LEASE AGREEMENT
BETWEEN
NOTTINGHAM VILLAGE, INC.
AND
METRIS DIRECT, INC.
LEASE AGREEMENT
THIS AGREEMENT OF LEASE, is made as of this 28 day of March, 1997, by
NOTTINGHAM VILLAGE, INC., a corporation organized and existing under the laws
of Maryland ("Landlord"), and METRIS DIRECT, INC., a Minnesota corporation
("Tenant").
LEASE
IN CONSIDERATION of the Rents hereinafter reserved and the agreements
set forth in the General Terms and Conditions, and any and all Schedules,
Attachments and Riders hereto, Landlord hereby leases to Tenant and Tenant rents
from the Landlord the Premises, located in the Building within the Center, for
the Term. Landlord and Tenant do hereby agree as follows.
1. SUMMARY OF LEASE TERMS; DEFINED WORDS AND PHRASES; ATTACHMENTS. The
following is a summary of the Terms of this Lease. These terms shall have the
following meanings, when used in the foregoing grant and in the following
Sections, Subsections, paragraphs and Schedules, and in the attached General
Terms and Conditions of Lease, and in all the other Exhibits and Riders attached
hereto.
1.1. "BASIC RENT". For the first Lease Year of the Term the Basic
Rent shall be the annual sum equal to the product of $10.00 multiplied by the
Rentable Area of the Premises rented to Tenant under this Lease, and it shall be
payable in equal consecutive monthly installments. Commencing with the second
Lease Year and continuing each Lease Year thereafter for the remainder of the
Term, the Basic Rent shall be increased to an amount equal to the product,
rounded to the nearest cent, of (A) the per-square-foot Basic Rent rate for the
immediately preceding year multiplied by (B) 1.025; and the product of such
equation then being multiplied by (C) the Rentable Area. Tenant shall pay no
monthly installment of Basic Rent for the first calendar month of the Term.
1.2. "BUILDING". The building to be constructed by Landlord and
situate within the Center, at the intersection of Sandpiper Circle, extended,
and Corporate Drive, in the White ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇, as shown on Exhibit A, the total square footage of which is hereinafter
referred to as the "Rentable Area". Based upon the Building Plans the Rentable
Area is estimated to be 50,000 square feet.
1.3. "BUILDING PLANS". The plans for the construction of the
Building to be prepared in accordance with Section 4.1.1. based upon the
preliminary plans identified in Exhibit D attached hereto.
1.4. "CENTER". As of the date of this Lease, that certain
office/industrial development owned and to be developed by Landlord within that
portion of the White ▇▇▇▇▇ Business Community, Section G, situate along the
western side of Sandpiper Circle, extended, and at the intersection of Sandpiper
Circle, extended, and Corporate Drive, containing 7.2157 acres, more or less, as
shown on Exhibit A.
1.5. "DEPOSIT". Collectively, (i) the amount of the Basic Rent due
hereunder for the second full month of the Term, together with (ii) the Letter
of Credit referred to in Section 5.6 of this Lease, all of which shall be held
by Landlord and applied as provided in Subsection 5.6 of the General Terms and
Conditions to Lease.
1.6. "LANDLORD'S NOTICE ADDRESS". Care of Nottingham Management
Company, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
1.7. "LANDLORD'S RENTAL PAYMENT ADDRESS". Care of Nottingham
Management Company, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
1.8. "LEASE YEAR". A period of twelve (12) consecutive full
calendar months. The first Lease Year shall begin on the date of commencement of
the Term hereof if the date of commencement shall occur on the first day of the
calendar month; if not, then the first Lease Year shall commence on the first
day of the calendar month next following the date of commencement of the Term
hereof. Each succeeding Lease Year shall commence upon the anniversary date of
the first Lease Year. The last Lease Year of the Term shall consist of the
number of months, less than twelve, remaining in the Term upon conclusion of all
prior Lease Years of 12 consecutive full calendar months.
1.9. "LEASEHOLD IMPROVEMENTS". Those improvements constructed or to
be constructed by Landlord within the Premises for Tenant as provided in Section
4 of the General Terms and Conditions to Lease.
1.10. "NAMED BROKER". CB Commercial Real Estate Group
1.11. "PERMITTED USE". The use of the Premises for a telephone call
center or for general office use.
2
1.12. "PREMISES". The total net Rentable Area of the Building as
constructed on the Center.
1.13. "TENANT'S NOTICE ADDRESS". The term means ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
169, Interchange Tower, Suite 1800, St. Louis Park, Minnesota, 55426-1222 until
the Commencement Date and, thereafter, the term means such address together with
address of the Premises.
1.14. "TERM". A period of one hundred twenty-one (121) calendar
months plus the fractional part of a calendar month (if any) commencing on the
date established pursuant to Section 3 of the General Terms and Conditions.
2. ATTACHMENTS. Exhibit A, the Site Plan; Exhibit B, the "Rules and
Regulations"; Exhibit "C", the "Form of Letter of Credit", and Exhibit D, the
schedule of "Building Plans", are attached hereto, and shall be deemed to be a
part hereof.
3. GENERAL TERMS AND CONDITIONS. The General Terms and Conditions to
Lease, numbered as Sections 1 through 40 on pages numbered 1 through 52,
attached hereto, are an integral part of this Lease and are incorporated herein
my reference.
4. "CERTAIN DEFINED WORDS AND PHRASES". In addition to the terms above
set forth, for purposes of this Lease, The General Terms and Conditions of
Lease, and any of the Exhibits, Schedules or Riders attached hereto and made a
part hereof and all agreements supplemental to this Lease, the following terms
shall have the respective meanings as set forth in the following Section,
Subsection and Schedule references found in the General Terms and Conditions:
3
Additional Rent 5.2 Legal Requirements 10.4.8
Alterations 10.4 Preliminary Plans and Specifications 4.1
Appropriate Authorities 7.2.2 Rent 5.4
Bankruptcy Code 8.4 Substantial completion 3
Casualty 16.1 Successor ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇ Maintenance Expenses 11.4 Superior Mortgage 21
Common Area Maintenance Expenses 11.4 Superior Mortgagee 21
Common Areas 11.1 Superior Lease 21
Common Areas 11.1 Superior Lessor 21
Default Rate 5.3 Tax Year 12.1
Environmental Laws 7.2.2 Taxes 12.1
Event of Default 23.1 Taxes 12.1
Expense Statement 11.3 Tenant 29
Expense Statement 113 Transfer 8.1
Final Plans and Specifications 4.1 Transferee 8.1
Hazardous Materials 7.2.2
Insurance Costs 15.6
Landlord 28
IN WITNESS WHEREOF, the parties hereto have executed this Agreement of
Lease, or have caused the same to be executed on their respective behalves by
their duly authorized representatives, the date and year first above written.
WITNESS: LANDLORD:
NOTTINGHAM VILLAGE, INC., a
Maryland corporation
[Illegible] By: P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, (SEAL)
----------------------------- --------------------------------
P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President
WITNESS OR ATTEST: TENANT:
METRIS DIRECT, INC., a Minnesota
corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (SEAL)
----------------------------- --------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
4
ACKNOWLEDGEMENT
STATE OF MINNESOTA, COUNTY OF HENNEPIN, to wit:
I HEREBY CERTIFY that on this 7TH day of March, 1997, before me, the
subscriber a Notary Public of the said State, personally appeared ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, known to me (or satisfactorily proven) to be the duly authorized
corporate officer of METRIS DIRECT, Inc., a Minnesota corporation, and that such
person, as such officer, being duly authorized so to do, did execute the
foregoing instrument on behalf of said entity, and such person made
acknowledgement that such execution was for and on behalf of, and was the
authorized act of, such entity.
AS WITNESS my hand and Notarial Seal.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
[SEAL] Notary Public
My Commission Expires: Jan. 31, 2000
5
LEASE AGREEMENT
EXHIBIT A
SITE PLAN
SEE ATTACHMENTS.
[SITE PLAN]
EXHIBIT TO
ACCOMPANY
LEASE AGREEMENT
BUSINESS COMMUNITY
SECTION G
#▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[SITE PLAN]
EXHIBIT TO ACCOMPANY
LEASE AGREEMENT
BUSINESS COMMUNITY
SECTION G
#▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LEASE AGREEMENT
EXHIBIT B
RULES & REGULATIONS
1. Tenant shall not obstruct in any way the sidewalks or parking areas in
the front, side, or rear of the Building nor do anything directly or indirectly
that will limit any of the ingress or egress or of the light of any other tenant
or of Landlord.
2. Tenant shall not attach awnings, antennas, pipes, wiring or other
projections to the roof or outside walls of the Building, nor shall Tenant
attach any curtains, blinds, shades, or screens shall be attached to, or hung
in, or used in connection with any window or door of the Premises which may be
visible from the exterior of the Premises without the prior written consent of
Landlord, having regard for the aesthetic impact of such installations upon the
exterior appearance of the Building.
3. No additional lock or locks shall be placed by Tenant on any door in
the Building unless Landlord shall be given additional keys therefor, so as to
permit Landlord to be able to effect entry into the Building to respond to
Building emergencies. All keys to doors shall be returned to Landlord at the
termination of the tenancy.
4. Tenant shall be responsible for storage of Tenant's trash or refuse in
proper recepticals and for removal of the same from the Premises and the Center
at Tenant's cost and expense. Dumpsters or other trash containers shall not be
allowed on the outside of the Building without Landlord's prior written consent
except as shown on the Site Plan or the Building Plans. If such consent be given
by Landlord, the type, size, and location of such containers shall be only as
approved by Landlord and shall be maintained by Tenant in a clean sanitary
manner, and in good repair at all times.
5. Tenant shall not burn any trash or garbage of any kind in or about the
Premises.
6. Tenant shall not commit any waste upon the Premises or create a
nuisance nor cause or permit objectionable odors to emanate or be dispelled from
the Premises.
7. No loudspeakers, radios, or other devices shall be used in a manner so
as to be heard outside of the Premises.
8. Tenant shall not locate or store equipment or other personal property
outside the confines of the Premises without Landlord's express written consent.
9. Under no circumstances shall all or any portion of the Premises be
used at any time, however temporarily, as a dormitory or otherwise for
residential purposes.
10. The maintenance of dogs, cats, domesticated animals or any other type
of pet or animal of any kind on or about the Premises, however temporarily, is
strictly forbidden. This provision shall not restrict entry of seeing eye dogs,
or other animals used to promote mobility of disabled persons.
11. Tenant, its officers, employees, agents, contractors and invitees shall
park their vehicles only in those portions of the parking area marked for such
purpose by Landlord and shown on the site plan. Any vehicle parked in any other
location on the Center or within public road rights-of-way may be towed without
notice at the expense of the tenant responsible therefor.
12. Any breach by Tenant of any of the foregoing Rules and Regulations, or
any other rules or regulations contained in the Lease or hereafter promulgated
by Landlord pursuant to its reserved powers contained in the Lease, if not
remediated by Tenant within ten (10) days following written notice by Landlord,
will result in the imposition of a penalty for breach in the amount of
Twenty-Five Dollars ($25.00) for each day of infraction, accounting from the
date of Landlord's notice until remediation of the breach. The penalties imposed
by this section shall be in addition to all other rights and remedies inuring to
Landlord under the Lease in case of Tenant's breach, specifically including the
right of self-help as therein set forth.
LEASE AGREEMENT
EXHIBIT C
FORM OF LETTER OF CREDIT
SEE ATTACHMENT.
THIS IS A DRAFT FOR DISCUSSION PURPOSES ONLY. IT DOES NOT REPRESENT A LIABILITY
OF FIRST BANK NATIONAL ASSOCIATION, MINNEAPOLIS OFFICE AT THIS TIME.
FIRST BANK
First Bank National Association International Banking Division
Minneapolis Office Cable: FIRSTBANK MPS
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ TELEX: 192179 FBNA ITL MPS
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ S.W.I.F.T.: FNBMUS44
▇▇▇ ▇▇▇-▇▇▇▇/0710 FAX: ▇▇▇ ▇▇▇-▇▇▇▇
(ISSUE DATE)
(BENEFICIARY'S NAME) ("BENEFICIARY")
(BENEFICIARY'S ADDRESS)
WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. XXXXX FOR THE
ACCOUNT OF METRIS COMPANIES INC., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("APPLICANT") IN THE AMOUNT OF $(NUMERIC DOLLAR AMOUNT)
(DOLLAR AMOUNT IN WORDS) AND AUTHORIZE YOU TO DRAW AT SIGHT ON FIRST BANK
NATIONAL ASSOCIATION, MINNEAPOLIS OFFICE.
DRAFTS ON US AT SIGHT MUST BE ACCOMPANIED BY THE FOLLOWING:
1. A WRITTEN STATEMENT, PURPORTEDLY SIGNED BY AN OFFICER OF THE BENEFICIARY,
DULY NOTARIZED, AS TO ONE OF THE ALTERNATIVES, AS FOLLOWS:
A) "THIS LETTER OF CREDIT EXPIRES PRIOR TO THE END OF THE TERM OF THE LEASE
BETWEEN APPLICANT, AS TENANT, AND BENEFICIARY, AS LANDLORD, DATED AS OF
(INDICATE DATE); APPLICANT HAS FAILED TO PROVIDE A RENEWAL OR REPLACEMENT
OF THIS LETTER OF CREDIT, UPON THE TERMS SET FORTH IN SECTION 5.6.2. 0F
THE LEASE WITHIN 60 DAYS PRIOR TO THE EXPIRATION OF THIS LETTER OF CREDIT;
BENEFICIARY HAS GIVEN APPLICANT 15 DAYS NOTICE, WHICH THE BENEFICIARY
CERTIFIES WAS DELIVERED IN ACCORDANCE WITH THE NOTICE PROVISIONS OF THE
LEASE, TO CURE SUCH FAILURE AND APPLICANT HAS FAILED TO DO SO WITHIN SUCH
TIME; OR
B) "APPLICANT HAS DEFAULTED IN THE PERFORMANCE OF ONE OR MORE OF ITS
OBLIGATIONS UNDER THE LEASE; AND PURSUANT TO SECTION 23 OF THE LEASE
BENEFICIARY HAS GIVEN APPLICANT NOTICE, WHICH THE BENEFICIARY CERTIFIES
WAS DELIVERED IN ACCORDANCE WITH THE NOTICE PROVISIONS OF THE LEASE,
DEMANDING CURE OF SUCH DEFAULT OR DEFAULTS; AND SUCH DEFAULT OR DEFAULTS
HAVE REMAINED UNCURED FOR THE PRESCRIBED PERIOD AFTER SUCH NOTICE."
2. THE ORIGINAL OF THIS LETTER OF CREDIT.
THE AMOUNT OF ANY DRAFT(S) DRAWN UNDER THIS CREDIT ARE TO BE ENDORSED ON THE
REVERSE SIDE HEREOF. SUCH DRAFT(S) MUST BEAR THE CLAUSE "DRAWN UNDER FIRST BANK
NATIONAL ASSOCIATION, MINNEAPOLIS OFFICE CREDIT NO. XXXXX DATED (ISSUE DATE)."
THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING TO YOU.
SUCH UNDERTAKING SHALL NOT IN ANY WAY BE MODIFIED, AMENDED OR AMPLIFIED BY
REFERENCE TO ANY DOCUMENT OR INSTRUMENT REFERRED OR RELATED TO HEREIN AND ANY
SUCH REFERENCE SHALL NOT BE DEEMED TO INCORPORATED HEREIN BY REFERENCE ANY SUCH
DOCUMENT OR INSTRUMENT.
ITS IS A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE CONSIDERED
AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR ONE YEAR FROM THE PRESENT OR ANY
FUTURE EXPIRATION DATE UNLESS WE NOTIFY YOU IN WRITING AT LEAST SIXTY (60) DAYS
PRIOR TO ANY SUCH EXPIRATION DATE THAT THIS LETTER OF CREDIT WILL NOT BE
RENEWED. NOTWITHSTANDING ANY OTHER PROVISION HEREIN THIS LETTER OF CREDIT WILL
NOT EXTEND BEYOND SEPTEMBER 30, 2007.
IF CANCELLATION OF THIS LETTER OF CREDIT IS REQUIRED BEFORE THE EXPIRY DATE
STATED ▇▇▇▇▇, THE ORIGINAL OF THIS LETTER OF CREDIT MUST BE RETRUNED TO US WITH
THE BENEFICIARY'S LETTER REQUESTING CANCELLATION.
WE HEREBY AGREE WITH DRAWERS THAT DRAFTS AND DOCUMENTS AS SPECIFIED ABOVE WILL
BE DULY HONORED UPON PRESENTATION TO FIRST BANK NATIONAL ASSOCIATION,
MINNEAPOLIS OFFICE, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
IF PRESENTED ON OR BEFORE SEPTEMBER THIRTIETH 1998, OR ANY EXTENDED DATE AS
PROVIDED ▇▇▇▇▇.
THIS CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY
CREDIT PUBLISHED BY THE INTERNATIONAL CHAMBER OF COMMERCE, OR ANY SUBSEQUENT
REVISION THERETO.
FIRST BANK NATIONAL ASSOCIATION, MINNEAPOLIS OFFICE
-------------------------------- -----------------------------
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
LEASE AGREEMENT
EXHIBIT D
BUILDING PLANS
Schedule of Building Plans and Specifications:
Drawings A-1 through A-9, inclusive, and S-1 through S-9, inclusive, issued for
Permit February 7, 1997, as prepared by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Associates, Inc.,
are incorporated herein by reference.
GENERAL TERMS AND CONDITIONS TO
LEASE AGREEMENT
1. GENERAL TERMS AND CONDITIONS TO LEASE. These are the General Terms and
Conditions to Agreement of Lease, numbered as Sections 1 through 40 on pages
numbered 1 through 52, and are attached to that Lease Agreement between
Nottingham Village, Inc., as Landlord, and the Tenant named therein.
2. LEASE OF PREMISES. Landlord has agreed to lease the Premises, located
in the Building within the Center, to the Tenant and Tenant has agreed to rent
and accept the same from the Landlord, subject to these General Terms and
Conditions. The Rentable Area shall be measured from the exterior surface of
exterior walls of the Building enclosing the Premises.
3. TERM.
3.1. ORIGINAL TERM. The original Term of this Lease shall commence
upon the date (the "Commencement Date"), following substantial completion of the
Building and Leasehold Improvements, on which Landlord tenders to Tenant the
keys to the Premises or other indicia of possession with respect thereto,
indicating that Tenant may enter into possession of the Premises for the Term,
or otherwise tenders delivery of the Premises to Tenant, in writing, and
terminating (unless sooner terminated pursuant to the provisions of this Lease)
on the last day of the last calendar month of the Term. The parties anticipate
that the Commencement Date shall occur September 1, 1997. The Commencement Date
shall be conclusively confirmed by Landlord to Tenant in writing; and, at the
request of either of them, the parties shall also enter into a supplementary
agreement or certificate, acknowledging that Tenant has accepted possession and
setting forth the Commencement Date and the date of termination of the Term.
"Substantial completion" means that (i) the Building has been completed in
accordance with the Building Plans, (ii) the driveways and parking areas have
been completed in accordance with the Site Plan; (iii) a certificate of use and
occupancy has been issued for the Building and the Premises; (iv) all Building
systems are installed and operable, and (v) the Leasehold Improvements to be
performed by Landlord as required by Subsection 4.1 have been substantially
completed, except for so-called punch list items, and that they are ready for
Tenant to commence the installation of its trade fixtures, equipment and
inventory, and so certified to by the Landlord or its representative. Beginning
with the execution of this Lease, but prior to the Commencement Date, Tenant
shall be subject to all of the terms and provisions of this Lease excepting only
those requiring the payment of Rent and the conduct of business.
3.2. RENEWAL OPTION. Provided no Event of Default exists and then
remains uncured, and Tenant is in possession of the Premises, Tenant shall be
entitled to renew this Lease for two (2) additional terms, each of five (5)
years, the first commencing immediately following the expiration of the original
Term, the second commencing upon the conclusion of
1
the first renewal term, on the same terms and conditions of this Lease, with the
following conditions:
3.2.1. With respect to each renewal term, Tenant will give
written notification to Landlord not later than one hundred eighty (180) days
prior to the scheduled termination date of the Term of its intention to elect to
renew this Lease.
3.2.2. Within fifteen (15) days following receipt of Tenant's
notification of intent, Landlord shall send Tenant a notice specifying
Landlord's then-current Basic Rent rate for the Premises (the "Offer Rate") as
determined by the Landlord in the sole and unfettered exercise of its
discretion. The Offer Rate shall reflect a shell rental rate for the Building,
in acknowledgement of the fact that Tenant shall have paid for all Leasehold
Improvements pursuant to the terms of this Lease.
3.2.3. Tenant shall have thirty (30) days following receipt of
Landlord's notice to inform Landlord whether it will accept a renewal of the
Lease at a Basic Rent equal to the Offer Rate and shall be deemed to have
accepted the Offer Rate unless, within such thirty (30) day period, it tenders
Notice to Landlord refusing to accept such Offer Rate and requiring the Basic
Rent rate to be determined by appraisal in accordance with the following
procedure.
3.2.4. If Tenant accepts the Offer Rate and elects to lease
the Premises for the renewal term above set forth pursuant to the renewal right
granted in this Section then Landlord and Tenant shall execute a Lease Amendment
extending the Term and confirming the new Basic Rent within thirty (30) days of
receipt of an instrument of amendment from Landlord. Any improvements to the
Premises to be completed in connection with any such renewal shall be as
negotiated by Landlord and Tenant at such time.
3.2.5. If Tenant refuses to accept Landlord's Offer Rate, then
unless Landlord and Tenant otherwise agree, the Basic Rent rate for the first
Lease Year of Renewal Term in question shall be the greater of (i) 1.025 times
the annual Basic Rent for the immediately preceding Lease Year or (ii) the "Fair
Market Rent" as determined by appraisal in accordance with the following
procedure. Within thirty (30) days following the date of Tenant's notice
rejecting Landlord's proposed Offer Rate Tenant shall request, obtain (from a
qualified appraiser chosen by Tenant) and deliver to Landlord an appraisal of
the Fair Market Rent for the Premises for the proposed renewal term. The Fair
Market Rent will be based upon rates for comparable space in a shell building
comparable to the Building, without regard to the Leasehold Improvements or
other improvements paid for by Tenant, but taking into account the annual
increases in Rent as provided below. Tenant's failure to deliver the appraisal
within such thirty (30) day period shall be deemed an acceptance of the Offer
Rate.
3.2.6. Upon receipt of the results of Tenant's appraisal,
Landlord may either accept or reject such appraised determination of the Fair
Market Rent, and shall be deemed to have accepted Tenant's appraiser's
determination unless Landlord rejects the same by notice to Tenant given within
fifteen (15) days following receipt of Tenant's appraisal. If
2
Landlord rejects such appraised Fair Market Rent then Landlord shall promptly
designate a second appraiser; and the two appraisers then chosen shall select a
third appraiser within fifteen (15) days following Landlord's notification as to
the identification of Landlord's choice of appraiser. The second and third
appraisers so chosen shall be instructed to produce appraisals of the Fair
Market Rent for the Premises, for the extended term, within thirty (30) days
following the date of selection of third appraiser and his acceptance of his
task. Each appraiser shall make an independent appraisal of the Fair Market
Rent, and the Fair Market Rent shall be the mean average of the two closest
valuations of the three appraisers (unless the mean and the median of the three
appraisals are equal, in which case the average or mean of the three appraisals
shall be the Fair Market Rent). The valuation of the Fair Market Rent thus
obtained shall be binding on Landlord and Tenant.
3.2.7. Landlord and Tenant shall each pay the cost of the
appraiser designated by them and shall divide equally the cost of the third
appraiser. All appraisers selected hereunder shall be M.A.I. designated and
shall be familiar with leasing of commercial properties in the Baltimore
Metropolitan area.
3.2.8. Following determination of the Fair Market Rent in
accordance with the appraisal procedure above set forth Landlord and Tenant
shall, within thirty (30) days of receipt of an instrument of amendment from
Landlord, execute a Lease Amendment extending the Term and confirming the Basic
Rent for the first Lease Year of the Renewal Term in question as the greater of
(i) 1.025 times the annual Basic Rent for the immediately preceding Lease Year
or (ii) the Fair Market Rent thus obtained, or such lesser amount as Landlord
and Tenant shall otherwise agree. Thereafter, commencing with the second Lease
Year of such Renewal Term and continuing each Lease Year thereafter for the
remainder of the Renewal Term in question, the Basic Rent shall be increased to
an amount equal to the product, rounded to the nearest cent, of (A) the Basic
Rent rate for the immediately preceding year multiplied by (B) 1.025.
3.2.9. Time shall be of the essence with respect to each of
the provisions of this Section; if Tenant fails or refuses to provide notices or
to take action as provided in this Section within the times herein set forth
then, except as otherwise set forth above, the renewal right and option herein
granted shall lapse and terminate.
3.2.10. No additional rights or options to renew shall be
deemed to be granted.
3.3. OPTION TO TERMINATE. Provided that Tenant is in possession of
the Premises and paying Rent and otherwise in compliance with its obligations
hereunder, Tenant shall have the option to terminate this Lease on a one-time
basis as of the end of the eighty-fifth (85th) full calendar month next
following the Commencement Date of the Term upon the following conditions:
3
3.3.1. Tenant must give Landlord written notice of its
intention to terminate at least six (6) full calendar months prior to the
expiration of the eighty-fifth (85th) full calendar month of the Term.
3.3.2. Tenant shall pay Landlord a Lease Termination Fee equal
to three (3) months' Basic Rent, calculated at the rate applicable to the month
in which the Lease termination is to become effective. Tenant shall pay this
amount concurrently with its notice of exercise of this option.
3.3.3. In addition to the payment required under Section 3.3.2
above, for the fourth, fifth and sixth full calendar months next following the
termination date, Tenant shall pay Landlord the monthly installment of Annual
Basic Rent which would otherwise be due and payable under this Lease if, as of
the commencement of each month during such three month period, Landlord shall
not then have re-leased Premises to another tenant who shall have taken
possession of the Premises. Tenant's liability under this subsection 3.3.3 shall
not exceed three (3) months' Basic Rent, calculated at rate otherwise due and
payable under the Lease with respect to each such month. Such sums shall be
payable at time otherwise required under the Lease, as though the Lease had not
been terminated.
3.3.4. In addition, Tenant shall also reimburse Landlord for
the unamortized cost of all leasing commissions paid by Landlord to the Named
Broker hereunder in connection with this Lease transaction ($200,000.00 being
the total amount paid); such unamortized cost (based on an amortization over the
original Term, in monthly installments, together with interest at the rate of
12% per annum) shall be paid concurrently with its notice of exercise of this
option.
3.3.5. Tenant or its subtenant or assignee (as approved by
Landlord if so required) must be paying Rent, and all Rent and Obligations due
through the date of termination shall continue to be paid and performed by
Tenant to Landlord, and no Event of Default shall exist under the Lease, either
as of the date of Tenant's notice of election to terminate or thereafter, for
the remainder of the Term.
3.3.6. The Premises shall be surrendered on the termination
date in the same condition as when received, normal wear and tear, damage by
fire or casualty and other obligations of the Landlord pursuant to this Lease
excepted.
4. CONSTRUCTION OF BUILDING AND PREMISES.
4.1. COMPLETION OF BUILDING AND LEASEHOLD IMPROVEMENTS.
4.1.1. Promptly following the complete execution and delivery
of this Lease Landlord shall provide Tenant with design development drawings,
consistent with the Building Plans attached to this Lease as Exhibit D, for the
construction of the Building, for
4
Tenant's review and approval, which Tenant shall not unreasonably withhold,
condition or delay. Tenant's approval shall be deemed given unless a contrary
response is given by Tenant within fifteen (15) days following Tenant's receipt
of Landlord's submission. Following such approval, Landlord shall construct on
the Center, at its cost and expense, the Building in which the Premises are to
be located, and the driveways, parking areas and other improvements shown on the
Site Plan, or cause it to be constructed as promptly as possible, subject to
conditions constituting force majeure, or other causes beyond Landlord's
reasonable control. Subject to such conditions Landlord shall use good faith
efforts to complete the Building to provide beneficial occupancy for
approximately 50,000 square feet of Premises so as to permit commencement of
this Lease by September 1, 1997. The Building shall be a single story structure,
of general rectangular shape, of brick-clad block construction, with glass on
all sides of the Building and otherwise suitable for office use, and otherwise
with architectural treatments consistent with structures erected on surrounding
properties, and consistent with the Building Plans attached to this Lease as
Exhibit D. The Building shall be designed and constructed substantially in
accordance with the Site Plan and the Building Plans. Landlord will not make any
material changes in the Building from the conditions shown by such Exhibits
without Tenant's prior written consent, which consent will not be unreasonably
withheld, conditioned or delayed. A "material change" is a change which in turn
requires an alteration to the Plans and Specifications, or which significantly
alters the exterior appearance of the Building.
4.1.2. Landlord shall also construct, at Tenant's cost and
expense, the Leasehold Improvements within the Premises for Tenant's use and
occupancy in accordance with plans and specifications provided by Tenant, in the
following manner. On or before April 1, 1997, and based upon the Building Plans,
Tenant shall provide Landlord with Final Plans and Specifications (the "Final
Plans and Specifications") prepared by a professional designer, interior
designer, or architect, approved by Landlord in advance, for the layout of the
Premises, including the dimensioned location of all partitions, interior doors,
lighting fixtures, lightpole switches, electrical outlets, telephone receptacles
or systems, together with the specifications therefor and any other improvements
Tenant desires to be made to the Premises prior to the commencement of the Term
of this Lease. If Tenant fails to submit the Final Plans and Specifications
within such period then Tenant shall be assessed a penalty equivalent to one-
thirtieth (1/30th) of the monthly installment of Basic Rent as set forth under
Lease Section 1 for each day late.
4.1.3. Within thirty (30) days following receipt of the Final
Plans and Specifications from Tenant Landlord shall provide Tenant with
Landlord's proposal for the cost of construction of Leasehold Improvements. Such
construction shall be the responsibility of Landlord's contractor, Nottingham
Construction Company, pursuant to a contract generally providing for the
completion of the Leasehold Improvements for a price equal to such contractor's
cost of Leasehold Improvements (subcontractors' prices plus general conditions,
design costs and permit fees) plus five percent (5 %) of the same. All work to
be performed shall be performed by subcontractors of Landlord's contractor under
this Section and shall be competitively bid. Tenant shall have the right to
submit subcontractors for consideration, to supervise the subcontractor
selection process and to approve the selection of each subcontractor
5
and the final subcontract bid; provided, however, that Landlord shall have the
right to disapprove any subcontractor so selected if in Landlord's reasonable
judgment the competence or creditworthiness of such subcontractor is
unsatisfactory. Landlord shall obtain all permits required in connection with
such work, and shall pay all fees in connection with the issuance of such
permits.
4.1.4. Upon selection and acceptance of all subcontractors and
determination of the final construction contract cost Landlord shall cause its
general contractor to construct all of the Leasehold Improvements required by
the Final Plans and Specifications, and Tenant shall pay Landlord for the cost
of such work in accordance with the Leasehold Improvement draw schedule set
forth in Exhibit D. The following provisions shall apply with respect thereto:
4.1.4.1. Landlord will perform such work in a good and
workmanlike manner, using new and first quality materials and in compliance with
applicable laws including but not limited to the Americans with Disabilities Act
and the Accessibility Guidelines promulgated pursuant thereto.
4.1.4.2. Tenant shall make monthly payments to
Landlord on account of the Leasehold Improvements based upon the value of labor,
services and materials incorporated into the Premises and of materials stored at
the Premises up to the last day of the preceding calendar month, less the
aggregate amount of previous payments made by Tenant to Landlord. Full payment
shall be due on or before the Commencement Date.
4.1.4.3. Following commencement of construction of the
Leasehold Improvements Landlord and Tenant shall participate in monthly draw
meetings, at the Landlord's offices in Towson, Maryland, at 10:00 a.m., on the
30th day of each calendar month. Such meetings shall be adjusted as reasonably
appropriate to accommodate job requirements but corresponding payment date shall
not be adjusted if all the requirements for payment have been met.
4.1.4.4. At each such monthly draw meeting Landlord,
Tenant and Landlord's Contractor shall review such Contractor's and all
subcontractors' applications for payment as filed with Landlord or such
Contractor on or before the 26th day of such calendar month and, provided that
such requests for approval are in accordance with the terms of the applicable
contract or subcontract for construction, the same shall be approved for
payment.
4.1.4.5. Thereafter, by on or before the tenth day of
the calendar month next following such draw meeting and approval of the requests
for payment then presented, Tenant shall pay Landlord the aggregate amount of
all approved requisitions. Landlord shall thereafter pay Landlord's Contractor,
out of the amount so paid by Tenant, the amount which Landlord's Contractor is
entitled to receive in accordance with approved
6
requisitions, and Landlord shall, by appropriate agreement with Landlord's
Contractor, require Landlord's Contractor to make payments to all subcontractors
in like manner.
4.1.4.6. Any payment due from Tenant to Landlord and
not paid within the time prescribed above shall bear interest at the Default
Rate from the date due until paid. Such failure to pay shall also constitute a
Default under this Lease.
4.1.5. If the actual cost of constructing the Leasehold
Improvements exceeds the agreed-upon sum due to changes requested to be made by
Tenant during construction of the Leasehold Improvements, then Landlord shall
have the right to require Tenant to pay any increase in the actual cost of
Leasehold Improvements over the parties' original agreement in one or more
installments on or before the Commencement Date. Landlord shall notify Tenant of
any such cost when changes to the Leasehold Improvements are requested,
including notice of any prospective increase in projected time for completion of
Leasehold Improvements necessitated by such change. Tenant shall have five (5)
business days to approve or disapprove such cost and any extension of time for
completion and shall be deemed to have accepted and approved the cost and
extension of time for completion unless Tenant shall have notified Landlord to
the contrary, in writing, in accordance with this Lease, within such five (5)
business day period. If Tenant fails to accept the Landlord's determination of
increased cost and any extension of time for completion due to changes made by
Tenant during construction within such five (5) business day period, then
Landlord shall not be obligated to construct such change. If, however, Tenant
accepts the increased cost and proposed extension of time, whether by express
notice of acceptance given within such five (5) business day period or by
failure to reject the same within such five (5) business day period, then Tenant
agrees to execute and acknowledge such instruments confirming such acceptance as
Landlord may from time to time require. Upon Tenant's acceptance of the
increased cost in the manner herein described, Landlord shall construct or cause
to be constructed all of the Leasehold Improvements required by the Final Plans
and Specifications, including agreed-upon changes.
4.1.6. Upon taking possession and occupying the Premises,
Tenant shall thereby be deemed to have accepted the same, with the exception of
latent defects (which shall be recognized as such only if discovered and brought
to Landlord's attention within one (1) year following the Commencement Date) and
those items contained in an agreed-upon punchlist to be prepared and delivered
to Landlord within thirty (30) days after taking possession, and to have
acknowledged that the Premises are in the condition called for hereunder and
under the Final Plans and Specifications. Under no circumstances shall Landlord
be liable to Tenant for damages for any delay in commencing or completing
construction of the Premises or for a total failure to complete or deliver the
same. Landlord shall have a reasonable time to correct all punchlist items.
4.2. DELAY IN DELIVERY OF PREMISES. Landlord will use reasonable
efforts to substantially complete the Landlord's Work on or before September 1,
1997. If Landlord's Work has not been substantially completed prior to December
31, 1997 (the "Deadline"), as the Deadline may be extended by (i) extension
occasioned by changes to the Final Plans and
7
Specifications as provided in Section 4.1.5, (ii) delay caused by Tenant's
failure to provide Final Plans and Specifications within the time provided in
Section 4.1.2, or (iii) action or inaction of governmental agencies or other
conditions constituting force majeure, then Landlord shall promptly pay Tenant,
upon demand, all costs and expenses incurred by Tenant for basic rent for any
premises then occupied by Tenant in ▇▇▇▇ Valley, Maryland, and in which Tenant
is compelled to hold over by reason of the incompletion of the Premises, for
each day completion is delayed beyond the Deadline as extended by items (i)
through (iii) above. If the Leasehold Improvements have not been substantially
completed by May 1, 1998, as extended by items (i) through (iii) above, then
Tenant may at any time thereafter give Landlord notice of its intention to
terminate this Lease. If Landlord has not substantially completed the Leasehold
Improvements within 30 days after Tenant's notice, then this Lease will
terminate and will be of no further force or effect, in which case Landlord
shall refund or redeliver the Deposit to Tenant. But if the Lease is not
terminated, then Landlord shall continue to pay Tenant, upon demand, all costs
and expenses incurred by Tenant for basic rent for any premises then occupied by
Tenant in ▇▇▇▇ Valley, Maryland, and in which Tenant is compelled to hold over
by reason of the incompletion of the Premises, for each day completion is
delayed beyond the Deadline as extended by items (i) through (iii) above. If the
Commencement Date shall not have occurred within twenty-four (24) months
following the date of this Lease, then this Lease shall terminate, Landlord
shall return any Deposit previously delivered by Tenant, and all rights and
obligations of the parties shall terminate, and Landlord shall not be subject to
any liability therefor. Termination under this Section shall be Tenant's sole
remedy and Tenant shall have no other rights or claims hereunder at law or in
equity except that Landlord shall return to Tenant promptly after any
termination any Deposit previously tendered to Landlord.
4.3. ACCEPTANCE OF PREMISES. By its acceptance of the Premises as
provided in Section 4.1.6 Tenant shall be deemed to have accepted the Premises,
to have acknowledged that they are in the condition called for hereunder and to
have agreed that the obligations of Landlord imposed for the delivery of the
Premises have been fully performed, subject only to latent defects (with respect
to which no claim shall be made more than one (1) year following the
Commencement Date) and to deficiencies (if any) listed in a written notice
delivered by Tenant to Landlord not more than 60 days after the date of taking
possession, which listed items will be completed by Landlord within 60 days
after Tenant's notice, or as soon thereafter as is practicable under all the
circumstances. Within 60 days after the Commencement Date, Landlord and Tenant
will execute an agreement supplementing this Lease setting forth: (i) the
Commencement Date and expiration date of the Term and (ii) the Rentable Area of
the Premises and the Building.
5. RENT. Tenant covenants and agrees to pay to Landlord during the Term,
as Rent for the Premises, the aggregate of all Basic Rent and Additional Rent
due hereunder, as follows.
5.1. BASIC RENT. The Basic Rent shall be payable in equal Monthly
Installments of Basic Rent in advance on the first day of each full calendar
month during the Term, without any deduction or setoff whatsoever, and without
demand. The first monthly
8
payment shall include any prorated Basic Rent for the period from the date of
the commencement of the Term to the first day of the next full calendar month.
5.2. ADDITIONAL RENT. Tenant's liability for the expenses described
in Subsections 11.3, 12.1 and 15.6 hereof, and together with each and every
other charge, cost, fee or expense due and payable from Tenant as set forth in
this Lease (other than Basic Rent), shall be deemed Additional Rent ("Additional
Rent") and shall be payable as provided in such Sections or Subsections or
otherwise as provided in this Lease.
5.3. LATE CHARGE FOR FAILURE TO PAY RENT AND ADDITIONAL RENT. All
sums payable as Basic Rent or Additional Rent shall be paid by Tenant to
Landlord's Rental Payment Address, or at such other address as Landlord may from
time to time designate by Notice given to Tenant care of Tenant's Notice
Address. If any check tendered by Tenant in payment of Rent is dishonored upon
presentment for payment, then Landlord, in addition to all other rights and
remedies contained in this Lease, may assess a dishonor charge of Fifty Dollars
($50.00). If Tenant fails to pay any Basic Rent or any Additional Rent within
ten (10) days after notice that it is due and payable (including deemed failure
to pay due to dishonor of Tenant's check upon presentation for payment), then
Landlord, in addition to all other rights and remedies contained in this Lease,
may assess a one-time late charge against Tenant in the amount of Five Hundred
Dollars ($500.00). Additionally, if Tenant fails to pay any Basic Rent or any
Additional Rent when due and payable, then such unpaid amounts shall bear
interest from the due date thereof to the date of payment at a rate of eighteen
percent (18 %) per annum (the "Default Rate"). This late charge is not a
penalty; it has been agreed to by Landlord and Tenant as necessary to compensate
Landlord for the Landlord's additional costs incurred in connection with late
payment of Rent. Tenant shall further be responsible for the payment of any
legal expense and management fees incurred by Landlord in collecting any
delinquent Rent due hereunder.
5.4. ALL CHARGES CONSTITUTE RENT. Notwithstanding anything in this
Lease to the contrary, all amounts payable by Tenant to or on behalf of Landlord
under this Lease, whether or not expressly denominated as Basic Rent or
Additional Rent, and including any and all advances, charges, costs or fees
incurred by Landlord in collecting any sums due from Tenant hereunder, or
otherwise in preserving the rights of Landlord hereunder or in enforcing the
rights and obligations of Landlord and Tenant hereunder, (and specifically
including legal expenses and management fees incurred by Landlord hereunder)
shall constitute and shall be referred to as "Rent" for the purposes of this
Lease as well as Section 502(ii)(6) of the Bankruptcy Code, 11 U.S.C. Section
502(ii)(6).
5.5. DEPOSIT; OTHER SECURITY FOR TENANT'S PERFORMANCE.
5.5.1. Landlord hereby acknowledges receipt from Tenant of
that portion of the cash Deposit as set forth in Section 1.4, which shall be
applied as provided in this Section and in Section 1.4.
9
5.5.2. Within fifteen (15) days following the date of this
Lease Tenant shall tender to Landlord, as an additional part of its Deposit, an
irrevocable clean letter of credit in the form referred to in Exhibit C and made
a part hereof, issued by a national banking association and of Tenant's
choosing, but in any event reasonably acceptable to Landlord, in the face amount
of One Million, Five Hundred Thousand Dollars ($1,500,000.00) (the "Letter of
Credit") which shall be held by the Landlord as security for the Tenant's
performance hereunder (except as otherwise provided in Section 5.6.5 below). If
the Letter of Credit expires prior to the date scheduled for termination of this
Lease then, not later than the sixtieth (60th) day before the expiration of the
Letter of Credit, Tenant shall deliver to Landlord a renewal or replacement of
the Letter of Credit having the effect of renewing the expiring Letter of Credit
or replacing it with a new Letter of Credit on terms materially identical to
those of the expiring Letter of Credit. If Tenant fails to deliver a renewal or
replacement of the expiring Letter of Credit on or before such sixty (60) day
period then Landlord shall be entitled, following fifteen (15) days notice to
Tenant, tendered in accordance with this Lease, and Tenant's failure or refusal
to deliver such renewal or replacement within such fifteen (15) day period, to
draw under the Letter of Credit for the full amount thereof for application as
hereinafter provided The proceeds of such draw shall, upon receipt, be held by
Landlord in escrow and deposited by Landlord in a federally insured interest
bearing account and shall be held in lieu of the Letter of Credit, to be applied
as hereinafter provided. In such case the Deposit shall thereafter consist of
the original proceeds of the Letter of Credit plus all accrued interest thereon,
all of which shall be held for the account of Tenant, subject to application by
Landlord as provided herein. In such case the Tenant shall have the right, once
and only once during the Term, to tender a substitute to the Letter of Credit to
Landlord and to receive in return the cash proceeds of the original Letter of
Credit then held on deposit by Landlord. Tenant shall also pay Landlord all of
Landlord's out-of-pocket costs and expenses incurred in effecting a draw under
the original Letter of Credit. If Tenant fails to deliver a renewal or
replacement of the expiring Letter of Credit in the manner above set forth and
if, as a result, Landlord draws under the Letter of Credit as above set forth
and receives the proceeds thereof, as aforesaid, then Tenant's original failure
to deliver a renewal or replacement of the expiring Letter of Credit shall not
be deemed to be a default pursuant to Section 23 of this Lease. If Tenant fails
to deliver a renewal or replacement of the expiring Letter of Credit in the
manner above set forth and if, as a result, the Letter of Credit expires prior
to Landlord's draw thereunder then, Tenant's original failure to deliver a
renewal or replacement of the expiring Letter of Credit shall be deemed to be a
default pursuant to Section 23 of this Lease; in addition to Landlord's other
remedies for such default Landlord shall have the right, upon demand by
Landlord, to require Tenant to forthwith deliver to Landlord a substitute or
replacement for the Letter of Credit and, in addition, Tenant shall pay Landlord
an amount equal to interest at the Default Rate on the principal amount of the
Letter of Credit, accounting from the date of expiry thereof to and including
the date on which a replacement to the Letter of Credit is delivered to
Landlord.
5.5.3. In no instance shall the amount of the Deposit be
considered a measure of liquidated damages. Landlord may apply all or any part
of the Deposit in total or partial satisfaction of any default by Tenant. The
application of all or any part of the Deposit to any obligation or default of
Tenant under this Lease shall not deprive Landlord of any other
10
rights or remedies Landlord may have, nor shall such application by Landlord
constitute a waiver by Landlord. If all or any part of the Deposit is applied to
an obligation of Tenant under this Agreement then Landlord shall have the right
to call upon Tenant to restore the Deposit to its original amount in cash by
giving notice to Tenant, in which case Tenant shall immediately restore the
Deposit. It is understood and agreed that should Landlord convey its interest
under this Lease, the Deposit may be turned over by Landlord to Landlord's
grantee or transferee, and upon any such delivery of the Deposit and assumption
by such transferee of Landlord's obligations under this Lease with respect to
the Deposit, Tenant hereby releases Landlord herein named of any and all
liability with respect to the Deposit, its application and return, and Tenant
agrees to look solely to such grantee or transferee. This provision shall also
apply to subsequent grantees and transferees. Landlord will return the balance
of the Deposit not previously applied as provided herein, within thirty (30)
days after expiration of the Term.
5.5.4. As further security for the obligations of Tenant under
this Lease, and at all times during the Term (except upon the conditions
hereinafter provided in Section 5.6.5 below) Tenant shall cause Metris Companies
Inc., as Guarantor of the obligations of Tenant hereunder, to maintain
availability of not less than $ 10,000.000.00 under that committed revolving
credit facility dated September, 1996, in the aggregate amount of
$300,000,000.00 (the "Facility") now in place with a syndicate of lenders the
administrative agent of which is The Chase Manhattan Bank (collectively,
"Lenders") for the benefit of such Guarantor (in being understood and agreed
that the term "Facility" shall include the existing Facility and any refinancing
of the same, with all or any number of the current participants, or with other
participants, whether or not including The Chase Manhattan Bank, so long as the
aggregate amount of the Facility shall not be less than $200,000.00.00). From
time to time during the Term, upon request of Landlord, Tenant shall provide the
certification, in the manner hereinafter set forth, for the benefit of Landlord
to the effect that (i) the Facility is in place, (ii) to the then-current
information and belief of parties making certification, that no defaults exist
thereunder on the part of Guarantor, as Borrower, and (iii) Guarantor's
availability under the Facility is not less than $10,000.000.00 nor, for the
period covered under Landlord's request, has such availability been less than
such sum. Such certification shall be given on request of Landlord, made not
more than once annually, and then within one hundred days following the close of
the Guarantor's fiscal year, by the Chief Financial Officers of Tenant and
Guarantor and, in addition, by a duly authorized representative of the
independent auditor of Guarantor.
5.5.5. Tenant's obligations, (i) to maintain the Letter of
Credit and (ii) to maintain Guarantor's availability under the Facility, as
security for Tenant's obligations under this Lease shall arise and extend so
long as Guarantor's credit rating, as established by a nationally-recognized
commercial credit reporting and rating service acceptable to Landlord, is less
than BBB-. At such time as Guarantor shall have achieved a credit rating of BBB-
or better as reported by such service and shall have maintained such rating for
two (2) consecutive calendar quarters, Tenant shall no longer be required to
maintain either the Letter of Credit or availability of Guarantor under the
Facility. If such conditions are satisfied then, upon request of Tenant made
after such time, Landlord will return the Letter of Credit to Tenant (except
that, if Landlord shall have previously negotiated the Letter of Credit and
deposited its proceeds into
11
a Deposit escrow for Tenant's account as provided in Section 5.6.2 above then
Landlord shall not be required to redeliver such monies; rather, such sums shall
remain on deposit with Landlord as above provided). If Guarantor's credit rating
shall subsequently deteriorate so that it is less than BBB- then, at any time
thereafter and upon demand by Landlord, (A) Tenant shall redeliver to Landlord
the Letter of Credit (unless Landlord shall then be holding the cash proceeds of
a previous Letter of Credit, as Tenant's Deposit) and (B) Tenant shall again
provide the certification of Lender for the benefit of Landlord as to the
matters set forth in Section 5.6.4 above.
6. PERMITTED USE. The Premises shall be used and occupied for the
Permitted Use in accordance with applicable zoning regulations and for no other
use or purpose. Tenant shall not commit or suffer to be committed any waste upon
the Premises or any nuisance or other act or thing which may disturb the quiet
enjoyment of any other tenant in the Building, or in the Center, or which may
disturb the quiet enjoyment of any person outside the Building or in the Center
in contravention of such person's legal rights, or which will subject Landlord
to any liability for injury to persons or damages to property. Furthermore,
except as specifically and expressly described within the definition of the
Permitted Use, no use of the Premises shall be made or be permitted to be made
that shall result in any use of the Premises which is improper or unlawful,
specifically including the sale, storage or preparation of food, alcoholic
beverages or materials generating an odor on the Premises, or any other use
generating noises or vibrations that may disturb the Landlord or other Tenants
of the Center. Nor shall the Premises be used or be permitted to be used in any
way which may violate any certificate of occupancy or other governmental
requirements or any covenants or restrictions of record and applicable to the
Center.
7. COMPLIANCE WITH LAW.
7.1. COMPLIANCE WITH RULES, ORDINANCES, ETC. Except as provided in
Subsections 10.4.4 through 10.4.6, Tenant shall, following completion of the
Building and Leasehold Improvements and thereafter throughout the Term, at
Tenant's sole cost and expense, promptly comply with the provisions of: (i) all
laws, ordinances, notices, orders, rules, regulations and requirements of any
and all federal, state or municipal governments, and of the appropriate
departments, commissions, boards and officers thereof, including but not limited
to The Americans with Disabilities Act, 42 U.S.C. Section 12101, ET. SEQ., and
the ADA Disability Guidelines promulgated with respect thereto ("ADA"); (ii) all
Environmental Laws; (iii) all zoning and other land use matters and utility
availability regulations or directives; (iv) any direction of any public officer
or officers, pursuant to law, which shall impose any duty upon Landlord or
Tenant with respect to the use or occupation of the Premises; and (v) all
notices, orders, rules and regulations of the National Board of Fire
Underwriters, or any other body now or hereafter constituted and exercising
similar functions, relating to all or any part of the Premises, regardless of
when they became effective, except to the extent that any such matters are the
responsibility of Landlord under this Lease. Tenant shall likewise observe and
comply with the requirements imposed by any and all policies of public
liability, fire and other insurance at any time in force with respect to the
Premises or with respect to the Building, any other
12
improvements upon the Premises, and/or equipment therein. Tenant shall comply
with the National Fire Code which prohibits smoking in storage areas containing
combustible products and shall install, at its expense, "No Smoking" signs in
those areas of the Premises. Tenant shall also install fire extinguishers
throughout the Premises and shall inspect such extinguishers at least once a
year and refill and maintain such extinguishers as often as necessary. Tenant
shall also maintain all exit and emergency directional signs within the
Premises. Tenant shall also comply with Landlord's rules and regulations
attached to the Lease as Exhibit B (the "Rules and Regulations").
7.2. HAZARDOUS MATERIAL.
7.2.1. LANDLORD'S AGREEMENTS. Landlord hereby makes the
following warranties to Tenant, each of which is made only to the best of
Landlord's knowledge as of the date of this Lease: (i) Landlord has not placed
or allowed to be placed on the Premises any Hazardous Materials or otherwise
violated any Environmental Laws with respect to the Premises which violation
remains unremedied; (ii) Landlord has received no notice of, nor does Landlord
have any knowledge of placement of Hazardous Materials on the Premises by third
parties; (iii) Landlord has made no environmental assessments, audits, tests or
sampling to ascertain if the Premises was previously contaminated by Hazardous
Materials or the existence of violation of Environmental Laws, nor does it have
any knowledge of the existence of any such assessments, audits, tests or
samplings; (iv) Landlord has neither filed or been required to file any reports
respecting Hazardous Materials with any Appropriate Authority; (v) Landlord has
received no notice from any Appropriate Authority respecting Hazardous Materials
on the Premises. If (i) it is determined at any time by a court of competent
jurisdiction that the representations of Landlord contained above are not
correct and that Landlord had actual knowledge of such incorrectness as of the
date of this Lease; or (ii) Landlord, its agents, employees or contractors (but
not tenants of Landlord or their agents, employees or contractors) violate any
Environmental Laws with respect to the Premises, then the following shall apply:
(1) Landlord shall be responsible for all costs incurred in complying with all
Environmental Laws which relate to the occurrence in question; and (2) Landlord
shall indemnify, defend and hold Tenant harmless from and against any and all
claims, judgements, damages, penalties, fines, costs, liabilities or losses
(including, without limitation, sums paid in settlement of claims, attorneys'
fees, consultant fees and expert fees) which arise during or after the Term from
or in connection with the Hazardous Materials and the occurrence in question
except for Tenant's lost profits or damages or loss to Tenant's business.
7.2.2. TENANT'S AGREEMENTS. Tenant warrants and agrees that
Tenant shall not cause or permit any Hazardous Material to be brought upon, kept
or used in or about the Premises by Tenant, its agents, employees, contractors
or invitees, without the prior written consent of Landlord (which Landlord shall
not unreasonably withhold as long as Tenant demonstrates to Landlord's
reasonable satisfaction that such Hazardous Material is necessary or useful to
Tenant's business and will be used, kept and stored in a manner that complies
with all Environmental Laws regulating any such Hazardous Material so brought
upon or used or kept in or about the Premises). Tenant shall have no obligation
under this Section 7.2 with respect
13
to conditions existing on the date of this Lease or construction of the Center,
Building or Leasehold Improvements. If Tenant breaches the obligations stated in
the first sentence of this Section, or if the presence of Hazardous Material on
the Premises caused or permitted by Tenant results in contamination of the
Premises, the Building or the Center generally or if contamination of the
Premises, the Building or the Center by Hazardous Material otherwise occurs for
which Tenant is legally liable to Landlord for damage resulting therefrom, then
Tenant shall indemnify, defend and hold Landlord harmless from any and all
claims, judgements, damages, penalties, fines, costs, liabilities or losses
(including, without limitation, diminution in value of the Premises, the
Building and the Center generally, damages for the loss or restriction on use of
rentable or usable space or of any amenity of the Building or the Center
generally, damages arising from any adverse impact on marketing of space in the
Building, and sums paid in settlement of claims, attorneys' fees, consultant
fees and expert fees) which arise during or after the Term as a result of such
contamination. This indemnification of Landlord by Tenant includes, without
limitation, costs incurred in connection with any investigation of site
conditions or any cleanup, remedial, removal or restoration work required by
any Appropriate Authority because of Hazardous Material present in the soil or
ground water on or under the Premises or the Center generally. Without limiting
the foregoing, if the presence of any Hazardous Material on the Premises caused
or permitted by Tenant results in any contamination of the Premises or the
Center generally, Tenant shall promptly take all actions at its sole expense as
are necessary to return the Premises to the condition existing prior to the
introduction of any such Hazardous Material to the Premises; provided that
Landlord's approval of such actions shall first be obtained, which approval
shall not be unreasonably withheld so long as such actions would not potentially
have any material adverse long-term or short-term effect on the Premises or the
Center generally. It shall not be unreasonable for Landlord to withhold its
consent to any proposed Transfer otherwise permitted pursuant to Section 8 of
the Lease if (i) the proposed Transferee's anticipated use of the Premises
involves the generation, storage, use, treatment or disposal of Hazardous
Material not permitted under this Lease; (ii) the proposed Transferee has been
required by any prior landlord, lender or governmental authority to take
remedial action in connection with Hazardous Material contaminating a property
if the contamination resulted from such Transferee's actions or use of the
property in question for the same use as proposed for the Premises; or (iii) the
proposed Transferee is subject to an enforcement order issued by any Appropriate
Authority in connection with the use, disposal or storage of a Hazardous
Material for the same use as proposed for the Premises.
7.2.3. DEFINITIONS. As used herein, the following terms have
the meanings ascribed: (i) "Appropriate Authorities" means all federal, state or
County Governments, or the departments, commissions, boards and officers thereof
having jurisdiction over the administration and enforcement of Environmental
Laws, and such public or other officials as are required to approve particular
permits, licenses, consents, waivers or other approvals needed in connection
with the use, storage or disposal of Hazardous Materials; (ii) "Environmental
Laws" means the Clean Air Act, the Resource Conservation Recovery Act of 1976,
the Hazardous Material Transportation Act, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Resource Conservation and
Recovery Act, the Toxic Substances Control Act, the Occupational Safety and
Health Act, the Consumer Product
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Safety Act, the Clean Water Act, the Federal Water Pollution Control Act, the
National Environmental Policy Act, Md. Nat. Res. Code ▇▇▇., Title 8, and Md.
Env. Code ▇▇▇., Title 7, as each of the foregoing shall be amended from time to
time, and any similar or successor laws, federal, state or local, or any rules
or regulations promulgated thereunder; and (iii) "Hazardous Materials" means and
includes asbestos; "oil, petroleum products and their by-products"; "hazardous
substances"; "hazardous wastes" or "toxic substances", as those terms are used
in Environmental Laws; or any substances or materials listed as hazardous or
toxic in the United States Department of Transportation Table, or by the
Environmental Protection Agency or any successor agency under any Environmental
Laws.
7.2.4. ANNUAL DISCLOSURE. At the commencement of this Lease,
and on January first in each Lease Year of the Term, and on January first next
following the termination of the Term, Tenant shall disclose to Landlord the
names and amounts of all Hazardous Materials, or any combination thereof, which
were stored, used, or disposed of on the Premises, or which Tenant intends to
store, use, or dispose of on the Premises.
7.2.5. RIGHT OF INSPECTION. Landlord and Landlord's Agents
shall have the right, but not the obligation, but upon reasonable prior written
notice to Tenant, to make regular annual inspections, investigations, sampling
or monitoring of the Premises and Tenant's operations therein to determine
whether Tenant is complying with the terms of this Section. If Tenant has
conducted activities which require inspection or monitoring then all sums
out-of-pocket sums reasonably disbursed by Landlord in connection therewith
shall be due and payable by Tenant to Landlord, as Additional Rent, within ten
(10) days following written demand by Landlord, accompanied by receipts for all
work performed, and, if not paid within such time, then such sum shall bear
interest thereon at the Default Rate accounting from the date of demand until
paid by Tenant.
8. ASSIGNMENT AND SUBLETTING.
8.1. TRANSFER. Tenant agrees for itself and its permitted successors
and assigns in interest hereunder that it will not (i) assign or otherwise
transfer, mortgage or otherwise encumber this Lease or any of its rights
hereunder; (ii) sublet the Premises or any part thereof or permit the occupancy
or use of the Premises or any part thereof by any person other than Tenant; or
(iii) permit the assignment or other transfer of this Lease or any of Tenant's
rights hereunder by operation of law, including any levy or sale in execution of
a judgment or any assignment or sale in bankruptcy, or insolvency, or the
appointment of a receiver or trustee by any state or federal court, without the
prior written consent of Landlord in each instance first obtained, which consent
Landlord may withhold in the unfettered exercise of its discretion. Each of the
events referred to in the foregoing clauses (i), (ii) and (iii) are hereinafter
referred to as a "Transfer"; and any transferee, assignee, mortgagee, sublessee
or occupant with respect thereto is hereinafter referred to as a "Transferee".
Any consent given to any one Transfer shall not constitute a consent to any
subsequent Transfer. Any attempted Transfer without Landlord's consent shall be
null and void and shall not confer any rights upon any purported Transferee.
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No Transfer, regardless of whether Landlord's consent has been granted or
withheld, shall be deemed to release Tenant from any of its obligations
hereunder or to alter, impair or release the obligations of any person
guaranteeing the obligations of Tenant hereunder.
8.2. CORPORATE, PARTNERSHIP TRANSFERS. If Tenant is a corporation
(except a corporation over fifty percent (50%) of the voting power of which, or
of such corporation's parent corporation, is held by fifty (50) or more
unrelated shareholders or distributed to such number of unrelated shareholders
in a public distribution of securities) and if at any time during the Term of
this Lease any part or all of the corporate shares of Tenant shall be
transferred by sale, assignment, bequest, inheritance, operation of law, or
other disposition so as to result in a change in the present effective voting
control of Tenant by the person or persons owning or controlling a majority of
the shares of Tenant on the date of this Lease (i.e., Metris Companies, Inc.)
then Tenant shall promptly notify Landlord in writing of such change, and such
change in voting control shall constitute an Transfer of this Lease for all
purposes of this Section. In the case of such deemed Transfer the recapture
provisions of Section 8.6, the excess rent provisions of Section 8.8, and the
net worth provisions of Subsection 8.3.2 and 8.5.1 shall be inapplicable.
8.3. LANDLORD'S APPROVAL OF CERTAIN TRANSFERS. Notwithstanding (and
without limiting) any other provisions of this Section 8, subsequent to the
Commencement Date, Landlord agrees not to unreasonably withhold its consent to a
Transfer of Tenant's entire interest in this Lease and the Premises provided
that:
8.3.1. At least thirty (30) days before the proposed effective
date of the Transfer Landlord receives for approval a copy of a fully executed
unconditional assignment or sublease together. with (i) reasonably detailed
information as to the character, reputation and business experience of the
proposed Transferee, and (ii) financial information and bank references on the
proposed Transferee (including, at Tenant's expense, a current Dun & Bradstreet
report and a financial statement certified as being true and correct by the
chief financial executive of the proposed Transferee);
8.3.2. The net worth of the Transferee immediately prior to
the Transfer shall not be less than Ten Million Dollars ($10,000,000.00);
8.3.3. No breach or default on Tenant's part can exist at the
time of the consent request and at the effective Transfer date;
8.3.4. Any Transfer will be upon and subject to all terms and
conditions of this Lease, including those regarding the Permitted Use of the
Premises;
8.3.5. Any assignment shall specifically state (and, if it
does not, it win be deemed to specifically state) that the assignee assumes and
agrees to be bound by all terms and conditions of this Lease; and any sublease
must specifically state (and, if it does not, it will be deemed to specifically
state) that at Landlord's election the subtenant will attorn to Landlord
16
and recognize Landlord as Tenant's successor under the sublease for the balance
of the sublease term if this Lease is surrendered by Tenant or terminated by
reason of Tenant's default;
8.3.6. Upon request and as additional rent Tenant will pay to
Landlord a processing fee of $500.00, for document review and/or preparation in
connection with the proposed transaction;
8.3.7. No Transfer will be to a then-existing tenant or
occupant of all or any part of the White ▇▇▇▇▇ Business Community, nor
violate or conflict with the rights of any such party;
8.4. DENIAL OF CONSENT TO CERTAIN TRANSFERS DEEMED NOT UNREASONABLE.
Without limiting Landlord's rights, it is agreed that Landlord will not be
deemed to be unreasonable if it does not approve any Transferee which will: (i)
perform governmental or quasi-governmental functions or social welfare services;
or (ii) operate an employment service, a messenger or an answering service or
make any use of the Premises for any purpose other than as general commercial,
non-retail, office space.
8.5. CONSENT NOT REQUIRED FOR CERTAIN CORPORATE TRANSFERS. Tenant may
Transfer this Lease, at any time during the Term of this Lease, to any parent,
subsidiary or affiliate corporation of Tenant or to the surviving corporation in
connection with a merger, consolidation or acquisition between Tenant and any of
its subsidiaries or any other corporation, or in connection with the sale and
transfer of all or substantially all of the real property and assets of the
Tenant, upon thirty (30) days' prior Notice to Landlord but without the
necessity for Landlord's prior written consent, provided:
8.5.1. The net worth of the Transferee immediately prior to
the transfer shall not be less than Ten Million Dollars ($10,000,000.00);
8.5.2. Such Transferee will operate a business in the Premises
for the Permitted Use and pursuant to all of the provisions of this Lease;
8.5.3. Such Transferee shall assume in writing in a form
reasonably satisfactory to Landlord all of Tenant's obligations hereunder;
8.5.4. Landlord shall be furnished with a copy of such
assignment within (30) thirty days following execution thereof; and
8.5.5. Tenant to which the Premises were initially leased
shall continue to remain liable on this Lease for the performance of all terms
including, but not limited to, payment of all rentals and other sums due under
this Lease.
8.6. REQUEST FOR TRANSFER. If Tenant desires to Transfer this LEASE IN
whole or in part, Tenant shall submit to Landlord (i) in writing, the name and
address of the
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proposed Transferee, a reasonably detailed statement of the proposed
Transferee's business and reasonably detailed financial references and
information concerning the financial condition of the proposed Transferee; (ii)
a copy of the proposed Transfer document, the effective date of which shall be
at least thirty (30) days after the date on which Tenant shall have furnished
Landlord with all of the information required pursuant to (i) above and which
shall be conditioned on Landlord's consent thereto; and (iii) an agreement in
form and substance satisfactory to Landlord by Tenant to indemnify Landlord
against liability resulting from any claim made against Landlord by the proposed
Transferee or by any broker claiming a commission in connection with the
proposed Transfer. If (i) Tenant's proposed Transfer constitutes a Transfer of
all or substantially all of the area of the Premises, or (ii) Tenant's proposed
Transfer constitutes a Transfer of the Premises or a portion thereof for all or
substantially all of the then-remainder of the Term then, in either case,
Tenant's notice and request for Landlord's consent to Transfer shall also be
deemed to constitute Tenant's offer to reconvey to Landlord, as of the proposed
effective date of the Transfer, that portion of the Premises which is the
subject of the proposed Transfer, which offer shall contain an undertaking by
Tenant to accept, as full and adequate consideration for the reconveyance,
Landlord's release of Tenant from all future Rent and other obligations under
this Lease with respect to the Premises or the portion thereof so reconveyed.
The foregoing provision shall not apply to Transfers excepted from Landlord's
approval as provided in Subsection 8.5 above. Landlord, in the sole and
unfettered exercise of its discretion, shall accept or reject the offered
reconveyance within thirty (30) days of the offer, and, if Landlord accepts, the
reconveyance shall be evidenced by an agreement in form and substance acceptable
to Landlord. If Landlord fails to accept or reject the offer within the thirty
(30) day period then Landlord shall be deemed to have rejected the offer of
reconveyance, but no such rejection shall be deemed to be a consent to the
requested Transfer.
8.7. ASSIGNMENT IN INSOLVENCY OR BANKRUPTCY. Notwithstanding any of
the other provisions of this Lease, if a voluntary or involuntary petition in
Bankruptcy shall be entered with respect to Tenant pursuant to the provisions of
the Federal Bankruptcy Code, so that this Lease and the Tenant's interest
therein shall voluntarily or involuntarily come under the jurisdiction of the
United States Bankruptcy Code, 11 U.S.C. Section 101, ET SEQ. (the "Bankruptcy
Code") and thereafter Tenant or its trustee in bankruptcy, under the authority
of and pursuant to applicable provisions thereof, shall determine to engage in a
Transfer, then Tenant agrees that, in addition to complying with the other
provisions of this Section, (i) Tenant or its trustee will provide to Landlord
sufficient information enabling it to independently determine whether Landlord
will incur actual and substantial detriment by reason of such Transfer and (ii)
"adequate assurance of future performance" under this Lease, as that term is
generally defined under the Bankruptcy Code, will be provided to Landlord by
Tenant and its Transferee as a condition of such Transfer. If this Lease is
Transferred pursuant to the provisions of the Bankruptcy Code, then any and all
monies or other considerations payable or otherwise to be delivered in
connection with such Transfer shall be paid or delivered to Landlord, shall be
and remain the exclusive property of Landlord and shall not constitute property
of Tenant or of the estate of Tenant within the meaning of the Bankruptcy Code.
All monies or other considerations constituting Landlord's property under the
preceding sentence not paid or delivered to Landlord shall be held in trust for
the benefit of Landlord and be promptly paid or delivered to Landlord.
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8.8. EXCESS RENT. In the case of any Transfer made without Landlord's
prior written consent Landlord may nevertheless collect Rent (including
Additional Rent) from the Transferee and apply the net amount collected to the
Rents herein reserved. The acceptance by Landlord of the payment of Rent
following any Transfer not expressly consented to by Landlord pursuant to this
Section shall not be deemed to be a consent by Landlord to such Transfer nor
shall the same be deemed to be a waiver of any right or remedy of Landlord
hereunder, nor constitute a release of Tenant or any guarantor of Tenant's
obligations from the further performance by Tenant and such guarantor of the
terms and provisions of this Lease and any such guaranty. Furthermore, under any
and all circumstances, in the case of any Transfer, Tenant shall pay to Landlord
monthly, as Additional Rent, the excess of the consideration received or to be
received during such month for such Transfer (whether or not denoted as rent)
over the Rent reserved for such month in this Lease applicable to such portion
of the Premises so Transferred. In the case of any approved Transfer Tenant
shall nevertheless remain fully liable for the full performance of all
obligations under this Lease to be performed by Tenant, and Tenant shall not be
released therefrom in any manner.
8.9. TRANSFER INSTRUMENT. No Transfer consented to by Landlord shall
be valid unless Tenant shall deliver to Landlord, within ten (10) days after
Landlord's written consent has been received, a duplicate original instrument of
Transfer duly executed by Tenant and the Transferee. Such instrument shall
provide that (i) the Transferee shall take subject to this Lease, (ii) the
Transferee shall also fulfill all obligations of Tenant under this Lease as they
pertain to the portion of the Premises set forth in the Transfer, and (iii) with
respect to such portion of the Premises the Transferee shall be deemed to be
Tenant under this lease.
8.10. LANDLORD'S COSTS. Tenant's request for consent to Transfer shall
be accompanied by Tenant's payment to Landlord of a Transfer review fee in the
amount of Five Hundred Dollars ($500.00), which is imposed in order to reimburse
Landlord for all of its internal costs and expenses incurred with respect to
Landlord's review of the request for the Transfer, including, without
limitation, costs incurred in connection with the review of financial materials,
meetings with representatives of Transferor and/or Transferee and preparation,
review, approval and execution of the required Transfer documentation. Tenant
further agrees to pay Landlord, as Additional Rent, all costs incurred by
Landlord in connection with any actual or proposed Transfer, including, without
limitation, the costs of making investigations as to the acceptability of a
proposed Transferee and legal costs actually incurred by Landlord in connection
with any requested consent to Transfer not to exceed $500.00. Tenant
acknowledges and agrees that the costs and expenses imposed and agreed to be
paid by Tenant under this Subsection are agreed to be paid in consideration of
the Landlord's processing of the Tenant's request for Transfer, and that they
are not intended as consideration for the consent to Transfer. Payment of such
fees and costs shall under no circumstances obligate the Landlord to consent to
any requested Transfer. Such fees and costs shall be non-refundable,
notwithstanding the failure of the Landlord to consent to the requested
Transfer.
9. ABANDONMENT OF PREMISES OR PERSONAL PROPERTY; SURRENDER OF PREMISES.
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9.1. ABANDONMENT. Tenant shall not abandon the Premises at any time
during the Term of this Lease, but if Tenant does abandon the Premises or is
dispossessed by process of law then any personal property belonging to Tenant
and left on the Premises may, at the option of the Landlord, be deemed to have
been abandoned by Tenant, in which case the provisions of Subsection 9.4 shall
apply. If Tenant vacates the Premises and continues to pay Rent and otherwise to
comply with its Lease obligations no abandonment will be deemed to have
occurred.
9.2. SURRENDER. Unless sooner terminated pursuant to the provisions
hereof, this Lease shall expire absolutely upon the expiration of the Term
without the necessity of any notice or other action from or by either party
hereto. At the expiration or earlier termination of the Term of this Lease,
Tenant shall peaceably surrender the Premises in broom clean condition and good
order and repair and otherwise in the same condition as the Premises were upon
the commencement of this Lease, except (i) ordinary wear and tear, (ii) to the
extent that the Premises is not required to be repaired or maintained by Tenant
and (iii) damage by fire or other casualty. Tenant further agrees that during
the six (6) month period preceding the expiration date of the Term, Landlord may
place upon the Premises a FOR RENT sign.
9.3. REMOVAL OF TENANT'S IMPROVEMENTS. If Landlord intends to elect
to require that any specific alterations, installations, changes, replacements,
additions or improvements made or proposed to be made by Tenant to the Premises
be removed at the termination of this Lease, then Landlord shall so state in
writing at the time Landlord gives its consent to the construction or
installation of such specific alterations, installations, changes, replacements,
additions or improvements, in which case Tenant hereby agrees to cause the same
to be removed at its sole cost and expense. Otherwise, such alterations,
installations, changes, replacements, additions or improvements shall be
permitted to remain in the Premises and not be removed as of the termination of
this Lease. If Tenant fails to remove the same, then Landlord may cause them to
be removed at Tenant's expense, and Tenant hereby agrees to reimburse Landlord
for the cost of such removal, together with all and any damages which Landlord
may suffer and sustain by reason of Tenant's failure to remove the same.
Alternatively, Landlord may elect that all or any of the alterations,
installations, changes, replacements, additions to or improvements made by
Tenant to the Premises shall remain at the termination of this Lease and not be
removed. Tenant shall surrender to Landlord all keys for the Premises at the
place then fixed for the payment of Rent and shall notify Landlord in writing of
all combinations or codes for any other locks or alarm systems, if any,
installed in the Premises. Tenant's obligations to observe and perform the
covenants set forth in this Subsection 9.3 shall survive the expiration or
earlier termination of this Lease.
9.4. REMOVAL OF PERSONAL PROPERTY. At the expiration or earlier
termination of the Term of this Lease, Tenant shall immediately remove all
personal property which it owns and is permitted to remove from the Premises
under the provisions of this Lease and, failing to do so, Landlord at its
option may either (i) cause that property to be removed at the risk and
expense of Tenant (both as to loss and damage) in which case Tenant hereby
agrees to pay all reasonable costs and expenses incurred thereby, including
sums paid to store the property
20
elsewhere, together with the costs of any repairs to the Premises caused by the
removal of the property; (ii) upon fifteen (15) days written notice to Tenant,
which the parties agree is commercially reasonable, sell at public or private
sale any or all of such property, whether exempt or not from sale under
execution or attachment (such property being deemed charged with a lien in favor
of Landlord for all sums due hereunder) with the proceeds to be applied as set
forth in Subsection 24.2.2, or (iii) at Landlord's option, title shall pass to
Landlord.
9.5. TRADE FIXTURES. All trade fixtures installed by Tenant in the
Premises, other than Alterations, shall remain the property of Tenant and shall
be removable from time to time and also at the expiration of the Term of this
Lease or other termination thereof. Tenant further agrees to repair any damage
to the Premises, fair wear and tear excepted, caused by removal of such
fixtures.
10. REPAIRS AND ALTERATIONS.
10.1. REPAIRS TO BE MADE BY LANDLORD.
10.1.1. Except as otherwise provided in this Section, Landlord
shall maintain (i) the structural soundness of the Building and shall maintain
and repair the roof of the Building; (ii) the exterior walls of the Building
(excluding all doors and locks, door frames, storefronts, windows and glass
within the Premises); and (iii) the structural columns and floors (excluding
floor coverings such as carpet and floor tile) of the Premises and the Building,
provided Tenant gives Landlord written notice specifying the need for and
nature of such repairs (but failure of notice shall not constitute a waiver of
Landlord's obligations); and further provided, however, that if Landlord is
required to make any repairs to such portions of the Premises or Building by
reason, in whole or in part, of the negligent act or failure to act by Tenant or
Tenant's contractors or subcontractors or its or their agents or employees, or
by reason of any unusual use of the Premises by Tenant (whether or not such use
is contemplated within the definition of the Permitted Use) then (subject to the
limitations of Section 14.5) Landlord may collect the cost of such repairs, as
Additional Rent, upon demand.
10.1.2. If without Landlord's prior consent, Tenant performs or
permits to be performed any Alterations which affects the structural portions of
the Premises and/or the roof of the Building or which affects the structural
integrity of the Building, such action by Tenant shall release and discharge
Landlord as of the commencement of such Alteration from such repair obligation
with respect to the affected portion of the Building. Thereafter, Tenant agrees
to be solely responsible under Landlord's supervision for the maintenance,
repair, and replacement of any or all such structural portions and/or roof which
have been affected as aforesaid, and Tenant shall commence promptly after demand
by Landlord to make an such repairs and replacements and proceed diligently to
complete them. If Tenant fails in the performance of such responsibilities, to
Landlord's satisfaction, then, in addition to Landlord's other remedies under
this Lease, at law or in equity, and subject to the provisions for Notice and
cure provided in Section 23, Landlord may (but shall not be obligated to) cure
21
such failure on behalf of Tenant without any liability of Landlord for damage to
Tenant's fixtures or other property or to Tenant's business by reason thereof.
In such case Tenant shall reimburse Landlord, as Additional Rent, upon demand,
for any sums paid or costs incurred in curing such failure, together with
interest at the Default Rate accounting from the date of demand until payment is
made. If Tenant performs or permits to be performed any Alterations
inconsistently with Landlord's prior consent then such work shall be deemed to
have been performed without Landlord's consent.
10.2. REPAIRS TO BE MADE BY TENANT. All repairs to the Premises or any
installations, equipment or facilities therein, other than those repairs
required to be made by Landlord pursuant to Subsections 10.1 or 16.1,
including repairs or improvements required by Applicable Laws as referred to in
Section 7, shall be made by Tenant at its expense. Tenant shall at all times at
its own expense keep and maintain the Premises in good order and repair, and in
a neat, safe, clean, and orderly condition, including, but not limited to,
reasonable periodic painting and making all nonstructural ordinary and
extraordinary, foreseen and unforeseen repairs and replacements to the Premises
under Landlord's supervision. These include, without limitation, repairs and
replacements: to the plumbing and electrical apparatus therein; to the other
mechanical installations therein; to the heating, ventilating and air
conditioning system installed in or with respect to the Premises; and to all
doors and locks, door frames, storefronts, windows and glass within the
Premises. In furtherance of Tenant's obligations hereunder, Tenant agrees to
obtain a maintenance repair and service contract on the heating, ventilating and
air conditioning system of the Premises, which contract shall be on such terms
and with such company as shall be reasonably approved by Landlord and shall be
delivered to Landlord within thirty (30) days after the commencement of the
Term. Tenant shall keep such contract in full force and effect during the Term.
Tenant shall keep all of the same in good order and repair and will make all
replacements from time to time required thereto at its expense. Tenant shall not
overload the electrical wiring serving the Premises or within the Premises, and
will install at its own expense under Landlord's supervision, but only after
obtaining Landlord's written approval, any additional electrical wiring which
may be required in connection with the Premises. Tenant shall be responsible for
storage of Tenant's trash or refuse in proper recepticals and for removal of the
same from the Premises and the Center at Tenant's cost and expense. Dumpsters or
other trash containers shall not be allowed on the outside of the Building
without Landlord's prior written consent except as shown on the Site Plan or
Building Plans. If such consent be given by Landlord, the type, size, and
location of such containers shall be only as approved by Landlord and shall be
maintained by Tenant in a clean sanitary manner, and in good repair at all
times.
10.3. DAMAGE TO PREMISES. Subject to the limitations of Section 14.5,
Tenant will repair promptly at its expense any damage to the Premises and, upon
demand, shall reimburse Landlord (as Additional Rent) for the cost of the repair
of any damage elsewhere on in the Center, caused by or arising from the
installation or removal of property or fixtures in or from the Premises,
regardless of fault or by whom such damage shall be caused (unless caused by
Landlord, its agents, employees or contractors). If Tenant fails to commence
such repairs within thirty (30) days after notice to do so, or complete such
repairs prior to the
22
termination or sooner expiration of the Term, then Landlord may make or cause
the same to be made and Tenant agrees to pay to Landlord promptly upon
Landlord's demand, as Additional Rent, the cost thereof with interest thereon at
the Default Rate until paid. At Landlord's election, Tenant shall also (i)
repair or remediate promptly, and at Tenant's expense, or (ii) reimburse
Landlord (as Additional Rent) for the cost of repairs or remediation of, any
damage to or dangerous condition created within the Center, if such damage or
dangerous condition was caused or created by Tenant, its agents, employees or
contractors. If Tenant fails to commence such repair or remediation within five
(5) days after Landlord's notice to do so, or if Landlord elects to undertake
such repair or remediation for the account of Tenant, then Tenant agrees to pay
to Landlord promptly upon Landlord's demand, as Additional Rent, the cost
thereof with interest thereon at the Default Rate until paid. Tenant's
obligations for Additional Rent hereunder shall survive the termination of this
Lease.
10.4. ALTERATIONS BY TENANT.
10.4.1. Tenant will not make: (i) any alteration, modification,
substitution or other change of any nature to the structural, mechanical,
electrical, plumbing, HVAC and sprinkler systems within or serving the Premises;
nor (ii) any renovations, improvements or other installations in, on or to any
part of the Premises (including, without limitation, any alterations of the
exterior of the Premises, signs, structural alterations, or any cutting or
drilling into any part of the Premises or any securing of any fixture,
apparatus, or equipment of any kind to any part of the Premises); nor (iii) any
installation or modification of walls, partitions, counters, doors, shelves,
lighting fixtures, hardware, locks, ceiling and windows (all collectively
referred to herein as "Alterations"), unless and until Tenant shall have caused
complete plans and specifications therefor to have been prepared, at Tenant's
expense, by an architect or other duly qualified person, shall have submitted
same to Landlord and shall have obtained Landlord's written approval thereof,
which approval shall not be unreasonably withheld, conditioned or delayed. If
such approval is granted, Tenant shall cause the work described in such plans
and specifications to be performed, at its expense, promptly, efficiently,
competently and in a good and workmanlike manner by duly qualified and licensed
persons or entities, without interference with or disruption to the operations
of tenants or other occupants of the Building or the Center. All such work shall
comply with all applicable codes, rules, regulations and ordinances and shall be
performed by contractors who are approved by Landlord and who carry the
insurance coverage required in Section 15. Landlord may elect that any
Alterations be performed by Landlord or by contractors engaged by and under the
direction of Landlord, in which case such Alterations shall nevertheless be made
at Tenant's sole cost, payable by Tenant as Additional Rent; and such cost shall
include a construction management fee of ten percent (10%) of the total cost of
the work. Alterations shall only be made after Tenant has obtained any necessary
permits from governmental authorities for the Alterations. Notwithstanding the
foregoing Tenant shall be permitted to perform all emergency repairs and
replacements (to the extent not responded to by Landlord within a reasonable
time, having regard to the nature of the emergency condition), interior
decorating and refurbishment, consisting of wallpapering, painting and
recarpeting, for its own account, and without Landlord's
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prior written consent (and in such case no construction management fee shall
apply to any such Tenant work).
10.4.2. If Tenant is permitted to make Alterations following
Landlord's approval (if such approval is required), then Tenant shall notify
Landlord of the date on which work on Alterations is scheduled to begin and
shall arrange for periodic inspections by Landlord of the job progress to insure
compliance with the approved plans and specifications. As a condition for
approving any Alterations on the Premises by Tenant the cost of which exceeds
$100,000, Landlord shall have the right to require Tenant, or Tenant's
contractor, to furnish bond in an amount equal to the estimated cost of
construction with a corporate surety approved by Landlord for (i) completion of
the construction and (ii) indemnification of Landlord and Tenant, as their
interests may appear, against liens for labor and materials, which bond shall be
furnished before any work has begun or any materials delivered. Landlord shall
also have the right at any time before, during, or after the construction to
require Tenant to furnish further assurances against mechanics' liens including,
but not limited to, releases of liens signed by all contractors, subcontractors,
and suppliers, and affidavits executed by Tenant, Tenant's contractor, or
architect, that all charges for labor and materials have been paid. Tenant shall
promptly pay or bond off any lien filed against the Premises, the Building or
the Center for any construction performed by or on behalf of Tenant.
10.4.3. If Tenant makes any Alterations requiring Landlord's
consent without obtaining the prior consent of Landlord, then, in addition to
Landlord's other remedies, but subject to the provisions for Notice and cure
set forth in Section 23, Landlord may correct or remove such Alterations and
Tenant shall, on demand, pay the cost thereof (plus ten percent (10%) of such
cost as a construction management fee) as Additional Rent. If any mechanic's
lien is filed against the Premises or the Building or the Center for work or
materials furnished to Tenant (other than by Landlord, its contractor or
subcontractors) the lien shall be discharged by Tenant within thirty (30)
days thereafter, solely at Tenant's expense, by either paying off or bonding
the lien. Should Tenant fail to discharge any lien within thirty (30) days of
its filing, then, in addition to Landlord's other remedies, Landlord shall
have the right, but not the obligation, to discharge said lien at Tenant's
expense, in which case Tenant shall reimburse Landlord for the same upon
demand, as Additional Rental, together with interest accounting from the date
of demand until payment is made.
10.4.4. If any Alterations are required to be made to the
Premises, the Building or the Center due to Legal Requirements because the same
were in actual violation of any Legal Requirements on or as of the Commencement
Date, or if, as a result of Landlord undertaking any alterations, repairs,
maintenance or other activities elsewhere in the Center, Alterations are
required to be made to the Premises, the Building or the Center due to Legal
Requirements, then Landlord shall make such Alterations at its sole cost and
expense (and such expenses shall not be included within Common Area Maintenance
Expenses or Additional Rent); and Landlord shall take all reasonable steps to
minimize disruption to Tenant while making such Alterations.
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10.4.5. Subject to Landlord's obligations set forth in the
previous Subsection and in the following Subsection, if any Alterations are
required to be made to the Premises, the Building or the Center due to a change
in, or change in the interpretation of, or more stringent enforcement of, Legal
Requirements occurring on or after the Commencement Date (and not in connection
with existing environmental conditions, or alterations, repairs, maintenance or
other activities elsewhere in the Center undertaken by Landlord), then Landlord
shall make such Alterations as aforesaid, provided that the cost of such
Alterations shall be amortized over their useful life and a ratable portion of
such cost shall be included within the definition of Common Area Maintenance
Expenses in each Lease Year until such cost is fully amortized. If, as a result
of Tenant undertaking any Alterations, Alterations are required to be made to
the Premises due to Legal Requirements, then Tenant shall make such Alterations
at Tenant's sole cost and expense.
10.4.6. Except as provided in Sections 10.4.4 and 10.4.5, if
any Alterations are required to be made to the Premises or any portion thereof
at any time during the Term as a result of any Legal Requirements relating to
accessibility by persons with disabilities or otherwise pursuant to the ADA
(collectively, the "Accessibility Alterations"), including any Alterations
required because the Premises, as used by Tenant, is deemed to be a place of
public accommodation under the ADA, then all such required Alterations shall be
made by Tenant at its sole cost and expense unless Landlord shall otherwise
agree; and, if Landlord elects to make such Alterations, then such Alterations
shall be at Tenant's sole cost and expense, and payable by Tenant as Additional
Rent; and such cost shall include a construction management fee of ten percent
(10%) of the total cost of the work. Alterations shall only be made after Tenant
has obtained any necessary permits from governmental authorities for the
Alterations.
10.4.7. Within ten (10) days after receipt, Tenant shall advise
Landlord in writing, and provide Landlord with a copy of (as applicable), any
notices alleging violation of Legal Requirements relating to any portion of the
Center or of the Premises; any claims made or threatened in writing regarding
noncompliance with Legal Requirements and relating to any portion of the Center
or of the Premises; or any governmental or regulatory actions or investigations
instituted or threatened regarding noncompliance with the ADA and relating to
any portion of the Center or the Premises.
10.4.8. As used in this Subsection 10.4, "Legal Requirements"
means environmental, air quality, wetlands, shoreline, flood plan, zoning,
planning, subdivision, building, health, labor, discrimination, fire, traffic,
safety and other governmental or regulatory rules, laws, ordinances, statutes,
codes and requirements (including any administrative, judicial or similar
interpretations or rulings or legislative clarifications that may be made after
any point in time but which relate to any of the same as they exist at such
point in time), including, without limitation, the Fair Housing Act of 1968 (as
amended) and the Americans with Disabilities Act of 1990 and the Accessibility
Guidelines promulgated with respect thereto ("ADA").
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10.5. CHANGES AND ADDITIONS TO THE CENTER. Landlord reserves the right
at any time and from time to time, subject to the provisions of Section 10.7, to
(i) make or permit changes or revisions in the plan for the Center, including
additions to, subtractions from, rearrangements of, alterations, modifications
of, or supplements to, the building areas, walkways, driveways, parking areas,
or other Common Areas; (ii) construct other buildings or improvements on the
Center (including any portion of the Common Areas) and make alterations thereof
or additions thereto and build additional stories on or in any such building(s)
and build extensions adjoining same; and (iii) make or permit changes or
revisions to the Center, including additions thereto, and to convey portions of
the Center (including any portion of the Common Areas) to others for the purpose
of constructing thereon other buildings or improvements, including additions
thereto and alterations thereof. Any diminution or shutting off of light, air or
view by any structure which may be erected on lands adjacent to or near the
Building shall in no way affect this Lease or impose any liability on Landlord.
10.6. ROOF AND WALLS; EXCAVATIONS. Landlord shall have the exclusive
right, subject to the provisions of Section 10.7, to use all or any part of the
roof of the Premises for any purpose; to erect in connection with the
construction thereof temporary scaffolds and other aids to construction on the
exterior of the Premises, provided that access to the Premises shall not be
denied; and to install, maintain, use, repair and replace within the Premises
pipes, ducts, conduits, wires and all other mechanical equipment serving other
parts of the Building, the same to be in locations within the Premises as will
not unreasonably deny or adversely affect Tenant's use thereof. Landlord may
make any use it desires of the side or rear walls of the Premises, provided that
such use shall not encroach upon the interior of the Premises. If an excavation
shall be made upon land adjacent to the Premises, or shall be authorized to be
made, Tenant shall afford to the person causing or authorized to cause such
excavation, license to enter the Premises for the purpose of doing such work as
Landlord shall deem necessary to preserve the wall or the Landlord's Building of
which the Premises form a part from injury or damage and to support the same by
proper foundations, without any claim for damages or indemnification against
Landlord, for diminution or abatement of rent.
10.7. LIMITATIONS ON CHANGES AND ADDITIONS TO THE CENTER AND BUILDING.
10.7.1. Notwithstanding any provisions of Sections 10.5 or 10.6
to the contrary, if Tenant is leasing all of the Premises, the following
alterations or modifications shall require the prior written approval of Tenant:
10.7.1.1. Any items referred to in Section 10.5 except
those necessary for (i) repair or maintenance of any portion of the Center;
(ii) installation, repair or replacement of pipes, conduits, wires and
utilities which do not interfere with Tenant's use of the Premises or the
Common Areas; and (iii) alterations of the Common Areas which do not
adversely affect Tenant's parking, access or other use of the Common Areas;
or,
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10.7.1.2. Any use of the roof or walls of the Premises
for signs, satellite dishes, antennae or other structures or devices visible
from the exterior of the Premises.
10.7.2. If at any time Tenant does not lease the
entire Premises, the Landlord's rights to make the modifications or alterations
described in Section 10.5 and to use the roof and walls in the manner set forth
in Section 10.6 shall not require Tenant's approval, provided that (i) Tenant
continues to have a proportionate share of parking provided under Section 11.1
consistent with its proportionate share of the occupancy of the Center; (ii)
Tenant continues to have reasonably convenient access to the parking and to the
portion of the Premises leased by Tenant; (iii) this Lease is modified to
provide for Tenant's sharing on a rentable square foot basis of the Common Area
Maintenance Expenses and Taxes; and (iv) no new building or other new structures
block the light, air or view to or from the portion of the Premises leased by
Tenant.
11. COMMON AREAS.
11.1. USE OF COMMON AREAS. Landlord grants to Tenant and its agents,
employees and invitees, a non-exclusive license to use the Common Areas in the
Center in common with others during the Term, subject to the exclusive control
and management thereof at all times by Landlord or others and subject, further,
to the rights of Landlord set forth in Subsections 10.5, 10.6, and 11.2. "Common
Areas" means those areas and facilities which may be furnished by Landlord
within the Center, for the general common use of tenants and other occupants of
the Center, their officers, agents, employees and invitees, including (without
limitation) all parking areas, access areas (other than public streets),
employee parking areas, truckways, driveways, loading docks and areas,
sidewalks, ramps, roofs, sprinkler systems, landscaped and planted areas,
retaining walls, stairways, lighting systems and facilities, common utility and
telecommunications facilities, drainage areas, roads, the common use elements of
the Landlord's Building, and other similar areas, facilities or improvements. So
long as Tenant occupies all of the Rentable Area of the Building no portion of
the Common Areas shall be made available for parking by other persons; and no
alteration of any parking area shall diminish the number of parking spaces
available for Tenant's use to a number less than that shown on the Site Plan. At
such time as Tenant ceases to lease the entirety of the Building such
restrictions shall not apply, except that no alteration of any parking area, or
grant of additional parking rights to other persons, shall diminish the number
of parking spaces available for Tenant's use to a number less than nine and
eight-tenths (9.8) spaces per thousand (1,000) square feet of leasehold space
then let to Tenant.
11.2. MANAGEMENT AND OPERATION OF COMMON AREAS. Landlord will operate
and maintain, or will cause to be operated and maintained, the Common Areas in a
manner deemed by Landlord to be reasonable and appropriate and in the best
interests of the Center and Tenant or other occupants thereof. Landlord will
have the right (i) to establish, modify and enforce rules and regulations with
respect to the Common Areas; (ii) to enter into, modify and terminate easements
and other agreements pertaining to the use and maintenance of the Common
27
Areas; (iii) to implement a parking management plan; (iv) to close all or any
portion of the Common Areas to such extent as may, in the opinion of Landlord,
be necessary to prevent a dedication thereof or the accrual of any rights to any
person or to the public therein; (v) to close temporarily any or all portions of
the Common Areas; and (vi) to do and perform such other acts in and to said
areas and improvements as, in the exercise of good business judgment, Landlord
shall determine to be advisable provided that Tenant's access to, and parking
for, the Premises will not be adversely affected (subject to the restrictions
contained in Section 11.1).
11.3. TENANT TO PAY FOR COMMON AREA MAINTENANCE EXPENSES. In each
Lease Year Tenant shall pay to Landlord, as Additional Rent, Common Area
Maintenance Expenses. Such payment shall be made by Tenant in monthly
installments in such amounts as are estimated and billed by Landlord at the
beginning of each Lease Year or other twelve (12) month period commencing and
ending on dates designated by Landlord, each installment being due on the first
day of each calendar month. At any time during each twelve (12) month period,
Landlord may re-estimate Tenant's installment payment of Common Area Maintenance
Expenses and adjust Tenant's monthly installments payable during such twelve
(12) month period to reflect more accurately Tenant's charge for Common Area
Maintenance Expenses. Within one hundred twenty (120) days (or such additional
time thereafter as is reasonable under the circumstances) after the end of each
such twelve (12) month period, Landlord shall deliver to Tenant a statement of
Common Area Maintenance Expenses (the "Expense Statement") for such twelve (12)
month period and the monthly installments paid or payable shall be adjusted
between Landlord and Tenant, and Tenant shall pay Landlord or Landlord shall
credit Tenant's account (or, if such adjustment is at the end of the Term,
Landlord shall pay Tenant), as the case may be, within fifteen (15) days of
receipt of such statement, the amount of any excess or deficiency in Tenant's
Common Area Maintenance Expenses paid by Tenant to Landlord during such twelve
(12) month period. Upon reasonable notice, Landlord shall make available for
Tenant's inspection (which inspection shall be at Tenant's sole cost and
expense) at Landlord's office, during normal business hours, Landlord's records
relating to Common Area Maintenance Expenses for such preceding twelve (12)
month period. Failure of Landlord to provide the statement called for hereunder
within the time prescribed shall not relieve Tenant of its obligations
hereunder. A dispute over the Expense Statement or any error by Landlord in
interpreting or applying the provisions of this Lease respecting Common Area
Maintenance Expenses or in calculating the amounts in the Expense Statement
shall not be a breach of this Lease by Landlord, and even if any legal
proceeding over the Expense Statement is resolved against Landlord this Lease
shall remain in full force and effect and Landlord shall not be liable for any
consequential damages, and pending the determination of such dispute, Tenant,
within fifteen (15) days of receipt of such Expense Statement, shall pay
Additional Rent in accordance with the Expense Statement, without prejudice to
Tenant's position. Anything to the contrary in the preceding sentence
notwithstanding, if the dispute shall be determined in Tenant's favor, Landlord
shall forthwith pay to Tenant the amount of Tenant's overpayment of Rent
resulting from compliance with the Expense Statement together with interest from
the time of such overpayment at the Default Rate, together with all of Tenant's
attorney fees, costs and expenses incurred in contesting the Expense Statement.
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11.4. "COMMON AREA MAINTENANCE EXPENSES" DEFINED. The term "Common
Area Maintenance Expenses" means all costs and expenses incurred by or on behalf
of Landlord in operating, managing, insuring, securing and maintaining the
Common Areas pursuant to Subsection 11.2 (excepting Insurance Costs described in
Subsection 15.6), including, without limitation, all costs and expenses of
operating, maintaining, repairing, lighting, signing, cleaning, painting,
striping, policing and security of the Common Areas (including cost of uniforms,
equipment and employment taxes); alarm and life safety systems; insurance,
excepting Insurance Costs described in Subsection 15.6, but otherwise including,
without limitation, liability insurance for personal injury, death and property
damage, insurance against loss of rents and other income, worker's compensation
insurance or similar insurance covering personnel, fidelity bonds for personnel,
insurance against liability for defamation and claims of false arrest occurring
on and about the Common Areas; cost of cleaning all exterior glass; removal of
water, snow, ice, litter and debris; regulation of traffic; costs and expenses
of inspecting and depreciation of machinery and equipment used in the operation
and maintenance of the Common Areas and personal property taxes and other
charges (including, but not limited to, leasing or rental costs) incurred in
connection with such equipment; costs and expenses incurred in making any
alterations to the Center required to be made pursuant to Legal Requirements,
consistent with the provisions of Subsection 10.4; costs and expenses of
maintenance and repair or replacement of roofs, awnings, paving, curbs,
walkways, landscaping, drainage, pipes, ducts, conduits and similar items,
signage for the Center, and lighting facilities; costs and expenses of planting,
replanting and replacing flowers, shrubbery and planters; costs of providing
energy to light, heat, ventilate and air condition areas in which the Common
Areas are located and the maintenance and repair of such equipment; cost of
water services, if any, furnished by Landlord for the non-exclusive use of all
tenants; costs and expenses of repairing and maintaining all mains and
electrical conduits necessary to provide water, electricity, telephone and sewer
service to the Center; roads and storm drainage facilities unless and until
dedicated for public purposes; Landlord's share of expenses under any
declaration, covenant, condition, restriction or other agreement recorded among
the land records of the county in which the Center is located and applicable to
the Center; and administrative costs or management fees relating to operating
and maintaining the Common Areas (but not in an amount in excess of 5% of gross
revenues from operations of the Center). Any of the foregoing expenses required
to be capitalized for federal income tax purposes shall be amortized on a
straight-line basis over a period equal to the lesser of the useful life thereof
for federal income tax purposes or ten years. The term "Common Area Maintenance
Expenses" shall not include any of the following: (a) Salaries or benefits for
Landlord's executives and employees above the grade of property manager, and for
any employee who does not devote all of his time to the Building; (b) costs or
expenses or depreciation or amortization for capital repairs and capital
replacements required to be made by Landlord pursuant to Subsection 10.1 or
capital improvements for development purposes; (c) Expenditures for which
Landlord is reimbursed by any insurance carrier, or from any other source; (d)
Cost of repairs or replacements incurred by reason of fire or other casualty or
condemnation; (e) Advertising and promotional expenditures; (f) Costs incurred
in performing work or furnishing services for any tenant (including Tenant),
whether at such Tenant's or Landlord's expense, to the extent that such work or
service is in excess of any work or service that Landlord is obligated to
furnish to Tenant at Landlord's expense; (g) Depreciation, except
29
as provided above; (h) Bad debt loss, rent loss or reserves for either of them;
(i) The cost of electricity furnished to any particular tenant and paid for by
such tenant; (j) Financing costs, including points, commitment fees, broker's
fees, legal fees and Mortgage interest and amortization payments; (k) Costs
incurred in connection with the construction and initial development of the
Building; (l) Costs, expenses or expenditures relating to the duties,
liabilities or obligations of other tenants in the Building; (m) Any costs
incurred by Landlord arising out of its failure to perform or breach of any of
its covenants, agreements, representations, warranties, guarantees or
indemnities made for the benefit of Tenant under this Lease; (n) Legal fees,
space planner's fees, broker's commissions and other costs incurred by Landlord
in connection with leasing space and negotiating leases with tenants of the
Building, or legal fees in connection with disputes between Landlord and any
tenant of the Building or between Landlord and any Mortgagee; (o) Lease payments
for rented equipment, the cost of which equipment would constitute a capital
expenditure if the equipment were purchased; and any late fees, penalties,
interest charges or similar fees incurred by Landlord; (p) Costs of improving,
altering, constructing or redecorating any space leased to tenants of the
Building; (q) Any cost representing an amount paid to a person, firm,
corporation or other entity related to Landlord which is in excess of the amount
which would have been paid in the absence of such relationship; (r) Costs
incurred by Landlord to remedy any defects in the design of or materials used
in, or the defective installation of the structural steel framing, roof,
foundation and underground utility lines forming a part of or servicing the
Building; (s) Costs associated with the operation of the business of the entity
which constitutes Landlord as the same are distinguished from the costs of
operation of the Building, including, without limitation, accounting and legal
expenses, costs of selling, syndicating, financing, mortgaging or hypothecating
Landlord's interest in the Building, costs of any disputes between Landlord and
its employees, building managers or other tenants; (t) Amounts paid as ground
rental under any Superior Lease:
12. TAXES.
12.1. TENANT'S PAYMENT FOR TAXES. Landlord shall pay all Taxes levied
upon or assessed against the land and improvements comprising the Center and the
appurtenances thereto during the Term of this Lease. If the land and
improvements comprising the Center and the appurtenances are not solely the
subject of a single tax account, but are rather accounted for together with
other lands and improvements lying outside the Center, then appropriate
allocation and apportionment shall be made by Landlord and Tenant to calculate
the Taxes allocable to the Center. For this purpose the land valuation of any
Tax assessment shall be apportioned based on the area of the Center as a
proportion of the total land area of the entire Tax account; and the
improvements valuation of any Tax assessment shall be apportioned based upon the
assessment valuation of the Building as a proportion of the valuation of all
improvements covered by the Tax account. Tenant shall pay to Landlord, as
Additional Rent, such Taxes. The term "Taxes" shall be defined as (i) all real
estate and other AD VALOREM taxes, including, without limitation, real estate
rental, receipt or gross receipt tax or any other tax on Landlord (excluding
Landlord's income taxes), now or hereafter imposed by any federal, state or
local taxing authority and whether as a substitution for or in addition to the
present method of real property
30
taxation currently in use; (ii) attorney's and appraiser's fees, if necessary,
incurred in connection with any negotiation, contest or appeal pursued by
Landlord in an effort to reduce taxes, and (iii) any metropolitan district water
and sewer use charges and other governmental charges (other than assessments or
charges for development related improvements) which customarily are part of the
real estate tax ▇▇▇▇ issued by governmental authorities charged with said
responsibility. Taxes shall be adjusted on a proportionate basis for any period
which shall be less than a Tax Year. The term "Tax Year" means the twelve (12)
month period beginning July 1 of each year or such other twelve (12) month
period (deemed, for the purposes of this Section, to have 365 days) established
as a real estate tax year by the taxing authorities having lawful jurisdiction
over the Center.
12.2. PAYMENT FOR TAXES. Tenant's payment for Taxes shall be paid by
Tenant, at Landlord's election (i) in advance, in equal monthly installments in
such amounts as are estimated and billed for each Tax Year by Landlord at the
commencement of the Term and at the beginning of each successive Tax Year during
the Term, each such installment being due on the first day of each calendar
month or (ii) in lump sum, following Landlord's receipt of the tax ▇▇▇▇ for the
Tax Year in question, and calculation of Tenant's payment with respect thereto.
If Landlord has elected that Tenant pay Taxes in installments, in advance, then,
at any time during a Tax Year, Landlord may re-estimate Tenant's Tax payment and
thereafter adjust Tenant's monthly installments payable during the Tax Year to
reflect more accurately Tenant's Tax payment. Within one hundred twenty (120)
days after Landlord's receipt of tax bills for each Tax Year, or such reasonable
time (in Landlord's determination) thereafter, Landlord will notify Tenant of
the amount of Taxes for the Tax Year in question. Any overpayment or deficiency
in Tenant's payment of Taxes for each Tax Year shall be adjusted between
Landlord and Tenant; Tenant shall pay Landlord or Landlord shall credit to
Tenant's account (or, if such adjustment is at the end of the Term, Landlord
shall pay Tenant), as the case may be, within fifteen (15) days of the aforesaid
notice to Tenant, such amount necessary to effect such adjustment. Landlord's
failure to provide such notice within the time prescribed above shall not
relieve Tenant of any of its obligations hereunder. Any payment or credit not
made by a party shall bear interest at the Default Rate until paid.
12.3. TAXES ON RENT. In addition to Tenant's Tax payments, Tenant
shall pay to the appropriate agency any sales, excise and other tax (not
including, however, Landlord's income taxes) levied, imposed or assessed by the
State of Maryland or any political subdivision thereof or other taxing authority
upon any Rent payable hereunder. Tenant shall also pay, prior to the time the
same shall become delinquent or payable with penalty, all taxes imposed on its
inventory, furniture, trade fixtures, apparatus, equipment, Leasehold
Improvements installed by Tenant or by Landlord on behalf of Tenant (except to
the extent such Leasehold Improvements or Alterations shall be covered by Taxes
referred to in Subsection 12.1 hereof), and any other property of Tenant.
13. UTILITIES.
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13.1. TENANT'S UTILITIES. Tenant shall promptly pay when due the
charges for all utility services rendered or furnished to or for the Premises,
including, without limitation, water (whether by meter or submeter),
electricity, telephone, cable and telecommunications services sanitary sewer
service, and any other public utility service now or hereafter provided to the
Premises, together with all taxes, levies and other charges on such utilities.
At such time or times as Tenant is the sole occupant of the Building, Tenant
shall promptly pay when due the charges for all utility services rendered or
furnished to or for the Building, including, without limitation, water (whether
by meter or submeter), electricity, telephone, cable and telecommunications
services, sanitary sewer service, and any other public utility service now or
hereafter provided to the Building, together with all taxes, levies and other
charges on such utilities. If Tenant defaults in the payment of any such charges
or taxes, Landlord may, at its option, pay the same for and on Tenant's account,
in which event Tenant shall promptly reimburse Landlord therefor. If any of such
utility charges are billed directly to Landlord then Tenant will reimburse
Landlord for such charges, as Additional Rent, promptly upon demand therefor. At
the time of the execution of this Lease utility charges for water are charged to
Tenant as an Common Area Maintenance Expense. Landlord reserves the right to
arrange at Tenant's expense for the installation of a submeter exclusively for
the Premises to measure the consumption of water by Tenant and upon the
installation of such submeter Tenant shall promptly pay when due the charges for
all water service furnished to the Premises.
13.2. DISCONTINUANCES AND INTERRUPTIONS OF UTILITY SERVICES. Landlord
shall not be in default hereunder or be liable for any damages by, or indirectly
resulting from, nor shall the Rent be abated by reason of, (i) the installation,
use or interruption of use of any equipment in connection with the furnishing of
the foregoing utilities and services; (ii) failure to furnish or delay in
furnishing any such utilities or service when such failure or delay is caused by
force majeure, or by the making of repairs or improvements to the Premises or
the Building or the Center generally; or (iii) the limitation, curtailment,
rationing or restriction by governmental action or by a public utility, on use
of water or electricity, gas or any other form of energy or any other service or
utility whatsoever serving the Premises or the Building. Neither shall the same
be deemed a termination of this Lease or an eviction of Tenant. Furthermore,
Landlord shall be entitled to cooperate voluntarily in a reasonable manner with
the efforts of national, state or local governmental agencies or utilities
suppliers in reducing energy or other resource consumption provided such
cooperation does not unreasonably interfere with Tenant's use of the Premises.
14. INDEMNIFICATIONS AND WAIVER OF CLAIMS.
14.1. INDEMNITY BY TENANT. To the maximum extent permitted by law, but
subject to the provisions of Subsection 14.5, Tenant shall and does hereby
indemnify Landlord, any Superior Lessor and any Superior Mortgagee, and agrees
to save them harmless and, at the option of any of them, defend them from and
against any and all claims, actions, damages, liabilities and expenses
(including attorneys' and other professional fees) judgments, settlement
payments, and fines paid, incurred or suffered by any of them:
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14.1.1 in connection with loss of life or personal injury, or
damage to property or to the environment, suffered by third parties, and arising
from or out of the occupancy or use by Tenant of the Premises or any part
thereof or any other part of the Property, and occasioned wholly or in part by
any act or omission of Tenant, its officers, agents, contractors, employees or
invitees; or,
14.1.2 in connection with loss of life or personal injury, or
damage to property or to the environment, suffered by third parties, or in
connection with any accident, injury or damages whatever in, at or upon the
Premises, and arising from or out of the conduct or management of the Premises
or of any business therein, or any work or thing whatsoever done, or any
condition created in or about the Premises during the Term of this Lease or
during the period of time, if any, prior to the Commencement Date that Tenant
may have been given access to the Premises; or,
14.1.3 in connection with damage to property or the
environment and arising, directly or indirectly, wholly or in part, from any
conduct, activity, act, omission, or operation involving the use, handling,
generation, treatment, storage, disposal, other management or release of any
Hazardous Material in, from or to the Premises, whether or not Tenant may have
acted negligently with respect to such Hazardous Material or
14.1.4 in connection with any claim or proceeding brought by a
third party alleging, in whole or in part, that Tenant's acts, activities,
conduct, or omissions in the Premises violate its obligations to comply with a
law, rule, order, ordinance, direction, regulation or requirement of federal,
state, county and municipal authorities imposing a duty with respect to the use,
occupation or alteration of the Premises; or,
14.1.5 in connection with any breach or default by Tenant in
the full and prompt payment and performance of Tenant's obligations under this
Lease.
14.2. INDEMNITY BY LANDLORD. To the maximum extent permitted by law,
but subject to the provisions of Subsection 14.5, Landlord shall and does hereby
indemnify Tenant and agrees to defend Tenant and save it harmless from and
against any and all claims, actions, damages, liabilities and expenses
(including attorneys' and other professional fees) in connection with loss of
life, personal injury and/or damage to property suffered by third parties
arising from or out of the use of any portion of the Common Areas by Landlord,
occasioned wholly or in part by any act or omission of Landlord, its officers,
agents, contractors or employees.
14.3. SURVIVAL OF INDEMNITIES. Landlord's and Tenant's obligations
pursuant to Subsections 14.1 and 14.2 shall survive any termination of this
Lease with respect to any act, omission or occurrence which took place prior to
such termination.
14.4. LIMITATION ON LANDLORD'S LIABILITY FOR LOSS, DAMAGE AND INJURY.
To the maximum extent permitted by law, Tenant shall occupy and use the
Premises, the Building
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and the Common Areas at Tenant's own risk. All property of Tenant, its
employees, agents or invitees, or of any other person located in or on the
Premises or the Building, shall be and remain at the sole risk of Tenant or such
employee, agent, invitee or other person. Tenant hereby expressly agrees that
Landlord and its agents, servants and employees shall not be liable or
responsible for, and Tenant does hereby save them harmless from, any damage or
injury to the person or property of Tenant, or its agents, servants, employees,
licensees, invitees or contractors, directly or indirectly caused by (i)
dampness or water in any part of the Premises or the Building; (ii) bursting,
leaking or overflowing of water, sewer, steam, gas or sprinkler pipes and
heating or plumbing fixtures; (iii) air-conditioning or heating failures; (iv)
interference with light, air or other incorporeal hereditaments; (v) operations
in the construction of any public or quasi-public work; (vi) theft or other
crime, whether violent or non-violent in nature; (vii) fire, accident, natural
disorder or other casualty; (viii) latent or apparent defect or change of
condition in the Premises and/or the Building; (ix) the acts or omissions of
other persons in the Building; and (x) any other source, circumstance or cause
whatsoever. The foregoing waiver and release is intended by Landlord and Tenant
to be absolute and unconditional, and without exception, and to supersede any
specific repair obligation imposed by Landlord hereunder; provided that such
waiver and release shall not apply to the omission, fault, negligence, or other
misconduct of Landlord except to the extent such omission, fault, negligence or
other misconduct is waived by Tenant after the occurrence or is waived pursuant
to Tenant's policies of fire insurance with standard broad form coverage
indorsements, which waiver Tenant is obligated to obtain and shall be liable for
failure to obtain. No representation, guaranty, assurance or warranty is made or
given by Landlord that the communications or security systems, devices or
procedures used, if any, will be effective to prevent injury to Tenant or any
other person or damage to, or loss (by theft or otherwise) of any of Tenant's
Personal Property or of the property of any other person, and Landlord reserves
the right to discontinue or modify at any time such communications or security
systems, devices or procedures without liability to Tenant.
14.5. WAIVER OF RIGHT OF RECOVERY. Except as provided in Subsection
7.2, neither party, nor its officers, directors, employees, agents or invitees,
nor, in case of Tenant, its subtenants, shall be liable to the other party or to
any insurance company (by way of subrogation or otherwise) insuring the other
party for any loss or damage to any building, structure or other tangible
property, when such loss is caused by any of the perils which are or could be
insured against under a standard policy of full replacement cost insurance for
fire, theft and all risk coverage, or losses under workers' compensation laws
and benefits, even though such loss or damage might have been occasioned by the
negligence of such party, its agents or employees (this clause shall not apply,
however, to any damage caused by intentionally wrongful actions or omissions);
provided, however, that if, by reason of the foregoing waiver, either party
shall be unable to obtain any such insurance, such waiver shall be deemed not to
have been made by either party and, provided, further, that if either party
shall be unable to obtain any such insurance without the payment of an
additional premium therefor, then, unless the party claiming the benefit of such
waiver shall agree to pay such party for the cost of such additional premium
within thirty (30) days after notice setting forth such requirement and the
amount of the additional premium, such waiver shall be of no force and effect
between such party and such
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claiming party. Each party shall use reasonable efforts to obtain such insurance
from a company that does not charge an additional premium or, if that is not
possible, one that charges the lowest additional premium. Each party shall give
the other party notice at any time when it is unable to obtain insurance with
such a waiver of subrogation without the payment of an additional premium and
the foregoing waiver shall be effective until thirty (30) days after notice is
given. Each party represents that its current insurance policies allow such
waiver. The provisions of this Section shall not limit the indemnification for
liability to third parties pursuant to Subsections 14.1 and 14.2.
15. INSURANCE
15.1. TENANT'S INSURANCE. Tenant, at its expense, shall obtain and
maintain in effect as long as this Lease remains in effect and during such other
time as Tenant occupies the Premises or any part thereof, insurance policies
providing at least the following coverage:
15.1.1. commercial general liability insurance written on an
occurrence basis with respect to the Premises and the business operated by
Tenant and any subtenants, concessionaires or licensees of Tenant, to afford
insurance against personal injury, death and property damage, and including
insurance against assumed or contractual liability under this Lease,
specifically including the liability of Tenant arising out of the indemnities
provided in Subsection 14.1, with minimum combined single limits of Two Million
Dollars ($2,000,000) per occurrence and in the aggregate;
15.1.2. all-risk property and casualty insurance, including
theft coverage, written at full replacement cost value and with full replacement
cost endorsement, covering all of Tenant's personal property in the Premises
(including, without limitation, all inventory, trade fixtures, floor coverings,
furniture and other property removable by Tenant under this Lease) and Tenant's
interest in all Alterations and all leasehold improvements and all betterments
installed in the Premises by or on behalf of Tenant (other than the Leasehold
Improvements constructed by Landlord as provided in Section 4 of this Lease);
and
15.1.3. comprehensive boiler and machinery equipment insurance,
including electrical apparatus, if applicable; and,
15.1.4. if and to the extent required by law, worker's
compensation or similar insurance in form and amounts required by law.
15.2. TENANT'S CONTRACTOR'S INSURANCE. Tenant shall require any
contractor of Tenant performing work on or about the Premises to carry and
maintain, at no expense to Landlord:
15.2.1. commercial general liability insurance written on an
occurrence basis with respect to the Premises and the business operated by
Tenant and any
35
subtenants, concessionaires or licensees of Tenant, to afford insurance against
personal injury, death and property damage, and including insurance against
assumed or contractual liability under this Lease, with minimum combined single
limits of Two Million Dollars ($2,000,000) per occurrence and in the aggregate;
15.2.2. comprehensive automobile liability insurance with
limits for each occurrence of not less than One Million Dollars ($1,000,000)
with respect to personal injury or death and Five Hundred Thousand Dollars
($500,000) with respect to property damage; and
15.2.3. worker's compensation or similar insurance in form and
amounts required by law.
15.3. POLICY REQUIREMENTS. The company or companies writing any
insurance which Tenant or Tenant's contractor is required to carry and maintain
or cause to be carried or maintained pursuant to Subsections 15.1 and 15.2, as
well as the form of such insurance, shall at all times be subject to Landlord's
approval and any such company or companies shall have a rating of at B+ or
better and a financial size rating of X or larger from BEST'S KEY RATING GUIDE
AND SUPPLEMENTAL SERVICE, PROPERTY/CASUALTY (or comparable rating from a
comparable insurance rating service), and shall be licensed to do business in
the State of Maryland. Public liability and all-risk casualty insurance policies
evidencing such insurance shall name Landlord and/or its designee(s) as
additional insured, shall be primary and noncontributory, and shall also contain
a provision by which the insurer agrees that such policy shall not be canceled,
materially changed or not renewed without at least thirty (30) days advance
notice to Landlord, at Landlord's Notice Address, by certified mail, return
receipt requested, or to its designee. None of the insurance which Tenant is
required to carry and maintain or cause to be carried or maintained pursuant to
the previous Sections shall contain any deductible provisions in excess of
$50,000 except following written notice to Landlord; and none of the insurance
which Tenant is required to carry and maintain or cause to be carried or
maintained pursuant to the previous Sections shall contain any deductible
provisions in excess of $100,000 except to the extent approved by Landlord. Each
such policy, or a certificate thereof, shall be deposited with Landlord by
Tenant promptly upon commencement of Tenant's obligation to procure the same.
15.4. TENANT'S FAILURE TO INSURE. If Tenant fails to obtain insurance
as required under this Section then, subject to the provisions for Notice and
cure provided in Section 23, Landlord may, but shall not be obligated to, obtain
such insurance, and in such event, Tenant agrees to pay, as Additional Rent, the
premium for such insurance upon demand by Landlord.
15.5. INCREASE IN INSURANCE PREMIUMS. Tenant will not do or suffer to
be done, or keep or suffer to be kept, anything in, upon or about the Premises
which will violate Landlord's policies of hazard or liability insurance or which
will prevent Landlord from procuring such policies in companies acceptable to
Landlord. Landlord acknowledges that the
36
Permitted Use will result in no such increase. If anything done, omitted to be
done or suffered by Tenant to be kept in, upon or about the Premises shall cause
the rate of fire or other insurance on the Premises or on other property of
Landlord or others within the Property to be increased beyond the minimum rate
from time to time applicable to the Premises or to any such property for the use
or uses made thereof, then Tenant will pay, as Additional Rent, the amount of
any such increase upon Landlord's demand.
15.6. LANDLORD'S INSURANCE; TENANT TO PAY INSURANCE COSTS. During each
calendar year or other 12-month period as determined by Landlord, Landlord shall
maintain in force, under one or more policies, insurance coverage with respect
to the Building and the Center generally, including, without limitation,
insurance against fire, all-risk coverage including earthquake and flood, theft
or other casualties and such other insurance deemed appropriate by Landlord with
such coverage limits, deductible amounts and companies as Landlord may
determine. Landlord shall pay all costs of maintaining such insurance (the
"Insurance Costs") in the first instance. Tenant will pay Landlord, as
Additional Rent, all Insurance Costs incurred by Landlord. Such payments shall
be made by Tenant in monthly installments in such amounts as are estimated and
billed by Landlord during each twelve (12) month period commencing and ending on
dates designated by Landlord, each installment being due on the first day of
each calendar month. Within one hundred twenty (120) days, or such reasonable
time (in Landlord's determination) after the end of each such twelve (12) month
period, Landlord shall deliver to Tenant a statement of Insurance Costs and
allocation thereof for such twelve (12) month period. Any overpayment or
deficiency in Tenant's payment of Insurance Costs shall be adjusted between
Landlord and Tenant, and Tenant shall pay Landlord or Landlord shall credit
Tenant's account (or, if such adjustment is at the end of the Term, Landlord
shall pay Tenant), as the case may be, within fifteen (15) days of receipt of
such statement, such amounts as may be necessary to effect such adjustment. Upon
reasonable notice, Landlord shall make available for Tenant's inspection (which
inspection shall be at Tenant's sole cost and expense) at Landlord's office,
during normal business hours, Landlord's records relating to Insurance Costs for
such preceding twelve (12) month period. Landlord's failure to provide the
statement called for hereunder within the time prescribed shall not relieve
Tenant of its obligations hereunder.
16. DAMAGE AND DESTRUCTION.
16.1. LANDLORD'S OBLIGATION TO REPAIR AND RECONSTRUCT. If the Premises
or Common Areas shall be damaged by fire, the elements, accident or other
casualty (any of such causes being referred to herein as a "Casualty"), but the
Premises shall not be thereby rendered wholly or partially untenantable, then
Landlord shall promptly cause such damage to be repaired and there shall be no
abatement of Rent. If, as the result of such Casualty, the Premises shall be
rendered wholly or partially untenantable, then, subject to the provisions of
Subsection 16.2, Landlord shall cause such damage to be repaired and all Rent
(other than any Additional Rent due Landlord because of Tenant's failure to
perform any of its obligations hereunder) shall be abated proportionately as to
the portion of the Premises rendered untenantable during the period of such
untenantability. All such repairs shall be made at the expense of Landlord, but
Landlord shall not be required to perform any work within the Premises beyond
that described in Section
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4 and which were constructed by Landlord as Leasehold Improvements. Landlord
shall not be liable for interruption to Tenant's business or for damage to or
replacement or repair of Tenant's personal property (including, without
limitation, inventory, trade fixtures, floor coverings, furniture and other
property removable by Tenant under the provisions of this Lease) or to any
Alterations installed in the Premises by or on behalf of Tenant pursuant to
Subsection 10.4 or otherwise, all of which damage, replacement or repair shall
be undertaken and completed by Tenant promptly.
16.2. LANDLORD'S, TENANT'S OPTIONS TO TERMINATE LEASE. If (i) the
Premises are (A) rendered wholly untenantable by a Casualty, or (B) damaged as a
result of any cause which is not covered by Landlord's insurance, or (C) damaged
or destroyed in whole or in part during the last two (2) years of the Term
(after giving effect to any then-existing right of renewal provided under this
Lease (and, for purposes of this Section, the Tenant shall be permitted the
early exercise any right of renewal so as to avoid the operation of this
termination provision); or (ii) the Building is damaged to the extent of fifty
(50%) or more the gross area thereof; or (iii) the Building shall be so
substantially damaged that it is reasonably necessary, in Landlord's sole
judgment, to demolish such Building for the purpose of reconstruction, then, in
any of such events, Landlord may elect to terminate this Lease by giving Tenant
notice of such election within ninety (90) days after the occurrence of such
event. If such notice is given, the rights and obligations of the parties shall
cease as of the date of such notice, and Rent, as abated under Subsection 16.1
(other than any Additional Rent due Landlord by reason of Tenant's failure to
perform any of its obligations hereunder) shall be adjusted as of the date of
such termination.
If, within the 90 day period set forth above, Landlord shall not have made
an election to rebuild or to terminate this Lease as provided in the preceding
paragraph, then Tenant may elect to terminate this Lease by giving to Tenant
notice of such election within thirty (30) days following the expiration of such
ninety (90) period. If the Premises have not been fully restored within 180 days
following the occurrence of a Casualty then Tenant may elect to terminate this
Lease by giving to Tenant notice of such election within thirty (30) days
following the expiration of such 180 day period. In either case, if such notice
is given, the rights and obligations of the parties shall cease as of the date
set forth in such notice, and the Basic Rent, as abated under Subsection 16.1,
and Additional Rent (other than any Additional Rent due Landlord either by
reason of Tenant's failure to perform any of its obligations hereunder or by
reason of Landlord's having provided Tenant with additional services hereunder)
shall be adjusted as of the date of such termination.
16.3. INSURANCE PROCEEDS. If Landlord does not elect to terminate this
Lease pursuant to Subsection 16.2, Landlord shall, subject to the prior rights
of any Superior Mortgagee or Superior Lessor, disburse and apply any insurance
proceeds received by Landlord to the restoration and rebuilding of the Building
in accordance with Subsection 16.1 hereof. All insurance proceeds payable with
respect to the Premises (excluding proceeds payable to Tenant pursuant to
Subsection 15.1), shall belong to and shall be payable to Landlord.
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17. SIGNS. Tenant shall be permitted to have and maintain one (1) exterior
Building sign and one (1) monument-type entrance sign, of a size, dimension and
location subject to Landlord's prior approval and, in addition, subject to
approval under all applicable architectural control covenants to which the
Center is subject, and further subject to the provisions of applicable zoning
and sign ordinances. Tenant shall neither erect, maintain or replace any sign
within the Premises visible from outside the Building, nor erect or maintain any
sign upon the exterior of the Building or anywhere else upon the Center, without
first obtaining Landlord's written approval as to the size, design, location,
type of composition or material and lighting thereof. Design shall be in
accordance with the guidelines established by Landlord from time to time and all
applicable laws and regulations. Any such sign shall be inscribed, painted or
affixed by Landlord, or a company approved by Landlord, but the entire cost
thereof shall be borne by Tenant. Tenant shall maintain any such sign or signs
in good condition and repair at all times, and pay any taxes imposed thereon.
18. CONDEMNATION. If the whole or any part of the Premises is taken under
the power of eminent domain then this Lease shall terminate as to the part so
taken on the date Tenant is required to yield possession thereof to the
condemning authority. Landlord shall make necessary repairs and alterations to
restore the part not taken to useful condition and the Basic Rent shall be
reduced proportionately as to the portion of the Premises so taken. If the
amount of the Premises so taken substantially impairs the usefulness of the
Premises for the Permitted Use, then either party may terminate this Lease as of
the date when Tenant is required to yield possession. All compensation awarded
for any taking of the fee and the leasehold shall belong to and be the property
of Landlord; provided, however, that Tenant, and not Landlord, shall be entitled
to any portion of the award which does not serve to reduce Landlord's award and
is made directly to Tenant in reimbursement for Tenant's cost of removal of its
stock, trade fixtures, moving and relocation costs.
19. RIGHT OF ENTRY. Landlord and its representatives shall have the right
at all reasonable times during normal business hours with prior oral or written
notice to enter the Premises for the purposes of inspecting them and exhibiting
them for sale or financing, or for lease during the last six (6) months of the
term; and Landlord shall not be liable in any manner for any entry into the
Premises for such purposes. Landlord shall act so as to minimize interference
with Tenant's business operations in the Premises. Landlord reserves and shall
at all times have the right to re-enter the Premises upon 24 hours prior notice
to Tenant (except in an emergency) to maintain, repair and replace the Premises
and any portion of the Building of which the Premises are a part, without
abatement of Rent. Landlord may for the purpose of such work erect, use and
maintain scaffolding, pipes, conduits and other necessary structures in and
through the Premises where reasonably required by the character of the work to
be performed, provided that entrance to the Premises shall not be blocked.
Tenant waives any claim for any injury or inconvenience to or interference with
Tenant's business, any loss of occupancy or quiet enjoyment of the Premises and
any other loss occasioned by any such maintenance, repair or replacement work.
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20. CURING THE TENANT'S DEFAULTS. If Tenant defaults in the performance of
any of its obligations under this Lease then, in addition to any other rights it
may have in law or equity, and after written notice to Tenant except in the case
of emergency, Landlord shall be entitled (but shall not be obligated) to cure
such default, and Tenant shall reimburse Landlord for any sums paid or costs
incurred by Landlord, including reasonable attorney's fees, in curing such
default, plus interest thereon at the Default Rate which sums, costs, and
interest shall be deemed to be Additional Rent hereunder and shall be payable by
Tenant upon demand by Landlord.
21. SUBORDINATION AND ATTORNMENT. This Lease and all rights of Tenant
hereunder are and shall be subject and subordinate in all respects to: (i) all
present and future ground leases, operating leases, superior leases, overriding
leases and underlying leases and grants of term of the Center and the Building
or any portion thereof (collectively, including the applicable items set forth
in Subdivision (iv) of this Section, the "Superior Lease", and the party then
exercising the rights of landlord thereunder being referred to herein as the
"Superior Lessor"); (ii) all mortgages and building loan agreements, including
leasehold mortgages and spreader and consolidation agreements, which may now or
hereafter affect the Center, the Building or the Superior Lease (collectively,
including the applicable items set forth in Subdivisions (iii) and (iv) of this
Section, the "Superior Mortgage", and the party then exercising the rights of
mortgagee, beneficiary or secured party thereunder being referred to herein as
the "Superior Mortgagee") whether or not the Superior Mortgage shall also cover
other lands or buildings or leases except that a mortgage on the Center only
shall not be a Superior Mortgage so long as there is in effect a Superior Lease
which is not subordinate to such mortgage: (iii) each advance made or to be made
under the Superior Mortgage; and (iv) all renewals, modifications, replacements,
supplements, substitutions and extensions of the Superior Lease and the Superior
Mortgage and all spreaders and consolidations of the Superior Mortgage. The
provisions of this Section shall be self-operative and no further instrument of
subordination shall be required; provided, however, that the forgoing provisions
are subject to the provisions respecting nondisturbance hereinafter set forth.
In confirmation of such subordination, Tenant shall promptly execute and
deliver, at its own cost and expense, any instrument, in recordable form if
requested, that Landlord, the Superior Lessor or the Superior Mortgagee may
reasonably request to evidence such subordination; and if Tenant fails to
execute, acknowledge or deliver any such instrument within 10 days after request
therefor, then such failure shall be deemed an Event of Default hereunder. The
Superior Mortgagee may elect that this Lease shall have priority over its
Superior Mortgage and, upon notification by the Superior Mortgagee to Tenant,
this Lease shall be deemed to have priority over such Superior Mortgage, whether
this Lease is dated prior to or subsequent to the date of such Superior
Mortgage. If, at any time prior to the termination of this Lease, the Superior
Lessor or the Superior Mortgagee or any person, or the Superior Lessor's or
Superior Mortgagee's or such person's successors or assigns (the Superior
Lessor, Superior Mortgagee and any such person or successor or assign being
herein collectively referred to as "Successor Landlord") shall succeed to the
rights of Landlord under this Lease through possession or foreclosure or
delivery of a new lease or deed or otherwise, then Tenant shall fully and
completely attorn to and recognize any such Successor Landlord, as Tenant's
landlord under this Lease upon the then-executory terms of this Lease; and, in
such event, and so long as no default exists, nor any event has occurred, which
has continued to exist
40
for such period of time (after notice, if any, required by the Lease) as would
entitle Successor Landlord to terminate the Lease or would cause, without any
further action of Successor Landlord, the termination of the Lease, or would
entitle Landlord to dispossess Tenant, the Lease shall not be terminated by
Successor Landlord, nor shall Tenant's use, possession, or enjoyment of the
Premises be interfered with or disturbed by Successor Landlord, nor shall the
leasehold estate granted by the Lease be affected by Successor Landlord in any
other manner, in any foreclosure or any action or proceeding instituted under or
in connection with the Superior Mortgage or Superior Lease, or in case Successor
Landlord takes possession of the Premises pursuant to any provision of the
Superior Mortgage or Superior Lease. The foregoing provisions of this Section
shall: (i) inure to the benefit of any such Successor Landlord; (ii) apply
notwithstanding that, as a matter of law, this Lease may terminate upon the
termination of the Superior Lease; (iii) be self-operative upon any such demand;
and (iv) require no further instrument to give effect to said provisions.
Tenant, however, upon demand of any such Successor Landlord agrees to execute,
from time to time, instruments to evidence and confirm the foregoing provisions
of this Section, satisfactory to any such Successor Landlord, acknowledging such
attornment and setting forth the terms and conditions, of its tenancy. Upon such
attornment this Lease shall continue in full force and effect as a direct lease
between such Successor Landlord and Tenant upon all of the then-executory terms
of this Lease except that such Successor Landlord shall not be: (i) liable for
any previous act or omission or negligence of Landlord under this Lease; (ii)
subject to any counterclaim, defense or offset, not expressly provided for in
this Lease and asserted with reasonable promptness, which theretofore shall have
accrued to Tenant against Landlord; (iii) obligated after the Commencement Date
to perform any Leasehold Improvements or other work with respect to the
Premises; (iv) bound by any previous modification or amendment of this Lease or
by any previous prepayment of more than one month's Rent, unless such
modification or prepayment shall have been approved in writing by the Superior
Lessor or the Superior Mortgagee through or by reason of which the Successor
Landlord shall have succeeded to the rights of Landlord under this Lease; (v)
obligated to repair the Premises or the Building or any part thereof, in the
event of total or substantial total damage beyond such repair as can reasonably
be accomplished from the net proceeds of insurance actually made available to
Successor Landlord; or (vi) obligated to repair the Premises or the Building or
any part thereof, in the event of partial condemnation beyond such repair as can
reasonably be accomplished from the net proceeds of any award actually made
available to Successor Landlord, as consequential damages allocable to the part
of the Premises or the Building not taken. Nothing contained in this Section
shall be construed to impair any right otherwise exercisable by any such owner,
holder or lessee.
22. MODIFICATIONS TO LEASE; RIGHTS OF SUPERIOR MORTGAGEE, SUPERIOR LESSOR.
Landlord hereby notifies Tenant that this Lease may not be cancelled or
surrendered, or modified or amended so as to reduce the Rent, shorten the Term
or adversely affect in any other respect to any material extent the rights of
Landlord hereunder and that Landlord may not accept prepayments of any
installments of Rent except for prepayments in the nature of security for the
performance of Tenant's obligations hereunder without the consent of the
Superior Lessor and the Superior Mortgagee in each instance, except that said
consent shall not be required to the institution or prosecution of any action or
proceedings against Tenant by reason of an Event of
41
Default. Tenant shall not do or suffer or permit anything to be done which
would constitute a default under the Superior Mortgage or the Superior Lease
or cause the Superior Lease to be terminated or forfeited by virtue of any
rights of termination or forfeiture reserved or vested in the Superior
Lessor. If any act or omission by Landlord would give Tenant the right,
immediately or after lapse of time, to cancel or terminate this Lease or to
claim a partial or total eviction, Tenant will not exercise any such right
until: (i) it has given written notice of such act or omission to each
Superior Mortgagee and each Superior Lessor, whose name and address shall
have previously been furnished to Tenant, by delivering notice of such act or
omission addressed to each such party at its last address so furnished; and
(ii) a reasonable period for remedying such act or omission shall have
elapsed following such giving of notice and following the time when such
Superior Mortgagee or Superior Lessor shall have become entitled under such
Superior Mortgage or Superior Lease, as the case may be, to remedy the same
(which shall in no event be neither less nor more than the period to which
Landlord would be entitled under this Lease to effect such remedy) provided
such Superior Mortgagee or Superior Lessor shall, with reasonable diligence,
give Tenant notice of intention to, and commence and continue to, remedy such
act or omission or to cause the same to be remedied.
23. DEFAULTS BY THE TENANT.
23.1. EVENTS OF DEFAULT DEFINED. Each of the following shall be deemed
an "Event of Default" under this Lease:
23.1.1. failure by Tenant to pay Basic Rent, Additional Rent,
or any other sum required to be paid under the terms of this Lease, when and as
due hereunder which continues more than ten (10) days following notice thereof
from Landlord;
23.1.2. failure by Tenant to perform or observe any other term,
covenant, agreement or condition of this Lease on the part of Tenant to be
performed, for a period of thirty (30) days after notice thereof from Landlord;
23.1.3. Tenant or any guarantor of any of Tenant's obligations
hereunder shall make or deliver to Landlord any financial report or statement,
certificate, representation or warranty (including, without limitation, any
representation or warranty made by Tenant herein) which proves to have been
false or misleading in any material respect as of the time at which the facts
therein set forth were stated or certified, or if any such financial report or
statement has omitted any material contingent or unliquidated liability or claim
against Tenant or any such guarantor of any of Tenant's obligations hereunder;
23.1.4. Tenant or any guarantor of any of Tenant's obligations
hereunder shall cease doing business as a going concern, make an assignment for
the benefit of creditors, generally not pay its debts as they become due or
admit in writing its inability to pay its debts when they become due, be
adjudicated an insolvent, file a petition seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
arrangement under any present or future statute, law, rule or regulation, or
file an answer
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admitting the material allegations of a petition filed against it in any such
proceeding, or consent to the filing of such a petition or acquiesce in the
appointment of a trustee, receiver, custodian or other similar official for it
of all or any substantial part of its assets or properties, or take any action
looking to its dissolution or liquidation; file a voluntary or involuntary
petition proposing the adjudication of Tenant or any guarantor of Tenant's
obligations hereunder as a debtor under the Bankruptcy Code, or the
reorganization of Tenant or any such guarantor under the Bankruptcy Code, unless
such a petition is filed by a party other than Tenant or any such guarantor and
is withdrawn or dismissed within sixty (60) days after the date of filing;
23.1.5. the sale or other transfer of Tenant's interest in the
Premises under attachment, execution or similar legal process or the assignment,
mortgage, encumbrance or sublease of the Premises by Tenant in violation of the
prohibition contained in Section 8;
23.1.6. the abandonment of the Premises by Tenant at any time
during the term of this Lease;
23.1.7. the failure of Tenant to vacate the Premises upon the
expiration of the Term, or earlier termination thereof pursuant to other
provisions of this Lease.
23.2. LANDLORD'S REMEDIES FOR DEFAULT. Upon the occurrence of an Event
of Default, Landlord shall have the right, at its election, immediately upon
such Event of Default or at any time thereafter and while any such Event of
Default shall continue, to exercise one or more of the following remedies.
23.2.1. Landlord may terminate this Lease, as well as all
right, title and interest of Tenant hereunder, by giving written notice of
Landlord's intention to terminate this Lease on the date of such given notice or
on any later date specified therein, whereupon, on the date specified in such
notice, Tenant's right to possession of the Premises shall cease and this Lease
shall thereupon be terminated, except as to Tenant's liability for damages as
hereafter set forth, as if the expiration of the term fixed in such notice were
the end of the Term originally set forth in this Lease.
23.2.2. Landlord may re-enter the Premises, with or without
legal process and using such force for such purposes as may be reasonably
necessary, without being liable for prosecution thereof, and without being
deemed guilty of any manner of trespass, and without prejudice to any remedies
for arrears of Rent or preceding breach of covenants or conditions and, upon
such reentry, Landlord may: (i) remove any and all of Tenant's property at the
Premises; (ii) store Tenant's property in a public warehouse or elsewhere at the
cost, risk and expense of Tenant without Landlord's being deemed guilty of
trespass or liable for any loss or damage which may occur to Tenant's property;
and (iii) upon fifteen (15) days written notice to Tenant, which Landlord and
Tenant agree is commercially reasonable, to sell at public or private sale any
or all said property, whether exempt or not from sale under execution or
attachment (such property being deemed charged with a lien in favor of Landlord
for all Rent due hereunder), with the proceeds of sale to be applied: first, to
the cost and expenses of
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retaking, or removal, storage, preparing for sale and sale of Tenant's property
(including reasonable attorneys' fees); and second, to the payment of any sum
due hereunder to Landlord (including Basic Rent, Additional Rent, and any other
charges and damages theretofore and thereafter accruing); and third, any surplus
to Tenant.
23.2.3. Landlord may exercise any other remedy available to it
at law, in equity, by statute or otherwise; and, for such purposes, Landlord
shall be entitled to the benefit of all provisions of applicable city or county
ordinances and public local laws and of the public general laws of the State of
Maryland dealing with the speedy recovery of lands and tenements held over by
tenants or proceedings in forcible entry and detainer.
23.3. LANDLORD'S RIGHT TO RELET PREMISES. Upon any entry or re-entry
by Landlord, with or without legal process, Landlord shall also have the right
(but not the obligation) to relet all or any part of the Premises, from time to
time, at the risk and expense of Tenant. No re-entry by Landlord with or without
a declaration of termination shall be deemed to be an acceptance or a surrender
of this Lease or as a release of Tenant's liability for damages under the
provisions of this Section. Landlord shall have the right to let or relet the
Premises for a longer or shorter term than that remaining after Tenant's
default, to lease more or less area than that contained in the Premises, to
lease the Premises together with other premises or property owned or controlled
by Landlord, and to change the character or use of the Premises. Landlord shall
be entitled to deduct from any amounts received from any such letting or
reletting all reasonable costs and expenses incurred in connection with Tenant's
default, including, but not limited to, the cost to repair, restore, renovate or
decorate the Premises for a new tenant, together with reasonable attorneys'
fees, real estate commissions, the cost of any legal actions brought against
Tenant and any other costs reasonably incurred. No entry or re-entry by
Landlord, whether resulting from summary proceedings or otherwise, nor any
letting or reletting shall absolve or discharge Tenant from liability hereunder.
Tenant's liability hereunder, even if there be no letting or reletting, shall
survive the issuance of any dispossess warrant, order of court terminating this
Lease or any other termination based upon Tenant's default. The words "enter",
"re-enter", and "re-entry" as used in this Section 23 and elsewhere in this
Lease are not restricted to their technical legal meanings.
23.4. DAMAGES. Tenant further agrees (i) notwithstanding re-entry by
Landlord with or without termination pursuant to the provisions of Subsection
23.2, or (ii) if this Lease is otherwise terminated by reason of Tenant's
default, or (iii) if Landlord retakes possession with or without process of law,
or re-enters with or without a declaration of termination or (iv) if Landlord
following any of the foregoing events, elects to let or relet the Premises as
provided in Subsection 23.3, then Tenant shall, nevertheless, in each instance,
be and remain obligated to, and shall pay to Landlord as damages, upon demand,
all expenses (including attorneys' fees) of any proceedings instituted by
Landlord to recover possession of the Premises or otherwise in connection with
Tenant's breach of this Lease, and the expenses of releasing the Premises,
including but not limited to, any leasing commissions paid in Connection
therewith, plus, at the election of the Landlord, either:
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23.4.1. liquidated damages determined as of the date of
termination of the Lease, in an amount equal to the excess, if any, of the sum
of the aggregate Basic Rent and the aggregate Additional Rent which would have
been paid over the remaining Term had this Lease not been terminated, discounted
to present worth, over the then-current rental value of the Premises, for such
remaining Term, as determined by Landlord, discounted to present worth, and in
determining such liquidated damages, the Additional Rent for each year of such
remaining Term shall be assumed to equal the Additional Rent payable for the
Lease Year immediately preceding the Lease Year in which the default occurs,
annualized in the event that such preceding Lease Year is less than twelve (12)
months, and in determining present worth, a discount rate equal to one
percentage point above the discount rate then in effect at the Federal Reserve
Bank in Baltimore shall be used; or
23.4.2. damages (payable in monthly installments, in advance,
on the first day of each calendar month following such termination and
continuing until the date originally fixed herein for the expiration of the Term
of this Lease) in amounts equal to the sum of (i) an amount equal to the
installment of Basic Rent which would have been payable by Tenant for such
calendar month had this Lease not been terminated plus (ii) an amount equal to
one-twelfth (1/12) of the total Additional Rent payable for the Lease Year
immediately preceding the Lease Year in which the default occurred, annualized
to the extent that such preceding Lease Year is less than twelve (12) months,
minus the rents, if any, collected by Landlord in respect to such calendar month
pursuant either to re-leasing the Premises or portion thereof or from any
existing subleases permitted under the terms of this Lease (after deduction from
such rents of the sum of Landlord's costs and expenses as set forth in
Subsection 23.3). Landlord shall be entitled immediately to bring a separate
suit, action or proceeding to collect any amount due from Tenant under this
Subsection 23.4 for any calendar month and any such suit, action, or proceeding
shall not prejudice in any way the right of Landlord to collect such amount due
on account of any subsequent calendar month by similar proceeding. In no event
shall Landlord be required to exercise any efforts whatsoever to re-lease the
Premises.
23.4.3. Nothing in this Subsection 23.4 shall limit or
prejudice the right of Landlord to prove and to obtain, as liquidated damages by
reason of a termination arising out of the provisions of this Section, an amount
equal to the maximum allowed by any statute or any rule of law in effect as of
the time when, and governing the proceedings in which, such damages are to be
proved, whether or not such amount be greater, equal to or less than the amount
of liquidated damages computed under this Subsection 23.4.
23.4.4. MITIGATION OF DAMAGES. Both Landlord and Tenant shall
each use commercially reasonable efforts to mitigate any damages resulting from
a default of the other party under this Lease. Landlord's obligation to mitigate
damages after a default by Tenant under this Lease shall be satisfied in full if
Landlord undertakes to lease the Premises to another tenant (a "Substitute
Tenant") in accordance with the following criteria: (a) Landlord shall have no
obligation to solicit or entertain negotiations with any other prospective
tenants for the Premises until Landlord obtains full and complete possession of
the Premises including, without limitation, the final and unappealable legal
right to relet the Premises free of any claim of
45
Tenant; (b) Landlord shall not be obligated to offer the Premises to a
prospective tenant when other premises in the Center suitable for that
prospective tenant's use are (or soon will be) available; (c) Landlord shall not
be obligated to lease the Premises to a Substitute Tenant for a rental less than
the current fair market rental then prevailing for similar space, nor shall
Landlord be obligated to enter into a new lease under other terms and conditions
that are unacceptable to Landlord under Landlord's then current leasing policies
for comparable space in the Center; (d) Landlord shall not be required to expend
any amount of money to alter, remodel, or otherwise make the Premises suitable
for use by a proposed Substitute Tenant unless Tenant pays any such sum to
Landlord in advance of Landlord's execution of a Substitute Lease with such
tenant (which payment shall not be in lieu of any damages or other sums to which
Landlord may be entitled as a result of Tenant's default under this Lease), or
Landlord, in Landlord's sole discretion, determines that any such expenditure is
financially justified in connection with entering into any such Substitute
Lease. Upon compliance with the above criteria regarding the releasing of the
Premises after a default by Tenant, Landlord shall be deemed to have fully
satisfied Landlord's obligation to mitigate damages under this Lease and under
any law or judicial ruling in effect on the date of this Lease or at the time of
Tenant's default, and Tenant waives and releases, to the fullest extent legally
permissible, any right to assert in any action by Landlord to enforce the terms
of this Lease, any defense, counterclaim, or rights of setoff or recoupment
respecting the mitigation of damages by Landlord, unless and to the extent
Landlord maliciously or in bad faith fails to act in accordance with the
requirements of this Section. Tenant's right to seek damages from Landlord as a
result of a default by Landlord under this lease shall be conditioned on Tenant
taking all actions reasonably required, under the circumstances, to minimize any
loss or damage to Tenant's property or business, or to any of Tenant's officers,
employees, agents, invitees, or other third parties that may be caused by any
such default of Landlord.
23.5. RENT DURING HOLDOVER. If Tenant fails to vacate the Premises at
any time after termination of this Lease as provided in Subsection 23.2, then
Tenant shall be liable to pay Landlord and shall pay Landlord, upon demand, one
and one-half times (1.50%) the Basic Rent and Additional Rent otherwise
payable during such holdover period.
23.6. NO IMPLIED WAIVER OF LANDLORD'S RIGHTS. The failure of Landlord
to insist in any one or more instances upon the performance of any of the
covenants or conditions of this Lease, or to exercise any right or privilege
herein conferred shall not be construed as thereafter waiving or relinquishing
Landlord's right to the performance of any such covenants, conditions, rights or
privileges, and the same shall continue and remain in full force and effect, and
the waiver of one default or right shall not constitute waiver of any other
default, and the receipt of any Rent by Landlord from Tenant or any assignee or
subtenant of Tenant, whether the same be Rent that originally was reserved or
that which may become payable under any covenants herein contained, or of any
portion thereof, shall not operate as a waiver of Landlord's right to enforce
the payment of the Rent or of any of the other obligations of this Lease by such
remedies as may be appropriate, and shall not waive or avoid Landlord's right at
any time thereafter to elect to terminate this Lease, on account of such
assignment, subletting, transferring of this Lease or any other breach of any
covenant or condition herein
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contained, unless evidenced by Landlord's written waiver thereof. The acceptance
of Rent or any other consideration by Landlord at any time shall not be deemed
an accord and satisfaction, and Landlord shall have absolute discretion to apply
same against any sum for any period or reason due hereunder without the same
constituting a release of any other sums remaining due and unpaid.
23.7. WAIVER OF JURY TRIAL.
23.7.1. LANDLORD AND TENANT HEREBY JOINTLY AND SEVERALLY WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY LANDLORD OR
TENANT ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY
OF THE PREMISES AND/OR ANY CLAIM OF INJURY OR DAMAGE. THIS WAIVER CONSTITUTES A
WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR
PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES OTHER THAN LANDLORD OR TENANT.
23.7.2. Landlord and Tenant make this waiver knowingly,
willingly and voluntarily. Each party represents that no representations of fact
or opinion have been made by any individual to induce this mutual waiver of
trial by jury or to in any way modify or nullify its effect. If landlord
commences any summary proceeding for nonpayment of Rent or for possession of the
Premises Tenant will not interpose and hereby waives any counterclaim of
whatever nature or description in any such proceeding. Tenant further waives the
right to remove said summary proceeding to any other court or to consolidate
said summary proceeding with any other action, whether brought prior or
subsequent to such summary proceeding. This shall not, however, be construed as
a waiver of Tenant's right to assert such claims in any separate action or
actions brought by Tenant.
23.7.3. Landlord and Tenant acknowledge and declare that the
resolution of disputes by trial before a jury in the circuit courts of this
state inevitably entails considerable expense, complication and delay, and that
the prompt, economical and efficient judicial resolution of any disputes which
may arise between them will best be promoted by giving effect to the foregoing
waiver. Such waiver was a material inducement to the parties' agreement to enter
into the Lease; and, accordingly, the parties irrevocably and unalterably agree
as follows:
23.7.3.1. If, in derogation of the foregoing waiver,
either Landlord or Tenant shall pray trial by jury in any action, proceeding or
counterclaim brought by either of them on any matters whatsoever arising out of
or in any way connected with this Lease, the relationship of Landlord and
Tenant, Tenant's use or occupancy of the Premises and/or any claim of injury or
damage, then the party making such prayer shall pay the other party, without
demand, the sum of One Thousand Dollars ($1,000.00) per week, or fraction
thereof, accounting from the date of such prayer until the actual date of
commencement of trial of the matter, whether before a jury or otherwise. The
first payment shall be made commencing on the date of prayer for jury trial, and
payments shall continue thereafter on the same day of
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the week for each successive week until commencement of trial. In addition to
the foregoing payments, such party shall also pay to the other party all of the
latter's costs, fees and expenses, including attorney's fees, incurred in
attempting to enforce the foregoing waiver. Such payments shall be paid upon
demand. Payments shall be made, if by Tenant, to Landlord's Rental Payment
Address, and if by Landlord, to Tenant's Notice Address.
23.7.3.2. The foregoing payments are expressly and
unalterably declared not to be a penalty, but as recompense for the cost,
expense and delay which the parties anticipate and agree will be incurred
because of an action of either party in derogation of the foregoing waiver. The
foregoing payments shall be due and payable without regard to the success or
failure of either parties' claims on the merits in the subject litigation.
23.7.3.3. The parties hereto irrevocably and
unalterably agree that the failure of any party to make payments as provided in
this Section shall, in all legal proceedings between them, conclusively be
deemed to constitute, and be interpreted by the court as constituting, such
party's immediate agreement for the complete and irrevocable withdrawal and
dismissal of such party's jury trial prayer and, if applicable, to the remand of
the proceeding to the forum in which the proceeding was originally filed.
24. CONSENT TO REQUESTS. If Tenant requests Landlord's consent on any
matter as to which Landlord's consent is required to be obtained under this
Lease, and Landlord fails or refuses to give such consent, then Tenant shall not
be entitled to any damages for Landlord's withholding of its consent, it being
intended that the sole and exclusive remedy for a wrongful withholding of
consent shall be an expedited arbitration of the dispute in the following
manner. The Tenant may initiate the arbitration within ten (10) days after
receiving Landlord's notice of denial of consent, by sending Landlord notice of
Tenant's demand for arbitration of the matter, referencing this Section.
Tenant's notice shall also name Tenant's proposed arbitrator, who shall be an
attorney licensed to practice law in the State of Maryland whose practice is
primarily real estate sales and leasing transactions. Within five (5) days
following receipt of Tenant's nomination Landlord shall send a responsive notice
accepting Tenant's nominee, or rejecting such nominee and proposing an alternate
arbitrator for Tenant's approval. If Landlord fails to respond within such time
then Tenant's nominee shall be deemed approved. If any alternate nominee
proposed by Landlord is in turn rejected by Tenant, so that the parties cannot
agree upon an arbitrator within five (5) business days after Landlord's
response, then the arbitrator shall be appointed, at the request of either
party, by the chief judge of the third judicial circuit of Maryland. A
prerequisite for such appointment shall be the arbitrator's commitment to
consider the matter and render a determination within thirty (30) days of the
date of the selection of the arbitrator. The jurisdiction of the arbitrator in
any such proceeding shall be limited to rendering a determination as to whether
the withholding was reasonable or unreasonable, and such determination shall be
final and binding upon the parties. Each party shall submit its position to the
arbitrator, and the losing party shall pay all of the costs of the arbitration
and the reasonable attorneys' fees and costs incurred by the prevailing party in
connection with the arbitration. Except as otherwise provided herein, the
procedures for the arbitration shall be in accordance with the rules of the
American Arbitration Association.
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25. QUIET POSSESSION. Tenant, if and so long as it pays all Rent due
hereunder, performs and observes the other terms and covenants to be performed
and kept by it as provided in this Lease, and complies with the restrictions and
easements of record, shall peaceably and quietly have, hold and enjoy the
Premises without hindrance, ejection or molestation by Landlord or any person
lawfully claiming through or under Landlord, subject nevertheless, to the
provisions of this Lease and to any Superior Lease and any Superior Mortgage.
Landlord represents and warrants that no Superior Lease or Superior Mortgage
exists as of the date of this Lease. This covenant shall be construed as a
covenant running with the land, and is not, nor shall it be construed as a
personal covenant of Landlord, except to the extent of Landlord's interest in
this Lease and only so long as such interest shall continue, and thereafter this
covenant shall be binding only upon subsequent successors in interest of
Landlord's interest in this Lease, to the extent of their respective interests,
as and when they shall acquire the same, and so long as they shall retain such
interest.
26. NOTICES. All notices required or permitted to be given hereunder shall
be in writing and shall be conclusively presumed to have been received one day
after depositing into the United States mail, if delivery is by postage paid
registered or certified mail, or by telecopier, or by FEDEX or other nationally
recognized overnight courier service. Any notice in any other manner shall be
deemed given when actually received. Any notice given by telecopier shall be
promptly sent by first class mail, postage prepaid, as well. All notices to be
sent to the Tenant shall be sent care of the Tenant's Notice Address. Notices to
Landlord shall be delivered or addressed to Landlord's Notice Address, with a
copy to any other persons designated by Landlord. Either party may, at any time,
in the manner set forth for giving notices to the other, set forth a different
address to which notices to it shall be delivered or sent.
27. TENANT'S, LANDLORD'S, CERTIFICATES. Tenant agrees at any time, and from
time to time, within ten (10) days after Landlord's written request, to execute,
acknowledge and deliver to Landlord a written instrument in recordable form
certifying or stating: (i) that this Lease is unmodified and in full force and
effect (or if there shall then have been modifications, that the same is in full
force and effect as so modified, and setting forth such modifications); (ii)
that the Premises have been completed by Landlord in accordance with Section 4
hereof (or if not so completed, stating the respects in which not completed);
(iii) that Tenant has accepted possession of the Premises, the date upon which
the Term has commenced and the date of the expiration of the Term of this Lease;
(iv) the dates to which Rent and other charges have been paid in advance, if
any; (v) whether or not, to the best knowledge of the signer of such
certificate, Landlord is then in default in the performance of any covenant,
agreement or condition contained in this Lease and, if so, specifying in detail
each such default of which the signer may have knowledge; (vi) as to any other
matters as may be reasonably so requested; and (vii) that it is understood that
such instrument may be relied upon by any prospective purchaser, mortgagee,
assignee or lessee of Landlord's interest in this Lease, in the Center, or any
portion or part thereof.
Landlord agrees at any time, and from time to time, within ten (10) days
after Tenant's written request, to execute, acknowledge and deliver to Tenant a
written instrument certifying
49
or stating: (i) that this Lease is unmodified and in full force and effect (or
if there shall then have been modifications, that the same is in full force and
effect as so modified, and setting forth such modifications); (ii) that the
Premises have been completed by Landlord in accordance with Section 4 hereof (or
if not so completed, stating the respects in which not completed); (iii) that
Tenant has accepted possession of the Premises, the date upon which the Term has
commenced and the date of the expiration of the Term of this Lease; (iv) the
dates to which Rent and other charges have been paid in advance, if any; (v)
whether or not, to the best knowledge of the signer of such certificate, Tenant
is then in default in the performance of any covenant, agreement or condition
contained in this Lease and, if so, specifying in detail each such default of
which the signer may have knowledge; (vi) as to any other matters as may be
reasonably so requested.
28. THE LANDLORD. As used herein, the term "Landlord" means the Landlord
named hereinabove as well as its successors and assigns, and any other
subsequent owner of the leasehold estate or reversion in the Center, as well as
the heirs, personal representatives, successors and assigns of any such
subsequent owner, each of whom shall have the same rights, remedies, powers,
authorities and privileges as he would have had if he had originally signed this
Lease as Landlord, but any such person, whether or not named herein, shall have
no liability hereunder after he shall cease to hold the title to or a leasehold
interest in the said real estate, except for obligations which may have
theretofore accrued. Neither Landlord nor any principal of Landlord, whether
disclosed or undisclosed, shall have any personal liability with respect to this
Lease, the Premises and the Center. After Tenant has accepted and taken
occupancy of the Premises, Tenant shall look only to Landlord's estate and
property in the Center (or the proceeds thereof) for the satisfaction of
Tenant's remedies for the collection of a judgment (or other judicial process)
requiring the payment of money by Landlord in the event of any default by
Landlord hereunder, and no other property or assets of Landlord or its partners
or principals, disclosed or undisclosed shall be subject to levy, execution or
other enforcement procedure for the satisfaction of Tenant's remedies under or
with respect to this Lease, the relationship of Landlord and Tenant hereunder or
Tenant's use or occupancy of the Premises.
29. THE TENANT. As used herein, the term "Tenant" means the Tenant named
in this Lease as well as its heirs, personal representatives, successors and
assigns, each of which shall be under the same obligations, liabilities, and
disabilities and have only such rights, privileges and powers as it would have
possessed had it originally signed this Lease as Tenant. However, no such
rights, privileges or powers shall inure to the benefit of any assignee of
Tenant, immediate or removed, unless the assignment to such assignee shall have
been permitted by the terms of this Lease or consented to in writing by the
Landlord, as aforesaid. Any person or entity to which this Lease is assigned
pursuant to the provisions of the Bankruptcy Code, shall be deemed without
further act or deed to have assumed all of the obligations arising under this
Lease on and after the date of such assignment. Any such Assignee shall upon
demand execute and deliver unto Landlord an instrument confirming such
assumption.
30. RECORDING. Neither this Lease, nor any memorandum, affidavit, or other
writing with respect thereto, shall be recorded by Tenant or by anyone acting
through, under or on
50
behalf of Tenant, and the recording thereof in violation of this provision,
shall (i) be deemed an Event of Default and, (ii) at Landlord's election, make
this Lease null and void.
31. APPLICABLE LAW. This Agreement shall be given effect, and shall be
construed by application of the law of Maryland.
32. SEVERABILITY. If any term or provision of this Lease shall to any
extent be held invalid or unenforceable, the remaining terms and provisions of
this Lease shall not be affected hereby, but each term and provision of this
Lease shall be valid and be enforced to the fullest extent permitted by law.
33. ACCEPTABILITY OF THE PREMISES FOR PERMITTED USE. All the terms,
covenants, and conditions hereof are in all respects subject and subordinate to
all zoning restrictions affecting the Premises, and the Building in which they
are located, and Tenant agrees to be bound by such restrictions. Landlord
further does not warrant that any license or licenses, permit or permits, which
may be required for the business to be conducted by Tenant on the Premises will
be granted, or, if granted, will be continued in effect or renewed, and any
failure to obtain such license or licenses, permit or permits, or any revocation
thereof or failure to renew the same, shall not release the Tenant from its
obligations under this Lease Agreement.
34. BROKERAGE. Landlord and Tenant warrant, each to the other, that
neither has had no dealings with any broker or agent in connection with this
Lease other than the Named Broker, whose commission Tenant covenants and agrees
to pay in the amount agreed between Tenant and such broker or brokers. Landlord
and Tenant covenant to pay, hold harmless and indemnify the other from and
against any and all costs, expense or liability for any compensation,
commissions or charges claimed by any broker other than those stated above or
any other agent with respect to this Lease or the negotiation thereof.
35. ENTIRE AGREEMENT. The Lease, including these General Terms and
Conditions to Agreement of Lease, and the Exhibits and Schedules attached hereto
set forth all the promises, agreements, conditions and understandings between
Landlord and Tenant with respect to the Premises, and there are no promises,
agreements, conditions or understandings, either oral or written, between them
other than are herein set forth. No subsequent alteration, amendment, change or
addition to this Lease shall be binding upon Landlord or Tenant unless reduced
to writing and signed and delivered by each of them.
36. HEADINGS. The headings of the sections and subsections hereof are
provided herein for convenience of reference only, and shall not be considered
in construing the contents of such sections or subsections.
37. FORCE MAJEURE. The obligations of the parties hereunder shall be in no
wise affected, impaired or excused, nor shall either party have any liability
whatsoever to the other, except as to Tenant's obligation to pay Rent, because:
(i) either party is unable to fulfill, or is delayed in fulfilling any of its
obligations under this Lease by reason of strike, other labor
51
trouble, governmental preemption of priorities or other controls in connection
with a national or other public emergency or shortages of fuel, supplies or
labor resulting therefrom, or any other cause, whether similar or dissimilar,
beyond their reasonable control; or (ii) of any failure or defect in the supply,
quantity or character of electricity, water or other utilities furnished to the
by reason of any requirement, act or omission of the public utility or others
serving the Building with electric energy, steam, oil, gas or water, or for any
other reason whether similar or dissimilar, beyond Landlord's reasonable
control.
38. JOINT AND SEVERAL LIABILITIES. If two or more individuals,
corporations, partnerships or other business associations (or any combination of
two or more thereof) shall sign this Lease as Tenant, the liability of each such
individual corporation, partnership or other business association to pay Rent
and perform all other obligations hereunder shall be deemed to be joint and
several. In like manner, if the Tenant named in this Lease shall be a
partnership or other business association, the members of which are, by virtue
of statute or general law, subject to personal liability, the liability of each
such member shall be joint and several.
39. EFFECT OF DELIVERY. Landlord has delivered a copy of this Lease to
Tenant for Tenant's review only, and the delivery does not constitute an offer
to Tenant or an option to lease. This Lease shall not be effective until a copy
has been executed by both Landlord and Tenant.
40. TIME. Time is of the essence of this Lease.
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[SEAL]
BALTIMORE COUNTY, MARYLAND
DEPARTMENT OF PERMITS AND LICENSES
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
PERMIT NO: B295587
PERMISSION IS HEREBY GRANTED TO: BUILDINGS ENGINEER
NAME: NOTTINGHAM PROPERTIES INC. METRIS
ADDRESS: ▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TO USE AND OCCUPY THE LAND AND/OR BUILDINGS DESCRIBED AND LOCATED AS FOLLOWS ON
PERMIT NO B295587
LOCATION OF PROPERTY: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
DIST: 14 LOT NO: 1 BLOCK NO.
SUBDIVISION: WHITE ▇▇▇▇▇ BUS COMM
DATE: 08/29/97 ISSUED BY THE BUILDINGS ENGINEER
FEE PAID: 1,427.00
/s/ J ▇▇▇▇▇▇▇▇▇
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