to errors by Landlord in the
calculation of Operating Expenses; and
(xi) costs incurred by Landlord in challenging the application of
Legal Requirements, or fees and expenses incurred or payable as a result of
such application provided, however, that such costs can be included as
Operating Expenses if Landlord reasonably expects the resulting savings
arising from such challenge to exceed the cost of the challenge.
Operating Expenses are subject to adjustment as provided in Section 3(d).
Parking Facilities: Any above grade parking structure and the surface
parking areas on the Land or on other parcels located in the Inner Harbor East
subdivision designated as available for Tenant's use during the term of this
Lease in accordance with Section 29 of this Lease.
Peer Group Buildings: First-class, Class A office buildings in downtown
Baltimore of comparable age, quality and location.
Person: A natural person, a partnership, a corporation and any other form
of business or legal association or entity.
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Real Estate Taxes: All taxes, assessments, vault rentals, and other
charges, if any, general, special or otherwise, including all assessments for
schools, public betterments and general or local improvements, levied or
assessed upon or with respect to the ownership of and/or all other taxable
interests in the Building and the Land imposed by any public or quasi-public
authority having jurisdiction and personal property taxes levied or assessed on
Landlord's personal property used in connection with the management, operation,
maintenance, repair, cleaning, safety and administration of the Land and the
Building less all applicable credits. Except for taxes, fees, charges and
impositions described in the next succeeding sentence, Real Estate Taxes shall
not include any federal or state estate or inheritance taxes or taxes on income.
If at any time during the Term the methods of taxation shall be altered so that
in addition to or in lieu of or as a substitute for the whole or any part of any
Real Estate Taxes levied, assessed or imposed there shall be levied, assessed or
imposed (i) a tax, license fee, excise or other charge on the rents received by
Landlord, or (ii) any other type of tax or other imposition in lieu of, or as a
substitute for, or in addition to, the whole or any portion of any Real Estate
Taxes, then the same shall be included as Real Estate Taxes. A tax xxxx or true
copy thereof, together with any explanatory or detailed statement of the area or
property covered thereby, submitted by Landlord to Tenant shall be conclusive
evidence of the amount of taxes assessed or levied, as well as of the items
taxed. If any real property tax or assessment levied against the land, buildings
or improvements covered thereby or the rents reserved therefrom shall be
evidenced by improvement or other bonds, or in other form, which may be paid in
annual installments only the amount paid or payable in any calendar year,
including the interest, if any, thereon, shall be included as Real Estate Taxes
for that calendar year. The Real Estate Taxes for the first Lease Year
includible as Operating Expenses shall not exceed $.75 per square foot. Landlord
shall make timely applications for, diligently pursue and use best efforts to
keep in place all discounts applicable as a result of the Building being located
in a State Enterprise Zone or Federal Empowerment Zone.
Rent Per Square Foot: Eleven Dollars ($11.00) per square foot of Rentable
Area during the first Lease Year. For each Lease Year (or part of a Lease Year)
thereafter during the Term, the Rent per Square Foot shall be an amount equal to
102.15% of the Rent per Square Foot for the immediately preceding Lease Year.
Rentable Area: The net rentable area of the Leased Premises, as determined
by Landlord's architect from the approved permit sets of construction drawings
for the Leased Premises, without field measurement, in accordance with the
provisions of
8
Exhibit E to this Lease. Landlord's architect has initially estimated the
Rentable Area to be approximately 50,000 square feet.
Rules and Regulations: The rules and regulations attached as Exhibit D to
this Lease as modified from time to time by Landlord pursuant to Section 8.
Security Deposits: A sum equivalent to one (1) month's Basic Rent.
Taking: A taking of property, or any interest therein or right appurtenant
or accruing thereto, by condemnation or eminent domain or by action or
proceedings, or agreement in lieu thereof, pursuant to governmental authority.
Tenant: The tenant named herein, any Affiliate thereof and any permitted
assignee under Section 15.
Tenant's Associates: Tenant's subtenants, agents, employees, invitees,
licensees, customers and clients, and guests or contractors of any of the
foregoing.
Tenant's Notice and Billing Address: Sylvan Learning Systems, Inc., 0000
Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000, (before the Lease Commencement Date), or the
Premises (after the Lease Commencement Date).
Tenant's Personal Property: All furniture, furnishings, business machines,
equipment and other moveable property installed in the Leased Premises by, or at
the expense of, Tenant and (i) not affixed to the Land or the Building; or (ii)
affixed but removable without substantial damage (which damage can be and is
repaired by Tenant).
Tenant's Proportionate Share: The percentage (rounded off to two decimal
points) from time to time which the Rentable Area is of the Building Rentable
Area.
Tenant's Space Layout: As defined in Section 4 of Exhibit B.
Tenant's Work: As defined in Exhibit B.
Term: The period commencing on the Lease Commencement Date and ending on
the last day of the calendar month which completes ten (10) full years after the
Lease Commencement Date, but in any event the Term shall end on any date when
this Lease is sooner terminated.
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Unavoidable Delays: Delays caused by strikes, acts of God, lockouts, labor
difficulties, riots, explosions, sabotage, accidents, shortages or inability to
obtain labor or materials, Legal Requirements, governmental restrictions, enemy
action, civil commotion, fire or other casualty or similar causes beyond the
reasonable control of Landlord, other than as to Landlord, delays caused by
financial difficulties experienced by Landlord, whether in securing initial
financing or otherwise.
2. Completion of Leased Premises.
a. The completion of the Leased Premises shall be done in accordance with
the provisions of Exhibit B to this Lease.
b. Construction on the Building shall commence by September 30, 1995.
c. The Base Building shall be built in accordance with plans and
specifications prepared by Landlord's architect, a copy of which have been
delivered to Tenant. Landlord agrees to provide to Tenant, upon request, copies
of such plans and specifications as may be needed by Tenant to install
improvements, make alterations or perform repairs which are Tenant's
responsibility hereunder, or which Tenant may need to perform in the event of an
emergency.
2A. Lease Commencement Date. Except as otherwise provided in Exhibit B, the
Lease Commencement Date shall occur sixty (60) days after Landlord has delivered
the-Leased Premises to Tenant in a Floor Ready Condition (the "Tenant Work
Period") provided that the Date of Substantial Completion has occurred. If the
Date of Substantial Completion has not occurred by the end of the Tenant Work
Period, the Lease Commencement Date shall be the Date of Substantial Completion.
Landlord and Tenant anticipate the following schedule: (i) the Leased Premises
will be delivered to Tenant in a Floor Ready Condition on August 1, 1996; (ii)
the Date of Substantial Completion will be September 1, 1996, and (iii) the
Lease Commencement Date will be October 1, 1996. If the Date of Substantial
Completion for the Base Building has not occurred by October 15, 1996, Landlord
shall pay Tenant liquidated damages in the amount of $1,424.00 per day for each
day of delay after October 15, 1996 not caused by Tenant's Delay (as defined in
Exhibit B) until the Lease Commencement Date occurs. Within 10 days after the
Lease Commencement Date has been determined, Tenant shall, at the request of
Landlord, execute and deliver to Landlord a written instrument setting forth the
precise dates of commencement and expiration of the Term and the Rentable Area,
and certifying that Tenant is in possession of the Leased Premises and has no
claims, defenses, offsets or counterclaims against Landlord, or specifying each
such claim, defense, offset or counterclaim.
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Notwithstanding the foregoing, Tenant may elect to use Landlord's
Contractor to perform the Tenant Work. In such event, subject to: (i) Tenant
complying with a reasonable schedule developed by Landlord for preparation and
delivery of Tenant Work Construction Documents: (ii) Tenant's timely approval of
costs for Tenant Work; and (iii) Unavoidable Delay, the Lease Commencement Date
will be the date of substantial completion by Landlord's Contractor of Tenant
Work (as determined by Tenant's architect and Landlord's architect) or the Date
of Substantial Completion, whichever is later.
3. Rent and Additional Charges.
(a) Payments of Rent and Additional Charges. Tenant shall pay the Basic
Rent for each Lease Year in equal monthly installments in advance on the Lease
Commencement Date and thereafter on the first day of each month (or part of a
month) during the Term. If the Lease Commencement Date is not the first day of a
month, Basic Rent for the month in which the Lease Commencement Date occurs
shall be pro-rated on the basis of the number of days in the month before and
after the Lease Commencement Date. Landlord acknowledges receipt of the
Advance--Rent. The difference, if any, between the Advance Rent and the first
monthly installment of Basic Rent shall be adjusted as of the Lease Commencement
Date. The Basic Rent and all Additional Charges shall be paid promptly when due,
in lawful money of the United States, without notice or demand and without
deduction, diminution, abatement, counterclaim or setoff of any amount or for
any reason whatsoever, except as otherwise expressly provided in subsection (b)
and in Sections 13(b) and 14(a), to Landlord at Landlord's Notice Address or at
such other address or to such other Person (including a successor to Landlord's
interest in the Building) as Landlord may from time to time designate. If Tenant
makes any payment to Landlord by check, such payment shall be by check of Tenant
and Landlord shall not be required to accept the check of any other Person, and
any check received by Landlord shall be deemed received subject to collection.
If any check is mailed by Tenant, Tenant shall post such check in sufficient
time prior to the date when payment is due so that such check will be received
by Landlord on or before the date when payment is due. Tenant shall assume the
risk of lateness or failure of delivery of the mails, and no lateness or failure
of the mails will excuse Tenant from its obligation to make the payment in
question when required under this Lease. If, during the Term, Landlord receives
two or more checks from Tenant which are returned by Tenant's bank for
insufficient funds or are otherwise returned unpaid, Tenant agrees that all
checks thereafter shall be either bank, certified or cashiers' checks. All bank
service charges resulting from any bad checks shall be borne by Tenant. The rent
reserved under this Lease shall be the total of all Basic Rent and Additional
Charges, increased and adjusted as elsewhere
11
herein provided, payable during the entire Term and, accordingly, the methods of
payment provided for herein, namely, annual and monthly rental payments, are for
convenience only and are made on account of the total rent reserved hereunder.
(b) Payment of Operating Expenses. Tenant shall pay as additional rent
Tenant's Proportionate Share of Operating Expenses for each calendar year,
commencing with the Initial Calendar Year.
(i) Landlord shall make a reasonable estimate of Tenant's Operating
Expenses for each calendar year after the Initial Calendar Year (based on the
projected Real Estate Taxes payable for the real estate tax fiscal years
included in such calendar year, the other Operating Expenses for the preceding
calendar year and anticipated increases in other Operating Expenses for the
current calendar year). Tenant shall pay to Landlord a properly prorated share
of the estimated amount of Tenant's Operating Expenses for each calendar year on
the first day of each month in advance, beginning on the first day of the first
calendar year after the Initial Calendar Year.
(ii) If Landlord's estimate of Tenant's Operating Expenses for any calendar
year is not received by Tenant on or before January 1 of the calendar year,
Tenant shall continue to pay the monthly installments of Operating Expenses at
the rate established for the immediately preceding calendar year until Tenant
receives a new estimate for the calendar year. Within 15 days after receipt of a
new estimate of Operating Expenses for the calendar year, Tenant shall pay to
Landlord in a lump sum the arrearages in the monthly estimates for each month in
the calendar year before receipt of the estimate, if any, and shall pay the
remaining monthly installments for the calendar year on the first day of each
month in advance during the balance of the calendar year.
(iii) Within 120 days after the end of each calendar year, including the
Initial Calendar Year, Landlord shall submit to Tenant a statement prepared by
Landlord's independent certified public accountant (the "Annual Operating
Expense Statement") setting forth in reasonable detail the Operating Expenses
for such calendar year and the amount (if any) of Tenant's Proportionate Share
of Operating Expenses for such calendar year. If Tenant's Proportionate Share of
Operating Expenses so stated are more than the amount (if any) theretofore paid
by Tenant for Operating Expenses based on Landlord's estimate for the calendar
year, Tenant shall pay to Landlord the deficiency after the submission of the
Annual Operating Expense Statement. Such payment shall be made with the next
payment of Basic Rent due at least 20 days after receipt by Tenant of all such
information. If Tenant's Proportionate Share of Operating Expenses so stated are
less than
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the amount (if any) theretofore paid by Tenant for Operating Expenses based on
Landlord's estimate for the calendar year, Landlord shall credit the excess
against the next monthly installment of Basic Rent thereafter payable by Tenant
under this Lease, except that Landlord shall refund the excess (if any) for the
calendar year within which the last Lease Year ends to Tenant within 15 days
after submission of the Annual Operating Expense Statement for such calendar
year.
(iv) If the Lease Commencement Date shall not coincide with the beginning
of a calendar year, the amount of Operating Expenses payable for the Initial
Calendar Year shall be pro-rated on a daily basis between Landlord and Tenant
based on the number of days in the Initial Calendar Year occurring on and after
the Lease Commencement Date. If the last day of the Term shall not coincide with
the end of a calendar year, the amount of Operating Expenses payable for the
calendar year in which the last day of the Term occurs shall be pro-rated on a
daily basis between Landlord and Tenant based on the number of days in which
this Lease is in effect. Tenant's obligation under this subsection to pay
Operating Expense Increases and Landlord's obligation to reimburse Tenant for an
overpayment of Operating Expenses shall survive the expiration of the Term or
the earlier termination of this Lease.
(c) Tenant's Right to Audit the Annual Operating Expense Statement. Tenant
shall have the right to audit the Annual Operating Expense Statement for any
calendar year at any time within 90 days after Tenant receives such Annual
Operating Expense Statement. The cost of any such audit shall be paid by Tenant,
except that, if it is determined on the basis of such audit (or if, in
accordance with the following provisions, it is otherwise ultimately determined)
that the amount of Operating Expenses for any calendar year was overstated by
more than seven percent (7%), then the cost of the audit shall be paid by
Landlord. Landlord shall pay to Tenant any overpayment of Tenant's Proportionate
Share of Operating Expense Increases for the calendar year in question within 30
days after the amount of the overpayment has been established by the audit or by
arbitration as provided in this subsection. If Tenant fails to exercise its
right of audit within the 90-day period, the amount of Tenant's Operating
Expenses for the calendar year shall be conclusively established as the amount
set forth in the Annual Operating Expense Statement for such calendar year
delivered by Landlord to Tenant pursuant to subsection (b) as to all matters
other than fraud. If, however, Tenant timely exercises its right of audit, the
amount of Tenant's Operating Expenses for such calendar year shall be
conclusively established as the amount determined as a result of such audit
unless, within 90 days after receipt of a report of the same from the auditors
selected by Tenant, Landlord, at its expense, shall contest the amount thereof,
in which event the amount of Tenant's
13
Proportionate Share of Operating Expenses shall be conclusively established by
an arbitration proceeding conducted pursuant to Section 28.
(d) Gross Up of Operating Expenses.
(i) If, during all or any part of a calendar year, any part of the Building
Rentable Area is leased to a tenant (hereinafter referred to as a "Special
Tenant") which, in accordance with the terms of its lease, provides its own
cleaning and janitorial services, has separately metered electrical service or
is not otherwise required to pay Operating Expenses on the basis of operating
expenses for the Building which include substantially the same components as the
Operating Expenses (as defined in Section 1(b), the Operating Expenses for such
calendar year shall be increased by the additional costs for cleaning and
janitorial service, electricity and the other expenses, as reasonably estimated
by Landlord, that would have been incurred by Landlord if Landlord had furnished
and paid for cleaning and janitorial services for the space occupied by the
Special Tenant, the space occupied by the Special Tenant was not separately
metered for electricity or Landlord had furnished and paid for any other service
which the Special Tenant did not receive and which was not included in operating
expenses as defined in the Special Tenant's lease.
(ii) If the average occupancy level of the Building for any calendar year
is less than 95%, the Operating Expenses for such calendar year shall be
increased by the additional Operating Expenses, as reasonably estimated by
Landlord, that would have been incurred by Landlord in providing the same
services provided to Tenant (and included in Operating Expenses) if the average
occupancy level of the Building for the calendar year had been 95%. For purposes
of the preceding sentence, the "average occupancy level of the Building" for any
calendar year shall be the arithmetic average of the Building Rentable Area
occupied by tenants on the first day of each month during the calendar year.
Notwithstanding the foregoing, as long as Tenant occupies at least its current
share of space in the Building, Tenant shall not be responsible for more than
eighty percent (80%) of all Operating Expenses.
(e) Interest. If Tenant fails to make any payment of Basic Rent or
Additional Charges within five days after the due date thereof, interest shall
accrue on the unpaid portion thereof from the due date at the Default Interest
Rate, and shall be payable on demand.
(f) Accord and Satisfaction. No payment by Tenant or receipt by Landlord of
any lesser amount than the amount stipulated to be
14
paid hereunder shall be deemed other than on account of the earliest stipulated
Basic Rent or Additional Charges nor shall any endorsement or statement on any
check or letter be deemed an accord and satisfaction, and Landlord may accept
any check or payment without prejudice to Landlord's right to recover the
balance due or to pursue any other remedy available to Landlord.
(g) Late Payment Charge. If Tenant fails to pay any Basic Rent or
Additional Charges within five days after the same become due and payable,
Tenant shall also pay to Landlord on demand a late payment service charge (to
cover Landlord's administrative and overhead expenses of processing late
payments and not to be a penalty) equal to the greater of $100.00 or 5% of such
unpaid sum for each and every calendar month or part thereof after the due date
that such sum has not been paid to Landlord. Such payment shall not excuse the
untimely payment of rent.
(h) Adjustment of Basic Rent for Increases in Rent per Square Foot.
Whenever there is a change in the Rent per Square Foot during a Lease Year
pursuant to any of the provisions of this Lease, the Basic Rent for the Lease
Year in which the change occurs shall be adjusted as of the date on which the
change becomes effective so that the Basic Rent for the period before the change
becomes effective shall be determined by the Rent per Square Foot in effect
immediately before the change and the Basic Rent for the period after the change
becomes effective shall be determined by the new Rent per Square Foot in effect
immediately after the change. Tenant shall continue to pay the Basic Rent at the
monthly amount in effect immediately before the change becomes effective until
notified by Landlord of an increase in the Basic Rent resulting from the
increase in the Rent per Square Foot. Within 15 days after receipt of a notice
from Landlord of the increase in the Basic Rent resulting from the increase in
the Rent per Square Foot, Tenant shall pay to Landlord, in a lump sum, an amount
equal to the difference between (i) the Basic Rent, adjusted to reflect the
increase in the Rent per Square Foot, for the period beginning on the date on
which the increase in the Rent per Square Foot became effective and ending on
the first day of the month in which Tenant receives Landlord's notice of the
increase, and (ii) the Basic Rent previously paid by Tenant to Landlord for the
same period.
(i) No Setoff. Tenant shall not have the right to setoff or deduct any
amount allegedly owed by Landlord to Tenant under this Lease from any of the
Basic Rent or Additional Charges payable by Tenant under this Lease. Tenant's
sole remedy with respect to any claim against Landlord shall be to commence an
independent legal action against Landlord.
15
4. Common Areas.
(a) Subject to the Rules and Regulations, for 24 hours of each day and
throughout the Term, Tenant and Tenant's Associates shall have the non-exclusive
right, in common with others, to use the Common Areas. Subject to subsection (b)
below, Landlord shall have the right at any time, without Tenant's consent, (i)
to change the arrangement or location of entrances, passageways, doors,
doorways, corridors, stairs or other public portions of the Land, the Building
and the Parking Facilities, provided any such change does not interfere with
Tenant's access to the Leased Premises or the Parking Facilities; (ii) to grant
to any Person an exclusive right to conduct a particular business or undertaking
in the Building that is not inconsistent with Tenant's permitted use of the
Leased Premises: (iii) to use and/or lease the roof of the Building and the
Common Areas for any purposes not inconsistent with the terms of this Lease;
(iv) to subdivide the Land or to combine the Land with other adjoining real
property; and (v) to add additional floors to the Parking Facilities (other than
to the Building), to erect additional buildings on the Land and to erect
temporary scaffolds and other devices in connection with the construction,
repair and maintenance of the Land or the Building, or both. Landlord's exercise
of any of the foregoing rights shall not constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any abatement or diminution
of rent, or relieve Tenant from any of its obligations under this Lease, or
impose any liability upon Landlord, by reason of inconvenience or annoyance to
Tenant, or injury to or interruption of Tenant's business, or otherwise.
Landlord shall use reasonable efforts to mitigate such inconvenience or
annoyance (but with no obligation to employ labor at overtime or other premium
pay rates).
(b) Notwithstanding subsection (a) above, no modifications shall be made to
all or part of the Common Areas, if as a result thereof: (i) any part of the
Building or the Leased Premises would be in violation of any Legal Requirement;
(ii) the security plan for the Building, the Leased Premises or the Parking
Facilities is compromised or diminished in effectiveness; (iii) any part of the
Common Areas are used for retail or marketing purposes except for advertising
the availability of space in the Building; or (iv) the appearance of the
Building is inconsistent with first class, Class A office buildings in downtown
Baltimore of comparable age, quality and location (the "Peer Group Buildings").
5. Services and Utilities.
(a) Building Services. Throughout the Term, Landlord agrees that the
Building will be maintained in the same manner as other Peer Group Buildings,
and that, subject to Unavoidable Delays and Legal Requirements, it will furnish,
or cause to be furnished, all
16
necessary maintenance, repairs, utilities and services, including, without
limitation, the initial capital improvements and equipment installations, as
well as the subsequent maintenance, services and repairs as set forth below to
the following services:
(1) Subject to the provisions of subsections (b) and (c), normal and usual
electricity for lighting purposes and the operation of ordinary office equipment
consisting of an average of 5 xxxxx per square foot of Rentable Area;
(2) Adequate supplies for toilet rooms located in the Common Areas and in
the Leased Premises (if any);
(3) Cleaning and janitorial services after business hours on Business Days
in accordance with the standards set forth in Exhibit C to this Lease;
(4) Hot and cold running water in the toilet rooms located in the Common
Areas and at valved outlets at the locations in the Leased Premises (if any)
shown on Tenant's Space Layout;
(5) Subject to the provisions of subsections (d), heating, ventilating and
air-conditioning to the Leased Premises as may seasonally be required to
maintain a minimum temperature within all of the Leased Premises of 72(degree)F
in winter when outdoor temperatures are 10(degree)F, or above, and a maximum
temperature within all of the Leased Premises of 76(degree)F in summer when
outdoor temperatures are 91(degree)F or below, between the hours of 8:00 A.M.
and 7:00 P.M. on Business Days and between the hours of 8:00 A.M. and 1:00 P.M.
on Saturdays ("normal business hours") unless Saturday is a Legal Holiday in
accordance with the standards set forth in subsection (f);
(6) Automatically operated elevator service 24 hours a day, seven days a
week, but Landlord may limit the number of elevators in the Building in
operation at times other than during normal business hours on Business Days but
in no event less than one;
(7) All electric bulbs and fluorescent tubes in light fixtures in the
Common Areas and Building Standard light fixtures in the Leased Premises shall
be promptly replaced when necessary;
(8) A security access system for the Common Areas of the Building; and
(9) Sufficient access cards, to be used in conjunction with the security
system, to provide each employee of Tenant with a card, and a system for
disarming and replacing cards as employees leave or are replaced.
17
(b) Electricity. Landlord shall not be liable in any way to Tenant for any
failure or defect in the supply or character of electrical energy furnished to
the Leased Premises by reason of any requirement, act or omission of the public
utility providing the Building with electricity. Tenant's use of electrical
energy in the Leased Premises shall not at any time exceed the capacity of any
of the electrical conductors and equipment in or otherwise serving the Leased
Premises. Tenant shall not install or operate in the Leased Premises any
electrically operated equipment which uses electric current in excess of the
capacity specified in paragraph (1) of subsection (a) without Landlord's prior
consent, which consent may be conditioned upon Tenant's agreement to pay an
additional charge to compensate Landlord for Tenant's excessive consumption of
electricity and to pay the cost of any additional wiring or electrical equipment
or installations which may be required for the operation of such equipment. In
order to ensure that such normal capacity is not exceeded and to avert a
possible adverse effect upon the Building electrical service Tenant shall give
notice to Landlord before Tenant connects to the Building electrical
distribution system any electrically operated equipment other than lamps,
typewriters, personal computers, copy machines and similar small office
machines. Any feeders or risers to supply Tenant's electrical requirements in
addition to those originally installed, and all other equipment proper and
necessary in connection with such feeders or risers, shall be installed by
Landlord upon Tenant's request, at the sole cost and expense of Tenant, but only
if, in Landlord's reasonable judgment, such additional feeders or risers are
permissible under all Legal Requirements and Insurance Requirements and the
installation of such feeders or risers will not cause permanent damage or injury
to the Building or cause or create a dangerous condition or unreasonably
interfere with other tenants of the Building. Tenant may elect, at Tenant's sole
cost and expense to separately meter full floors of the Leased Premises.
(c) Landlord's Right to Meter Tenant's Electrical Usage. If, at any time or
from time to time, the estimated connected electrical load (including lighting
and power) used by Tenant's lighting and electrically operated equipment exceeds
the capacity specified in paragraph (1) of subsection (a), Landlord may either
(i) install a separate electric meter for the Leased Premises, at Tenant's sole
cost and expense, and Tenant shall reimburse Landlord for the cost of
electricity it consumes, as recorded by such meter, in excess of the amount of
electricity that would be consumed by a tenant whose consumption of electricity
was equal to, but did not exceed, the specified limits, or (ii) from time to
time have a survey made by an independent electrical engineer or electrical
consulting firm to be selected and paid for by Landlord to determine the amount
of electricity consumed by Tenant in excess of the amount of electricity that
would be consumed by a tenant whose
18
consumption of electricity was equal to, but did not exceed, the specified
limits, and Tenant shall pay to Landlord the cost of excess electricity it
consumes as determined by such electrical engineer or consulting firm.
(d) After-Hours Heating and Air-Conditioning. Landlord shall provide heat
and air-conditioning at times in addition to those specified in paragraph (5) of
subsection (a) at Tenant's expense, if Tenant gives Landlord notice before 3:00
P.M. (in the case of after-hours service on weekdays) and before 3:00 P.M. on
Fridays or the day preceding a Legal Holiday (in the case of after-hours service
on Saturdays, Sundays or Legal Holidays). Landlord shall have the right
throughout the Term to charge Tenant for after-hours use of heat or
air-conditioning at an hourly rate which represents Landlord's reasonable
estimate of its actual cost of providing such after-hours service, including
labor, cost of electricity and wear and tear on equipment, plus an allowance of
10% thereof to cover general overhead but in no event more than comparable
charges at Peer Group Buildings. During the first Lease Year, Landlord's charge
for after-hours service shall not exceed the Initial After Hours HVAC Rate. If
the same after-hours service is also requested by other tenants on the same
floor of the Building as Tenant, the charge therefor to each tenant requesting
such after-hours service shall be a pro-rated amount based upon the square
footage of the leased premises of all tenants on the same floor requesting such
after-hours services. Tenant shall pay such charges to Landlord within 15 days
after Tenant's receipt of an invoice therefor.
Notwithstanding anything herein to the contrary, Tenant may, in lieu of
being charged for after-hours service, request Landlord to install at Tenant's
sole cost and expense a separate electric meter with time of day capability for
the Leased Premises and thereafter Tenant shall reimburse Landlord for the cost
of electricity it consumes, as recorded by such meter, plus Tenant's pro rata
share of the maintenance and depreciation associated with that portion of the
HVAC system attributable to such after hours use and reasonable administration
costs associated therewith, if applicable.
(e) Landlord's Right to Maintain Pipes, Conduits. etc. Landlord reserves
the right to erect, install, use, maintain and repair pipes, ducts, conduits,
cables, plumbing, vents and wires in, to and through the Leased Premises as and
to the extent that Landlord may now or hereafter deem to be necessary or
appropriate for the proper operation and maintenance of the Building, or other
tenants' installations in the Building, and the right at all times to transmit
water, heat, air-conditioning and electric current through such pipes, conduits,
cables, plumbing, vents and wires. In exercising its rights under this
subsection, Landlord shall use reasonable efforts to minimize interference with
Tenant's business
19
in the Leased Premises (but with no obligation to employ labor at overtime or
other premium pay rates).
(f) HVAC Specifications. Landlord represents to Tenant that the HVAC system
for the Leased Premises has been designed to provide for the comfortable
occupancy of the Leased Premises at temperatures consistent with those provided
in other Peer Group Buildings subject to Legal Requirements. Landlord shall not
be responsible if the normal operation of the Building air-conditioning system
shall fail to provide conditioned air within comfortable temperatures levels (i)
in any portions of the Leased Premises which have a connected electrical load
for all purposes (including lighting and power) in excess of 5 xxxxx per square
foot of Rentable Area or which have a human occupancy factor in excess of one
individual for each 100 square feet of Rentable Area (the average electrical
load and human occupancy factors for which the Building air-conditioning system
is designed), (ii) because of the arrangement of partitioning or other
Alterations made by or on behalf of Tenant or any Person claiming through or
under Tenant (including work performed by Landlord for Tenant pursuant to
Exhibit B), (iii) in any portions of the Leased Premises exposed to direct
sunlight in which Tenant fails to keep the venetian blinds closed, or (iv)
because of the failure by Tenant or its employees to use the HVAC system in the
manner in which it was designed to be used. Tenant agrees to observe and comply
with all reasonable rules from time to time prescribed by Landlord for the
proper functioning and protection of the HVAC systems in the Building.
(g) Cessation of HVAC and Mechanical Services. Landlord reserves the right
to stop the service of heating, air-conditioning, ventilating, elevator,
plumbing, electricity or other mechanical systems or facilities in the Building,
if necessary by reason of accident or emergency, or for repairs, alterations,
replacements, additions or improvements which, in the reasonable judgment of
Landlord, are desirable or necessary, until said repairs, alterations,
replacements, additions or improvements shall have been completed. The exercise
of such right by Landlord shall not constitute an actual or constructive
eviction, in whole or in part, or relieve Tenant from any of its obligations
under this Lease, or impose any liability upon Landlord or its agents by reason
of inconvenience or annoyance to Tenant, or injury to, or interruption of,
Tenant's business, or otherwise, or entitle Tenant to any abatement or
diminution of rent. Except in cases of emergency repairs, Landlord will give
Tenant reasonable advance notice of any contemplated stoppage of any such
systems or facilities. In all cases, Landlord will use due diligence to complete
any such repairs, alterations, replacements, additions or improvements with
reasonable promptness. Landlord shall also perform any such work in a manner
reasonably designed to minimize interference with
20
Tenant's normal business operations (but with no obligation to employ labor at
overtime or other premium pay rates).
(h) Unavoidable Delays in Providing Building Services. Landlord does not
make any warranty that the services to be provided by this Section will be free
from any irregularity or stoppage. Landlord shall use due diligence to correct
any such irregularity or stoppage. However, if Landlord fails to supply, or is
delayed in supplying, any service expressly or impliedly to be supplied by
Landlord under this Lease, or is unable to make, or is delayed in making, any
repairs, alterations, additions, improvements or decorations, or is unable to
supply, or is delayed in supplying, any equipment or fixtures, and if such
failure, delay or inability results from Unavoidable Delays, such failure, delay
or inability shall not constitute an actual or constructive eviction, in whole
or in part, or relieve Tenant from any of its obligations under this Lease, or
impose any liability upon Landlord or its agents by reason of inconvenience to
Tenant, or injury to, or interruption of, Tenant's business, or otherwise, or
entitle Tenant to any abatement or diminution of rent. Provided, however, should
any disruption in service or utilities which has any material adverse impact on
Tenant's business last beyond five (5) consecutive days, Tenant shall be
entitled to xxxxx one day of Basic Rent for each day of further disruption of
services.
(i) Landlord, in addition to any other obligations set forth in this Lease,
shall be responsible for making all repairs, alterations and improvements
resulting from: (1) any deficiencies or defects in the initial plans for the
Building, including any failures to meet current Legal Requirements; (2) an
inability to enforce any guaranties or warranties provided in conjunction with
the construction of the Base Building in the Leased Premises; and (3) future
Legal Requirements applicable to the Building, the Parking Facilities or the
Leased Premises provided, however, that Tenant shall reimburse Landlord for the
cost of any repairs, alterations and improvements in the Leased Premises as
Additional Rent on a monthly basis over a period of time equal to the useful
life of the repairs, alterations and improvements.
(j) Work During Non-Business Hours. Landlord agrees that, except in the
event of serious emergencies requiring immediate attention, at Tenant's request
and at Tenant's sole expense (as to the additional cost of performing the work
during non-business hours), all work required to be done in the Leased Premises
shall be performed during hours which are not normal business hours.
21
6. Use of Leased Premises and Building.
(a) Permitted Use. Tenant and its permitted subtenants shall use and occupy
the Leased Premises solely for general office purposes and other legally
permitted uses which are mutually agreed upon by Landlord and Tenant, including
transmitting equipment and studios; seminar rooms and auditoriums; training
areas and work stations; dining areas, vending areas and classrooms in
accordance with the applicable Legal Requirements and zoning regulations
consistent with the character and dignity of the Building, and shall not use or
permit or suffer the use of the Leased Premises for any other purpose whatsoever
without the prior consent of Landlord which shall not be unreasonably withheld
or delayed. Tenant shall control its business and control Tenant's Associates in
such a manner as not to create a nuisance or interfere with, annoy or disturb
other tenants or Landlord in the management of the Building. Tenant shall not
permit or suffer the Leased Premises to be occupied by anyone other than Tenant
except as provided by Section 15. Tenant shall at all times have access to the
Leased Premises, the Building, and the Parking Facilities 24 hours a day, seven
days a week, subject, however, in all respects to all the terms contained in
this Lease. However, Landlord may regulate and restrict access to the Building
and the Parking Facilities at times other than normal business hours on Business
Days for security purposes so long as Tenant's employees, agents and business
invitees have reasonable access to the Leased Premises, and the Parking
Facilities without unreasonable inconvenience.
(b) Payments of Taxes. Throughout the Term, Tenant covenants and agrees to
pay 10 days before delinquency any and all taxes, assessments and public charges
levied, assessed or imposed upon Tenant's business conducted in the Leased
Premises, upon the Leasehold Estate or upon Tenant's Personal Property other
than Real Estate Taxes.
(c) Restrictions on Use. Throughout the Term, Tenant shall not : (i)
knowingly use or permit or suffer the use of any portion of the Leased Premises,
the Building or the Parking Facilities for any unlawful purpose; (ii) use the
plumbing facilities for any purpose other than that for which they were
constructed, or dispose of any foreign substances therein; (iii) place a load on
any floor exceeding the floor load per square foot which such floor was designed
to carry in accordance with the plans and specifications of the Building; (iv)
install, operate or maintain in the Leased Premises any heavy item of equipment
except in such manner as to achieve a proper distribution of weight; (v) strip,
overload, damage or deface the Leased Premises, the Common Areas or the Parking
Facilities, or the fixtures therein or used therewith; (vi) move any bulky
furniture or equipment into or out of the Leased Premises except at such times
and using such loading docks,
22
entrances and elevators as Landlord may from time to time designate; (vii) use
any floor adhesive in the installation of any carpeting without Landlord's prior
written consent; or (viii) install in the Leased Premises any other equipment of
any kind or nature which will or may necessitate any changes, replacements or
additions to, or in the use of, the water system, HVAC system, plumbing system,
or electrical system serving the Leased Premises or the Building, unless the
Alterations involved in making such changes, replacements or additions have been
approved by Landlord in writing and made pursuant to Section 9(a).
(d) Compliance with Legal Requirements.
(i) Landlord represents and warrants to the Tenant that the Building, the
Parking Facilities and the Leased Premises are or will be in compliance with all
applicable Legal Requirements, including the Americans With Disabilities Act, at
the Lease Commencement Date, and that Landlord is not now aware of any Legal
Requirements that will go into effect subsequent to that date which have not
been incorporated in the design and construction of the Building, the Parking
Facilities and the Leased Premises.
(ii) Tenant, at its expense, shall make any Alterations required after the
Lease Commencement Date to comply with Legal Requirements to the extent the
obligation to comply with such Legal Requirements arises uniquely from Tenant's
use or manner of use of the Leased Premises and not from any general office or
educational use.
(iii) Neither Landlord nor Tenant shall use or occupy the Leased Premises,
or knowingly permit the Leased Premises, the Building or the Parking Facilities
to be used or occupied in violation of any Legal Requirements. Specifically,
Tenant is obligated to comply with all provisions of the Americans With
Disabilities Act applicable to Alterations made to the Leased Premises beyond
those to be made by Landlord as part of Landlord's work, and Landlord is
responsible for all other forms of compliance.
(iv) If, after the commencement of the Term, any governmental authority
shall contend or declare that the Leased Premises or the Building are being used
for a purpose which is in violation of any Legal Requirements, (i) Tenant shall,
upon five days' notice from Landlord, immediately discontinue such use of the
Leased Premises, unless Tenant has in the interim, undertaken to challenge the
claim, and the continuation of such challenge does not jeopardize Landlord's
interest in the Building (whether through bonding or by way of the limited
nature of remedies available to the governmental authority), and (ii) Landlord
shall seek to discontinue such use in a manner that avoids any adverse
23
consequences to Tenant, including disruption of service and/or utilities. If
thereafter the governmental authority asserting such violation threatens,
commences or continues proceedings against Landlord for Tenant's failure to
discontinue such use, in addition to any and all rights, privileges and remedies
given to Landlord under this Lease for default therein, Landlord shall have the
right to terminate this Lease forthwith. Tenant shall save, defend, indemnify
and hold harmless Landlord from and against any and all liability for any such
violation or violations resulting from Tenant's actions or failure to take
action. Landlord shall save, defend, indemnify and hold harmless Tenant from and
against any liability for any violation or violations resulting from Landlord's
actions or failure to take action.
(e) Compliance with Insurance Requirements. Tenant shall not use or occupy
the Leased Premises, or permit the Leased Premises, the Building or the Parking
Facilities be used or occupied, in violation of Insurance Requirements. Tenant
shall not do, or permit anything to be done, in or upon the Leased Premises, the
Building or the Parking Facilities, or bring or keep anything therein, which
shall increase the premiums payable for casualty and property damage insurance
for the Land, the Building or the Parking Facilities or on any property located
therein. If, by reason of the failure of Tenant to comply with the provisions of
this subsection, the premiums payable for casualty and property damage insurance
for the Land, the Building or the Parking Facilities shall at any time be higher
than they otherwise would be, then Tenant shall reimburse Landlord and any other
tenant of the Building, on demand, for that part of all premiums for any
insurance coverage that shall have been charged because of such violation by
Tenant and which Landlord or such other tenant, or both, shall have paid on
account of an increase in the rate or rates in its own policies of insurance.
(f) No Flammable Substances. Tenant shall not bring or permit to be brought
or kept in or on the Leased Premises any flammable, combustible or explosive
substance except standard cleaning fluid, standard equipment, materials and
supplies (including magnetic tape) customarily used in conjunction with business
machines and equipment of the type used from time to time by Tenant in
reasonable quantities.
(g) Hazardous Substances.
(i) Tenant shall not (either with or without negligence) cause or permit
the escape, disposal or release of any Hazardous Substances. Tenant shall not
allow the storage or use of such Hazardous Substances in any manner not
sanctioned by law or by the highest standards prevailing in the industry for the
storage and use of such Hazardous Substances, nor allow to be brought into
24
the Leased Premises any Hazardous Substances except to use in the ordinary
course of Tenant's business.
(ii) Landlord has provided Tenant with a copy of a Limited Phase II
Environmental Site Assessment Inner Harbor East-Parcel G prepared by Engineering
Consulting Services, Ltd. and dated June 20, 1995 (the "Environmental Report").
Landlord represents and warrants to Tenant that it has no knowledge of any
Hazardous Substances on the site, other than as noted in the Environmental
Report. Any remediation required in connection with matters described in the
Environmental Report shall be Landlord's responsibility, and the indemnity
described in clause (iii) below shall apply to such Landlord obligation.
(iii) Landlord represents and warrants to Tenant that Landlord will not
directly, nor knowingly permit others to, cause or permit the escape, disposal
or release of any Hazardous Substances anywhere on the Land or within the
Parking Facilities and the Building and Landlord will indemnify and hold Tenant
harmless from any liability, cost or expense resulting from a violation of these
provisions if caused by Landlord or persons acting at Landlord's direction.
(iv) Any expenses incurred by either party for the purpose of testing shall
be borne by the party undertaking the test, unless a determination is made that
a violation has occurred of this Section 6(g), in which event the party
responsible for the violation shall bear the cost of the testing.
(v) Each party shall execute affidavits, representations and the like from
time to time at the other party's request concerning the responding party's best
knowledge and belief regarding the presence of Hazardous Substances on the
Leased Premises.
(vi) In all events, Tenant shall indemnify Landlord in the manner elsewhere
provided in this Lease from any release of hazardous materials on the Leased
Premises occurring while Tenant is in possession, or elsewhere if caused by
Tenant or Persons acting under Tenant or at Tenant's direction.
7. Care of Leased Premises and Building.
(a) Maintenance and Repairs by Tenant. Tenant shall act with care in its
use and occupancy of the Leased Premises and the fixtures therein and, at
Tenant's sole cost and expense, shall furnish its own electric bulbs and
fluorescent tubes for all light fixtures in the Leased Premises which are not
Building Standard fixtures and, except as otherwise provided in Section 13,
shall make all repairs and replacements to the Leased Premises, other
25
than structural necessitated or caused by the willful or negligent acts or
omissions of Tenant, Tenant's Associates or any Person claiming through or under
Tenant or by the use or occupancy or manner of use or occupancy of the Leased
Premises by Tenant, Tenant's Associates or any such Person. Without affecting
Tenant's obligations set forth in the preceding sentence, Tenant, at Tenant's
sole cost and expense, shall also (i) make all repairs and replacements, as and
when necessary, to Alterations (other than for correcting Landlord's work), and
(ii) perform all maintenance and make all repairs and replacements, as and when
necessary, to any air-conditioning equipment, private elevators, escalators,
conveyors or mechanical systems (other than the standard equipment and systems
serving the Building) which may be installed in the Leased Premises by Landlord
or Tenant. In addition to the foregoing, all damage or injury to the Leased
Premises or its fixtures, appurtenances and equipment or to the Building or to
its fixtures, appurtenances and equipment caused by Tenant moving property in or
out of the Building or by installation or removal of furniture, fixtures or
other property by Tenant shall be repaired, restored or replaced promptly by
Tenant, at its sole cost and expense, to the reasonable satisfaction of
Landlord. All such aforesaid repairs, restoration and replacements shall be in
quality and class equal to the original work or installation and shall be made
in accordance with accepted construction practices.
(b) Landlord's Responsibility for Maintenance and Repairs. Except as
otherwise provided in subsection (a), Landlord shall make or cause to be made
the following repairs as and when necessary: (i) structural repairs to the
Building, provided, however, that Tenant shall reimburse Landlord for the costs
of structural repairs to the Leased Premises due to Tenant's negligence as
Additional Rent; (ii) repairs required in order to provide the elevator,
plumbing, electrical, HVAC and other services to be furnished by Landlord
pursuant to this Lease; (iii) maintenance and repairs to exterior portions of
the Building, including the windows, balconies and roof; (iv) repairs to the
Common Areas unless caused by the misconduct or negligent action of Tenant or
Tenant's Associates; and (v) any other repairs required under other provisions
of this Lease (including Section 5(i) above. Landlord's obligations under the
preceding sentence shall not accrue until after notice by Tenant to Landlord of
the necessity for any specific repair. Landlord shall perform its obligations
under this subsection in accordance with accepted construction practices so as
to minimize interference with Tenant's business in the Leased Premises (but with
no obligation to employ labor at overtime or other premium pay rates).
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8. Rules and Regulations,
Tenant shall, and shall cause Tenant's Associates to, comply with and
observe all reasonable rules and regulations concerning the use, management,
operation, safety and good order of the Leased Premises, the Common Areas, the
Parking Facilities and the Building which may from time to time be promulgated
by Landlord, provided that such rules and regulations are not inconsistent with
the provisions of this Lease, do not increase the cost of occupancy to Tenant,
do not reduce the scope of Landlord's obligations hereunder and do not
materially interfere with Tenant's use of the Leased Premises. Initial rules and
regulations, which shall be effective until amended by Landlord, are attached as
Exhibit D to this Lease. Tenant shall be deemed to have received notice of any
amendment to the rules and regulations when a copy of such amendment has been
delivered to Tenant at the Leased Premises or has been delivered to Tenant in
the manner prescribed for the giving of notices. Tenant may not dispute the
reasonableness of any additional rule or regulation unless Tenant's intention to
do so is asserted by notice given to Landlord within 30 days after notice is
given to Tenant of the adoption of any such additional rule or regulation.
Landlord shall make reasonable efforts to uniformly enforce the Rules and
Regulations, and the covenants or agreements contained in any other lease.
Tenant may challenge the implementation of particular Rules and Regulations on
the basis that they are not comparable to rules and regulations of Peer Group
Buildings. In the event the Rules and Regulations conflict with any provisions
set forth in the Lease, the Lease provisions will control.
9. Tenant's Alterations.
(a) Tenant's Alterations. Except for Minor Alterations which require no
prior consent or approval from Landlord, Tenant shall not make or perform, or
permit the making or performance of, any Alterations without Landlord's prior
consent. Notwithstanding the foregoing provisions of this subsection or
Landlord's consent to any Alterations, all Alterations made during the Term
shall be made and performed in conformity with and subject to the following
provisions: (i) all Alterations shall be made and performed at Tenant's sole
cost and expense and, except for Minor Alterations, at such time and in such
manner as Landlord may reasonably designate; (ii) all Alterations, except for
Minor Alterations, shall be made only by contractors or mechanics approved by
Landlord; (iii) no Alteration shall affect any part of the Building other than
the Leased Premises or adversely affect any service required to be furnished by
Landlord to Tenant or to any other tenant or occupant of the Building; (iv) all
business machines and mechanical equipment shall be placed and maintained by
Tenant in settings sufficient in Landlord's reasonable judgment to absorb and
prevent vibration, noise and annoyance to other tenants or
27
occupants of the Building; (v) Tenant shall submit to Landlord reasonably
detailed plans and specifications for each proposed Alteration and shall not
commence any such Alteration without first obtaining Landlord's approval of such
plans and specifications, which approval will not be unreasonably withheld or
delayed, but Landlord shall have the right to withhold its consent to
Alterations involving structural changes or changes affecting the Common Areas
or the Building for any reason whatsoever; (vi) all Alterations in or to the
electrical facilities in or serving the Leased Premises shall be subject to the
provisions of Section 5(b); (vii) notwithstanding Landlord's approval of plans
and specifications for any Alteration, all Alterations shall be made and
performed in full compliance with all Legal Requirements and Insurance
Requirements and in accordance with the Rules and Regulations; (viii) all
materials and equipment to be incorporated in the Leased Premises as a result of
all Alterations shall be of good quality; (ix) Tenant shall require any
contractor performing Alterations to carry and maintain at all times during the
performance of the Alterations, at no expense to Landlord, (I) a policy of
Commercial General Liability Insurance, including contractor's liability
coverage, completed operations coverage and contractor's protective liability
coverage, naming Landlord and (at Landlord's request) the Additional Insureds,
as additional insureds, with such policy to afford protection to the limit of
not less than $5,000,000 combined single limit annual aggregate for bodily
injury, death and property damage, and (II) workmen's compensation or similar
insurance in the form and amounts required by the laws of the Jurisdiction in
which the Building is located; (x) except as to Minor Alterations, Tenant shall
carry (or shall cause its contractor to carry) at all times during the
performance of the Alterations, at no expense to Landlord, a policy of Builders
Risk Insurance written on the Completed Value Form covering the Alterations in
an amount equal to 100% of the replacement cost thereof; and (xi) if the
estimated cost of an Alteration exceeds $100,000, Tenant shall, before
commencement of work, at Tenant's sole cost and expense, furnish to Landlord a
surety company performance and payment bond, issued by a surety company
reasonably acceptable to Landlord, or other security satisfactory to Landlord,
in an amount at least equal to the estimated cost of the Alteration, or a
guaranty satisfactory to Landlord guaranteeing the completion thereof within a
reasonable time, free and clear of all liens and in accordance with the plans
and specifications approved by Landlord. In the event of any dispute between the
parties as to whether or not Landlord has acted reasonably in any case with
respect to which Landlord is required, pursuant to the provisions of this
subsection (a) to do so, Tenant's sole remedy shall be to submit such dispute to
arbitration pursuant to Section 28. If the determination in any such arbitration
shall be adverse to Landlord, Landlord nevertheless shall not be liable to
Tenant for breach of Landlord's covenant to act
28
reasonably, and Tenant's sole remedy in such event shall be to proceed with the
proposed Alterations.
(b) No Union Conflicts. Tenant shall not knowingly, at any time before or
during the Term, directly or indirectly employ, or permit the employment of, any
contractor, mechanic or laborer in the Leased Premises, whether in connection
with any Alteration or otherwise, if such employment will interfere with, or
cause any conflict under, any collective bargaining agreement with other
contractors, mechanics or laborers engaged in the construction, maintenance or
operation of the Building by Landlord, Tenant or others.
(c) Tenant's Right to Cure. If Tenant shall be in default under this
Section by reason of the making of any Alteration not hereby authorized or by
reason of failure to give any notice or to obtain any approval required herein,
Tenant may cure such default within the applicable grace period provided in this
Lease for curing such default by immediately commencing the removal of such
Alteration and restoring the Leased Premises to the condition they were in
before the Alteration was made.
(d) Title to, and Removal of, Alterations. Title to all Alterations made by
Tenant, at its expense, after the Lease Commencement Date shall be and remain in
Tenant throughout the Term, but on the expiration or earlier termination of this
Lease Tenant hereby covenants and agrees that title to all Alterations not
previously removed from the Leased Premises pursuant to this subsection, and the
right to possess and use the same, shall automatically pass to and be vested in
Landlord without payment or consideration of any kind. Although the provisions
of the preceding sentence are intended to be self-executing, Tenant hereby
agrees, upon such earlier expiration or termination of this Lease, to execute
any further deed, xxxx of sale or document requested by Landlord to confirm
Landlord's title to Alterations and Tenant's grant and conveyance thereof to
Landlord pursuant to this subsection. Tenant hereby appoints Landlord
irrevocably as its attorney-in-fact with an interest to execute, acknowledge and
deliver on its behalf any such deed, xxxx of sale or document. As long as an
Event of Default has not occurred and is not continuing, Tenant may, at its
expense, remove from the Leased Premises before the expiration of the Term any
Alterations made by Tenant after the Lease Commencement Date the removal of
which Landlord shall have consented to before the Alteration was made. Tenant
shall repair all damage to the Leased Premises caused by the removal of such
Alterations and Tenant shall repair, including all necessary replacements, all
adjoining surfaces to a condition equivalent to Building Standard Work. Any
Alterations which Tenant has the right to remove and which are not removed from
the Leased Premises at the expiration of the Term shall be deemed to have been
abandoned by
29
Tenant and may be disposed of by Landlord without thereby incurring liability to
Tenant.
(e) Removal of Tenant's Personal Property. All of Tenant's Personal
Property shall remain the property of Tenant and may, at its expense, be removed
from the Leased Premises at any time during the Term. Tenant shall, at its
expense, remove all of Tenant's Personal Property at the expiration of the Term.
Tenant shall repair all damage to the Leased Premises caused by the removal of
Tenant's Personal Property to the condition it was in before the installation of
the item removed, ordinary wear and tear excepted. Any of Tenant's Personal
Property which is not removed from the Leased Premises at the expiration of the
Term shall be deemed to have been abandoned by Tenant and may be disposed of by
Landlord without thereby incurring liability to Tenant.
(f) Landlord's Right to Remove Alterations and Tenant's Personal Property.
If Tenant fails to remove Alterations or Tenant's Personal Property and make the
repairs required by subsections (d) or (e), Landlord shall have the right,
provided there is no event of default, after notice and failure of Tenant to
cure same within 5 days, to remove such Alterations or Tenant's Personal
Property or make such repairs and Tenant shall reimburse Landlord, on demand,
for any costs incurred by Landlord as a result of such removal or repair.
(g) Mechanics' Liens. Notice is hereby given that Landlord shall not be
liable to any Person for any labor or materials furnished or to be furnished to
Tenant upon credit, and that no mechanic's, materialman's or other lien for any
such labor or materials shall attach to or affect the reversion or other estate
or interest of Landlord in and to the Leased Premises, the Building or the Land.
Whenever and as often as any mechanic's lien or materialman's lien shall have
been filed against the Leased Premises, the Building or the Land based upon any
act or interest of Tenant or of anyone claiming through or under Tenant, or if
any lien with respect thereto shall have been filed affecting any materials,
machinery or fixtures used in the construction, repair or operation thereof or
annexed thereto by Tenant or anyone claiming through or under Tenant, Tenant
shall, at its expense, immediately take such action by bonding, deposit or
payment as will remove or satisfy the lien or other security interest. If Tenant
fails to bond remove or discharge the lien or other security interest within 30
days after receipt of demand therefor by Landlord, Landlord, in addition to any
other remedy under this Lease and without waiving or releasing Tenant's default
in not timely discharging the lien or security interest, may pay the amount
secured by such lien or security interest or discharge the same by deposit and
the amount so paid or deposited shall be collectible as additional rent. The
provisions of this subsection
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shall not be applicable to liens filed with respect to work done for Tenant's
account by Landlord at Landlord's expense.
(h) Plans. Promptly after the completion of any Alterations, Tenant shall
deliver to Landlord a complete set of "as built" drawings showing the
Alterations in place to the extent such drawings are prepared.
10. Name of Building; Tenant's Signs.
(a) Name. Landlord expressly reserves the right to have the Building
designated by a street number or numbers and to affix to the Building, at
locations designated by Landlord, signs indicating any such number or numbers
and the name of the Building as selected from time to time by Landlord. The name
of the Building shall reflect the address of the Building.
(b) Exterior Signs. Except as set forth below, Landlord has not granted to
Tenant any rights in or to the roof or the exterior surfaces of the perimeter
walls of the Building, control of which is hereby reserved to Landlord. Landlord
agrees to allow Tenant, at Tenant's sole cost and expense, to erect signage on
the exterior of the Building, the size, shape and illumination of such signage
to be mutually agreed to by Landlord and Tenant and further subject to the
review and approval of Baltimore City. The size, design, location and content
(which may include the word "SYLVAN" and/or a corporate logo) of the exterior
signage shown on Exhibit H has been approved by Landlord and Tenant. Landlord
hereby agrees that such approval is granted for comparable signage in
substitution of that shown should Tenant's name and/or logo change. Landlord
shall not grant rights to any other tenant to have any exterior signage on the
roof or top floor of the Building. Tenant shall not display or erect any
lettering, signs, advertisements, awnings or other projections on the interior
of the Leased Premises which can be seen from the exterior of the Building,
without the prior written consent of Landlord which shall not be unreasonably
withheld. Landlord shall provide at Tenant's expense customary suite entry door
lettering identifying Tenant in the style and color selected by Landlord for the
Building. The number, size, color, style and configuration of such lettering
shall be determined by Landlord. Except for the retail tenants, no other tenant
shall display a sign on the exterior of the Building as long as Tenant occupies
at least its current share of space in the Building.
If at any time during the Term hereof, including all renewals, construction
on any of those parcels located on the Inner Harbor East Subdivision Plan as
shown on Exhibit I hereto, the effect of which materially and adversely blocks
or obstructs the view of the signage containing the name of Tenant as permitted
by
31
this Section 10(b), then subject to applicable governmental regulations, Tenant
shall be permitted to relocate such signs to such other location on the exterior
of the Building as Tenant may reasonably require, provided such relocation is
performed at Tenant's sole cost and expense and does not adversely affect the
structural integrity of the Building. Such relocation shall be subject to
Landlord's prior written approval which shall not be unreasonably withheld or
delayed.
(c) Building Directory. Landlord shall provide a directory in the main
lobby of the Building, at its expense, upon which Landlord, at Landlord's
expense, will affix Tenant's name and a reasonable and customary number of names
of its officers, partners or employees as designated by Tenant. The size, color
and style of such directory and names affixed thereto shall be selected by
Landlord.
(d) Ground Level Exterior Signs. Landlord agrees that either (i) Tenant at
its sole cost and expense shall be permitted to erect one sign on the first
floor exterior of the Building or at such other location on the Land as Tenant
shall reasonably require containing the name and logo of Tenant (the "Sylvan
Sign"), subject to applicable governmental regulations and subject to Landlord's
prior written approval, which shall not be unreasonably withheld or delayed; or
(ii) Landlord at its sole cost and expense shall erect an exterior directory
sign at the entrance to the Building listing all of the tenants in the Building
with Tenant's name prominently displayed and sized in proportion to the square
footage leased by Tenant in the Building (the "Building Directory Sign").
The election to choose a Sylvan Sign or a Building Directory Sign shall be
in Landlord's sole discretion and shall be made prior to the Lease Commencement
Date.
11. Tenant's Insurance.
(a) Liability Insurance. Tenant, at Tenant's sole cost and expense, shall
obtain and maintain in effect throughout the Term a policy of Commercial General
Liability Insurance (ISO form or equivalent) naming Landlord and (at Landlord's
request) the Additional Insureds as additional insureds, protecting Landlord,
Tenant and, if applicable, the Additional Insureds against liability for bodily
injury, death and property damage occurring upon or in the Leased Premises, with
such policy to afford protection to the limit of not less than $1,000,000 with
respect to bodily injury or death or damage to property arising from any one
occurrence and $2,000,000 from the aggregate of all occurrences within each
policy year. If the policy also covers locations other than the Leased Premises,
the policy shall include a provision to the effect that the aggregate limit of
$2,000,000 shall apply
32
separately at the Leased Premises and that the insurer will provide notice to
Landlord if the aggregate is reduced either by payment of claims or the
establishment of reserves for claims if the payments or reserves exceed
$250,000. If the aggregate limit of $2,000,000 is reduced by the payment of a
claim or the establishment of a reserve, Tenant agrees to take immediate steps
to have the aggregate limit restored by endorsement to the existing policy or
the purchase of an additional insurance policy which complies with this
subsection.
(b) Property Damage Insurance. Tenant, at Tenant's sole cost and expense,
shall obtain and maintain throughout the Term a policy of property damage
insurance on Alterations and Tenant's Personal Property in an amount sufficient
to prevent Tenant from becoming a co-insurer.
(c) Policy Requirements. The insurance policies required to be obtained by
Tenant under this Section: (i) shall be issued by an insurance company of
recognized responsibility qualified to do business in the jurisdiction in which
the Building is located which is rated A or better (and is in a Financial Size
Category of Class VIII or higher) by Best's Key Rating Guide or which has an
equivalent financial rating from a comparable insurance rating organization, and
(ii) shall provide (and each certificate evidencing the existence of such
insurance policy shall certify) that the insurance policy shall not be canceled
or amended (other than to increase the amount of coverage) unless Landlord shall
have received 30 days' prior written notice of such cancellation or amendment.
All limits of liability required by subsection (a) may be satisfied by
maintaining a policy of primary insurance and a policy or policies of excess
liability insurance. Neither the issuance of any insurance policy required under
this Lease nor the minimum limits specified herein with respect to Tenant's
insurance coverage shall be deemed to limit or restrict in any way Tenant's
liability arising under or out of this Lease.
(d) Evidence of Insurance. On or before the Lease Commencement Date, and at
least 15 days before the expiration of the expiring certificate previously
furnished, Tenant shall deliver to Landlord a certificate of insurance
evidencing the issuance of each insurance policy required to be obtained by
Tenant under this Section.
(e) Landlord's Indemnification. Except for the willful or grossly negligent
acts or omissions (where applicable law imposes a duty to act) of Landlord or
its agents, employees or contractors, Tenant hereby agrees to indemnify and hold
harmless Landlord, the Additional Insureds and the officers, directors, agents
and employees of, and the partners in, Landlord and the Additional Insureds,
from and against any and all claims, losses, actions,
33
damages, liabilities and expenses (including reasonable attorneys' fees and
disbursements) that (i) arise from or are in connection with Tenant's
possession, use, occupancy, management, repair, maintenance or control of all or
any part of the Leased Premises, the making or removal of Alterations and the
performance of all related construction work, or that relate in any other manner
to the business conducted by Tenant in the Leased Premises, or (ii) arise from
or are in connection with any willful or negligent act or omission of Tenant or
Tenant's Associates, or (iii) result from any default, breach, violation or
nonperformance of this Lease or any provision therein by Tenant, or (iv) arise
from injury or death to individuals or damage to property sustained on or about
the Leased Premises. Tenant shall, at its own cost and expense, upon notice
thereof from Landlord, defend any and all actions, suits and proceedings which
may be brought against Landlord, the Additional Insureds and the officers,
directors, agents and employees of, and the partners in, Landlord and the
Additional Insureds, or any of them, with respect to the foregoing or in which
Landlord, the Additional Insureds and the officers, directors, agents and
employees of, and the partners in, Landlord and the Additional Insureds, or any
of them, may be impleaded. Tenant shall pay, satisfy and discharge any and all
final money judgments which may be recovered against Landlord, the Additional
Insureds and the officers, directors, agents and employees of, and the partners
in, Landlord and the Additional Insureds, or any of them, in connection with the
foregoing. For so long as Tenant is in compliance with the insurance
requirements of this Section 11, the indemnity provided above shall be limited
to the policy limits of such insurance, excluding only such deductibles as
Tenant maintains, provided, however, that Tenant is still liable if the act is
not covered by Tenant's insurance or insurance coverage is not in place.
(f) Contractual Liability Insurance. Tenant agrees to keep and maintain as
part of the coverage of its policy(ies) of liability insurance contractual
liability coverage or a contractual liability endorsement covering Tenant's
liability to Landlord for bodily injury or damage to property of others under
subsection (e), in the same limits required by subsection (a).
(g) Prohibition Against Concurrent Insurance. All property damage insurance
shall be written as primary insurance. Tenant shall not take out separate
insurance concurrent in form or contributing in the event of loss with any
property damage insurance carried by Landlord for the Building unless Landlord
is included therein as an insured.
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12. Landlord's Insurance.
(a) Property Damage Insurance. Landlord, at its cost and expense, but
subject to Section 3(b), shall obtain and maintain throughout the Term a policy
of property damage insurance covering the Building and the Parking Facilities,
but not Alterations or Tenant's Personal Property, providing all-risk coverage
in such amount as any first Mortgagee of the Building may from time to time
require or in such greater amount as Landlord may from time to time determine,
but in no event less than the replacement cost (excluding footings and
foundations) of the Building and the Parking Facilities.
(b) Liability Insurance. Landlord, at Landlord's cost and expense, but
subject to Section 3(b), shall obtain and maintain in effect throughout the Term
a policy of Commercial General Liability Insurance (ISO form or equivalent)
insuring Landlord against liability for bodily injury, death and property damage
occurring upon, in or about the Land, the Building and the Parking Facilities,
with such policy to afford protection to the limit of not less than 85,000,000
combined single limit annual aggregate for bodily injury, death and property
damage.
(c) Blanket Policy. Landlord shall have the right to comply with and to
satisfy its obligations under subsections (a) and (b) by means of any so-called
blanket policy or policies of insurance covering this and other liability and
locations of Landlord and its Affiliates, provided that such policy or policies
by the terms thereof shall allocate to the Building and the liabilities to be
insured under this Section an amount not less than the amount of insurance
required to be carried pursuant to this Section, so that the proceeds from such
insurance shall not be less than the amount of proceeds that would be available
if Landlord were insured under a unitary policy.
(d) Waiver of Subrogation. Landlord and Tenant shall each include in each
of its property damage insurance policies, including Landlord's policies of rent
insurance and Tenant's policies of business interruption insurance, if any, a
waiver of the insurer's right of subrogation against the other party and the
officers, directors, agents and employees of, and the partners in, the other
party (and, in the case of Tenant's policies, against the Additional Insureds
and their respective officers, directors, agents and employees), or, if such
waiver at any time becomes unobtainable (i) an express agreement that such
policy shall not be invalidated if the insured waives or has waived before the
loss the right of recovery against any party responsible for an insured
casualty, or (ii) any other form of permission for the release of such
responsible party, provided such waiver, agreement or permission is obtainable
under normal commercial
35
insurance practice at the time. If such waiver, agreement or permission is not,
or ceases to be, obtainable without additional charge or at all, the insured
party shall so notify the other party promptly after notice thereof. If the
other party agrees in writing to pay the insurer's additional charge therefor,
such waiver, agreement or permission shall (if obtainable) be included in the
policy. Landlord and Tenant hereby acknowledge and agree that such waiver is
obtainable under normal commercial insurance practice on the date of this Lease
at no additional charge.
(e) Tenant's Indemnification. Except for the willful or grossly negligent
acts or omissions (where applicable law imposes a duty to act) of Tenant or its
agents, employees or contractors, Landlord hereby agrees to indemnify and hold
harmless Tenant and the officers, directors, agents and employees or Tenant,
from and against any and all claims, losses, actions, damages, liabilities and
expense (including reasonable attorneys' fees and disbursements) that (i) arise
from or are in connection with the performance of Landlord's obligations under
this Lease, or (ii) arise from or are in connection with any willful or
negligent act or omission of Landlord or its agents, or (iii) result from any
default, breach, violation or nonperformance of this Lease or any provision by
Landlord, or (iv) arise from injury or death to individuals or damage to
property sustained on or about the Common Areas, the Land or the Parking
Facilities. Landlord shall, at its own cost and expense, upon notice thereof
from Tenant, defend any and all actions, suits and proceedings which may be
brought against Tenant, and the officers, directors, agents and employees of,
and the partners in, Tenant or any of them, with respect to the foregoing or in
which Tenant and the officers, directors, agents and employees of, and the
partners in, Tenant or any of them, may be impleaded. Landlord shall pay,
satisfy and discharge any and all final money Judgments which may be recovered
against Tenant, and the officers, directors, agents and employees of, and the
partners in Tenant, or any of them, in connection with the foregoing. For so
long as Landlord is in compliance with the insurance requirements of this
Section 11, the indemnity provided above shall be limited to the policy limits
of such insurance, excluding only such deductibles as Landlord maintains.
(f) Evidence of Insurance. Landlord shall provide to Tenant, at the times
and in the manner required of Tenant under Section 11(d), comparable evidence
of compliance with the terms of this Section 12.
13. Damage by Fire or Other Casualty.
In the event of loss of, or damage to, the Leased Premises or the Building
by fire or other casualty, the rights and obligations of Landlord and Tenant
shall be as follows:
36
(a) Repair of Damage. If all or any part of the Leased Premises is damaged
by fire or other casualty, Tenant shall give prompt notice thereof to Landlord.
Landlord, upon receiving such notice, shall proceed promptly and with reasonable
diligence, subject to Unavoidable Delays, to repair, or cause to be repaired,
such damage, but not damage to Alterations or Tenant's Personal Property, in a
manner reasonably designed to minimize interference with Tenant's occupancy (but
with no obligation to employ labor at overtime or other premium pay rates). If
all or any part of the Common Areas is damaged by fire or other casualty,
Landlord shall proceed promptly and with reasonable diligence, subject to
Unavoidable Delays, to repair, or cause to be repaired, such damage, in a manner
designed to minimize interference with Tenant's occupancy (but with no
obligation to employ labor at overtime or other premium pay rates).
(b) Abatement of Basic Rent and Additional Charges. If all or any part of
the Leased Premises is rendered untenantable by reason of damage caused by a
fire or other casualty, whether to the Leased Premises or the Building, and the
damaged part is not in fact be used by Tenant, the Basic Rent and Additional
Charges shall be abated for the proportion of the Leased Premises rendered
untenantable for the period between the date of the fire or other casualty and
the date when the damage which Landlord is obligated to repair shall have been
repaired or the date on which this Lease is terminated pursuant to subsection
(c), whichever occurs first. However, if, before the date when all of the damage
required to be repaired by Landlord shall have been repaired, any part of the
Leased Premises so damaged shall be repaired to the condition required by
subsection (e), then the amount by which the Basic Rent and Additional Charges
shall be abated shall be equitably apportioned for the period beginning on the
date of completion of such repair. If Tenant reoccupies a portion of the Leased
Premises during the period of repair, the Basic Rent and Additional Charges
allocable to such reoccupied portion, based upon the proportion which the
reoccupied portion of the Leased Premises bears to the total area of the Leased
Premises, shall be payable by Tenant from the date of such occupancy. If, by
reason of some action or inaction on the part of Tenant or Tenant's Associates
after the occurrence of an insured peril, Landlord or the Additional Insureds
shall be unable to collect all of the insurance proceeds applicable to the
damage or destruction of the Leased Premises or the Building caused by such
insured peril, then, without prejudice to any other remedy which may be
available to Landlord against Tenant, the abatement of rent provided for in this
subsection shall not be effective to the extent of uncollectible insurance
proceeds. For purposes of this Section, all or a part of the Leased Premises
shall be deemed to be "untenantable" if, because of the fire or other casualty,
Tenant is materially impaired in its use of all or
37
such part of the Leased Premises for the uses permitted by Section 6(a).
(c) Termination of Lease by Landlord or Tenant. If as a result of fire or
other casualty more than one-half (1/2) of the Building Rentable Area is
rendered untenantable, Landlord within 60 days after the date of the fire or
casualty may terminate this Lease by notice to Tenant, specifying a date, not
less than 20 nor more than 40 days after the giving of the notice, on which the
Term shall expire as fully and completely as if such date were the date herein
originally fixed for the expiration of the Term. If the Leased Premises are
damaged as a result of fire or other casualty and if Landlord reasonably
determines that the damage to the Leased Premises (but not the damage to
Alterations or Tenant's Personal Property) is so extensive that the damage
cannot be substantially repaired within 90 days after the receipt of insurance
proceeds but in no event more than 270 days after the date of the fire or other
casualty (except for Unavoidable Delays), Landlord shall notify Tenant of that
fact. Within 15 days after receipt of Landlord's notice, Tenant may terminate
this Lease by notice to Landlord, specifying a date, not less than 20 nor more
than 40 days after the giving of such notice, on which the Term shall expire as
fully and completely as if such date were the date originally fixed for the
expiration of the Term, except that Tenant shall not have the right to terminate
this Lease if the fire or other casualty was caused by the willful or negligent
act or omission of Tenant or Tenant's Associates. If either Landlord or Tenant
terminates this Lease pursuant to this subsection, the Basic Rent and Additional
Charges shall be apportioned as of the date of such termination. Any dispute
between Landlord and Tenant concerning the time periods within which the Leased
Premises can be repaired should be submitted to arbitration pursuant to Section
28. If neither Landlord nor Tenant so elects to terminate this Lease, then
Landlord shall proceed to repair the damage to the Building and the damage to
the Leased Premises (but not the damage to Alterations or Tenant's Personal
Property, if any shall have occurred), and the Basic Rent and Additional Charges
shall meanwhile be apportioned and abated all as provided in subsection (b).
(d) Insurance Proceeds. The proceeds payable under all policies of property
damage insurance maintained by Landlord on the Building shall belong to and be
the property of Landlord, and Tenant shall not have any interest in such
proceeds. Tenant agrees to look to its own policies of property damage insurance
in the event of damage to Alterations or Tenant's Personal Property.
(e) Limitation on Landlord's Duty to Repair. Landlord shall not be
required to repair or replace Alterations or Tenant's Personal Property, but
Landlord's only obligation under subsection (a) shall be to repair or replace
the portions of the Building and
38
the Base Building Work to the condition necessary to enable Tenant, in
accordance with accepted construction practices, to begin the performance of the
repair or replacement of Tenant Work. Except as required by Section 12(e),
Landlord shall not be obligated to make any payment to Tenant for damages or
compensation for inconvenience, loss of business or annoyance arising from any
damage to or repair or restoration of any portion of the Leased Premises or of
the Building.
(f) Inapplicability of Other Laws. The provisions of this Section shall be
considered an express agreement governing any instance of damage or destruction
of the Building or the Leased Premises by fire or other casualty, and any law
now or hereafter in force providing for such a contingency in the absence of
express agreement shall have no application.
(g) Landlord Released from Liability. As long as Tenant's policies of
property damage insurance include the waiver of subrogation or agreement or
permission to release liability referred to in Section 12(d), Tenant hereby
waives (and agrees to cause all other occupants of the Leased Premises to
execute and deliver to Landlord instruments waiving) any right of recovery
against Landlord, the Additional Insureds and any of their respective officers,
directors, agents, employees, partners, contractors or invitees, for any loss or
damage to Alterations or Tenant's Personal Property caused by fire or other
insured peril. If at any time any of Tenant's policies shall not include a
waiver of subrogation or agreement or permission or similar provisions, the
waiver set forth in the preceding sentence shall, upon notice given by Tenant to
Landlord, be of no further force or effect from and after the giving of such
notice (or, if the insurer shall not grant a waiver for all of the required
parties, the waiver shall be of no force or effect only with respect to the
required parties not included in the waiver). If Tenant fails to obtain and
maintain the policy of property damage insurance required by Section 11(b),
Tenant hereby waives (and agrees to cause all occupants of the Leased Premises
to execute and deliver to Landlord instruments waiving) any right of recovery
against Landlord, the Additional Insureds and any of their respective officers,
directors, agents, employees, partners, contractors and invitees for any loss or
damage to Alterations or Tenant's Personal Property caused by fire or other
perils of the type that would have been insured against by a policy of property
damage insurance if Tenant had obtained the policy and the policy had been in
effect on the date of the fire or other insured peril.
(h) Tenant Released from Liability. As long as Landlord's policies of
property damage insurance include the waiver of subrogation or agreement or
permission to release liability referred to in Section 12(d), Landlord hereby
waives any right of
39
recovery against Tenant, any other permitted occupant of the Leased Premises and
any of their respective officers, directors, agents, employees, partners,
contractors or invitees for any loss or damage to the Building caused by fire or
other insured peril. If at any time any of Landlord's policies of property
damage insurance shall not include such waiver of subrogation or agreement or
permission or similar provisions, the waiver set forth in the foregoing sentence
shall be of no further force or effect (or, if the insurer shall not grant
waiver for all of the required parties, the waiver shall be of no force or
effect only with respect to the required parties not included in the waiver).
14. Condemnation.
(a) Effect of Taking. In the event of a Taking of the whole of the Leased
Premises, this Lease shall terminate as of the date of such Taking. If only a
part of the Leased Premises shall be so taken then, except as otherwise provided
in this subsection, this Lease shall continue in force and effect, but from and
after the date of the Taking the Basic Rent and Additional Charges shall be
equitably reduced on the basis of the Rentable Area so taken. If a part of the
Building shall be taken, and if either (i) the part of the Building so taken
contains more than twenty-five percent (25%) of the Rentable Area immediately
before such Taking, or (ii) in Landlord's reasonable opinion, it shall be
impracticable to continue to operate the Building, then Landlord, at Landlord's
option, may give to Tenant within 60 days after the date upon which Landlord
shall have received notice of the Taking, a 30 days' notice of termination of
this Lease. If a part of the Building shall be taken, and if either (i) the part
of the Building so taken contains more than thirty-five percent (35%) of the
Rentable Area immediately before such Taking, or (ii) by reason of such Taking
all or substantially all of the Leased Premises becomes untenantable (within the
meaning of Section 13(b) and Tenant does not, in fact, use all or substantially
all of the Leased Premises for the uses permitted by Section 6(a), then Tenant,
at Tenant's option, may give to Landlord within 60 days after the date upon
which Tenant shall have received notice of such Taking, a 30 days' notice of
termination of this Lease. If a 30 days' notice of termination is given by
Landlord or Tenant, this Lease shall terminate upon the earlier of (x) the date
on which title to the part of the Building taken vests in the condemning
authority, or (y) the expiration of the 30-day period. If this Lease is
terminated pursuant to the foregoing provisions of this subsection, then, to the
extent permitted by applicable law and such Taking, Tenant shall have access to
the Leased Premises in order to remove Tenant's Personal Property and any other
property which Tenant is entitled to remove pursuant to this Lease during the
period of 30 days from the date Tenant is permitted access therefor. If a Taking
occurs which does not result in the termination of this Lease, Landlord shall
repair,
40
alter and restore the remaining portions of the Leased Premises (but not
Alterations) to their former condition to the extent that the same may be
feasible.
(b) Award. Landlord shall have the exclusive right to receive any and all
awards made with respect to the Leased Premises, the Building and the Land
accruing by reason of a Taking or by reason of anything lawfully done in
pursuance of public or other authority. Tenant hereby releases and assigns to
Landlord all of Tenant's rights to such awards and covenants to deliver such
further assignments and assurances thereof as Landlord may from time to time
request, hereby irrevocably designating and appointing Landlord as its
attorney-in-fact coupled with an interest to execute and deliver in Tenant's
name and behalf all such further assignments. Tenant shall not have the right to
claim any award for the value of the Leasehold Estate, but Tenant shall have the
right to make its own claim against the condemning authority for a separate
award for the value of Alterations made by Tenant, at its expense, reduced by
the amount (if any) of Tenant's Allowance (as defined in Exhibit B), and any
of Tenant's Personal Property, for moving and relocation expenses and for
business damages and/or consequential damages, as may be allowed by law which do
not constitute part of the compensation for the Building or the Land, or both,
and do not diminish the amount of the award to which Landlord would otherwise be
entitled.
15. Assignment and Subletting.
(a) Assignment and Subletting Permitted. So long as Tenant remains
primarily liable for the obligations of Tenant under this Lease, Tenant may,
subject to the terms and requirements of this Lease and subject to Landlord's
approval, not to be unreasonably withheld or delayed, including the use
restrictions in Section 6, assign its leasehold estate under this Lease and/or
sublet all or part of the Leased Premises. Any rent collected by Tenant in
connection with an assignment or a sublease, shall be and remain the property of
Tenant, whether or not equal to, less than or in excess of the Basic Rent and
Additional Charges payable hereunder, provided, however, that any true profits
from rents collected by Tenant shall be shared between Tenant and Landlord on an
equal basis.
(b) Release of Tenant in Connection with an Assignment or Sublease. After
the 5th year Tenant may request, and Landlord may grant to Tenant, a release
from further liability under this Lease in conjunction with an assignment of the
Lease to an entity whose net worth as determined by an independent certified
public accountant equals or exceeds Tenant's net worth at the Lease Commencement
Date. Landlord may request such information of Tenant
41
and the proposed assignee as is consistent with applicable Legal Requirements
and customary practice.
(c) Change of Corporate Control. If any assignee of Tenant is a
corporation, any transfer of any of the corporation's issued and outstanding
capital stock or any issuance of additional capital stock, as a result of which
the majority of the issued and outstanding capital stock of the corporation is
held by a Person or Persons who do not hold a majority of the issued and
outstanding capital stock of the corporation on the date of the assignment of
this Lease shall be deemed an assignment under this Section 15; provided,
however, that this sentence shall not apply to a corporation if any of the
outstanding voting stock of such corporation is registered under federal or
state securities laws. If any assignee of Tenant is a partnership, any transfer
of any interest in the partnership or any other change in the composition of the
partnership which results in a change in the control of the partnership from the
Person or Persons controlling the partnership on the date on which the
partnership acquires the Leasehold Estate, shall be deemed an assignment under
this Section 15.
(d) Documentation. No permitted assignment or subletting shall be valid
unless, within 10 days after the consummation thereof, Tenant shall deliver to
Landlord (i) in the case of an assignment, (x) a duplicate original instrument
of assignment in form reasonably satisfactory to Landlord, duly executed by
Tenant, and (y) an instrument in form and substance reasonably satisfactory to
Landlord, duly executed by the assignee, in which such assignee shall agree to
observe and perform, and to be personally bound by, all of the terms, covenants
and conditions of this Lease on Tenant's part to be observed and performed,
whether or not accruing before or after the date of such assignment and whether
or not relating to matters arising before or after such assignment, or (ii) in
the case of a subletting, a duplicate original counterpart of the sublease
signed by Tenant and the subtenant.
(e) Landlord's Right to Collect Rent. If the Leasehold Estate is assigned,
whether or not in violation of the provisions of this Section, Landlord may
collect rent from the assignee. If the Leased Premises or any part thereof are
sublet to, or occupied or used by, any Person other than Tenant, whether or not
in violation of this Section, Landlord, after an Event of Default has occurred
and while such Event of Default is continuing, may collect rent from the
subtenant, user or occupant. In either case, Landlord shall apply the amount
collected to the Basic Rent and Additional Charges payable under this Lease, but
neither any such assignment, subletting, occupancy or use, whether with or
without Landlord's prior consent, nor any such collection or application shall
be deemed to be a waiver of any term, covenant or condition of this Lease or the
acceptance by Landlord of such assignee,
42
subtenant, occupant or user as Tenant. The consent by Landlord to any assignment
or subletting shall not relieve Tenant from its obligation to obtain the express
prior consent of Landlord to any further assignment or subletting. The listing
of any name other than that of Tenant on any door of the Leased Premises or on
any directory in the Building, or otherwise, shall not operate to vest in the
Person so named any right or interest in this Lease or in the Leased Premises or
be deemed to constitute, or serve as a substitute for, any prior consent of
Landlord required under this Section, and it is understood that any such listing
shall constitute a privilege extended by Landlord which shall be revocable at
Landlord's will by notice to Tenant. Neither an assignment of the Leasehold
Estate nor a subletting, occupancy or use of the Leased Premises or any part
thereof by any Person other than Tenant, nor the collection of rent by Landlord
from any Person other than Tenant as provided in this subsection, nor the
application of any such rent as provided in this subsection shall, in any
circumstances, relieve Tenant from its obligation fully to observe and perform
the terms, covenants and conditions of this Lease on Tenant's part to be
observed and performed, except under the terms of subsection (b) above.
16. Default Provisions.
(a) Events of Default. Each of the following events shall be deemed to be,
and is referred to in this Lease as, an "Event of Default "::
(1) A default by Tenant in making any payment of Basic Rent on the day such
payment is due and payable which continues for more than ten days after the due
date subject to paragraph (b) below;
(2) A default by Tenant in making any payment of Additional Charges on the
day such payment is due and payable which continues for more than ten days after
Landlord shall have given Tenant a written notice specifying such default:
(3) Subject in all instances to Unavoidable Delays, the neglect or failure
of Tenant to perform or observe any of the terms, covenants or conditions
contained in this Lease on Tenant's part to be performed or observed (other than
those referred to in paragraphs (1) and (2) above and (4) and (5) below) which
is not remedied by Tenant (i) within 30 days after Landlord shall have given to
Tenant notice specifying such neglect or failure, or (ii) in the case of any
such neglect or failure which cannot with due diligence and in good faith be
cured within 30 days, within such additional period, if any, as may be
reasonably required to cure such default with due diligence and in good faith
provided that Tenant commences the curing of the same within the 15-day period
43
(it being intended that, in connection with any such default which is not
susceptible of being cured with due diligence and in good faith within 30 days,
the time within which the Tenant is required to cure such default shall be
extended for such additional period as may be necessary for the curing thereof
with due diligence and in good faith);
(4) The assignment, transfer, mortgaging or encumbering of this Lease or
the subletting of the Leased Premises in a manner not permitted by Section 15:
(5) The taking of this Lease or the Leased Premises, or any part thereof,
upon execution or by other process of law directed against Tenant, or upon or
subject to any attachment at the instance of any creditor of or claimant against
Tenant, which execution or attachment shall not be discharged or disposed of
within 60 days after the levy thereof;
(6) The failure of Tenant to take possession of the Leased Premises on the
Lease Commencement Date or within 45 days (increased by the number of days of
delay caused by Tenant or by Tenant Work pursuant to Sections 8 and 9 of Exhibit
B to this Lease) thereafter; or
(7) Except during the last year of the Lease Term, the vacating or
abandonment of the Leased Premises by Tenant; provided that Tenant shall not be
deemed to have vacated or abandoned the Leased Premises (a) in connection with
alterations or repairs, (b) as a result of Unavoidable Delays, (c) as a result
of a condemnation or taking, (d) as a result of damage or destruction, and (e)
in any case, for a period of nine (9) months after temporarily vacating the
Leased Premises.
(b) Landlord has no obligation to give Tenant notice of a Basic Rent
payment default. Landlord shall, however, give Tenant notice of such default as
long as (i) Tenant has not committed any previous defaults hereunder; and (ii)
the Building is either owned by Landlord first named in this Lease or managed by
The Xxxxx Company or a related entity. Under such circumstances, Tenant shall
have ten (10) days after Landlord has given Tenant a written notice specifying
such default in which to make its payment of Basic Rent. This subsection 16(b)
is not binding upon any creditors or lenders of Landlord.
(c) Landlord's Rights upon Event of Default. Upon the occurrence of an
Event of Default, Landlord shall have the right, at its election, then or at any
time thereafter, either:
(1) To give notice to Tenant that this Lease will terminate on a date to be
specified in such notice, which date may
44
be five (5) days from the date of such notice or any day thereafter, and on the
date specified in such notice Tenant's right to possession of the Leased
Premises shall cease and this Lease shall thereupon be terminated, but Tenant
shall remain liable as provided in subsection (d); or
(2) Without demand or notice, to reenter and take possession of the Leased
Premises, or any part thereof, and repossess the same as of Landlord's former
estate and expel Tenant and those claiming through or under Tenant and remove
the effects of both or either, either by summary proceedings, or by action at
law or in equity, or by force (if necessary) or otherwise, without being deemed
guilty of any manner of trespass and without prejudice to any remedies for
arrears of rent or preceding breach of covenant.
If Landlord elects to reenter under paragraph (2), Landlord may terminate
this Lease, or, from time to time, without terminating this Lease, may relet the
Leased Premises, or any part thereof, as agent for Tenant for such term or terms
and at such rental or rentals and upon such other terms and conditions as
Landlord may deem advisable, with the right to make alterations and repairs to
the Leased Premises. No such reentry or taking of possession of the Leased
Premises by Landlord shall be construed as an election on Landlord's part to
terminate this Lease unless a written notice of such intention is given to
Tenant under paragraph (1) or unless the termination thereof is decreed by a
court of competent jurisdiction. Tenant waives any right to the service of any
notice of Landlord's intention to reenter provided for by any present or future
law. Landlord shall make a good faith effort to mitigate damages by seeking to
relet the Leased Premises.
(d) Tenant's Liability for Damages. If Landlord terminates this Lease
pursuant to subsection (b), Tenant shall remain liable (in addition to accrued
liabilities) to the extent legally permissible for (i) the sum of (A) all Basic
Rent , Additional Charges and additional rent provided for in this Lease until
the date this Lease would have expired had such termination not occurred
accelerated and due and payable as of the date of default, and (B) any and all
reasonable expenses incurred by Landlord in reentering the Leased Premises,
repossessing the same, making good any default of Tenant, painting, altering or
dividing the Leased Premises, combining the same with any adjacent space for any
new tenants, putting the same in proper repair, reletting the same (including
any and all reasonable attorneys' fees and disbursements and reasonable
brokerage fees incurred in so doing), and any and all expenses which Landlord
may incur during the occupancy of any new tenant (other than expenses of a type
that are Landlord's responsibility under the terms of this Lease); less (ii) the
net proceeds of any reletting actually received by Landlord. Tenant
45
agrees to pay to Landlord the difference between items (i) and (ii) above with
respect to each month during the Term, at the end of such month. Any suit
brought by Landlord to enforce collection of such difference for any one month
shall not prejudice Landlord's right to enforce the collection of any difference
for any subsequent month. In addition to the foregoing, Tenant shall pay to
Landlord, whether or not the Lease is terminated such sums as the court which
has jurisdiction thereover may adjudge reasonable as attorneys' fees with
respect to any successful legal proceeding or action instituted by Landlord to
enforce the provisions of this Lease. Landlord shall have the right, at its sole
option, to relet the whole or any part of the Leased Premises for the whole of
the unexpired Term, or longer, or from time to time for shorter periods, for any
rental then obtainable, giving such concessions of rent and making such special
repairs, alterations, decorations and paintings for any new tenant as Landlord,
in its sole and absolute discretion, may deem advisable. Tenant's liability
under this subsection shall survive the institution of summary proceedings and
the issuance of any warrant thereunder. Landlord shall be under no obligation to
relet the Leased Premises.
(e) Buy Out/Liquidated Damages. The following described "buy-out" right
shall be available to Tenant, at any time upon 60 days prior written notice, and
to Landlord, at any time after a termination of this Lease under Section 16(c).
The amount payable shall be due from Tenant 90 days from the date of the written
notice, should Tenant so choose, or at such time as Landlord specifies should it
exercise the right. In either event, the amount payable by Tenant shall be
liquidated and final damages in lieu of any further liability by Tenant under
this Lease, and shall be an amount equal to the difference, discounted to the
date of such demand at an annual rate of interest equal to the then-current
yield on actively traded U.S. Treasury bonds with July - December, 2006
maturities, as published in the Federal Reserve Statistical Release for the week
before the date of such termination or notice, between (i) the Basic Rent and
Additional Charges, computed on the basis of the then-current annual rate of
Basic Rent and Additional Charges and all fixed and determinable increases in
Basic Rent, which would have been payable from the date of such demand to the
date when this Lease would have expired, if it had not been terminated, and (ii)
the then fair rental value of the Leased Premises for the same period (and
pass-through of operating expenses, comparable to the terms hereof). Upon
payment of such liquidated and agreed final damages, Tenant shall be released
from all further liability under this Lease with respect to the period after the
date of such demand or option. If, after the Event of Default giving rise to the
termination of this Lease, but before presentation of proof of such liquidated
damages, the Leased Premises, or any part thereof, shall be relet by Landlord
for a term of one year or more, the amount of rent reserved and pass
46
through of operating expenses upon such reletting shall be deemed to be the fair
rental value for the part of the Leased Premises so relet during the term of
such reletting.
(f) Rights and Remedies Cumulative. The rights and remedies herein
conferred are cumulative and not exclusive of any other rights or remedies, and
shall be in addition to every other right, power, and remedy that Landlord and
Tenant may have, whether specifically granted herein, or presently or hereafter
existing at law, in equity, or by statute.
17. Security Deposit.
(a) Use and Application. Tenant hereby deposits with Landlord the Security
Deposit, as security for the prompt, full and faithful performance by Tenant of
each and every obligation of Tenant hereunder. If an Event of Default occurs,
Landlord may (or if Landlord defaults hereunder, Tenant may) use, apply or
retain the whole or any part of the Security Deposit for the payment of (i) any
Basic Rent or Additional Charges which Tenant may not have paid or which may
become due after the occurrence of such Event of Default (or Landlord default),
(ii) any sum expended by Landlord on Tenant's behalf in accordance with the
provisions of this Lease, or (iii) any sum which Landlord may expend or be
required to expend by reason of Tenant's default, including any damages or a
deficiency in the reletting of the Leased Premises as provided in Section 16.
The use, application or retention of the Security Deposit, or any portion
thereof, by Landlord shall not prevent Landlord from exercising any other right
or remedy provided by this Lease or by law and shall not operate as a limitation
on any recovery to which Landlord may otherwise be entitled. If any portion of
the Security Deposit is used, applied or retained by Landlord for the purposes
set forth above, Tenant shall, within 10 days after a demand therefor is made by
Landlord, deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to its original amount provided, however, that if the Security
Deposit is applied to Basic Rent as a result of a default by Landlord, Tenant is
not obligated to restore the Security Deposit until Landlord cures its default.
(b) Return of Security Deposit. Landlord shall keep the Security Deposit in
an interest bearing account. If Tenant shall fully and faithfully comply with
all of the provisions of this Lease, the Security Deposit, or any balance
thereof, shall be returned to Tenant after the expiration of the Term, with
interest. Tenant shall be responsible for all income taxes arising from the
interest income. In the absence of evidence satisfactory to Landlord of any
permitted assignment of the right to receive the Security Deposit, or the
remaining balance thereof, Landlord may return the same to the original Tenant,
regardless of one or more
47
assignments of the Leasehold Estate or the Security Deposit. In such event, upon
the return of the Security Deposit (or balance thereof) to the original Tenant,
Landlord shall be completely relieved from liability under this Section.
(c) Transfer of Security Deposit. In the event of a transfer of Landlord's
interest in the Leased Premises, Landlord shall transfer the Security Deposit to
the transferee thereof. In such event, upon notice to Tenant of such transfer,
Landlord shall be released from all liability or obligation for the return of
the Security Deposit to Tenant, and Tenant agrees to look solely to such
transferee for the return of the Security Deposit and the transferee shall be
bound by all provisions of this Lease relating to the return of the Security
Deposit. Tenant acknowledges that a Mortgagee shall not be liable for the return
of the Security Deposit unless the Mortgagee actually receives the Security
Deposit.
(d) Restrictions on Encumbering. The Security Deposit shall not be
mortgaged, pledged, assigned or encumbered in any manner whatsoever by Tenant.
18. Bankruptcy Termination Provision.
At Landlord's election, this Lease shall automatically terminate and
expire, without the performance of any act or the giving of any notice by
Landlord, upon the occurrence of any of the following events: (1) Tenant's
admitting in writing its inability to pay its debts generally as they become
due, or (2) the commencement by Tenant of a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar law, or (3)
the entry of a decree or order for relief by a court having jurisdiction in the
premises in respect of Tenant in an involuntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar law, and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days, or (4) Tenant's making an assignment of all or a
substantial part of its property for the benefit of its creditors, or (5)
Tenant's seeking or consenting to or acquiescing in the appointment of, or the
taking of possession by, a receiver, trustee or custodian for all or a
substantial part of its property, or (6) the entry of a court order without
Tenant's consent, which order shall not be vacated, set aside or stayed within
60 days from the date of entry, appointing a receiver, trustee or custodian for
all or a substantial part of its property. The provisions of this Section shall
be construed with due recognition for the provisions of the federal bankruptcy
laws, where applicable, but shall be interpreted in a manner which
48
results in a termination of this Lease in each and every instance, and to the
fullest extent, 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.
19. Landlord May Perform Tenant's Obligations.
If Tenant shall fail to keep or perform any of its obligations as provided
in this Lease with respect to (a) maintenance of insurance as required
hereunder, (a) repairs and maintenance of the Leased Premises, (c) compliance
with Legal Requirements, or (d) the making of any other payment or performance
of any other obligation, then Landlord may (but shall not be obligated to do so)
upon the continuance of such failure on Tenant's part for 10 days after notice
to Tenant, or without notice in the case of an emergency, and without waiving or
releasing Tenant from any obligation, and as an additional but not exclusive
remedy, make any such payment or perform any such obligation. All sums so paid
by Landlord and all necessary incidental costs and expenses, including
attorneys' fees and disbursements, incurred by Landlord in making such payment
or performing such obligation, together with interest thereon from the date of
payment at the Default Interest Rate, shall be deemed additional rent and shall
be paid to Landlord on demand or, at Landlord's option, may be added to any
installment of Basic Rent thereafter falling due, and if not so paid by Tenant,
Landlord shall have the same rights and remedies as in the case of a default by
Tenant in the payment of Basic Rent.
20. Subordination/Non-Disturbance.
(a) Non-Disturbance. At least 30 days prior to the Lease Commencement Date,
but in any event in conjunction with any closing on financing or refinancing for
the Building, during the Term, and during any renewal periods, Landlord shall
procure for the benefit of Tenant an agreement from each Mortgagee and ground
lessor, confirming each Mortgagee's and ground lessor's agreement that Tenant's
rights under this Lease and right to possession of the Leased Premises, shall
not be disturbed by Mortgagee or ground lessor, whether in conjunction with the
exercise of remedies under the Mortgage or the ground lease or otherwise, so
long as Tenant is not in default hereunder, and further assuring to Tenant that
it will not be named as a defendant in any action taken by the Mortgagee or the
ground lessor against the Landlord.
(a) Mortgages. This Lease and the Leasehold Estate shall have priority
over, and be senior to, the lien of any Mortgage made by Landlord after the date
of this Lease. However, if at any time or from time to time during the Term and
any renewal periods, a Mortgagee or prospective Mortgagee requests that this
Lease be sub-
49
ject and subordinate to its Mortgage, and if (x) the Mortgagee has provided to
Tenant a non-disturbance agreement consistent with paragraph (a) above, and (y)
Landlord consents to such subordination, this Lease and the Leasehold Estate
shall be subject and subordinate to the lien of such Mortgage and to all
renewals' modifications, replacements, consolidations and extensions thereof and
to any and all advances made thereunder and interest thereon. Tenant agrees
that, within 10 days after receipt of a request therefor from Landlord, it will,
from time to time, execute and deliver any instrument or other document required
by any such Mortgagee to subordinate this Lease and the Leasehold Estate to the
lien of such Mortgage. If, at any time or from time to time during the Term, a
Mortgagee of a Mortgage made prior to the date of this Lease shall request that
this Lease have priority over the lien of such Mortgage, and if Landlord
consents thereto, this Lease and the Leasehold Estate shall have priority over
the lien of such Mortgage and all renewals, modifications, replacements,
consolidations and extensions thereof and all advances made thereunder and
interest thereon, and Tenant shall, within 10 days after receipt of a request
therefor from Landlord, execute, acknowledge and deliver any and all documents
and instruments confirming the priority of this Lease. In any event, however, if
this Lease shall have priority over the lien of a first Mortgage, this Lease
shall not become subject or subordinate to the lien of any subordinate Mortgage,
and Tenant shall not execute any subordination documents or instruments for any
subordinate Mortgagee, without the written consent of the first Mortgagee.
(c) Ground Leases. Subject to the requirement of subsection (a) above this
Lease and the Leasehold Estate shall be subject and subordinate to the Ground
Lease between the City of Baltimore and Landlord and to each and every ground or
underlying lease hereafter made of the Building or the Land, or both, and to all
renewals, modifications, replacements and extensions thereof. Tenant agrees
that, within 10 days after receipt of request therefor from Landlord, it will,
from time to time, execute, acknowledge and deliver any instrument or other
document required by any such lessor to subordinate this Lease and the Leasehold
Estate to such ground or underlying lease.
(d) Mortgagee's Right to Cure. If (i) the Building or the Land, or both, or
Landlord's leasehold estate in the Building or the Land, or both, is at any time
subject to a Mortgage, and (ii) this Lease, or the Basic Rent and Additional
Charges payable under this Lease, is assigned to the Mortgagee, and (iii) the
Tenant is given notice of such assignment, including the name and address of the
assignee, then, in that event, Tenant shall not terminate this Lease or make any
abatement in the Basic Rent or Additional Charges payable hereunder for any
default on the part of the Landlord without first giving notice, in the manner
provided elsewhere in
50
this Lease for the giving of notices, to such Mortgagee, specifying the default
in reasonable detail, and affording such Mortgagee a reasonable opportunity to
make performance, at its election, for and on behalf of the Landlord, except
that (x) the Mortgagee shall have at least 30 days to cure the default; (y) if
such default cannot be cured with reasonable diligence and continuity within 30
days, the Mortgagee shall have any additional time as may be reasonably
necessary to cure the default with reasonable diligence and continuity; and (z)
if the default cannot reasonably be cured without the Mortgagee having obtained
possession of the Building, the Mortgagee shall have such additional time as may
be reasonably necessary under the circumstances to obtain possession of the
Building and thereafter to cure the default with reasonable diligence and
continuity. If more than one Mortgagee makes a written request to Landlord to
cure the default, the Mortgagee making the request whose lien is the most senior
shall have such right. This provision shall not preclude prudent and reasonable
action by Tenant in the event of an emergency.
21. Attornment.
In the event of (a) a transfer of Landlord's interest in the Building, (b)
the termination of any ground or underlying lease of the Building or the Land,
or both, or (c) the purchase or other acquisition of the Building or Landlord's
interest therein in a foreclosure sale or by deed in lieu of foreclosure under
any Mortgage or pursuant to a power of sale contained in any Mortgage, then in
any of such events Tenant shall, at the request of Landlord or Landlord's
successor in interest, attorn to and recognize the transferee or purchaser of
Landlord's interest or the lessor under the terminated ground or underlying
lease, as the case may be, as Landlord under this Lease for the balance then
remaining of the Term, and thereafter this Lease shall continue as a direct
lease between such Person, as "Landlord," and Tenant, as "Tenant," except that
such lessor, transferee or purchaser shall not be liable for any act or omission
of Landlord before such lease termination or before such Person's succession to
title, nor be subject to any offset, defense or counterclaim accruing before
such lease termination or before such Person's succession to title, nor be bound
by any payment of Basic Rent or Additional Charges before such lease termination
or before such Person's succession to title for more than one month in advance.
Tenant shall, within 10 days after request by Landlord or the transferee or
purchaser of Landlord's interest or the lessor under the terminated ground or
underlying lease, as the case may be, execute and deliver an instrument or
instruments confirming the foregoing provisions of this Section. Tenant hereby
waives the provisions of any present or future law or regulation which gives or
purports to give Tenant any right to terminate or otherwise adversely affect
this Lease, or the obligations of Tenant hereunder, upon or as a result of the
51
termination of any such ground or underlying lease or the completion of any such
foreclosure and sale.
22. Quiet Enjoyment.
Landlord covenants that Tenant, upon paying the Basic Rent and the
Additional Charges provided for in this Lease, and upon performing and observing
all of the terms, covenants, conditions and provisions of this Lease on Tenant's
part to be kept, observed and performed, shall quietly hold, occupy and enjoy
the Leased Premises during the Term without hindrance, ejection or molestation
by Landlord or any Person lawfully claiming through or under Landlord.
23. Right of Access to Leased Premises.
(a) Landlord's Right of Entry. Landlord and its agents, employees and
contractors shall have the following rights in and about the Leased Premises:
(i) to enter with prior written notice (except in an emergency) the Leased
Premises at all reasonable times for the purpose of performing any obligation of
Landlord under this Lease or exercising any right or remedy reserved to Landlord
in this Lease, and if, in the case of an emergency, Tenant or its officers,
partners, agents or employees shall not be personally present or shall not open
and permit an entry into the Leased Premises at any time when such entry shall
be necessary, forcibly to enter the Leased Premises; (ii) to exhibit the Leased
Premises to others at reasonable times and for reasonable purposes after
notifying Tenant and obtaining Tenant's consent, which shall not be unreasonably
withheld. Tenant may accompany Landlord and restrict sensitive areas of the
Leased Premises; (iii) to make such repairs, alterations, improvements or
additions, or to perform such maintenance, including the maintenance of all
plumbing, electrical and other mechanical facilities installed by Landlord, as
Landlord may deem necessary or desirable to comply with its obligations
hereunder; and (iv) to make such repairs, alterations or improvements, or to
perform maintenance, of all HVAC, elevator, plumbing, electrical and other
mechanical facilities installed by Landlord, as may be required from time to
time by this Lease to be made or performed by Landlord. Landlord agrees to give
reasonable advance notice before it exercises its rights under this subsection,
except that Landlord may enter the Leased Premises without notice in the case of
an emergency creating an imminent risk of injury to person or damage to
property.
(b) Landlord's Reservation of Rights in Adjacent Areas. Landlord reserves
the right to use, including access thereto through the Leased Premises, all
parts (except surfaces facing the interior of the Leased Premises) of all
exterior walls, windows and doors bounding the Leased Premises (including
exterior Building
52
walls, corridor walls, doors and entrances), all terraces and roofs adjacent to
the Leased Premises, all space in or adjacent to the Leased Premises used for
shafts, stacks, stairways, chutes, pipes, conduits, ducts, fan rooms, heating,
air-conditioning, plumbing, electrical and other mechanical facilities installed
by Landlord, service closets and other Building facilities. Nothing contained in
this Section shall impose any obligation upon Landlord with respect to the
operation, maintenance, alteration or repair of the Leased Premises or the
Building, except as expressly provided in this Lease. Landlord agrees to repair
and restore any damage to the Leased Premises resulting from the use of the
rights reserved hereunder to Landlord.
(c) Effect of Landlord's Entry. The exercise by Landlord or its agents,
employees or contractors of any right reserved to Landlord in this Section shall
not constitute an actual or constructive eviction, in whole or in part, or
entitle Tenant to any abatement or diminution of rent, or relieve Tenant from
any of its obligations under this Lease, or impose any liability upon Landlord,
or its agents, or upon any lessor under any ground or underlying lease, by
reason of inconvenience or annoyance to Tenant, or injury to or interruption of
Tenant's business, or otherwise. Landlord agrees to exercise its rights under
this Section in a manner reasonably designed to minimize interference with
Tenant's normal business operations. Except when an emergency exists, Landlord
agrees to exercise such rights during hours that are not normal business hours.
(d) Tenant's Right of Access prior to the Lease Rental Commencement Date.
Landlord agrees to provide reasonable access to the Leased Premises during
construction of the Building in order to permit Tenant and its consultants to
take measurements, plan improvements and otherwise prepare for the installation
of Tenant's Personal Property and the Alterations.
24. Limitation on Landlord's Liability.
(a) Accidents, etc. Except for damages resulting from the willful or
grossly negligent act or omission (where applicable law or this Lease imposes a
duty to act) of Landlord, its agents and employees, Landlord shall not be liable
to Tenant or Tenant's Associates for any damage or loss to the property of
Tenant or others located in or on the Leased Premises, the Building or the Land,
or for any accident or injury, including death, to Persons or for any loss,
compensation or claim, including claims for interruption or loss of Tenant's
business, based on, arising out of or resulting from the necessity of
maintaining or repairing any portion of the Building or the Parking Facilities;
the use or operation (by Tenant or any other Person or Persons whatsoever) of
any elevators, or heating, cooling, electrical, plumbing or other
53
equipment or apparatus; the termination of this Lease by reason of, or the
occurrence of, damage or destruction of the Building or the Leased Premises; any
fire, robbery, theft, and/or any other casualty; any unlawful breach of
Landlord's security system for the Building; any leaking in any part or portion
of the Leased Premises or the Building; any water, wind, rain, or snow that may
leak into, or flow from, any part of the Leased Premises or the Building; any
acts or omissions of any other occupant of any space in the Building; any water,
gas, steam, fire, explosion, electricity or falling plaster; the bursting,
stoppage or leakage of any pipes, sewer pipes, drains, conduits, appliances,
sprinkler system, plumbing or other works; or any other similar cause.
(b) Parking Facilities. Except for damages resulting from the willful or
grossly negligent act or omission (where applicable law or this Lease imposes a
duty to act) of Landlord, its agents and employees, Landlord shall not be liable
for any damage or loss to any automobile (or any personal property therein)
parked in or on the Parking Facilities or any other part of the Land, or for any
injury sustained by any individual in, on or about the Parking Facilities or any
other part of the Land.
(c) Liability Limited to Landlord's Estate. Notwithstanding any provision
to the contrary, Tenant agrees that (i) the liability of Landlord and Landlord's
Partners for the satisfaction of any Claim shall be limited to Landlord's
Estate, (ii) no other properties or assets of Landlord, Landlord's Partners or
the officers, directors, agents or employees of Landlord or any of Landlord's
Partners shall be subject to levy, execution or other enforcement procedures for
the satisfaction of any Claim or any judgment based on a Claim, and (iii) if
Tenant acquires a lien on or interest in any other properties or assets of
Landlord, any of Landlord's Partners or any of the officers, directors, agents
or employees of Landlord or any of Landlord's Partners by judgment or otherwise,
Tenant shall promptly release such lien on or interest in such other properties
and assets by executing, acknowledging and delivering to Landlord an instrument
to that effect prepared by Landlord's attorneys. For purposes of this
subsection, (x) the term "Landlord's Estate" shall mean the estate and property
of Landlord in and to the Building and the Land , (y) the term "Claim" shall
mean any claim which Tenant may have against Landlord arising out of or in
connection with this Lease, the relationship of landlord and tenant or Tenant's
use of the Leased Premises, and (z) the term "Landlord's Partners" shall mean,
in the case of a Landlord which is a partnership, the Persons who are partners
in such partnership.
54
25. Estoppel Certificates.
Each party agrees from time to time, within 10 days after request therefor
by the other party, to execute, acknowledge and deliver to the other party a
statement in writing certifying to the other party, any Mortgagee, any assignee
of a Mortgagee, or any purchaser, of the Building or the Land, or both, or any
other Person designated by the other party, as of the date of such statement,
(i) that Tenant is in possession of the Leased Premises; (ii) that this Lease is
unmodified and in full force and effect (or, if there have been modifications,
that this Lease is in full force and effect as modified and setting forth such
modifications): (iii) whether or not there are then existing any set-offs or
defenses known to Tenant 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); (iv) the dates, if any, to which any Basic Rent or
Additional Charges have been paid in advance: (v) that the certifying party has
no knowledge of any uncured defaults on the part of Landlord under this Lease
(or, if the certifying party has knowledge of any such uncured defaults,
specifying the same in detail); (vi) that the certifying party has no knowledge
of any event having occurred that authorizes the termination of this Lease by
the other party (or, if the certifying party has such knowledge, specifying the
same in detail); (vii) the amount of any Security Deposit held by Landlord; and
(viii) any additional facts reasonably requested by the other party or any such
Mortgagee, assignee of a Mortgagee or purchaser
26. Surrender of Leased Premises.
(a) Possession of Leased Premises. Tenant shall, on or before the last day
of the Term, except as otherwise expressly provided elsewhere in this Lease,
remove all of Tenant's Personal Property and peaceably and quietly leave,
surrender and yield up to the Landlord the Leased Premises, free of
subtenancies, broom clean and in good order and condition except for reasonable
wear and tear, damage by fire or other casualty, or conditions requiring repair
by Landlord hereunder at Landlord's expense.
(b) Inspection of Leased Premises. At the time Tenant surrenders the Leased
Premises at the end of the Term, or within three days thereafter, Landlord and
Tenant, or their respective agents, shall make an inspection of the Leased
Premises and shall prepare and sign an inspection form to describe the condition
of the Leased Premises at the time of surrender.
27. Holding Over.
If Tenant shall hold over possession of the Leased Premises after the end
of the Term, Tenant shall be deemed to be occupying
55
the Leased Premises as a Tenant from month to month, at one hundred fifty
percent (150%) of the Basic Rent, adjusted to a monthly basis. Any hold over of
possession of all or any part of the Leased Premises after the end of the Term
shall be subject to all other conditions, provisions and obligations of this
Lease, including the obligation to pay Additional Charges, insofar as the same
are applicable, or as the same shall be adjusted, to a month to month tenancy.
28. Arbitration.
In any case in which it is provided by the terms of this Lease that any
matter shall be determined by arbitration, then such arbitration shall be in
accordance with the Commercial Arbitration Rules then in effect of the American
Arbitration Association. The arbitration proceeding shall be conducted in
Baltimore City, Maryland, by one arbitrator selected in accordance with the
Commercial Arbitration Rules. Judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof. All direct and
reasonable costs of the arbitration proceeding, including compensation of the
arbitrator but excluding any compensation paid to counsel, agents, employees,
and witnesses of either party, shall be borne equally by the parties or as the
arbitrator shall determine.
29. Parking.
Tenant shall be guaranteed parking within the Parking Facilities for 150
cars for the Term.
(a) All Parking Facilities shall either be paved, striped and fenced
surface lots, that comply with all applicable Legal Requirements and are
consistent with the Security Plan described on Exhibit G, or are contained
within structured deck or garage parking. If the Parking Facilities are on
surface lots, Tenant's spaces shall be consolidated (as opposed to dispersed) in
a cohesive grouping, and marked so as to minimize the chance of usage by
unauthorized parkers. Tenant may, at Tenant's expense require Landlord to
designate with customary signage the restriction of a portion of such spaces to
"Sylvan Visitor Parking Only" or similar wording.
(b) Attached as Exhibit I is a plat showing the Inner Harbor East
subdivision, and identifying the location of Parcels B, C and P. Tenant's
parking area shall initially be located on an undeveloped portion of Parcel P in
closest proximity to the Building. Landlord has the authority to provide parking
on this parcel. Tenant's parking area shall be designated as reserved for the
use of Tenant's employees and visitors. Tenant shall be responsible for assuring
that only authorized persons park in
56
Tenant's parking area. As Parcel P is developed, Landlord shall offer Tenant the
option of utilizing structured parking on Parcels B, C or P, where available, at
structured parking rates, as set forth below, or moving its parking area to
surface lots on undeveloped portions of Parcels B or C that meet the
requirements of paragraph (a) above. No parking spaces shall be relocated until
substitute space, meeting the standards of paragraph (a) above, have been
completed and are available for immediate use.
(c) In addition to the parking spaces on Parcels B, C or P described above,
Tenant shall have the option of renting, at the structured space rates described
below, up to 25 spaces within the structured parking to be constructed on
Parcels R and Q, some of which may be designated for "Sylvan Visitor Parking
Only" or similar wording.
(d) The rates to be paid by Tenant for parking during the Term shall be as
follows:
(i) During the first five years of the Lease, Tenant shall pay the
following Parking Fees for surface parking:
Cost Per Estimated*
Lease Year Space/Day Annual Cost
---------- --------- -----------
1 Free $ 0
2 $0.25 $ 9,375
3 $0.50 $18,750
4 $0.75 $28,125
5 $1.00 $37,500
*Assumes all 150 spaces are used 5 days per week, 50 weeks per year.
(ii) During the first five years of the Lease, Tenant shall pay the
following Parking Fees for structured parking:
Market Cap
For Structured
Lease Year Space/Day
---------- ---------
1 $5.00
2 $5.15
3 $5.30
4 $5.46
5 $5.63
(iii) For Lease Years 6 through 10, Tenant shall be provided with
discounted parking as follows:
57
150 spaces shall be offered to Tenant at a rate equal to 75% of the current
market rate but in no event shall the cost to Tenant exceed the following
rates. In the event the parties are unable to mutually agree on the market
rate, then same shall be determined by using the methodology set forth in
Section 35(d) hereof.
Market Cap Market Cap
for Surface for Structured
Lease Year Space/Day Space/Day
---------- --------- ---------
6 $2.90 $5.80
7 $2.99 $5.97
8 $3.07 $6.15
9 $3.17 $6.33
10 $3.26 $6.52
(e) Tenant agrees to use the Parking Facilities for the parking of
passenger automobiles and vans and for no other purposes.
(f) If Tenant rents more space in the Building or on the Inner Harbor
East site, Tenant shall be offered a proportionate increase in the number
of parking spaces, to the extent they are available, at market rates.
(g) Parking rates during any renewal periods shall be provided at
market rates.
30. Transfer of Landlord's Interest.
If the original Landlord named in this Lease, or any successor to the
original Landlord's interest in the Building, conveys or otherwise disposes of
its interest in the Land and/or the Building, then upon such conveyance or other
disposition all liabilities and obligations on the part of the original
Landlord, or such successor Landlord, as Landlord under this Lease, which accrue
after such conveyance or disposition shall cease and terminate and each
successor Landlord shall, without further agreement, be bound by Landlord's
covenants and obligations under this Lease, but only during the period of such
successor Landlord's ownership of the Building. A copy of the recorded deed
conveying the interest in the Building shall be satisfactory evidence of a
successor Landlord's interest.
31. Leasing Commissions.
Landlord and Tenant each represent and warrant to the other that, except
for the Leasing Broker, neither of them has employed or dealt with any broker
or finder in carrying on the negotiations
58
relative to this Lease. Landlord and Tenant shall each indemnify and hold
harmless the other from and against any claim or claims for brokerage or other
commission arising from or out of any breach of the foregoing representation and
warranty. Landlord recognizes that the Leasing Broker and the Cooperating Broker
are entitled to the payment of a commission for services rendered in the
negotiation and obtaining of this Lease, and Landlord has agreed to pay such
commission pursuant to a separate agreement, a copy of which is attached as
Exhibit J.
32. Recordation.
Tenant shall not record this Lease without the written consent of Landlord.
Upon Landlord's request or with Landlord's written consent, the parties agree to
execute a short form of this Lease for recording purposes, containing such items
as Landlord believes appropriate or desirable, the expense thereof to be borne
by Landlord. If such a short form of this Lease is recorded, upon the
termination of this Lease, Tenant shall execute, acknowledge, and deliver to
Landlord all right, title, and interest of Tenant in and to the Premises arising
from this Lease or otherwise.
33. Commercial Purposes.
The parties stipulate that the Premises is being leased exclusively for
business, commercial, manufacturing, mercantile, or industrial purposes within
the meaning of Section 8-110(a) of the Real Property Article of the Annotated
Code of Maryland, and that the provisions of Section 8-110(b) of such Article
(or any future statute) pertaining to the redemption of reversionary interests
under leases shall be inapplicable.
34. General Provisions.
(a) Binding Effect. The terms contained in this Lease shall be binding
upon, and shall inure to the benefit of, the parties hereto and, subject to the
provisions of Section 15, each of their respective legal representatives,
successors and assigns.
(b) Governing Law. It is the intention of the parties hereto that this
Lease shall be construed and enforced in accordance with the laws of the
jurisdiction in which the Building is located.
(c) Waivers. No failure by either party to insist upon the strict
performance of any term of this Lease or to exercise any right or remedy
consequent upon a breach thereof, and no acceptance by Landlord of full or
partial rent during the continuance of any such breach, shall constitute a
waiver of any such breach or of any such term. No term of this Lease to be kept,
observed or performed by Landlord or by Tenant, and no breach thereof, shall be
waived,
59
altered or modified except by a written instrument executed by Landlord or by
Tenant, as the case may be. No waiver of any breach shall affect or alter this
Lease, but each and every term of this Lease shall continue in full force and
effect with respect to any other then existing or subsequent breach thereof.
(d) Notices. Every notice, request, consent, approval or other
communication (hereafter in this subsection collectively referred to as
"notices" and singly referred to as a "notice") which Landlord or Tenant is
required or permitted to give to the other pursuant to this Lease shall be in
writing and shall be delivered personally or by overnight courier service or
shall be sent by certified or registered mail, return receipt requested,
first-class postage prepaid, if to Landlord, at Landlord's Notice Address, or if
to Tenant, at Tenant's Notice Address, or at any other address designated by
either party by notice to the other party pursuant to this subsection. Any
notice delivered to a party's designated address by (a) personal delivery, (b)
recognized overnight national courier service, or (c) registered or certified
mail, return receipt requested, shall be deemed to have been received by such
party at the time the notice is delivered to such party's designated address.
Confirmation by the courier delivering any notice given pursuant to this
subsection shall be conclusive evidence of receipt of such notice. Landlord and
Tenant each agrees that it will not refuse or reject delivery of any notice
given hereunder, that it will acknowledge, in writing, receipt of the same upon
request by the other party and that any notice rejected or refused by it shall
be deemed for all purposes of this Lease to have been received by the rejecting
party on the date so refused or rejected, as conclusively established by the
records of the U.S. Postal Service or the courier service. Any notice required
to be given within a stated period of time which is sent by certified or
registered mail shall be considered timely if postmarked before midnight of the
last day of such period.
(e) Entire Agreement. This Lease contains the final and entire agreement
between said parties, and they shall not be bound by any terms, statements,
conditions or representations, oral or written, express or implied, not
contained in this Lease. However, the terms of this Lease shall be modified, if
so required, for the purpose of complying with or fulfilling the requirements of
any Mortgagee secured by a first Mortgage that may now be or hereafter become a
lien on the Building, provided, however, that such modification shall not be in
substantial derogation or diminution of any of the rights of the parties
hereunder, nor increase any of the obligations or liabilities of the parties
hereunder.
(f) Jury Trial. Landlord and Tenant each hereby waives all right to trial
by jury in any claim, action, proceeding or counterclaim by either Landlord or
Tenant against the other on any
60
matters arising out of or in any way connected with this Lease, the relationship
of Landlord and Tenant and/or Tenant's use or occupancy of the Leased Premises.
(g) Venue. Tenant hereby waives any objection to the venue of any action
filed by Landlord against Tenant in any state or federal court in the
jurisdiction in which the Building is located, and Tenant further waives any
right, claim or power, under the doctrine of forum non conveniens or otherwise,
to transfer any such action filed by Landlord to any other court.
(h) Authority. If Tenant is a corporation, concurrently with the signing of
this Lease, Tenant shall furnish to Landlord certified copies of the resolutions
of its Board of Directors (or of the executive committee of its Board of
Directors) authorizing Tenant to enter into this Lease; and it shall furnish to
Landlord evidence (reasonably satisfactory to Landlord and its counsel) that
Tenant is a duly organized corporation in good standing under the laws of the
jurisdiction of its incorporation, is qualified to do business in good standing
in the jurisdiction in which the Building is located, has the power and
authority to enter into this Lease, and that all corporate action requisite to
authorize Tenant to enter into this Lease has been duly taken.
Landlord shall provide to Tenant similar evidence of Landlord's authority
to execute, deliver and perform in accordance with this Lease, and shall further
deliver to Tenant, prior to the full execution of this Lease, a copy of
Landlord's title insurance policy evidencing the ownership of the Land and the
liens, encumbrances and easements to which the Land is subject.
(i) Time of the Essence. Time is of the essence in the performance of all
Tenant's obligations under this Lease.
(j) Invalidity and Reduction of Charges. If any provision of this Lease
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not be affected thereby and the
remainder of this Lease shall not be affected by such holding and shall be fully
valid and enforceable. In the event any late charge, interest rate or other
payment provided herein exceeds the maximum applicable charge legally allowed,
such late charge, interest rate or other payment shall be reduced to the maximum
legal charge, rate or amount.
(k) Captions. The captions in this Lease are for convenience only and shall
not affect the interpretation of the provisions hereof.
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(l) No Partnership. This Lease is not intended to create a partnership or
joint venture between Landlord and Tenant in the conduct of their respective
businesses.
(m) Counterparts. This Lease may be executed in several counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
(n) Authority. If Tenant is a corporation, partnership or other legal
entity, the individual who executes and delivers this Lease on behalf of Tenant
represents and warrants to Landlord that he or she is duly authorized to do so.
(o) No Offer. The submission of an unsigned counterpart of this Lease to
Tenant shall not constitute an offer or option to lease the Leased Premises.
This Lease shall become effective and binding only upon the execution and
delivery by Landlord and Tenant.
(p) Survival. Tenant's obligations under Sections 3(b), 3(e), 3(g), 6(d),
6(g), 9(d), 9(e), 9(f), 9(g), 11(c), 11(e), 14(b), 15(d), 16(c), 24(c) and 26
and Landlord's obligations under Sections 6(g) and 12(e) shall survive the
expiration of the Term or the earlier termination of this Lease. Nothing herein
shall be construed to limit Tenant's right to collect any amounts owed to Tenant
under Sections 2A and 39(a) following the expiration of the Lease or the earlier
termination of this Lease.
35. Options to Extend Term.
(a) Renewal Options. Tenant shall have the option to renew the Term
provided in Section l(b) (the "Initial Term") for two additional periods of five
(5) years each (each of such additional periods being hereinafter referred to as
a "Renewal Period"). Each renewal option shall be exercisable by Tenant by
giving notice of the exercise of such renewal option to Landlord at least 365
days before the expiration of the Initial Term, in the case of the first renewal
option, or at least 365 days before the expiration of the first Renewal Period,
in the case of the second renewal option, except that if the Rent per Square
Foot for the first Lease Year in a Renewal Period has not been determined by the
last day on which the renewal option for such Renewal Period must be exercised
in accordance with the procedure set forth in subsection (d), the period of time
within which the Tenant may exercise the renewal option for such Renewal Period
shall be extended until 30 days after the determination of the Rent per Square
Foot for the first Lease Year in such Renewal Period. Time shall be of the
essence in connection with Tenant's exercise of the renewal options. Tenant may
not exercise the renewal option for either Renewal Period unless the Rent per
Square Foot for such
62
Renewal Period has previously been determined by agreement between Landlord and
Tenant or by appraisal in accordance with the procedure set forth in subsection
(d). Tenant may not exercise the renewal option for the second Renewal Period
unless Tenant has previously exercised the renewal option for the first Renewal
Period in accordance with the provisions of this subsection. Tenant may not
exercise the renewal option for either Renewal Period if an Event of Default has
occurred and is continuing. If (i) the last day on which Tenant has the right to
exercise a renewal option (the "Last Exercise Date"), occurs less than 365 days
before the expiration of the Initial Term, in the case of the first renewal
option, or less than 365 days before the expiration of the first Renewal Period,
in the case of the second renewal option, and (ii) Tenant does not exercise the
renewal option, the Term shall be extended until the last day of the month in
which the 365th day after the Last Exercise Date occurs; unless prior to the
Last Exercise Date, Tenant advises Landlord that it will not exercise its
applicable renewal option. For purposes of determining the Basic Rent payable
during the extension provided by the preceding sentence, the Rent per Square
Foot shall be 95% of the fair rental value of the Leased Premises as actually
determined by the procedure described in subsection (d) with respect to the
Renewal Period for which Tenant did not exercise its renewal option. If Tenant
timely exercises the options to renew this Lease in accordance with the
provisions of this Section, then the Term shall be extended accordingly. Except
as otherwise expressly provided in this Section, each Renewal Period shall be
upon the same terms, covenants and conditions set forth in this Lease with
respect to the Initial Term and Tenant's obligations to pay Tenant's
Proportionate Share of Operating Expenses pursuant to Section 3(b) shall
continue without interruption during each Renewal Period and the extension
provided for in the seventh sentence, except that there shall be no renewal
options after the second Renewal Period. All references in this Lease to the
"Term" shall include each Renewal Period for which Tenant shall have effectively
exercised its renewal option.
(b) Rent Per Square Foot During Renewal Periods.
(1) First Lease Year. If Tenant exercises the renewal option provided by
subsection (a) to extend the Initial Term for a Renewal Period, the Rent per
Square Foot for the first Lease Year in the Renewal Period shall be an amount
equal to 95% of the fair rental value (per square foot) of the Leased Premises
as of the first day of the Renewal Period as determined by mutual agreement
between Landlord and Tenant or by appraisal by one or more commercial real
estate brokers in the manner provided in subsection (d).
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(2) Balance of First Renewal Period. For each Lease Year (or part of a
Lease Year) thereafter during the Renewal Period, the Rent per Square Foot shall
be an amount equal to 102.15% of the Rent per Square Foot for the immediately
preceding Lease Year.
(c) [Omitted].
(d) Method of Determining Rent per Square Foot. If Tenant desires to
exercise the renewal option provided by subsection (a) to extend the Initial
Term for a Renewal Period, and if Landlord and Tenant are unable mutually to
agree on the Rent per Square Foot for the first Lease Year in such Renewal
Period at least 420 days before the end of the last Lease Year in the Initial
Term, in the case of the first renewal option, or at least 420 days before the
end of the last Lease Year in the first Renewal Period, in the case of the
second renewal option, Tenant shall notify Landlord of its desire to determine
the Rent per Square Foot by appraisal pursuant to this subsection not more than
450 days and not less than 420 days before the end of the last Lease Year in the
Initial Term or the last Lease Year in the first Renewal Period, as the case may
be, and in such notice Tenant shall designate the broker appointed by it. The
giving of such notice shall not constitute an exercise of the option by Tenant.
Within 20 days thereafter, Landlord shall, by notice to Tenant, designate a
second broker. If Landlord does not so designate a second broker within the
20-day period, the first broker appointed by Tenant shall proceed to make his
valuation, in which case the fair rental value of the Leased Premises for the
first Lease Year in the Renewal Period shall be the amount determined by the
first broker. Each broker shall make an independent determination of the fair
rental value of the Leased Premises for the first Lease Year in the applicable
Renewal Period. If the two brokers so appointed agree on the fair rental value
of the Leased Premises within 15 days after the appointment of the second
broker, the fair rental value of the Leased Premises for the first Lease Year in
the applicable Renewal Period shall be the amount determined by them. If the two
brokers so appointed do not agree on the fair rental value of the Leased
Premises within 15 days after the appointment of the second broker, but if the
difference between the fair rental value determined by each broker is not more
than $1.00 per square foot, the fair rental value of the Leased Premises for the
first Lease Year in the applicable Renewal Period shall be an amount equal to
the quotient obtained by dividing the sum of the fair rental value determined by
each broker by two. If the two brokers so appointed do not agree on the fair
rental value of the Leased Premises, and if the difference between the fair
rental value determined by each broker is more than $1.00 per square foot, the
two brokers shall jointly appoint a third broker. If the two brokers so
appointed shall be unable, within 15 days after the appointment of the second
broker, either (i) to
64
agree on the fair rental value of the Leased Premises (or to disagree on such
value with a difference of $1.00 or less per square foot) or (ii) to agree on
the appointment of a third broker, they shall give written notice of such
failure to agree to the parties, and, if the parties fail to agree upon the
selection of a third broker within 10 days after the brokers appointed by the
parties give such notice, then within 10 days thereafter either of the parties
upon notice to the other party may request such appointment by the then
President of the Baltimore City Board of Realtors (or any organization successor
thereto), or in his failure to act, may apply for such appointment to the
Circuit Court for Baltimore City, Maryland. If a third broker is appointed, he
shall make his valuation within 15 days after his appointment and the fair
rental value of the Leased Premises for the first Lease Year in the applicable
Renewal Period shall be an amount equal to the quotient obtained by dividing the
sum of the fair rental values determined by the two brokers who were closest to
each other in amount, by two.
(e) Qualifications of Brokers and Method of Valuation. Each broker
appointed pursuant to subsection (d) shall be an individual of recognized
competence who has had a minimum of 10 years' experience in the leasing of
commercial office space in the metropolitan Baltimore, Maryland area. All
valuations of the fair rental value of the Leased Premises shall be in writing
and shall be expressed in terms of an annual rent per square foot of Rentable
Area. Each broker shall determine the fair rental value of the Leased Premises,
as a whole, as of the first day of the first Lease Year in each Renewal Period
on the basis of all relevant factors affecting fair rental value, including the
actual Operating Expenses for the calendar year ending during the Lease Year
immediately preceding the Renewal Period. The party appointing each broker shall
be obligated, promptly after receipt of the valuation report prepared by the
broker appointed by such party, to deliver a copy of such valuation report to
the other party in the manner provided elsewhere in this Lease for the giving of
notices. If a third broker is appointed, the third broker shall be directed, at
the time of his appointment, to deliver copies of his valuation report, promptly
after its completion, to Landlord and Tenant in the manner provided elsewhere in
this Lease for the giving of notices.
(f) Expenses of Brokers. The expenses of each of the first two brokers
appointed pursuant to subsection (d) shall be borne by the party appointing such
broker. The expenses of the third broker appointed pursuant to subsection (d)
shall be paid one-half by Landlord and one-half by Tenant. Notwithstanding the
foregoing provisions, if Tenant gives a notice to Landlord pursuant to
subsection (d) to determine the fair rental value of the Leased Premises for a
Renewal Period by appraisal, and if, after the fair
65
rental value of the Leased Premises for the first Lease Year in such Renewal
Period has been determined by appraisal, Tenant does not exercise its option to
extend the Term for such Renewal Period within the time required by subsection
(a), Tenant shall reimburse Landlord, on demand, for all expenses of Landlord's
appraisal and the third appraisal, if any.
36. Expansion Options.
(a) During the six month period following the date of this Lease, Tenant
shall have the option of leasing additional space in the Building under the same
terms and conditions, including Basic Rent, as are set forth in this Lease. In
addition, during such six month period, as to any unleased space and until such
space in the Building is initially leased, as Landlord receives an offer or
proposal to rent space in the Building which Landlord wishes to accept, Landlord
shall notify Tenant and Tenant shall have five (5) business days to notify
Landlord in writing that it wishes to lease the space under the same terms and
conditions including Basic Rent as are set forth in this Lease.
(b) After the end of the six month period following the date of this Lease,
as to any unleased space and until such space in the Building is initially
leased, as Landlord receives an offer or proposal to rent space in the Building
which Landlord wishes to accept, Landlord shall notify Tenant and Tenant shall
have five (5) business days to notify Landlord in writing that it wishes to
lease the space at fair rental value pursuant to Section 35. All concessions
relating to tenant improvements shall be at market rates.
(c) If Tenant has given Landlord twelve (12) month's prior written notice
of its intent to lease additional space in the Building, Tenant shall have the
option of renting an additional 5,000 square feet in the Building after the
third Lease Year commencing upon the termination of the initial short term
leases entered into by Landlord, if any, but in no event later than twelve (12)
months after the end of the third Lease Year. If Tenant exercises its option to
rent the additional 5,000 contiguous square feet and if Tenant has given
Landlord twelve (12) months prior written notice at the end of the fourth Lease
Year, Tenant shall have the option to lease an additional 10,000 contiguous
square feet after the fifth Lease Year upon the termination of the initial short
term leases entered into by Landlord, if any, but in no event later than twelve
(12) months after the end of the fifth Lease Year. The Basic Rent for any
additional space in the Building leased by Tenant shall be an amount equal to
fair rental value as determined pursuant to Section 35 and all concessions
relating to Tenant improvements shall be at market rates. All other terms and
conditions of this Lease shall apply. If Tenant exercises its
66
option to rent additional space, the space shall be made available to Tenant at
the termination of any pre-existing short term leases entered into by Landlord
for the space.
37. Roof Options. Tenant shall have an ongoing right of first negotiation
for space on the Roof as long as it is available. Tenant may rent space on the
roof of the Building for uses approved by Landlord in advance at market rates.
Notwithstanding the foregoing sentences, upon Tenant's written request, Landlord
shall make available to Tenant, without any rental or other charge, except as
provided below, an area on the Roof measuring approximately twenty (20) feet by
twenty (20) feet, together with an easement thereto, for the purposes of the
installation, operation and maintenance of a receiving satellite dish and
communications equipment in such location as may be reasonably required by
Tenant. The size and type of such satellite dish and equipment shall be at the
sole discretion of Tenant subject only to applicable governmental regulations.
The installation and operation of the satellite dish and equipment shall be at
the sole cost and expense of Tenant and Tenant shall promptly repair any damage
to the Roof resulting from the installation and operation of such satellite dish
and equipment.
Tenant shall also pay reasonable administrative expenses incurred by
Landlord, if any, arising out of or in connection with the installation and
operation of such satellite dish and equipment. If as a direct cause of Tenant's
operation of such satellite dish and equipment, Landlord is unable to lease all
or any part of the remainder of the Roof to prospective tenants, then Tenant
shall be obligated to pay rent on that portion of the Roof it occupies at market
rates. Landlord further agrees that it will not lease any other portion of the
Roof to any tenant or permit any tenant to use the Roof in a manner which will
materially and adversely affect Tenant's use of the Roof for the purposes
intended hereby. Tenant may terminate its use of the Roof at any time during the
Term, or any renewals, upon written notice to Landlord. Following such notice,
Tenant shall remove the satellite dish and equipment and promptly repair any
damage to the Roof resulting from such removal.
38. Security Plan. Upon the Lease Commencement Date, Landlord shall
implement a security plan for the Building and Parking Facilities that includes
the items listed on Exhibit G (the "Security Plan"). The Security Plan shall not
be materially revised by Landlord without obtaining the prior written consent of
the Tenant, which shall not be unreasonably withheld.
67
39. Tenant's Allowance.
(a) Landlord shall give Tenant an allowance to cover the cost of Tenant's
Work in an amount equal to the product obtained by multiplying $15.00 by the
Rentable Area, or a total allowance of 8750,000 ("Tenant's Regular Allowance").
(b) Landlord shall give Tenant an additional allowance ("Tenant's Special
Allowance") in an amount equal to $350,000 which may be used to reimburse Tenant
for any direct costs paid or incurred by Tenant in designing, preparing and
completing the Leased Premises including, without limitation, the purchase of
furniture and equipment. Tenant's Regular Allowance and Tenant's Special
Allowance are collectively referred to herein as "Tenant's Allowance. " Tenant
shall not be entitled to receive any part of the Tenant's Allowance which is not
used.
(c) Tenant shall have the right, by written request given to Landlord at
any time or from time to time within ninety (90) days after completion of
Tenant's Work, to require Landlord to disburse to Tenant, by check, Tenant's
Allowance, as needed by Tenant to pay for the costs and expenses of the type
referred to in this subsection. Tenant agrees to furnish to Landlord copies of
bills and invoices supporting each request for funds pursuant to this subsection
at the time such request is made. Landlord shall pay the amount requested by
Tenant in writing, on the 15th day of the month after the month in which
Landlord receives Tenant's written request, except that if Landlord receives
Tenant's written request on or after the 25th day of a month, Landlord shall not
be required to make the payment to Tenant until the 15th day of the second
succeeding month.
(d) During each of the first ten Lease Years Tenant shall pay as Additional
Rent, ten percent (10%) of the amount paid by Landlord to Tenant as Tenant's
Special Allowance above plus interest at the rate of twelve percent (12%). Such
sum shall be paid in equal monthly installments, in advance, commencing on the
Lease Commencement Date, and continuing thereafter on the first day of each and
every month thereafter for a period of one hundred and twenty (120) months.
40. City Approvals. Both parties acknowledge that Landlord has not obtained
all Baltimore City approvals relating to the execution of the Ground Lease
referenced in Section 20(c) herein. In the event such approvals are not obtained
by February 29, 1996, this Lease shall be null and void. Landlord shall
diligently pursue receipt of the appropriate City approvals.
41. Tenant's Right to Terminate. In the event Landlord has not completed
construction of the Building for whatever reason and
68
regardless of force majeure by April 1, 1997, Tenant shall have the right, at
its discretion, to terminate this Lease Agreement upon written notice to
Landlord.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be signed
by their duly authorized partners or officers as of the day and year first above
written.
Witness: Landlord
Harbor East Parcel G - Office, LLC
By: Presidential Entertainment Associates,
LLC, Member
By: Xxxxxxxxx/Xxxxxxxx Family Partnership,
LLP, Member
/s/ Xxxx Xxxxxxxxxx By: /s/ Xxxxxxx Patarakis (SEAL)
------------------- ---------------------------------
Name: Xxxxxxx Pararakis
Partner
/s/ Xxxx Xxxxxxxxxx By: /s/ Xxxxxxxx Xxxxxxxx (SEAL)
------------------- ---------------------------------
Name: Xxxxxxxx Xxxxxxxx
Partner
By: Xxxxxxxxx/Tsakalos Family Partnership,
LLP, Member
/s/ Xxxx Xxxxxxxxxx By: /s/ Xxxxxxx Patarakis (SEAL)
------------------- ---------------------------------
Name: Xxxxxxx Pararakis
Partner
/s/ Xxxx Xxxxxxxxxx By: /s/ Xxxxxxxx Xxxxxxxx (SEAL)
------------------- ---------------------------------
Name: Xxxxxxxx Xxxxxxxx
Partner
69
Witness: Tenant
Sylvan Learning Systems, Inc.
/s/ Illegible By: /s/ Xxxxxxx X. Xxxxxx
------------------- ---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
The undersigned joins herein to acknowledge that it will make Parcels P, B
and C available to Landlord to satisfy the surface parking requirements
described in Section 29(b) hereof.
Harbor East Limited Partnership
By: Xxxxxxxxx/Xxxxxxxx Family Partnership
LLP
By: /s/ Xxxxxxxx Xxxxxxxx (SEAL)
---------------------------------
Name: Xxxxxxxx Xxxxxxxx
By: /s/ Xxxxxxx Patarakis (SEAL)
---------------------------------
Name: Xxxxxxx Pararakis
70
EXHIBIT A
FLOOR PLAN LEVELS 3 & 0
XXXXX XXXXXX XXXX
XXXXXXXXX, XXXXXXXX
PARCEL G
EXHIBIT A
FLOOR PLAN LEVEL 0
XXXXX XXXXXX XXXX
XXXXXXXXX, XXXXXXXX
PARCEL G
EXHIBIT B
DESIGN AND CONSTRUCTION AGREEMENT
THIS DESIGN AND CONSTRUCTION AGREEMENT (this "Agreement") is attached to
and made a part of that certain Lease Agreement dated August _, 1995 (the
"Lease") by and between Inner Harbor East Parcel G - Office LLC ("Landlord") and
Sylvan Learning Systems, Inc.
ARTICLE 1
GENERAL
1.1 Purpose. This Agreement sets forth the agreement of the parties for the
design and construction of an office building and other improvements (the
"Project") on the site located on Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, and
more particularly described in Exhibit F to the Lease (the "Project Site"). The
Project will be comprised of the preparation and improvement of the Project Site
and the construction of the Base Building (hereinafter defined), for which
Landlord shall be responsible for the design and construction as more
particularly set forth herein, and the Tenant Work, for which Tenant shall be
responsible for the design and construction as more particularly set forth
herein.
1.2 Scope of Work. The scope of work to be performed pursuant to this Agreement
includes the development and preparation of Construction Documents (as
hereinafter defined) for the Project and the performance of all work thereunder
and reasonably inferable therefrom in order to complete the Project as a
fully-equipped, fully-functioning, first-class office building and related
improvements.
1.3 Landlord's Representative. Landlord hereby designates Xxxxx XxXxxxx to be
its designated representative for purposes of contact between Landlord and
Tenant in connection with the design and construction of the Project, including,
without limitation, the giving of notices and approvals ("Landlord's
Representative"). Landlord shall have the right, by timely written notice given
to Tenant in the manner provided in the Lease for the giving of notices, to
remove the existing Landlord's Representative and to appoint another individual
to act as Landlord's Representative. However, no more than one (1) person shall
act as Landlord's Representative at any given time. Landlord agrees that
Landlord's Representative shall have the authority to bind Landlord with respect
to all matters for which the consent or approval of Landlord is required or
permitted pursuant to this Agreement and that all consents, approvals and
waivers given in writing by Landlord's Representative shall bind Landlord and
may be relied
upon by Tenant. Landlord hereby ratifies all actions and decisions with respect
to the design and construction of the Project that Landlord's Representative has
taken or made prior to the execution of the Lease.
1.4 Tenant's Representative. Tenant hereby designates Xxxx Xxxx to be its
designated representative for purposes of contact between Tenant and Landlord in
connection with the design and construction of the Project, including, without
limitation, the giving of notices and approvals. Tenant shall have the right, by
timely written notice given to Landlord in the manner provided in the Lease for
the giving of notices, to remove the existing Tenant's Representative and to
appoint another individual to act as Tenant's Representative. However, no more
than one (1) person shall act as Tenant's Representative at any given time.
Tenant agrees that Tenant's Representative shall have the authority to bind
Tenant with respect to all matters for which the consent or approval of Tenant
is required or permitted pursuant to this Agreement and that all consents,
approvals and waivers given in writing by Tenant's Representative shall bind
Tenant and may be relied upon by Landlord. Tenant hereby ratifies all actions
and decisions with respect to the design and construction of the Project that
Tenant's Representative has taken or made prior to the execution of the Lease.
ARTICLE 2
DEFINITIONS
2.1 The following words and phrases used in this Agreement shall have the
respective definitions ascribed to them:
Base Building: The building to be constructed pursuant to this Agreement
and to Annex 1, excluding interior finishing of the space for Tenant's use and
occupancy but including toilet rooms, telephone closets, mechanical equipment
rooms (complete with air handling equipment and electrical closets with
high-voltage and low-voltage panel boards and transformers), elevators and
stairwells, main lobby, the Parking Structure (hereinafter defined), preliminary
and final site work, landscaping and all other improvements described in the
Base Building Construction Documents (as hereinafter defined) and all other
improvements required in order to obtain a non-residential use permit for the
building (exclusive of the Tenant Work).
Base Building Construction Contract: The contract between Landlord and
Landlord's Contractor for the performance of the Base Building Work (hereinafter
defined).
Base Building Construction Documents: The final construction drawings and
specifications for the Base Building, approved by Landlord and by appropriate
governmental authorities, and all
2
addenda issued prior to and all modifications issued after the execution of the
Base Building Construction Contract.
Base Building Work: All items of work, materials, equipment and
installation (including Project site work) necessary to the construction and
completion of the Base Building in accordance with the Base Building
Construction Documents.
Date of Substantial Completion: The date on which the Base Building is
substantially complete as evidenced by (i) a Certificate of Substantial
Completion issued by Landlord's Architect and (ii) a Non-Residential Use Permit
(shell only) for the Base Building issued by appropriate local government
authorities of Baltimore City.
Floor Ready Condition: The condition of the Leased Premises when it meets
the standards set forth in Annex 2 of this Agreement so that the Leased Premises
are ready to receive Tenant Work.
Landlord's Architect: Xxxxxx/Xxxxxx/Xxxxxx, the architect selected by
Landlord to develop and prepare the Base Building Construction Documents. For
the purposes of this Agreement, the term "Landlord's Architect" shall include
Xxxxxx/Xxxxxx/Xxxxxx and all other engineers, architects, designers and/or
consultants retained by either Landlord or Xxxxxx/Xxxxxx/Xxxxxx in the execution
of the Base Building Work pursuant to this Agreement and their respective
subcontractors and subconsultants.
Landlord's Contractor: The contractor or contractors selected by Landlord.
Parking Structure: The parking structure to be constructed by the Landlord,
as part of the Base Building.
Tenant Construction Delay: The cumulative total of all delays after the
execution of this Lease which are due solely to the acts or omissions of Tenant,
its agents, employees or contractors. Tenant Construction Delay shall include,
without limitation, delays in the performance of Base Building Work caused by
the performance of Tenant Work.
Tenant Work: All interior finish work which is not included in the Base
Building Work but which is required to complete the Base Building for Tenant's
use and occupancy for the purposes permitted by the Lease.
Tenant Work Construction Contract: The contract between Tenant and Tenant's
Contractor for the performance of the Tenant Work.
Tenant Work Construction Documents: The final construction drawings and
specifications for the Tenant Work.
3
Tenant's Architect: As identified in Paragraph 3.1 of this Agreement. For
purposes of this Agreement, the term "Tenant's Architect" shall be deemed to
include all architects, engineers designers, and consultants retained by either
Tenant or Tenant's Architect in the execution of the design of the Tenant Work
pursuant to this Agreement and their respective subcontractors and
subconsultants.
Tenant's Contractor: The contractor or contractors selected by Tenant to
perform the Tenant Work.
2.2 Other Terms. Other capitalized terms used in this Agreement, unless
otherwise expressly defined in this Agreement, shall have those definitions
respectively ascribed to them in this Lease.
ARTICLE 3
CONSTRUCTION DOCUMENTS
3.1 Tenant Work Construction Documents. Landlord and Tenant agree that Tenant
has the unconditional right, without penalty, to select the architect of its
choice for the preparation of the Tenant Work Construction Documents (the
"Tenant's Architect"). Tenant shall be responsible for the timely preparation
and completion of the Tenant Work Construction Documents.
3.2 The Tenant Work Construction Documents shall set forth, among other things,
the proposed configuration of the Tenant Work, the materials to be used in the
construction thereof and all appropriate electrical, plumbing, mechanical and
finish specifications and schedules.
3.3 Tenant shall deliver to Landlord, for its review and comment, preliminary
plans and specifications of the construction documents for the Tenant Work.
Landlord shall review and approve the preliminary plans and specifications to
assure that the Tenant Work is consistent with the Base Building Construction
Documents. Within five (5) business days after its receipt of preliminary plans
and specifications of the construction documents for the Tenant Work, Landlord
shall provide to Tenant its written comments to the documents. Tenant shall take
complete responsibility for ensuring that the Tenant Work Construction Documents
comply with all applicable legal requirements. Tenant shall not be entitled to a
postponement of the Lease Commencement Date for any delay in the commencement or
completion of the Tenant Work caused by the failure of the Tenant Work
Construction Documents to comply with applicable legal requirements.
3.4 After Tenant revises the Tenant Work Construction Documents based on
Landlord's comments, Tenant shall submit to Landlord, for its timely review and
comment, final plans and specifications for the Tenant Work. Within five (5)
business days of its receipt of final plans and specifications, Landlord shall
confirm to Tenant in
4
writing its approval or give Tenant any additional comments. The failure of
Landlord to review or comment on the construction documents for the Tenant Work
in a timely manner shall not operate as a bar to Tenant from approving final
construction documents for the Tenant Work and submitting them to appropriate
governmental authorities for approval. The government-approved final
construction documents for the Tenant Work shall be the "Tenant Work
Construction Documents. " Tenant shall deliver to Landlord two (2) complete sets
of Tenant Work Construction Documents promptly after Tenant receives the
government permits to construct the Tenant Work.
3.5 Landlord's comments or failure to comment on any of the documents prepared
by Tenant pursuant to the is Article 3 shall not be deemed to be an approval of
or admission as to the legality or accuracy of the work described in such
documents or as to the adequacy of the design or the coordination of such work.
ARTICLE 4
PERFORMANCE OF THE WORK GENERALLY
4.1 Cooperation of the Parties. Landlord and Tenant agree to cooperate with one
another in the performance of their respective construction obligations for the
Project pursuant to this Agreement and specifically relating to those portions
of the Base Building construction that may affect Tenant's construction costs.
Landlord and Tenant each agree to work expeditiously and in good faith with the
other and with the respective contractors, architects and others to complete the
Base Building Work and the Tenant Work in a timely manner in accordance with the
respective construction documents and to cause their respective architects,
contractors and employees to do the same. Landlord shall respond to requests for
information from Tenant within ten (10) days. Landlord shall provide Tenant with
a detailed schedule for its Base Building construction. Notwithstanding this
mutual cooperation, Landlord shall not have any right to direct Tenant's
Architect, Tenant's Contractor or Tenant's employees and Tenant shall not have
any right to direct Landlord's Architect, Landlord's Contractor or Landlord's
employees.
4.2 Coordination of Contractors. Landlord shall properly coordinate the Base
Building Work with the Tenant Work and shall ensure that the Base Building
Construction Contract provides for such opportunity. Tenant shall properly
coordinate the Tenant Work with the Base Building Work and shall ensure that the
Tenant Work Construction Contract provides for such opportunity. Tenant shall
ensure that the Tenant Work Construction Contract includes appropriate
provisions to the effect that, if any part of the Tenant Work depends on the
proper execution or results of the Base Building Work, then Tenant's Contractor
shall inspect the Base Building Work and shall promptly report to Tenant (with
copies to Landlord and to Landlord's Contractor) any defects it discovers in
5
the Base Building Work that render it unsuitable for the proper execution of the
Tenant Work. Landlord shall construct the Base Building in accordance with the
Base Building Construction Documents.
4.3 Landlord shall cause Landlord's Contractor to perform the Base Building Work
in a manner that does not unreasonably interfere with the performance by
Tenant's Contractor of the Tenant Work. Tenant shall cause Tenant's Contractor
to perform the Tenant Work in a manner that does not unreasonably interfere with
the performance by Landlord's Contractor of the Base Building Work.
4.4 Construction Contract Provisions. The Base Building Construction Contract
and the Tenant Work Construction Contract shall each include, without
limitation, sufficient and appropriate provisions for: (i) reasonably detailed
and unambiguous procedures for the administration of change orders and
construction change directives, (ii) in the case of the Base Building
Construction Contract, express warranties that the work performed under the Base
Building Construction Contract is warranted to be free from defects in materials
and workmanship for a period of at least one (1) year from the Date of
Substantial Completion, (iii) insurance in forms and amounts customary for the
construction of a first-class office building in Baltimore, Maryland (iv) the
performance of work under the respective construction contracts and subcontracts
in accordance with the respective construction documents and in accordance with
the standards of workmanship and materials for a first-class office building in
Baltimore, Maryland, (v) the timely payment of sums due under the respective
construction contract and the prompt discharge of all liens and claims of lien,
(vi) reasonable measures for conducting operations in a manner which guards
against damage to property and injury to persons, (vii) the coordination of work
by separate contractors, (viii) in the case of the Tenant Work Construction
Contract, the agreement that Tenant's Contractor shall not file a mechanic's or
materialman's lien against Landlord's interest in the Land, the Base Building,
or both, and shall limit its lien rights to Tenant's Leasehold Estate, and (ix)
in the case of the Base Building Construction Contract, the agreement that
Landlord's Contractor shall not file a mechanic's or materialman's lien against
all or part of the Tenant Work but shall limit its lien rights to Landlord's
interest in the Land, the Base Building or both.
6
ARTICLE 5
PERFORMANCE OF THE TENANT WORK
5.1 Tenant Allowances. Landlord shall provide Tenant with a construction
allowance as set forth in Section 39 of the Lease. The Tenant Regular Allowance
and the Tenant Special Allowance shall be collectively referred to as the
"Tenant Allowances. "
5.2 Tenant shall be responsible for all costs to design and perform the Tenant
Work in excess of the respective Tenant Allowances, except for damage to the
Tenant Work caused by Landlord, Landlord's Contractor or their respective
employees or agents.
5.3 Tenant Work Construction Contract. The Tenant Work shall be constructed in
accordance with the Tenant Work Construction Documents. Landlord and Tenant
agree that Tenant has the unconditional right, without penalty, to select the
contractor of its choice to perform the Tenant Work ("Tenant's Contractor"). All
Tenant Work shall be constructed by Tenant's Contractor under a written
construction contract between Tenant and Tenant's Contractor (the "Tenant Work
Construction Contract"). Tenant agrees that the bid documents for the Tenant
Work shall include the standards of Floor Ready Condition. Tenant reserves its
right to substitute contractors and shall give reasonable notice of any such
substitution to Landlord.
5.4 Government Permits and Approvals. Tenant shall be responsible for timely
obtaining, from appropriate governmental authorities, all licenses, permits and
approvals necessary for the proper performance of the Tenant Work and for the
cost of such licenses, permits and approvals. Landlord shall cooperate with
Tenant in obtaining such licenses, permits and approvals.
5.5 Tenant's Cost Obligations. Tenant shall be responsible for all costs
associated with removing or discharging liens or claims of lien asserted by
Tenant's Architect or Tenant's Contractor.
5.6 Landlord Right of Access and Inspection, Progress of the Work. Landlord and
Landlord's Architect shall have the right of access to inspect the Tenant Work
and Tenant shall allow Landlord and Landlord's Architect free and unrestricted
access to the Tenant Work for such inspections, provided such access and
inspection do not unreasonably interfere with or delay the performance of the
Tenant Work. Landlord, Tenant, Tenant's Architect, Landlord's Architect and,
where appropriate, Landlord's Contractor and Tenant's Contractor shall meet on a
regular basis to discuss the progress of the construction of the Tenant Work and
its coordination with the Base Building Work. Tenant and Landlord shall hold
such meetings more frequently when needed.
5.7 Utilities; Protection of Work, Clean-up. Tenant shall make arrangements with
Landlord for temporary water, power and other
7
utilities and connections therefor and the use of the porta-sans for the Base
Building during the period when the Tenant Work is being performed. Landlord
shall pay the cost of temporary utilities up to the date that the Leased
Premises are delivered to Tenant in Floor Ready Condition for its construction
of Tenant Work; thereafter, Tenant shall be responsible for the cost of such
utilities in the Leased Premises. Tenant shall be responsible for the removal
(including cost) of trash and construction debris resulting from the performance
of Tenant Work. Tenant shall take all reasonable steps to protect the Base
Building Work from and against damage arising out of its performance of the
Tenant Work. Landlord shall take all reasonable steps to protect the Tenant Work
from and against damage arising out of its performance of Base Building Work.
Upon completion of the Tenant Work, Tenant shall remove all surplus materials,
debris and rubbish of whatever kind remaining in any part of the Base Building
brought in or created in the performance of the Tenant Work. Tenant shall make,
whether directly or through Landlord, all payments when due for the Tenant Work,
whether to contractors or others. When the Tenant Work is completed, Tenant
shall furnish to Landlord one (1) set of "as-built" plans of mylars and one (1)
set of specifications for the Tenant Work prepared and sealed by Tenant's
Architect.
5.8 Neither Tenant nor Tenant's Contractor shall store materials required for
performance of the Tenant Work in any part of the Base Building that is leased
to another tenant. Landlord shall permit Tenant and Tenant's contractors use of
unoccupied portions of the Project for field offices, staging and construction
materials storage at no charge.
ARTICLE 5A
LANDLORD'S WORK
5A.1 Landlord shall prepare the Project Site and construct the Base Building in
a good and workmanlike manner, with reasonable diligence, in accordance with the
Base Building Construction Documents and to the standard set forth in Section
1.2.
5A.2 Landlord will give Tenant, to the extent available, the benefit of all
warranties relating to equipment installed in the Leased Premises.
5A.3 Tenant Right of Access. Tenant and Tenant's Architect shall have the right
of access to inspect the Base Building and Landlord shall allow Tenant and
Tenant's Architect free and unrestricted access to the Base Building for such
inspections, provided such access and inspection do not unreasonably interfere
with or delay the performance of the Base Building Construction.
8
5A.4 Tenant shall have thirty (30) days to give notice to Landlord of any
defects in the Base Building construction. Subject to Unavoidable Delays,
Landlord shall have sixty (60) days from the date of receipt of notice from
Tenant to correct such defects.
ARTICLE 6
DELIVERY OF LEASED PREMISES
6.1 Prior to the Date of Substantial Completion of the Base Building, Landlord
shall deliver possession of the Leased Premises to Tenant in Floor Ready
Condition, except for touch-up, minor finish and similar so-called "punchlist"
items that do not prevent Tenant from beginning to perform Tenant Work in the
Leased Premises. When Landlord believes that the Base Building Work on the
Leased Premises is about to be completed, Landlord, Tenant, Tenant's Architect
and Tenant's Contractor shall walk through and make a visual inspection of the
Leased Premises, and Landlord's Architect and Tenant's Architect shall jointly
prepare a schedule of "punchlist" work for the Leased Premises within 30 days of
the delivery of the Leased Premises. Landlord shall provide five (5) Business
Days' oral or written notice to Tenant of the time when such inspection shall
occur.
6.2 Subject to Unavoidable Delays, within thirty (30) calendar days after the
receipt by Landlord's Architect of the punchlist for the Leased Premises,
Landlord shall cause Landlord's Contractor to complete all items identified in
the punchlist.
ARTICLE 7
DISPUTE RESOLUTION
7.1 Cooperation of the Architects. Landlord's Architect and Tenant's Architect
shall each have the affirmative duty to consult with one another and to
cooperate in rendering a determination under the Base Building Construction
Contract or the Tenant Work Construction Contract whenever such determination
affects both the Base Building Work and the Tenant Work. Landlord and Tenant
shall include provisions to such effect in their respective contracts with the
architects.
7.2 Dispute Resolution. If the parties to this Agreement are unable to resolve
their differences through negotiation, then such dispute(s) shall be resolved
through arbitration pursuant to the Construction Industry Arbitration Rules of
the American Arbitration Association then in effect, as modified by the terms of
this Article 7. Arbitration shall be conducted at a location in Baltimore,
Maryland to be agreed upon by the parties. Disputes under the respective
architect contracts and construction contracts shall be resolved in accordance
with the dispute resolution provisions set forth in such contracts.
9
7.3 Selection of Arbitrators. Arbitration shall be conducted by three (3)
arbitrators with each party to this Agreement selecting one (1) arbitrator each
and the two selected arbitrators then selecting the third arbitrator.
7.4 Limited Discovery. Prior to the commencement of the arbitration, each party
shall be entitled to take limited discovery, including the rights to request a
reasonable number of documents, to serve no more than twenty (20)
interrogatories and to take no more than three (3) depositions. This limited
discovery shall be conducted in accordance with the Federal Rules of Civil
Procedure, which shall be interpreted and enforced by the arbitrator.
7.5 Hearing and decision. The arbitrators shall, as soon as practicable and upon
fifteen (15) days' written notice to each party, conduct an arbitration hearing
and proceeding on the merits of the dispute and thereafter shall issue a written
decision citing the bases for the decision, including findings of fact and
conclusions of law.
7.6 Costs and Expenses. Each party shall bear its own costs and expenses arising
out of any arbitration and shall bear equally the costs, expenses and fees of
the arbitrator, unless the arbitrator determines otherwise.
7.7 Consolidation and Joinder. Any arbitration arising out of or relating to
this Agreement or breach thereof may include by consolidation, joinder or other
manner any other Person or Persons which or whom a party to the arbitration
reasonably believes to be substantially involved in a common question of fact or
law.
7.8 Enforcement. The agreement to arbitration shall be specifically enforceable
under prevailing arbitration law. Any award rendered by the arbitrator(s) shall
be final and enforceable by any party to the arbitration, and judgment may be
rendered upon it in accordance with applicable law in a court of competent
jurisdiction.
10
ANNEX I
HARBOR EAST BUILDING SHELL DEFINITION
AUGUST 9, 1995
BUILDING SHELL
--------------
1. The building standard HVAC system capacity is 310 gross square feet per
ton.
2. The building Standard HVAC system shall be as follows:
A. VAV's will be installed at a ratio of 1 VAV per 1500 square feet. Each
VAV will have & thermostat.
B. The Building Standard system does not extend beyond the VAV's and does
not include flex duct, spin outs or low pressure duct work and
diffusers.
C. VAV's will be located to accommodate the tenant's plan provided that
all final tenants plans are issued to us in accordance with a mutually
agreed upon schedule such that construction coordination and progress
is not impacted.
3. The Building Standard, sprinkler system will be installed at a density on
average of one head, per 150 rentable square feet. Coordination of
sprinkler installation with the tenant plans will be provided if the plans
are issued in advance of the sprinkler design. Any head relocation or
additional heads required will be at tenant's expense.
4. The Building fire alarm smoke detectors, exit lights, hose cabinets, etc.
will be installed per code requirements for the core and shell only.
However, the alarm system will have the capacity for adding additional
tenant devices.
5. The Building power distribution system including the power to the
electrical panel will be able to handle the three xxxxx per square feet for
lighting and five xxxxx per square feet for convenience power and shall
consist of the incoming switch gear and vertical distribution to panel
boards in an electrical closet on each floor. All distribution from the
panel will be by he tenant. The Building Standard does not include
independent "clean power" risers.
6. The mini-blinds will be furnished and installed at all perimeter windows by
Landlord.
1
7. The Building generator is sized at 300 KVA.
8. The window system will be provided on 5' modules.
9. The Building design provides for 100 pound per square feet floor loafing.
10. The loading dock area will have space for one (1) tractor trailer and a
trash compactor.
11. Exterior xxxxx adjacent to and beneath windows will be insulated, furred.
drywalled, taped, bedded and ready to receive paint.
12. No corridor or demising walls are included in the core and shell for full
floor users.
13. Two (2) wet stacks will be provided for plumbing tie-ins.
14. Finishes in elevator cabs and restrooms are included.
16. Tenant elevator lobbies will be finished with a combination of carpet,
vinyl wallcovering, ceiling and light fixtures. In the event that the
Tenant notifies the Landlord in writing within ninety (90) days after the
Lease execution, the Tenant has the option to receive credit for base
building Tenant elevator lobby finishes.
17. Signage for restrooms, elevator lobbies, and stairs shall comply with all
the Americans With Disabilities Act of 1990 (ADA)
0
XXXXX XX
XXXXXX XXXX
XXXXX READY CONDITION
4TH & 5TH FLOOR
August 8, 1995
Base Building work to be completed in order for each Base Building Floor to be
in Floor Ready Condition:
1) Exterior walls and "less windows end frames Installed and weathertight,
except for area(s) at external lift locations (if any).
2) Unfinished interior of exterior walls (with wallboard portion of exterior
walls taped, bedded, and finished ready for surface treatment).
3) Unfinished concrete floors to have a trowel finish throughout and to be
level to the specifications required in the Base Building Construction
Documents.
4) Sprinkler risers and main loop installed, together with sprinkler heads,
as provided in the Base Building Construction Documents..
5) Tenant side of building core installed with walls installed, taped and
finished.
6) Building electrical panels (ready for Tenant's electrical connections) in
the core electrical closets constucted in accordance with the Base Building
Construction Documents and ready for Tenant's electrical connections.
7) Building air handling unit(s) in the applicable mechanical room (if any).
8) One (1) sanitary sewer and vent location (if any) in the core area for
Tenant's connection in accordance with the Base Building Construction
Documents.
9) One (1) domestic colt water supply connection (if any) in the core area in
accordance with the Base Building Construction Documents.
10) The reinforcement of the Base Building floor, if required by the Base
Building Construction Documents.
EXHIBIT C
SPECIFICATIONS FOR OFFICE CLEANING
The leased premises and the building itself will be maintained in a manner
befitting a modern, first-quality rental office building in Baltimore, Maryland.
The Landlord will furnish janitor and cleaning services as described below
for the demised premises (includes office areas, stock rooms, xerox rooms,
conference rooms and corridors):
I. DAILY:
1. Collect trash. (Private kitchens included.)
2. Empty ash trays; damp wipe clean.
3. Dust furniture, desks, machines, phones, file cabinets, window
ledges, etc. (Papers left on desks will not be disturbed.)
5. Wash water fountains.
6. LAVATORIES:
(a) Clean and disinfect all toilet bowls, urinals, and wash
basins.
(b) Clean mirrors.
(c) Resupply all dispensers and toilet paper.
(d) Damp wipe and disinfect all ledges, toilet stalls, and
doors.
(e) Damp mop and disinfect all floors.
(f) Empty and clean sanitary napkin disposal containers.
(g) Collect trash.
7. TURN OFF LIGHTS AND CHECK ALL DOORS ON COMPLETION OF WORK.
II. WEEKLY:
1. Spot clean carpet stains.
2. Spot clean walls, doors, partitions.
3. Sweep all stair areas.
4. Dust wood wall paneling.
III. MONTHLY:
1. Scrub and recondition resilient tile floors.
2. Wash all interior glass partitions on both sides.
3. Dust Venetian blinds.
4. Dust picture frames, charts, etc.
IV. SEMI-ANNUALLY:
1. Dust all horizontal and vertical surfaces not reached in nightly
cleaning (pipes, light fixtures, door frames, wall hangings,
etc.).
2. Wash windows, inside and outside.
V. ANNUALLY:
Strip and refinish all resilient floor areas using buffable, non-slip
floor finish.
VI. AS NECESSARY:
1. Clean Venetian blinds.
2. Spot clean light switches, doors, and walls
3. Wash light fixtures including reflectors. globes, diffusers, and
trim.
4. Spot clean all baseboards.
VII. EXTRAS - CHARGED TO TENANT: *
1. Daily buffing of hardwood floors in executive office areas.
2. Cleaning of kitchen, canteen, or coffee station areas, including
washing sink, washing ledge, cleaning cabinets, and/or
appliances.
3. Dusting and sweeping of storage areas, closets, telephone
exchange areas.
4. Cleaning of shower stalls, jacuzzis, or other similar
non-standard equipment included in restrooms.
Should Lessee install specialty items, other than building standard items
as outlined in Exhibit "A", or above, which will increase in any way the rate
being charged by the cleaning contractor for the demised premises, Lessee shall
be liable for such increases and will reimburse Lessor for any additional cost.
All of the above services are to be performed during those hours as
established between owner and cleaning contractor. Any special cleaning requests
are to be in writing and delivered to the management office by 3:00 p.m.
*Only if authorized by Tenant.
5368EML.2dl
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EXHIBIT D
RULES AND REGULATIONS
The following rules and regulations have been formulated for the safety and
well-being of all the Tenants of the Building. Adherence to these rules and
regulations insures that each and every Tenant will enjoy a safe occupancy in
the Building. Any violation of these rules and regulations by any Tenant which
continues after notice from Landlord shall be sufficient cause for termination,
at the option of Landlord, of the Tenant's lease.
Landlord shall have the continuing right to amend or eliminate any of the
rules and regulations, and also to adopt additional reasonable rules and
regulations of like force and effect. Any change whatsoever of any nature shall
be effective thirty (30) days after delivery of written notice thereof to the
Tenant at the demised premises.
1. The sidewalks, entrances, passages, courts excluding main
security/reception area, elevators, vestibules, stairway corridors or halls or
other parts of the Building not occupied by any Tenant (hereinafter "Common
Areas") shall not be obstructed or encumbered by any Tenant or used for any
purpose other than ingress and egress to and from the Tenant's premises.
Landlord shall have the right to control and operate the Common Areas, and the
facilities furnished for the common use of the Tenants, in such manner as
Landlord deems best of the benefit of the Tenants generally. No Tenant shall
permit the visit to its premises of persons in such numbers under such
conditions as to interfere with the use and enjoyment by other Tenants of the
Common Areas.
2. No awning or other projections shall be attached to the outside walls of
the Building without the prior written consent of Landlord. No blinds, shades or
screens shall be attached to or hung in, or used in connection with, any window
or door of a Tenant's premises, without the prior written consent of the
Landlord. Such awnings, projections, curtains, blinds, screens or other fixtures
must be of a quality, type, design and color, and attached in the manner
approved by Landlord.
3. No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by any Tenant on any part of the outside of the
Tenant's premises or the Building without the prior written consent of the
Landlord. In the event of the violation of the foregoing by any Tenant, Landlord
may remove same without any liability, and may charge the expense incurred by
such removal to the Tenant or Tenants violating this rule.
4. No show cases or other articles shall be put in front or affixed to any
part of the exterior of the Building, nor placed in the Common Areas without the
prior written consent of Landlord.
5. The water and wash closets and other plumbing fixtures shall not be used
for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags, or other substances shall be thrown therein. All
damages resulting from any misuse of the fixtures shall be borne by Tenant, who,
or whose employees, agents, visitors or licensees, shall have caused the same.
6. There shall be no defacing or damage of any part of a Tenant's premises
or the Building. No Tenant shall construct, maintain, use or operate within its
premises or elsewhere within or on the outside of the Building, any electrical
device, wiring or apparatus in connection with a loud speaker system or other
sound system. Landlord will, however, permit a Tenant to install muzak or other
internal music system within the Tenant's premises if the music system cannot be
heard outside the premises.
7. No Tenant shall make or permit to be made, any disturbing noises or
disturb or interfere with occupants of the Building or neighboring buildings or
premises or those having business with them, whether by the use of any musical
instrument, radio, tape recorder, whistling, singing, or any other way. No
Tenant shall throw anything out of the doors or windows or down the corridors or
stairs.
8. No bicycles, vehicles or animals, birds or pets of any kind shall be
brought into the Building or kept in or about a Tenant's premises. No cooking
shall be done or permitted by any Tenant on its premises, except that, with
Landlord's prior approval, a Tenant may install and operate for the convenience
of its employees, a main kitchen, a lounge or coffee room with microwave, sink
and refrigerator. No Tenant shall cause or permit any unusual or objectionable
odors to originate from its premises.
9. No space in or about the Building, including balconies, shall be used
for the manufacture or sale at auctions, or merchandise, goods or property of
any kind.
10. No other inflammable, combustible or explosive fluid, chemical or
substance shall be brought or kept upon a Tenant's premises.
11. No additional bolts of any kind shall be placed upon any of the doors
or windows by any Tenant, nor shall changes be made in existing locks or the
mechanism thereof. The doors leading to the corridors or main halls shall be
kept closed during business hours except as they may be used for ingress or
egress. Each Tenant shall, upon the termination of its tenancy, return to
Landlord all keys used in connection with its premises, including any keys to
the premises, to rooms and offices within the premises; to storage rooms and
closets, to cabinets and other built-in furniture, and to toilet rooms, whether
or not such keys were furnished by Landlord
or procured by Tenant, and in the event of loss of any such keys, such Tenant
shall pay to Landlord the cost of replacing the locks. On termination of a
Tenant's lease, the Tenant shall disclose to Landlord the combination of all
locks for safes, safe cabinets, and vault doors, if any, remaining in the
premises.
12. All removals, or the carrying in or out of any safes, freight,
furniture or large items of any description must take place in specified
elevators and in such manner as to not unreasonably interfere with other
tenants.
13. Any persons employed by any Tenant to do Janitorial work within the
Tenant's premises shall comply with all instructions issued by the
superintendent of the Building.
14. No Tenant shall purchase spring water, ice, coffee, soft drinks,
towels, or other like merchandise or service from any company or person whose
repeated violations of building regulations have caused, in Landlord's
reasonable opinion, a hazard or nuisance to the Building and/or its occupants.
15. Landlord shall have the right to prohibit any advertising by any Tenant
which, in Landlord's reasonable opinion, tends to impair the reputation of the
Building or its desirability as a building for offices, and upon written notice
from Landlord, such Tenant shall refrain from or discontinue such advertising.
16. Landlord reserves the right to exclude from the Building at all times
any person who is not known or does not properly identify himself to the
building management or its agents. Landlord may at its option require all
persons admitted to or leaving the Building to register. If identification cards
are used in any security system, Tenant shall be issued a reasonable number of
cards without charge, but each additional or replacement card requested shall be
issued only upon payment of a service fee of Ten Dollars ($10.00) per card.
17. Each Tenant, before closing and leaving its premises at any time, shall
use reasonable efforts to see that lights, electrical appliances and mechanical
equipment are turned off.
18. The requirements of Tenants will be attended to only upon application
at the office of the Building. Building employees shall not perform any work or
do anything outside of their regular duties unless under special instruction
from the management of the Building.
19. Canvassing, soliciting and peddling in the Building is prohibited and
each Tenant shall cooperate to prevent the same, including notifying Landlord
when and if such activity occurs.
3
20. No water cooler, plumbing or electrical fixture (other than common wall
outlets) shall be installed by the Tenant without Landlord's prior written
consent, which consent shall not be unreasonably withheld.
21. There shall not be used in any space, or in the public halls of the
Building, either by any Tenant or by jobbers or others, in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and side guards.
22. Access plates to underfloor conduits shall be left exposed. Where
carpet is installed, carpet shall be cut around access plates.
23. Mats, trash, boxes, crates and other objects shall not be placed in
public corridors. When Tenant must dispose of trash, boxes, crates, etc., it
will be the responsibility of Tenant to dispose of same prior to or after normal
business hours so as to avoid having such debris visible in the public areas
during such hours.
24. Drapes installed by Tenant which are visible from the exterior of the
Building must be clean by such Tenant at least once a year, at Tenant's own
expense.
25. Landlord does not maintain, or clean, or repair suite finishes which
are non-standard such as wallpaper, special lights, etc. However, should the
need for repairs arise, Landlord will arrange for the work to be done at the
Tenant's expense.
26. All office equipment of any electrical or mechanical nature shall be
placed by Tenant in the demised premises in approved settings to absorb or
prevent any vibration, noise or annoyance. Further, Landlord shall have the
power to prescribe the weight and position of heavy equipment or objects which
may overstress any portion of the floor. All damage done to the Building by the
improper placing of such heavy items will be repaired at the sole expense of the
responsible Tenant.
27. Tenant shall not permit or cause to be used in the demised premises any
device or instrument such as sound reproduction system, or excessively bright,
changing, flashing, flickering, moving lights or lighting devices or any similar
devices, the effect of which shall be audible or visible beyond the confines of
the demised premises, nor shall Tenant permit any act or thing upon the demised
premises disturbing to normal sensibilities of other Tenants.
28. All deliveries must be made via the service entrance and elevators
designated by Landlord for service, if any, during normal business hours.
4
29. The demised premises shall never at any time be used for any immoral or
illegal purposes.
5369EML.2sc
6/2/95
EXHIBIT E
Rentable Area for a Single and Multiple Tenancy Floor
The rentable area of a single and multiple tenancy floor shall be the area
within the outside walls computed by measuring the inside finishes surface from
the glass line of the permanent outer building walls. Inclusions shall be
accessory areas serving that floor, such as elevator lobby, corridors, toilets,
janitor's closets, electrical closets, mechanical rooms, telephone closets, etc.
Inclusions shall also be a proportionate share of common services for the
building, such as main floor lobby area, main building electrical and mechanical
rooms, building engineer's office, etc. Rentable area shall include a
proportionate share of these services based upon the percentage of square
footage leased on the floor.
No deduction shall be made for columns and projections necessary to the
building.
Exclusions shall include such items as elevator shafts, stair xxxxx, air
duct charges and plumbing chases.
5369EML.sac
EXHIBIT F
BEING KNOWN AND DESIGNATED as Parcel R as depicted on that certain subdivision
plat entitled, "flat of Subdivision, INNER HARBOR EAST; Xxxx 0, Xxxxxxx 0, Xxxxx
0000, Xxx 1; Block 1802, Lot 1 & 2" which Plat is to be duly recorded among the
Land Records of Baltimore City.
5366EML,4kk
August 2, 1995
EXHIBIT G
HARBOR EAST OFFICE BUILDING
SECURITY
================================================================================
1. Manned security station will be located in lobby with visual lines to
front and rear access points to lobby. Station will be manned during
the building hours of operation described in Lease.
2. An electronic security system will be provided for the building to
provide access to the building 24 hours per day, seven (7) days a
week.
3. Cardreaders will be provided at the main entries to the building,
including access from garage.
4. If parking is leased in garage, cardreader access (number of cards)
will be provided in garage equal to the number of spaces leased.
5. Stairs will be controlled with prop sensors.
6. Cardreader access will be provided at elevator bank in main lobby and
garage level to provide additional control.
7. Adjacent parking lot to have card access system for after hours.
8. Adjacent parking is manned during business hours.
9. Adjacent parking lot is lighted from dark to xxxx.
10. Adjacent parking lot is fenced.
11. Parking location is convenient to building.
EXHIBIT I
INNER HARBOR EAST
-----------------
SUBDIVISION PLAN
DATE 3 AUGUST 1995
EXHIBIT J
================================================================================
XXXXXX
================================================================================
CORPORATE REAL ESTATE SERVICES
August 29, 1994
Xx. Xxxxxxx Xxxxxxx
Xxxxxxx Properties
0 Xxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Dear Xxxxxxx:
Xxxxxx Corporate Real Estate Services, a Maryland corporation ("Broker"),
has procured a perspective tenant, Sylvan Learning Systems (Tenant) for the
property known as Inner Harbor East (Landlord).
To follow is the commission schedule "d terms by which Xxxxxx Corporate
Real Estate Services expects to be paid, Kindly review this agreement, have it
executed and return a signed copy to me.
COMMISSION RATE AND SCHEDULE
Broker shall be paid by Landlord a real estate commission based on $4.00
per square foot multiplied by the gross building area 1 leased by Tenant.
For example. in the event Tenant leases 51,200 GBA. Broker will be paid
$204,000.00 based on a calculation of 51,200 GBA x $4.00 p.s.f. =
$204,000.00.
In no event will broker be paid a fee less than $204,000.00. Payment of the
commission shall be 75% upon lease execution and 25% upon lease
commencement.
EXPANSION SPACE
In the event Tenant expands its space compared to the originally leased
square footage Broker will be paid a fee of $4.00 per gross square foot
leased Said commission shall be earned and payable at the time he
additional space terms are mutually executed between Landlord and Tenant.
RENEWAL OPTIONS
In the event Tenant renews its lease for a term of length equal to the
initial term, Broker shall be pan' by Landlord a real estate commission
equal to $4.00 per gross square foot leased or a fee equivalent to current
standard commission structures in the: Baltimore City market, whichever is
greater.
XXX XXXXX XXXXXX - XXXXX 000 * BALTIMORE * XXXXXXXX 00000
ILLEGIBLE
This agreement constitutes the entire agreement between Landlord and Broker
and supersedes all prior discussions. negotiations, and agreements whether oral
or written. No amendment, alteration cancellation or withdrawal of this
agreement shall be valid or binding unless made in writing and signed by both
Landlord and Broker. This agreement shall be binding upon and shall benefit the
heirs successors ant assignees of the parties.
Thank you in advance for your prompt attention and we look forward to
working with you as it relates to this potential transaction
Very truly yours,
/s/ Xxx X. Xxxxxx
Xxx X. Xxxxxx
Principal
IJM:mgo
APPROVED THIS 28 DAY OF OCTOBER, 1994
OWNER: GILBANE PROPERTIES INC.
BY: /s/ ILLEGIBLE
----------------------------
TITLE: Vice President
Xxxxxx Corporate Real Estate Services
Licensed Real Estate Broker
BY: /s/ Xxx Xxxxxx Xxx Xxxxxx
TITLE: Principal
DATE: 10/3/94
==============================
XXXXXX
==============================
CORPORATE REAL ESTATE SERVICES
5/13/96
AMENDMENT OF LEASE
THIS AMENDMENT OF LEASE ("Amendment") is made as of this 13th day of May,
1996, by and between HARBOR EAST-OFFICE, LLC, formerly known as HARBOR EAST
PARCEL G - OFFICE, LLC (hereinafter referred to as "Landlord") and SYLVAN
LEARNING SYSTEMS, INC. (hereinafter referred to as "Tenant").
R E C I T A L S
A. Landlord and Tenant entered into a lease dated as of August 24, 1995
(hereinafter referred to as the "Original Lease") regarding portions of the
Building located at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx Xxxx, Xxxxxxxx.
B. The parties hereto desire to amend the Original Lease as hereinafter set
forth.
NOW, THEREFORE, WITNESSETH for good and valuable consideration, the receipt
and sufficiency of which are hereby mutually acknowledged, the parties hereto
agree as follows:
1. Defined Terms: Terms defined in the Original Lease shall have the same
meaning for purposes of this Amendment except for the following definitions
which shall supersede the version contained in the Original Lease:
1.1. Leased Premises: The area located on the 2nd, 3rd, 4th and 5th
Floors of the Building as outlined in red on the floor plans attached as
Exhibit A-1 to this Amendment consisting of 88,578 square feet as
hereinafter set forth:
2nd Floor 27,695 square feet
3rd Floor 9,447 square feet
4th Floor 27,695 square feet
5th Floor 23,741 square feet
The space on the 2nd and 3rd Floor of the Building shall be the
"Expanded Leased Premises" for the specific purposes set forth in the
Lease.
1.2. Rentable Area: The net rentable area of the Leased Premises as
determined by Landlord's architect from the approved permit set of
construction drawings for the Leased Premises, without field measurement,
in accordance with the provisions of Exhibit E to this Lease. Landlord's
architect has initially estimated the Rentable Area to be approximately
92,333 square feet as hereinafter set forth:
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2nd Floor 28,486 square feet
3rd Floor 11,042 square feet
4th Floor 28,486 square feet
5th Floor 24,319 square feet
1.3. Tenant: The Tenant named herein and any permitted assignee under
Section 15.
2. Lease Commencement Date. Section 2A is deleted in its entirety and the
following is inserted in lieu thereof:
"2A. Lease Commencement Date. The Lease Commencement Date shall occur
on the earlier of (a) seventy-five (75) days after Landlord has delivered
the Leased Premises to Tenant in a Floor Ready Condition (the "Tenant Work
Period") provided that the Date of Substantial Completion has occurred or
(b) the first day Tenant moves in and occupies any significant portion of
the Leased Premises (the "Occupancy Date"). For purposes of this Lease, (i)
significant portion of the Leased Premises shall mean the occupancy of at
least 10,000 square feet and (ii) the performance of Tenant Work and the
installation of files, furniture, equipment and decorations shall not
constitute the taking of occupancy by Tenant. If neither the Occupancy Date
nor the Date of Substantial Completion has occurred by the end of the
Tenant Work Period, the Lease Commencement Date shall be deferred until the
earlier of (i) the Date of Substantial Completion, or (ii) the Occupancy
Date. If the Date of Substantial Completion for the Base Building has not
occurred by December 1, 1996, Landlord shall pay Tenant liquidated damages
in the amount of $1,424.00 per day for each day of delay after December 1,
1996 not caused by Tenant's Delay (as defined in Exhibit B) until the Lease
Commencement Date occurs. Within 10 days after the Lease Commencement Date
has been determined, Tenant shall, at the request of Landlord, execute and
deliver to Landlord a written instrument setting forth the precise dates of
commencement and expiration of the Term and the Rentable Area, and
certifying that Tenant is in possession of the Leased Premises and has no
claims, defenses, offsets or counterclaims against Landlord, or specifying
each such claim, defense, offset or counterclaim.
Notwithstanding the foregoing, Tenant may elect to use Landlord's
Contractor to perform the Tenant Work. In such event, the Floor Ready
Condition shall be the earlier of (a) fifteen (15) days after Landlord's
Contractor commences Tenant Work or (b) the date the Landlord delivers the
Leased Premises in a Floor Ready Condition.
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3. Gross On Of Operating Expenses: The last sentence of Section 3(d)(ii) is
deleted in its entirety and the following is inserted in lieu thereof:
"Notwithstanding the foregoing, Tenant's share of Operating Expenses
shall not exceed the following: (1) eighty percent (80%) of all Operating
Expenses so long as Tenant's Rentable Area does not exceed 55,000 square
feet; and (2) ninety-two and a half percent (92.5%) of all Operating
Expenses so long as Tenant's Rentable Area does not exceed 90,000 square
feet. In no event shall Tenant's share of Operating Expenses by any
calculation hereunder exceed one hundred percent (100%) of all Operating
Expenses.
4. Basic Rent for Expanded Leased Premises and Abatement: Add as a new
Section 3(j) the following:
"(j) Basic Rent for Expanded Leased Premises and Abatement.
Notwithstanding any other provision of this Lease, no Basic Rent shall be
payable on the Expanded Leased Premises for the first ninety (90) days
after the Lease Commencement Date. Such abatement of Basic Rent shall not
reduce Landlord's obligations to Tenant under Section 39 or Tenant's
obligation to pay Additional Charges on the Expanded Leased Premises,
beginning on the Lease Commencement Date."
5. Restrictions on Use: A new clause 6(c)(ix) shall be added which shall
read:
"or (ix) make any penetrations into the slab of the Leased Premises
without having the area to be penetrated xrayed to assure that the cables
located within the slab will not be damaged as the result of any proposed
drilling, cutting or penetration of the slab by Tenant."
6. Abatement of Basic Rent and Additional Charges In The Event of Damage by
Fire or Other Casualty: Replace the first sentence of Section 13(b) with the
following:
"If all or any part of the Leased Premises are rendered untenantable
by reason of damage caused by a fire or other casualty, whether to the
Leased Premises or the Building and the damaged part is not being used by
Tenant, the Basic Rent and Additional Charges shall be abated for the
proportion of the Leased Premises rendered untenantable for the period
between the date of the fire or other casualty and the date when the damage
which Landlord is obligated to repair shall have been repaired or the date
on which this Lease is terminated pursuant to subsection (c), whichever
occurs first.
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7. Assignment and Subletting: Section 15(a) is deleted in its entirety and
the following is inserted in lieu thereof:
"So long as Tenant remains primarily liable for the obligations of
Tenant under this Lease, Tenant may, subject to the terms and requirements
of this Lease, including the use restrictions in Section 6, assign its
leasehold estate and/or sublet all or part of the Leased Premises (i) to
any Affiliate of Tenant, and (ii) subject to Landlord's approval, not to be
unreasonably withheld or delayed, to any other party. Provided Tenant is
not in default under the terms of this Lease, any rent collected by Tenant
in connection with an assignment or a sublease, shall be and remain the
property of Tenant, whether or not equal to, less than or in excess of the
Basic Rent and Additional Charges payable hereunder; however, any true
profits from rents collected by Tenant shall be shared between Tenant and
Landlord on an equal basis. For purposes of this Lease, true profits shall
mean the difference between the rent collected by Tenant from an assignee
or sublessee for any portion of the Leased Premises and the rent paid by
Tenant to Landlord for such portion of the Leased Premises under the terms
hereof less any third party expenses incurred in connection with the
assignment or subletting."
8. Default Provisions:
8.1. Section 16(a)(3) clause (ii) is deleted in its entirety and the
following is inserted in lieu thereof:
". . . (ii) in the case of any such neglect or failure which
cannot with due diligence and in good faith be cured within 30 days,
within such additional period, if any, as may be reasonably required
to cure such default with due diligence and in good faith provided
that Tenant commences the curing of the same within the 15-day period
and completes the cure within 120 days after Landlord's notice to
Tenant (it being intended that, in connection with any such default
which is not susceptible of being cured with due diligence and in good
faith within 30 days, the time within which the Tenant is required to
cure such default shall be extended for such additional period as may
be necessary for the curing thereof with due diligence and in good
faith but in no event longer than 120 days from the date of Landlord's
notice), it being agreed that any default which is not cured within
120 days shall become an Event of Default;"
8.2. The following language is deleted from the first clause of
Section 16(d): "If Landlord terminates this Lease pursuant to Section
16(b)," and the following language is inserted
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in lieu thereof: "If Landlord terminates this Lease pursuant to Section
16(c);".
8.3. Section 16(e) is deleted in its entirety and the following is
inserted in lieu thereof:
"(e) Liquidated Damages. If Landlord terminates this Lease
pursuant to Section 16(c), Landlord shall have the right, at any time,
at its option, to require Tenant to pay to Landlord, on demand, as
liquidated and agreed final damages in lieu of Tenant's liability
under Section 16(d), an amount equal to the Basic Rent and Additional
Charges, computed on the basis of the then-current annual rate of
Basic Rent and Additional Charges and all fixed and determinable
increases in Basic Rent which would have been payable from the date of
such demand to the date when this Lease would have expired, if it had
not been terminated, discounted to the date of such demand at an
annual rate of interest equal to the then-current yield on actively
traded U.S. Treasury bonds with July-December, 2006 maturities, as
published in the Federal Reserve Statistical Release for the week
before the date of such termination, plus 125 basis points. Upon
payment of such liquidated and agreed final damages, Tenant shall be
released from all further liability under this Lease with respect to
the period after the date of such demand.
If, after Tenant pays such liquidated damages, Landlord, in its
sole discretion, relets the Leased Premises, or any part thereof,
Landlord shall reimburse Tenant for Basic Rent and Additional Charges
actually collected and allocable to the Leased Premises or to the
portions thereof relet by Landlord, prior to the expiration of the
original term of the Lease, less the costs and expenses of reletting
including, but not limited to, reasonable attorneys' fees, brokers'
fees, and the costs of obtaining possession of the Leased Premises, of
maintaining the Leased Premises while vacant, and repairing and
remodeling the Leased Premises in order to obtain new tenants.
Notwithstanding anything herein to the contrary, the provisions of the
preceding sentence shall not be applicable after Landlord has
defaulted in the performance of any Mortgage obligation and Mortgagee
has exercised any of its remedies."
9. City Mortgage: Section 20(c) is deleted in its entirety and the
following language is inserted in lieu thereof:
"(c) City Mortgage. Subject to the requirement of subsection (a)
above, this Lease shall be subject and subordinate to the Mortgage from the
Landlord to the Mayor and City Council of Baltimore in the original
principal amount of
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Two Million Five Thousand Eight Hundred Seventy-Eight Dollars and
Seventy-five Cents ($2,005,878.75), intended to be recorded among the Land
Records of Baltimore City, and to all renewals, modifications, replacements
and extensions thereof. Tenant agrees that, within 10 days after receipt of
request therefor from Landlord, it will, from time to time, execute,
acknowledge and deliver any instrument or other document required by said
Mortgagee to subordinate this Lease to the herein described Mortgage."
10. Parking: Section 29 shall be deleted in its entirety and the following
language is inserted in lieu thereof:
"29. Parking.
Tenant shall be guaranteed parking within the Parking Facilities for
225 cars for the Term. During the first five Lease Years, not less than the
number of spaces set forth below (the "Guaranteed Surface Spaces") will be
guaranteed surface lot spaces:
Lease Year Guaranteed Surface Spaces
---------- -------------------------
1 175
2 175
3 175
4 165
5 155
The remaining spaces (i.e., the difference between the number of surface
spaces which the Landlord supplies and the guaranteed 225 spaces) shall be
provided within a structured deck or parking garage within the Inner Harbor
East project. Of these structured spaces, at least 35 shall be located in
the structured parking being constructed on Parcels R and Q (the "On-Site
Garage"), some of which may be designated for "Sylvan Visitor Parking Only"
or similar wording.
In the event Landlord, during the first five Lease Years, is unable to
fully satisfy its obligation to provide the Guaranteed Surface Spaces as
herein required, Landlord shall, in lieu thereof, provide Tenant at the
rates set forth in paragraph (d)(i) below a sufficient number of structured
parking surfaces to fulfill the Guaranteed Surface Space requirement.
Within the 225 parking space guarantee, Tenant shall have the option of
renting, within the On-Site Garage, (i) at the rates set forth in
paragraphs (d)(ii)(l) and (d)(iii)(1), up to 25 spaces, and (ii) at market
rates, up to 10 additional spaces,
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some or all of which spaces under (i) and (ii) may be designated, at
Tenant's option, for "Sylvan Visitor Parking Only" or similar wording.
(a) All Parking Facilities shall either be paved, striped and fenced
surface lots, that comply with all Legal Requirements and are consistent
with the Security Plan described on Exhibit G, or are contained within
structured deck or garage parking. If the Parking Facilities are on surface
lots, Tenant's spaces shall be consolidated (as opposed to dispersed) in a
cohesive grouping, and marked with signs so as to minimize the chance of
usage by unauthorized parkers. Tenant may, at Tenant's expense, require
Landlord to designate with signage the restriction of a portion of such
spaces to "Sylvan Parking Only" or similar wording.
(b) Attached as Exhibit I is a plat showing the Inner Harbor East
subdivision and identifying the location of Parcels B, C and P. Tenant's
surface parking area shall initially be located on an undeveloped portion
of Parcel P in closest proximity to the Building. Landlord has procured the
agreement of the owner of Parcel P to allow parking on this parcel as
evidenced by its joining in the execution of this Lease. Tenant's parking
area shall be designated as reserved for the use of Tenant's employees and
visitors. Tenant shall be responsible for assuring that only authorized
persons park in Tenant's parking area. Until Parcel P is developed, Tenant
shall have priority over all persons except other tenants of the Building,
their employees and invitees with respect to use of the surface spaces
located on Parcel P. This priority is limited to the number of Guaranteed
Surface Spaces. As Parcel P is developed, Landlord shall relocate Tenant's
Guaranteed Surface Spaces to surface lots, if available, on undeveloped
portions of Parcels B or C that meet the requirements of paragraph (a)
above or, if not available, to structured decks or parking garages at the
rates and subject to the conditions set forth in paragraph b(i) below:
(i) During the first five Lease Years, (1) all replacement spaces
up to the number of Guaranteed Surface Spaces shall be subject to the
rates set forth in paragraph (d)(i) below, (2) all replacement spaces
in excess of number of Guaranteed Surface Spaces up to but not
exceeding 190 spaces, shall be at the rates set forth in paragraph
(d)(i) for surface spaces, and at the rates set forth in paragraph
(d)(ii)(1) for structured parking, and (3) except for replacement
spaces under clause (1) or clause (2) above, spaces within the On-Site
Garage shall be subject to the rates set forth in paragraph (d)(ii)(1)
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as to the first 25 spaces and market rates for the balance.
(ii) During Lease Years 6 through 10, Tenant shall have at least
150 spaces which are either on surface lots or in structured parking
if the Landlord is unable to provide the 150 surface spaces. These 150
spaces are subject to the surface space rate set forth in paragraph
(d)(iii)(1); provided however, that the 150 number shall be reduced by
that number, up to 25, of parking spaces which are within the On-Site
Garage and which are subject to the rates set forth in paragraph
(d)(iii)(l) for structured parking. All other spaces, whether on
surface lots or within structured parking, shall be subject to the
rates in paragraph (d) (iii) (2) .
(iii) No parking spaces shall be relocated until substitute
spaces, meeting the standards of paragraph (a) above, have been
completed and are available for immediate use.
(c) Landlord shall provide Tenant with at least six (6) months written
notice in the event any of the spaces need to be relocated or are no longer
available. In the case of relocation, the notice shall specify the number
of spaces to be relocated, the new location, any change in the rent (where
permitted by the terms hereof) and the date when the new spaces will be
ready for use by Tenant.
(d) The rates to be paid by Tenant for parking during the Term shall
be as follows:
(i) During the first five Lease Years, assuming the use of 190
surface parking spaces, the parking rates payable by Tenant shall be
as follows:
Lease Year Annual Cost for Monthly
190 Surface Spaces Parking Fee
1 $0 $0
2 $45,000 $3,750.00
3 $57,500 $4,791.66
4 $68,000 $5,666.66
5 $80,000 $6,666.66
In the event of an election by Tenant under paragraph (i) below to increase
(but not above 190) or decrease the number of surface parking spaces (or
replacements thereof), the rate shall be adjusted as follows:
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Lease Year Cost Per Day Yearly Adjustment Monthly
Per Space Adjustment
1 $0.00 $ 0.00 $ 0.00
2 $0.25 $ 62.50 $ 5.21
3 $0.50 $125.00 $10.42
4 $0.75 $187.50 $15.63
5 $1.00 $250.00 $20.84
Any increase in the number of surface parking spaces above 190, if
available, shall result in the following adjustments for each space above
190:
Lease Year Cost Per Day Yearly Adjustment Monthly
Per Space Adjustment
1 $2.25 $562.50 $46.88
2 $2.25 $562.50 $46.88
3 $2.50 $625.00 $52.08
4 $2.75 $687.50 $57.29
5 $3.00 $750.00 $62.50
(ii) During the first five Lease Years, Tenant shall pay the
following Parking Fees for structured parking spaces, other than for
structured parking which is subject to the terms of paragraph (b)(i):
(1) The first 25 structured spaces in the On Site Garage,
and any other spaces located within parking structures pursuant
to paragraph (b)(i) above shall be at 75% of current market rent
but in no event shall the cost to Tenant exceed the caps
hereinafter set forth:
Cap Cap
Per Structured Annual Cost Per
Lease Year Space Per Day Structured Space
1 $5.00 $1,500
2 $5.15 $1,545
3 $5.30 $1,590
4 $5.46 $1,638
5 $5.63 $1,689
(2) Unless otherwise provided herein, the remaining
structured spaces shall be at current market rent.
(3) The fee structure shall be converted to a monthly
payment by application of the following
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formula: Daily rate (either at market, 75% of market or the "Cap
Rate", whichever is applicable) times 5 times 50 divided by 12.
(iii) For Lease Years 6 through 10, Tenant shall be provided with
parking as follows:
(1) Up to one hundred fifty (150) surface spaces shall be
offered to Tenant at the discounted rates hereinafter set forth.
The one hundred fifty surface spaces shall be reduced by the
number of structured parking spaces, up to 25, which Tenant rents
within the On-site Garage (the "Discounted Surface Spaces"). The
Discounted Surface Spaces shall be offered to Tenant at a rate
equal to 75% of the current market rent for the surface spaces
but in no event shall the cost exceed the caps hereinafter set
forth for surface spaces. The first 25 parking spaces within the
On-Site Garage shall be offered to Tenant at a rate equal to 75%
of the current market rent for structured spaces but in no event
shall the cost of such 25 spaces exceed the caps hereinafter set
forth for structured spaces. The remaining 10 parking spaces
available to Tenant within the On-Site Garage shall be at market
rates. If the Landlord is unable to provide all of the Discounted
Surface Spaces, Landlord shall offer structured parking spaces,
if available, for the difference between the Discounted Surface
Spaces and the actual number of surface spaces provided. Such
structured spaces shall be offered at rates equal to 75% of
current market rent for structured spaces but in no event greater
than the caps hereinafter set forth for structured spaces.
Cap Per Surface Space Cap Per Structured
Per Day for Space Per Day for
Lease Year Discounted Surface Spaces Structured Spaces
6 $2.90 $5.80
7 $2.99 $5.97
8 $3.07 $6.15
9 $3.17 $6.33
10 $3.26 $6.52
(2) All other spaces, in excess of the 150 spaces described
above, shall be offered to Tenant at market rates without caps.
In the event the parties are unable to mutually agree on the
market
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rate, then same shall be determined by using the methodology set
forth in Section 35(d) hereof.
(3) The fee structure shall be converted to a monthly
payment by application of the following formula: Daily rate
(either at market, 75% of market or the "Cap Rate", whichever is
applicable) times 5 times 50 divided by 12.
(e) Tenant agrees to use the Parking Facilities for the parking of
passenger automobiles, sport-utility vehicles and vans and for no other
purposes.
(f) If Tenant rents more space in the Building or on the Inner Harbor
East site, Tenant may, to the extent they are available, rent, at market
rates, a proportionate number of additional surface and structured parking
spaces. The proportion or ratio that shall apply to any additional space
rented in the Building by Tenant shall be 3.0 spaces for each 1,000 square
feet of Rentable Area leased.
(g) Parking rates during any renewal periods shall be provided at
market rates.
(h) The Parking Fees set forth in this section shall be Additional
Charges and shall be paid by Tenant on a monthly basis together with the
Basic Rent.
(i) Tenant shall notify Landlord in writing on or before July 1, 1996
as to how many of the 225 guaranteed parking spaces it wishes to rent as of
the Lease Commencement Date as well as the breakdown between surface spaces
and structured spaces. Within ten (10) Business Days after receipt of such
notice Landlord shall notify Tenant as to the availability and location of
such spaces. Thereafter, Tenant shall notify Landlord in writing at least
thirty (30) days before the first day of each calendar quarter of any
change in the number of parking spaces or in the mix between surface and
structured spaces it wishes to rent for the three (3) month period. Within
ten (10) Business Days after receipt of such notice Landlord shall notify
Tenant as to the availability, location and any applicable rent
adjustment."
11. Additional Expansions Options: Section 36(c) is deleted in its entirety
and the following shall be inserted in lieu thereof:
"(c) If Tenant has given Landlord twelve (12) months prior written
notice of its intent to lease additional space in the Building, Tenant
shall rent all (but not less than all)
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space on the 3rd Floor of the Building which is not already part of the
Leased Premises (an estimated 15,000 rentable square feet) after the fifth
Lease Year upon the termination of any leases entered into by Landlord for
such space, if any, but in no event later than twelve (12) months after the
end of the fifth Lease Year. The Basic Rent for any additional space in the
Building leased by Tenant under the terms of this provision shall be an
amount equal to fair rental value as determined pursuant to Section 35, and
the commencement date and all concessions relating to Tenant improvements
shall be on terms and at rates reflective of the market and parking, if
available, shall be at market rates. All other terms and conditions of this
Lease shall apply other than the rent abatement provided in Section 3(j).
The parties agree to execute an appropriate amendment to this Lease
evidencing their agreement with respect to the additional space.
Notwithstanding the foregoing, if Tenant exercises its option to rent
additional space pursuant to this paragraph, the space shall be made
available to Tenant only upon the termination of any pre-existing leases
entered into by Landlord for the space but in no event shall such leases
terminate later than twelve (12) months after the expiration of the fifth
Lease Year."
12. Tenant's Allowance: Replace the entire Section 39 with the following:
"Landlord shall give Tenant an allowance to cover the cost of Tenant's
Work actually performed in an amount not to exceed the product obtained by
multiplying $15.00 by the Rentable Area, or a total allowance of $1,384,995
("Tenant's Regular Allowance").
Tenant's Regular Allowance shall be allocated for specific work
performed over the four (4) floors of the Leased Premises (including the
Expanded Leased Premises) as follows:
2nd Floor 427,290
3rd Floor 165,630
4th Floor 427,290
5th Floor 364,785
The Tenant's Regular Allowance shall be paid by Landlord to Tenant
within thirty (30) days after completion of the Tenant Work for a given
floor and presentation of invoices from general contractors, subcontractors
and materialmen which invoices describe with specificity the work
performed, the floor on which the work has been performed or the materials
supplied and the cost of such work or materials."
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05/10/96
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13. Deletion of Ground Lease: The parties acknowledge that Landlord is
acquiring the Land in fee simple from the City of Baltimore, and that references
to a "ground lease" shall no longer apply. Thus, Section 40 is hereby deleted.
14. Exhibits: Exhibit A-1 is added and attached hereto. The parties agree
that the construction of the Expanded Leased Premises shall be in accordance
with Exhibit B unless otherwise provided in this Amendment.
15. Tenant's Right to Terminate: Section 41 of the Original Lease shall be
deleted in its entirety and the following language is inserted in lieu thereof:
"41. Tenant's Right to Terminate. In the event the delivery by
Landlord of the Leased Premises in a Floor Ready Condition has not occurred
for whatever reason and regardless of force majeure by April 1, 1997.
Tenant shall have the right, at its discretion, to terminate this Lease
Agreement upon written notice to Landlord."
16. MIDFA Provisions: The following language is added as Section 42.
"42. Certain Lender Requirements. During the Term of this Lease Tenant
agrees to use all reasonable efforts to:
(a) Furnish to the Maryland Industrial Development Financing
Authority (the "Authority"), upon written request of either the
Landlord or the Authority, one copy of each Annual Report on Form
10-K, and each Quarterly Report on Form 10-Q and each notice or report
sent by Tenant to stockholders generally . It is agreed and understood
that no request shall be made earlier than thirty (30) days prior to
the date such material is made available to the general public and
that the material shall not be provided to the Landlord or the
Authority prior to when it is made available to the general public.
(b) Upon request, but not more frequently than twice annually,
supply the approximate employment count of Tenant at the Building to
the Authority.
(c) Comply with laws prohibiting discrimination on the basis of
(i) political or religious opinion or affiliation, marital status,
race, color, creed, or national origin, or (ii) sex or age, except
when sex or age constitutes a bona fide occupational qualification, or
(iii) the physical or mental disability of a qualified individual with
a disability."
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17. General:
17.1. In all other respects, the Lease shall remain in full force and
effect.
17.2. This Amendment shall be binding upon the parties hereto and
their respective successors, and assigns.
17.3. This Amendment shall be interpreted and construed in accordance
with the laws of the State of Maryland.
[signature page follows]
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05/10/96
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WITNESS the hands and seals of the parties hereto as of the day and year
first above written.
ATTEST/WITNESS: HARBOR EAST-OFFICE, LLC
LANDLORD
By: The Xxxxxxxxx/Xxxxxxxx Family
Partnership LLP
Administrative Member
/s/ Xxxx Xxxxxxxxxx By /s/ Xxxxxxx Xxxxxxxxx
------------------- -------------------------- (SEAL)
Name: Xxxxxxx Xxxxxxxxx
Partner:
/s/ Xxxx Xxxxxxxxxx By /s/ Xxxxxxxx Xxxxxxxx
------------------- -------------------------- (SEAL)
Name: Xxxx Xxxxxxxx
Partner:
ATTEST/WITNESS: SYLVAN LEARNING SYSTEMS, INC.
TENANT
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxx
------------------- ----------------------------- (SEAL)
Xxxx X. Xxxx
The undersigned joins herein solely to confirm that it will make Parcels P,
B & C available to Landlord to satisfy the parking requirements described
Section 29(b) hereof.
HARBOR EAST LIMITED PARTNERSHIP
By: The Xxxxxxxxx/Xxxxxxxx Family
Partnership LLP
General Partner
By /s/ Xxxxxxx Xxxxxxxxx
-------------------------- (SEAL)
Name: Xxxxxxx Xxxxxxxxx
Partner:
By /s/ Xxxxxxxx Xxxxxxxx
-------------------------- (SEAL)
Name: Xxxx Xxxxxxxx
Partner:
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EXHIBIT X-0
XXXXXX XXXXX
XXXXX XXXX XXXXX 0
XXXXX XXXXXX EAST
APARTMENTS
EXHIBIT X-0
XXXXX XXXXX
XXXXX XXXX
XXXXX XXXXXX XXXX
APARTMENTS
EXHIBIT X-0
XXXXXX XXXXX
XXXXX XXXX
XXXXX XXXXXX XXXX
APARTMENTS
-18-
EXHIBIT A-1
FIFTH FLOOR
FLOOR PLAN
INNER HARBOR EAST
APARTMENTS
11/11/96
SECOND AMENDMENT OF LEASE
THIS SECOND AMENDMENT OF LEASE ("Second Amendment") is made as of this
_____ day of __________, 1996, by and between HARBOR EAST OFFICE, LLC, formerly
known as HARBOR EAST PARCEL G - OFFICE, LLC (hereinafter referred to as
"Landlord") and SYLVAN LEARNING SYSTEMS, INC. (hereinafter referred to as
"Tenant").
R E C I T A L S
A. Landlord and Tenant entered into a lease dated as of August 24, 1995
(hereinafter referred to as the "Original Lease") and an Amendment of Lease
dated as of May 13, 1996 (hereinafter referred to as the "First Amendment") for
portions of the Building located at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx Xxxx,
Xxxxxxxx.
B. The parties hereto desire to amend the Original Lease and First Amendment in
order to lease additional space to Tenant on the terms hereinafter set forth.
NOW, THEREFORE, WITNESSETH for good and valuable consideration, the receipt
and sufficiency of which are hereby mutually acknowledged, the parties hereto
agree as follows:
1. Defined Terms: Terms defined in the Original Lease and the First
Amendment shall have the same meaning for purposes of this Amendment except for
the following definitions which shall supersede the versions contained in the
Original Lease and the First Amendment:
1.1. Additional Charges: All amounts payable by Tenant to Landlord
under this Lease other than Basic Rent. All Additional Charges shall be
deemed to be additional rent and all remedies applicable to the non-payment
of Basic Rent shall be applicable thereto.
1.2. Advance Rent: $65,353 representing the Basic Rent for the first
full month of the Term after the Lease Commencement Date, which Tenant
shall pay to Landlord upon execution of this Second Amendment which
Landlord shall credit against the corresponding monthly installment of
Basic Rent.
1.3. Basic Rent: The amount of rent for the Leased Premises due from
Tenant to Landlord each month is as follows:
Months Monthly Rent
------ ------------
1* First Full Month $53,750
2 $65,353
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3 $72,110
4-12 $110,915
13-24 $117,035
25-36 $121,545
37-48 $125,695
49-60 $129,070
61-72 $152,921
73-84 $156,833
85-96 $161,225
97-108 $164,848
109-120 $168,953
* If the Commencement Date is other than the first day of the month, the
rent for the period from the Commencement Date until the last day of
that month shall be calculated on a prorated basis as provided in
Section 3(a) of this Second Amendment and said rent shall be due and
payable on the Commencement Date.
1.4. Building Rentable Area: The total net rentable area in the
Building is 132,598 square feet.:
1.5. Leased Premises: The area located on the 1st, 2nd, 3rd, 4th
and 5th Floors of the Building outlined in red on the floor plans
attached as Exhibits A-1 through A-5 to this Second Amendment.
1.6. Rentable Area: The total rentable area is 108,164 square
feet, as hereinafter set forth:
Sylvan Retail Rentable Space
----------------------------
1st Floor 9,345 square feet
Original Rentable Area (Office)
-------------------------------
2nd Floor 28,486 square feet
3rd Floor 11,042 square feet
4th Floor 28,486 square feet
5th Floor 24,319 square feet
Additional Rentable Space (Office)
----------------------------------
3rd Floor 6,486 square feet
1.7. Operating Expenses: The aggregate of all Office Operating
Expenses, Retail Operating Expenses and Shared Operating Expenses.
Operating Expenses shall not include financing or mortgage costs;
depreciation expense; advertising for vacant space or building
promotion; leasing commissions; executive salaries; the cost of tenant
improvements; ground rent; or legal fees for leasing
14330rrk.6pl
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vacant space in the Building or enforcing Landlord's rights under
leases with tenants for space in the Building. In addition, Operating
Expenses shall not include the following:
(i) fees for licenses and permits obtained by or for
Landlord in connection with any non-office use activity by a
tenant within the Building, such as retail or commercial uses;
(ii) management fees paid to Affiliates of Landlord or other
related Persons, provided however, that such fees can be included
in Operating Expenses to the extent they do not exceed those paid
by other Peer Group Buildings;
(iii) expenses not generally treated as operating expenses
under generally accepted accounting principles except as
specifically set forth herein;
(iv) any repairs or improvements made (A) by third parties
to correct defects in prior construction, (B) to bring the
Building in compliance with Legal Requirements applicable prior
to the Lease Rental Commencement Date or (C) to cure Landlord's
default under the terms of this Lease or any other space lease
with a tenant in the Building;
(v) increases in salary and benefits to employees of
Landlord which are in excess of the prevailing increases within
downtown Baltimore;
(vi) expenses properly treated as indirect corporate or of f
ice overhead for other sites under generally accepted principles
of office building management;
(vii) costs of renovating, decorating or improving space for
tenants or other occupants of the building, or vacant space;
(viii) expenses in connection with services provided to
tenants which are not consistent with services provided to all
other tenants;
(ix) interest and penalties on taxes, utility bills and
other costs due to Landlord's negligence;
(x) fees paid to Tenant or other tenants in the Building as
reimbursement for audit expenses incurred due to errors by
Landlord in the calculation of Operating Expenses; and
(xi) costs incurred by Landlord in challenging the
application of Legal Requirements, or fees and expenses incurred
or payable as a result of such application provided, however,
that such costs can be included as Operating Expenses if
14330rrk.6pl
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Landlord reasonably expects the resulting savings arising from
such challenge to exceed the cost of the challenge.
1.8. Security Deposit: The sum of $110,915.
1.9. Tenant's Proportionate Share: When used in conjunction with the
term "Operating Expenses", such phrase shall mean the combination of
Tenant's Office Proportionate Share of Office Operating Expenses and
Tenant's Retail Proportionate Share of Retail Operating Expenses.
In addition, the following definitions shall be added to Section l(b)
of the Original Lease:
1.10. Additional Leased Space: The additional area consisting of 5,491
square feet located on the 3rd Floor of the Building not previously leased
pursuant to the Original Lease and First Amendment.
1.11. Additional Rentable Space: The net rentable area of the
Additional Leased Space is 6,486 square feet.
1.12. Building Space: The net square footage of the Building which is
127,229 square feet.
1.13. Office Operating Expenses: The aggregate of all reasonable and
customary costs and expenses incurred on an accrual basis by Landlord in
connection with the management, operation, maintenance, repair, cleaning,
safety and administration of the Office Space, including employees' wages,
salaries, welfare and pension benefits, other fringe benefits and payroll
taxes for on site employees; telephone service; painting of Common Areas of
Office Space; repairs and maintenance to Office Space; the cost of
obtaining and providing electricity; janitorial and cleaning supplies;
cleaning and janitorial services; window cleaning; service contracts for
the maintenance of elevators, boilers, HVAC and other mechanical, plumbing
and electrical equipment; sales and use taxes payable in connection with
tangible personal property and services purchased for the management,
operation, maintenance, repair, cleaning, safety and administration of the
Office Space; accounting fees relating to the determination of Office
Operating Expenses and Office Operating Expense Increases and the
preparation of statements required by tenants' leases; purchase and
installation of indoor plants in the Common Areas of the Office Space; and
all other expenses now or hereafter reasonably and customarily incurred in
connection with the operation, maintenance, and management of Peer Group
Buildings. If Landlord makes an expenditure for a capital improvement to
the Office Space, whether by installing energy conservation or labor-saving
devices to reduce Office Operating Expenses, to comply with Legal
Requirements or otherwise, and if, under generally accepted accounting
principles,
14330rrk.6pl
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such expenditure is not a current expense, then, except as otherwise
provided in Section 1.21, the cost thereof shall be amortized over a period
equal to the useful life of such improvement, determined in accordance with
generally accepted accounting principles, and the amortized cost allocated
to each calendar year during the Term, together with an imputed interest
amount calculated on the unamortized portion thereof using an interest rate
equal to the prime rate of NationsBank, N.A. at the time of the
expenditure, shall be treated as an Office Operating Expense. Amounts
payable by tenants of the Office Space for after-hours heating or air
conditioning and for excess electrical usage, recoveries of expenses and
other separate charges made to tenants of the Office Space for special
services shall be credited against Office's Operating Expenses in computing
the amount thereof. In addition, the amount of Office's Pro Rata Portion of
Shared Operating Expenses shall be included as an Office Operating Expense.
1.14. Office's Pro Rata Portion of the Shared Operating Expenses: The
percentage which the Office Space is of Building Space (i.e. 106,862 square
feet / 127,229 square feet = 84%).
1.15. Office Rentable Area: The total net rentable area in the Office
Space is 109,777 square feet.
1.16. Office Space: The total area located on the 2nd, 3rd, 4th and
5th floors of the Building is 106,826 square feet.
1.17. Original Rentable Area: The net rentable area of the Original
Leased Premises is 92,333 square feet as hereinafter set forth:
2nd Floor 28,486 square feet
3rd Floor 11,042 square feet
4th Floor 28,486 square feet
5th Floor 24,319 square feet
1.18. Retail's Pro Rata Portion of Shared Operating Expenses: The
percentage which the Retail Space is of Building Space (i.e., 20,403 square
feet / 127,229 square feet = 16%).
1.19. Retail Rentable Area: The total net rentable area in the Retail
Space, determined by Landlord's architect, to be 22,821 square feet.
1.20. Retail operating Expenses: The aggregate of all reasonable and
customary costs and expenses incurred on an accrual basis by Landlord in
connection with the management, operation, maintenance, repair, cleaning,
safety and administration of the Retail Space, including employees' wages,
salaries, welfare and pension benefits, other fringe benefits and payroll
taxes for on-
14330rrk.6pl
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site employees; painting of Common Areas of Retail Space; repairs and
maintenance of Retail Space; window cleaning; sales and use taxes payable
in connection with tangible personal property and services purchased for
the management, operation, maintenance, repair, cleaning, safety and
administration of the Retail Space; accounting fees relating to the
determination of Retail Operating Expenses and Retail Operating Expense
Increases and the preparation of statements required by tenants' leases;
and all other expenses now or hereafter reasonably and customarily incurred
in connection with the operation, maintenance, and management of other
first class retail space. If Landlord makes an expenditure for a capital
improvement to the Retail Space, whether by installing energy conservation
or labor-saving devices to reduce Retail Operating Expenses, to comply with
Legal Requirements or otherwise, and if, under generally accepted
accounting principles, such expenditure is not a current expense, then,
except as otherwise provided in Section 1.21, the cost thereof shall be
amortized over a period equal to the useful life of such improvement,
determined in accordance with generally accepted accounting principles, and
the amortized cost allocated to each calendar year during the Term,
together with an imputed interest amount calculated on the unamortized
portion thereof using an interest rate equal to the prime rate of
NationsBank, N.A. at the time of the expenditure, shall be treated as a
Retail Operating Expense. Recoveries of expenses and other separate charges
made to tenants of the Retail Space for special services shall be credited
against Retail Operating Expenses in computing the amount thereof. In
addition, the amount of Retail's Pro Rata Portion of Shared Operating
Expenses shall be included as a Retail Operating Expense.
1.21. Shared Operating Expenses: The aggregate of all reasonable and
customary costs and expenses incurred on an accrual basis by Landlord in
connection with the management, operation, maintenance, repair, cleaning
safety and administration of the Building and Land not included in Office
Operating Expenses and Retail Operating Expenses including Real Estate
Taxes; exterminating services; detection and security services; sewer rents
and charges; premiums for fire and casualty, liability, workmen's
compensation, sprinkler, water damage and other insurance; building
supplies; uniforms and dry cleaning; trash removal; snow removal; water and
other public utilities; landscaping maintenance; management fees, whether
or not paid to any Person having an interest in or under common ownership
with Landlord; fees paid in connection with the challenge of any proposed
assessment which would result in an increase in the Real Estate Taxes;
provided, Landlord shall only pursue such challenges if it reasonably
expects the resulting savings to exceed the cost of such challenge;
purchase and installation of additional landscaping not included in the
original landscaping plan for the Building and replacement or substitute
landscaping. The cost of all repairs, replacements and improvements
required to maintain the
14330rrk.6pl
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Building in a first class condition other than those (i) excluded under
Section 1.21 of this Second Amendment; (ii) related to structural or
building systems; or (iii) serving exclusively either the Office Space or
Retail Space shall be treated as a Shared Operating Expense even if the
cost would otherwise be classified as a capital expenditure under generally
accepted principles. Refunds of Real Estate Taxes (reduced by Landlord's
reasonable expenses in obtaining such refunds); recoveries of water, sewer
or other utility charges separately metered or submetered and collected by
Landlord; and (to the extent that Shared Operating Expenses include the
cost of any repair or reconstruction work) the amount of any insurance
recoveries (net of the costs of collection) all determined on an accrual
basis shall be credited against the Shared Operating Expenses in computing
the amount thereof.
1.22. Retail Space: The total area located on the 1st Floor of the
Building is 20,403 square feet.
1.23. Sylvan Retail Rentable Space: The Sylvan Retail Space plus a
fifteen percent (15%) loss factor is 9,345 square feet.
1.24. Sylvan Retail Space: The area located on the 1st Floor of the
Building as outlined in red on the attached Exhibit A1 to this Second
Amendment is 8,126 square feet.
1.25. Tenant's Office Proportionate Share: The percentage (rounded to
two (2) decimal points) from time to time which the Original Rentable Space
and the Additional Rentable Space is of the Office Rentable Space (i.e.:
92,333 + 6,486 / 109,777 = 90.01%).
1.26. Tenant's Retail Proportionate Share: The percentage (rounded off
to two (2) decimal points) from time to time which the Sylvan Retail Space
is of the total number of square feet of leased Retail Space on the first
floor of the Building (i.e., 39.83% assuming all of the Retail Space is
leased [8,126 square feet / 20,403 square feet]).
In addition, the definition of Rent Per Square Foot shall be
deleted from Section l(b) of the Original Lease.
2. Section 2(a) of the Original Lease is deleted in its entirety and the
following is inserted in lieu thereof:
"(a) The completion of the Leased Premises shall be done in accordance
with the provisions of Exhibit B to this Lease; however, Landlord's
obligations with respect to the completion of the Sylvan Retail Space shall
be limited to those specifically set out in Exhibit B-1 to this Lease."
14330rrk.6pl
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3. The first and second sentence of Section 3(a) of the Original Lease are
deleted in their entirety and the following is inserted in lieu thereof:
"(a) Tenant shall pay Basic Rent in monthly installments in advance
commencing on the first day of the first month after the Lease Commencement
Date and thereafter on the first day of each month during the term. If the
Lease Commencement Date is not the first day of a month, Basic Rent in the
amount of $99,312 for the month in which the Lease Commencement Date occurs
shall be pro-rated on the basis of the number of days between the Lease
Commencement Date and the end of that month."
4. The preface for Section 3(b) of the Original Lease is deleted in its
entirety and the following is inserted in lieu thereof:
"(b) Payments of Operating Expenses: Tenant shall pay as additional
rent Tenant's Office Proportionate Share of Office Operating Expenses and
Tenant's Retail Proportionate Share of Retail Operating Expenses for each
calendar year, commencing with the Initial Calendar Year."
In addition, each reference in Section 3(b) of the Original Lease to
"Tenant's Operating Expenses" shall be replaced by "Tenant's Proportionate Share
of Operating Expenses".
5. Section 3(h) of the Original Lease and Section 3(j) as added by the
First Amendment shall be deleted.
6. Services for Retail Space and Janitorial/Cleaning Services for Retail
Space: Add as new Sections 5(k) and (1) the following:
"(k) Retail Space: Notwithstanding anything herein to the contrary,
Landlord's obligation for services and utilities for the Sylvan Retail
Space shall be limited to the following:
(1) Hot and cold water to Sylvan Retail Space;
(2) Electricity to Sylvan Retail Space for lighting purposes and
operation of ordinary equipment consisting of an average of 5 xxxxx
per square foot of Retail Rentable Space;
(3) A security access system for the Common Areas of the
Building; and
(4) Sufficient access cards to be used with a security system, to
provide each employee of Tenant with
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a card and a system for disarming and replacing cards as employees
leave or are replaced.
(l) Janitorial/Cleaninq Services For Retail Space: Landlord shall only
provide janitorial and cleaning services for the Sylvan Retail Space, if
requested by Tenant, for an agreed fee.
7. Parking: Section 29 shall be deleted in its entirety and the following
language is inserted in lieu thereof:
"29. Parking.
Tenant shall be guaranteed parking within the Parking Facilities
for 265 cars for the Initial Term. In the event Tenant exercises the
renewal option provided for in Section 35, Tenant shall be guaranteed
parking within the Parking Facilities for 150 cars for the Renewal
Period. Of this guaranteed number, 40 shall be located in the
structured parking being constructed on Parcels R and Q (the "On Site
Garage"), some of which may be designated for "Sylvan Visitor Parking
Only" or similar wording.
(a) All Parking Facilities shall either be paved, striped
and fenced surface lots, that comply with all applicable Legal
Requirements and are consistent with the Security Plan described
on Exhibit G, or are contained within structured deck or garage
parking. If the Parking Facilities are on surface lots, Tenant's
spaces shall be consolidated (as opposed to dispersed) in a
cohesive grouping, and marked with signs so as to minimize the
chance of usage by unauthorized parkers. Tenant may, at Tenant's
expense, require Landlord to designate with signage the
restriction of a portion of such spaces to "Sylvan Parking Only"
or similar wording.
(b) Attached as Exhibit I is a plat showing the Inner Harbor
East subdivision, and identifying the location of Parcels B, C
and P. Tenant's surface parking area shall initially be located
on an undeveloped portion of Parcel P in closest proximity to the
Building. Landlord has procured the agreement of the owner of
Parcel P to allow parking on this parcel as evidenced by its
joining in the execution of this Lease. Tenant's parking area
shall be designated as reserved for the use of Tenant's employees
and visitors. Tenant shall be responsible for assuring that only
authorized persons park in Tenant's parking area. Until Parcel P
is developed, Tenant shall have priority over all persons other
than other tenants of the Building, their employees and invitees
with respect to the use of spaces on
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Parcel P. As Parcel P is developed, Landlord shall relocate
Tenant's surface spaces to surface lots, if available, on
undeveloped portions of Parcels B, C or P, that meet the
requirements of paragraph (a) above, or if not available, to
structured decks or parking garages, subject to the requirement
that no parking spaces shall be relocated until substitute
spaces, meeting the standards of paragraph (a) above, have been
completed and are available for immediate use. No such relocation
shall occur without at least thirty (30) days prior notice to
Tenant.
(c) Tenant agrees to use the Parking Facilities for the
parking of passenger automobiles, sport and utility vehicles and
vans and for no other purposes.
(d) During the second Lease Year, Landlord, in its
discretion, may, with at least thirty (30) days written notice to
Tenant, elect to relocate up to ten (10) surface spaces to the
On-Site Garage. For each space so relocated, the monthly rent
shall be increased by $53.65. During Lease Years 3 through 10,
Landlord in its discretion may, with at least thirty (30) days
written notice to Tenant, relocate up to 12 additional surface
spaces to On-Site Garage for a total of up to 62 One-Site Garage
spaces. The monthly rent per space shall be increased as follows:
Per Space
Lease Year Monthly Rent Increase
---------- ---------------------
3 $55.26
4 $56.91
5 $58.64
6 $60.38
7 $62.19
8 $64.06
9 $65.98
10 $67.96
(e) In the event no structured deck or garage parking, other
than the On-Site Garage, are constructed within the Inner Harbor
East subdivision as outlined on Exhibit I prior to the sixth
Lease Year, the Basic Rent provided for in Section 3(a) above
shall be reduced by Six Thousand Two Hundred Fifty Dollars
($6,250) for each month of the remaining term until such
additional structured deck or garage parking is constructed and
open for parking.
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(f) In the event the On-site Garage is not open and
operating on the Commencement Date, Landlord shall provide Tenant
with a credit of $2.50 per work day (Monday through Friday) for
each of the 40 guaranteed spaces which are to be located in the
On-Site Garage. Said credit shall be applied against Tenant's
Operating Expenses each month in the arrears until Tenant is
notified that the On-Site Garage is open and operating.
8. Options to Extend Term: Replace Sections 35(a)(b)(c) and (d) with the
following:
"35. Options to Extend Term.
(a) Renewal Options. Tenant shall have the option to renew the
Term provided in Section l(b) (the "Initial Term") for two additional
periods of five (5) years each (each of such additional periods being
hereinafter referred to as a "Renewal Period"). Each renewal option
shall be exercisable by Tenant by giving notice of the exercise of
such renewal option to Landlord at least 365 days before the
expiration of the Initial Term, in the case of the first renewal
option, or at least 365 days before the expiration of the first
Renewal Period, in the case of the second renewal option, except that
if the Rent for the first Lease Year in a Renewal Period has not been
determined by the last day on which the renewal option for such
Renewal Period must be exercised in accordance with the procedure set
forth in subsection (d), the period of time within which the Tenant
may exercise the renewal option for such Renewal Period shall be
extended until 30 days after the determination of the Rent for the
first Lease Year in such Renewal Period. Time shall be of the essence
in connection with Tenant's exercise of the renewal options. Tenant
may not exercise the renewal option for either Renewal Period unless
the Rent for such Renewal Period has previously been determined by
agreement between Landlord and Tenant or in accordance with the
procedure set forth in subsection (d). Tenant may not exercise the
renewal option for the second Renewal Period unless Tenant has
previously exercised the renewal option for the first Renewal Period
in accordance with the provisions of this subsection. Tenant may not
exercise the renewal option for either Renewal Period if an Event of
Default has occurred and is continuing. If (i) the last day on which
Tenant has the right to exercise a renewal option (the "Last Exercise
Date"), occurs less than 365 days before the expiration of the Initial
Term, in the case of the first renewal option, or less than 365 days
before the expiration of the first Renewal Period, in the case of the
second renewal option, and (ii) Tenant does not exercise the renewal
option, the Term shall be extended until the last day of the month in
which the 365th day after the Last Exercise
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Date occurs; unless prior to the Last Exercise Date, Tenant advises
Landlord that it will not exercise its applicable renewal option. For
purposes of determining the Basic Rent payable during the extension
provided by the preceding sentence, the Rent shall be 95% of the fair
rental value of the Leased Premises plus 100% of the fair rental value
(market rate) of the parking spaces guaranteed by Section 29, all as
actually determined by the procedure described in subsection (d) with
respect to the Renewal Period for which Tenant did not exercise its
renewal option. If Tenant timely exercises the options to renew this
Lease in accordance with the provisions of this Section, then the Term
shall be extended accordingly. Except as otherwise expressly provided
in this Section, each Renewal Period shall be upon the same terms,
covenants and conditions set forth in this Lease with respect to the
Initial Term and Tenant's obligations to pay Tenant's Proportionate
Share of Operating Expenses pursuant to Section 3(b) shall continue
without interruption during each Renewal Period and the extension
provided for in the seventh sentence, except that there shall be no
renewal options after the second Renewal Period. All references in
this Lease to the "Term" shall include each Renewal Period for which
Tenant shall have effectively exercised its renewal option.
(b) Rent During Renewal Periods.
(1) First Lease Year. If Tenant exercises the renewal option
provided by subsection (a) to extend the Initial Term for a
Renewal Period, the Rent for the first Lease Year in the Renewal
Period shall be an amount equal to 95% of the fair rental value
(per square foot) of the Leased Premises plus 100% of the fair
rental value (market rate) of the parking spaces guaranteed by
Section 29 as of the first day of the Renewal Period as
determined by mutual agreement between Landlord and Tenant or by
appraisal by one or more commercial real estate brokers in the
manner provided in subsection (d).
(2) Balance of First Renewal Period. For each Lease Year (or
part of a Lease Year) thereafter during the Renewal Period, the
Basic Rent for the area leased by Tenant shall be an amount equal
to 102.40% of the Basic Rent for the immediately preceding Lease
Year.
(c) [Omitted].
(d) Method of Determining Rent. If Tenant desires to exercise the
renewal option provided by subsection (a) to extend the Initial Term
for a Renewal Period, and if Landlord and Tenant are unable mutually
to agree on the Rent
14330rrk.6pl
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for the first Lease Year in such Renewal Period at least 420 days
before the end of the last Lease Year in the Initial Term, in the case
of the first renewal option, or at least 420 days before the end of
the last Lease Year in the first Renewal Period, in the case of the
second renewal option, Tenant shall notify Landlord of its desire to
determine the Rent by appraisal pursuant to this subsection not more
than 450 days and not less than 420 days before the end of the last
Lease Year in the Initial Term or the last Lease Year in the first
Renewal Period, as the case may be, and in such notice Tenant shall
designate the broker appointed by it. The giving of such notice shall
not constitute an exercise of the option by Tenant. Within 20 days
thereafter, Landlord shall, by notice to Tenant, designate a second
broker. If Landlord does not so designate a second broker within the
20-day period, the first broker appointed by Tenant shall proceed to
make his valuation, in which case the fair rental value of the Leased
Premises including the fair rental value (market rate) of the parking
spaces guaranteed by Section 29 for the first Lease Year in the
Renewal Period shall be the amount determined by the first broker.
Each broker shall make an independent determination of the fair rental
value of the Leased Premises including the fair rental value (market
value) of the parking spaces guaranteed by Section 29 for the first
Lease Year in the applicable Renewal Period. If the two brokers so
appointed agree on the fair rental value of the Leased Premises
including the fair rental value (market value) of the parking spaces
(market value) guaranteed by Section 29 within 15 days after the
appointment of the second broker, the fair rental value of the Leased
Premises including the fair rental value of the parking spaces
guaranteed by Section 29 for the first Lease Year in the applicable
Renewal Period shall be the amount determined by them. If the two
brokers so appointed do not agree on the fair rental value of the
Leased Premises including the fair rental value (market rate) of the
parking spaces guaranteed by Section 29 within 15 days after the
appointment of the second broker, but if the difference between the
fair rental value determined by each broker is not more than $1.00 per
square foot, the fair rental value of the Leased Premises including
the fair rental value (market rate) of the parking spaces guaranteed
by Section 29 for the first Lease Year in the applicable Renewal
Period shall be an amount equal to the quotient obtained by dividing
the sum of the fair rental value determined by each broker by two. If
the two brokers so appointed do not agree on the fair rental value of
the Leased Premises including the fair rental value (market rate) of
the parking spaces guaranteed by Section 29, and if the difference
between the fair rental value determined by each broker is more than
$1.00 per square foot, the two brokers shall jointly appoint a third
broker. If the two brokers so appointed shall be unable, within 15
days after the
14330rrk.6pl
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appointment of the second broker, either (i) to agree on the fair
rental value of the Leased Premises including the fair rental value
(market rate) of the parking spaces guaranteed by Section 29 (or to
disagree on such value with a difference of $1.00 or less per square
foot) or (ii) to agree on the appointment of a third broker, they
shall give written notice of such failure to agree to the parties,
and, if the parties fail to agree upon the selection of a third broker
within 10 days after the brokers appointed by the parties give such
notice, then within 10 days thereafter either of the parties upon
notice to the other party may request such appointment by the then
President of the Baltimore City Board of Realtors (or any organization
successor thereto), or in his failure to act, may apply for such
appointment to the Circuit Court for Baltimore City, Maryland. If a
third broker is appointed, he shall make his valuation within 15 days
after his appointment and the fair rental value of the Leased Premises
including the fair rental value (market rate) of the parking spaces
guaranteed by Section 29 for the first Lease Year in the applicable
Renewal Period shall be an amount equal to the quotient obtained by
dividing the sum of the fair rental values determined by the two
brokers who were closest to each other in amount, by two.
9. Expansion Options For Office Space. Sections 36(a) and 36 (b) are no
longer applicable; replace the first sentence of Section 36(c), as set forth in
the First Amendment, with the following:
"(c) Provided Tenant has given Landlord written notice twelve (12)
months prior to the fifth Lease Year, Tenant shall have the option of
renting the remaining 9,277 square feet on the third floor of the
Building."
10. Expansion Options For Retail Space: Add as a new Section 36(d) the
following:
"(d) Notwithstanding anything herein to the contrary, Tenant shall not
have the option of leasing additional space on the first floor of the
Building."
11. Tenant's Allowance: Replace the entire Section 39 with the following:
"Landlord shall give Tenant an allowance to cover the cost of Tenant's
Work actually performed in an amount not to exceed the product obtained by
multiplying $15.00 by the Rentable Area, or a total allowance of $1,622,460
("Tenant's Regular Allowance").
14330rrk.6pl
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Tenant's Regular Allowance shall be allocated for specific work
performed over the five (5) floors of the Leased Premises as follows:
1st Floor $140,175
2nd Floor $427,290
3rd Floor $262,920
4th Floor $427,290
5th Floor $364,785
The Tenant's Regular Allowance shall be paid by Landlord to Tenant
within thirty (30) days after completion of the Tenant Work for a given
floor and presentation of invoices from general contractors, subcontractors
and materialmen which invoices describe with specificity the work
performed, the floor on which the work has been performed or the materials
supplied and the cost of such work or materials."
12. Relocation of Sylvan Retail Space: The following is added as Section
43:
"43. Relocation of Sylvan Retail Space: Notwithstanding anything in
this Lease to the contrary, in the event Tenant leases twenty-five thousand
(25,000) square feet or more in other space within the Inner Harbor East
Renewal area from Landlord or an Affiliate, Landlord shall have the right
to relocate the Sylvan Retail Space to the building where the other space
is being leased; provided, the proposed relocated Sylvan space is
comparable in size and tenant improvements made prior to the relocation.
All reasonable direct third party expenses relating to the move from the
Sylvan Retail Space to the new space shall be borne by Landlord. If the
parties do not agree that all of the expenses are appropriate, the parties
agree to arbitrate the issue and waive any and all rights of litigation
with respect to the determination of the moving expenses. The cost and
expense of any such arbitration shall be shared equally by the parties.
Tenant agrees, after such relocation and the payment of third party
moving expenses, to execute, if requested by Landlord, a release or
modification of this Lease Agreement and a new lease for the relocated
space; provided, it is on the same terms and conditions as those contained
herein applicable to the Sylvan Retail Space and the Basic Rent under this
Lease is reduced in accordance with the following schedule:
14330rrk.6pl
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Months Monthly Rent
------ ------------
1-12 $11,603
13-24 $11,951
25-36 $12,310
37-48 $12,679
49-60 $13,060
61-72 $13,451
73-84 $13,855
85-96 $14,271
97-108 $14,699
109-120 $15,140
13. General:
13.1. In all other respects, the Lease and the First Amendment shall
remain in full force and effect.
13.2. This Amendment shall be binding upon the parties hereto and
their respective successors, and assigns.
13.3. This Amendment shall be interpreted and construed in accordance
with the laws of the State of Maryland.
14330rrk.6pl
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WITNESS the hands and seals of the parties hereto as of the day and year
first above written.
ATTEST/WITNESS: HARBOR EAST-OFFICE, LLC
LANDLORD
By: The Xxxxxxxxx/Xxxxxxxx Family
Partnership LLP
Administrative Member
/s/ ILLEGIBLE By: /s/ Xxxxxxxx Xxxxxxxx
------------- -------------------------- (SEAL)
Name:
Partner:
/s/ ILLEGIBLE By: /s/ Xxxxxxx Xxxxxxxxx
------------- -------------------------- (SEAL)
Name:
Partner:
ATTEST/WITNESS: SYLVAN LEARNING SYSTEMS, INC.
TENANT
/s/ ILLEGIBLE By: /s/ ILLEGIBLE
------------- -------------------------- (SEAL)
The undersigned joins herein solely to confirm that it will make Parcels P,
B & C available to Landlord to satisfy the parking requirements described
Section 29(b) hereof.
By: The Xxxxxxxxx/Tsakalos Family
Partnership LLP
General Partner
By: /s/ Xxxxxxxx Xxxxxxxx
-------------------------- (SEAL)
Name:
Partner:
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------- (SEAL)
Name:
Partner:
14330rrk.6pl
-17-
EXHIBIT X-0
XXXXX XXXXX
XXXXX XXXX
XXXXX XXXXXX XXXX
APARTMENTS
EXHIBIT A-2
SECOND FLOOR
FLOOR PLAN
INNER HARBOR EAST
APARTMENTS
EXHIBIT X-0
XXXXX XXXXX
XXXXX XXXX
XXXXX XXXXXX XXXX
APARTMENTS
EXHIBIT X-0
XXXXXX XXXXX
XXXXX XXXX
XXXXX XXXXXX XXXX
APARTMENTS
-21-
EXHIBIT A-1
FIFTH FLOOR
FLOOR PLAN
INNER HARBOR EAST
APARTMENTS
EXHIBIT I
INNER HARBOR EAST
PLAT S.E.B. NO. 3363
PLAT S.E.B. NO. 3506
BALTIMORE, MARYLAND
OCTOBER 10, 1996
