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EXHIBIT 10.7
2
AGREEMENT OF LEASE
by and between
RIVERS CENTER ASSOCIATES LIMITED PARTNERSHIP
(Landlord) and
NOVAVAX, INC. (Tenant)
R & D Lease
Page
1. Leased Premises . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Security Deposit . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5. Basic Annual Rent . . . . . . . . . . . . . . . . . . . . . . . 4
5.1. Definitions . . . . . . . . . . . . . . . . . . . . . 4
5.2. Rent Adjustment . . . . . . . . . . . . . . . . . . . 6
5.3. Tax Adjustment . . . . . . . . . . . . . . . . . . . 7
5.4. Summary of Payments . . . . . . . . . . . . . . . . . 7
5.5. Utilities . . . . . . . . . . . . . . . . . . . . . . 8
5.6. Payments . . . . . . . . . . . . . . . . . . . . . . 9
6. Requirements of Law . . . . . . . . . . . . . . . . . . . . . . 9
7. Tenant's Improvements . . . . . . . . . . . . . . . . . . . . . 9
8. Condition of Premises . . . . . . . . . . . . . . . . . . . . . 9
9. Conduct on Premises . . . . . . . . . . . . . . . . . . . . . 10
10. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 11
11. Mechanics' and Materialmen's Liens and Other Liens . . . . . 11
12. Failure to Perform . . . . . . . . . . . . . . . . . . . . . 11
13. Loss, Damage, Injury . . . . . . . . . . . . . . . . . . . . 12
14. Destruction--Fire or Other Casualty . . . . . . . . . . . . . 13
15. Eminent Domain . . . . . . . . . . . . . . . . . . . . . . . 13
16. Environmental Assurances . . . . . . . . . . . . . . . . . . 14
(a) Covenants . . . . . . . . . . . . . . . . . . . . . . 14
(b) Indemnification by Tenant. . . . . . . . . . . . . . . 15
(c) Indemnification by Landlord . . . . . . . . . . . . . 15
(d) Representation by Landlord . . . . . . . . . . . . . . 15
(e) Office Supplies . . . . . . . . . . . . . . . . . . . 16
(f) Definitions . . . . . . . . . . . . . . . . . . . . . 16
17. Assignment/Subletting . . . . . . . . . . . . . . . . . . . . 16
18. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 18
19. Acceptance of Leased Premises . . . . . . . . . . . . . . . . 20
20. Access to Premises and Change in Services . . . . . . . . . . 20
21. Estoppel Certificates . . . . . . . . . . . . . . . . . . . . 21
22. Subordination and Non-Disturbance . . . . . . . . . . . . . . 21
23. Attornment . . . . . . . . . . . . . . . . . . . . . . . . . 21
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24. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
25. Landlord's Liability . . . . . . . . . . . . . . . . . . . . 22
26. Separability, Enforceability. . . . . . . . . . . . . . . . . 22
27. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . 22
28. Recordation . . . . . . . . . . . . . . . . . . . . . . . . . 22
29. Successors and Assigns . . . . . . . . . . . . . . . . . . . 22
30. Holding Over . . . . . . . . . . . . . . . . . . . . . . . . 22
31. Commissions . . . . . . . . . . . . . . . . . . . . . . . . . 23
32. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . 23
33. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . 23
34. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 24
35. Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
36. Signage . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
37. Roof Access . . . . . . . . . . . . . . . . . . . . . . . . . 25
38. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . 25
39. Intentionally Deleted . . . . . . . . . . . . . . . . . . . . 25
40. Riders . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
41. Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . 25
42. Loading Dock . . . . . . . . . . . . . . . . . . . . . . . . 26
Exhibit A - Site Plan and Leased Premises
Exhibit B - Intentionally Omitted
Exhibit C-1 - Base Finish Work
Exhibit C-2 - Additional Finish Work
Exhibit D - HVAC Specifications
Exhibit E - ▇▇▇▇▇▇ County Zoning Letter
Rider No. 1 - Right of Cancellation
Rider No. 2 - Right of First Offer
Rider No. 3 - Renewal Option
Rider No. 4 - Exclusions
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RIVERS CENTER ASSOCIATES LIMITED PARTNERSHIP
LEASE AGREEMENT
THIS AGREEMENT OF LEASE (this "Lease") is made this 25th day of
September, 1996, by and between RIVERS CENTER ASSOCIATES LIMITED PARTNERSHIP, a
limited partnership formed under the laws of the State of Maryland (hereinafter
referred to as "Landlord"), and NOVAVAX, INC., a corporation organized under
the laws of the State of Delaware (hereinafter referred to as "Tenant").
WITNESSETH, that the parties hereby covenant, promise and agree as
follows:
1. Leased Premises.
(a) Landlord is the developer of the building known as
Building E, 8320 Guilford Road (hereinafter referred to as the "Building"), in
an office/warehouse/research and development complex containing three office/
warehouse/research and development buildings and two office buildings located
in the Rivers ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Landlord does hereby
lease unto Tenant and Tenant does hereby rent from Landlord, that portion of
the Building known as Suite C-E and containing, as confirmed by Landlord's
architect, twelve thousand twelve (12,012) rentable square feet (which does not
include any "core factor") (hereinafter referred to as the "Leased Premises")
as more particularly described on "Exhibit A" attached hereto, incorporated by
reference herein and initialed by the parties. In addition thereto, Landlord
has caused RECRA Environmental, Inc. ("RECRA"), the existing tenant of the
Leased Premises, to vacate the Leased Premises early and leave those items (the
"Personalty") now in the Leased Premises, thereby causing the Personalty to be
owned by Landlord, which Personalty Landlord shall convey to Tenant effective
on the Commencement Date (defined below). Tenant agrees to accept the
Personalty in its present, "as is" condition. As an inducement to Landlord to
obtain the early release of the existing lease for the Leased Premises with
RECRA, Tenant shall pay Landlord, on the Commencement Date, a fee of $2,500.00
to cover Landlord's lost rent otherwise payable by RECRA.
(b) Landlord, at Landlord's expense, shall cause to be
made those improvements to the Leased Premises described on "Exhibit C-1"
attached hereto and incorporated herein by reference (the "Base Finish Work").
In addition to the Base Finish Work, Tenant has requested, and Landlord has
agreed to make, those additional improvements to the Leased Premises (the
"Additional Finish Work") all as described and for the cost shown on "Exhibit
C-2" attached hereto and incorporated herein. Landlord shall contribute
$36,036.00 towards the cost of the Additional Finish Work (the "Landlord's
Contribution"). All charges and expenses, which shall be deemed additional
rent, incurred for work and material respecting the Additional Finish Work
which are in excess of Landlord's Contribution, and are estimated to be
$18,265.20, are to be paid by Tenant on the Commencement Date. The Base Finish
Work and Additional Finish Work is hereinafter collectively referred to as
"Landlord's Work". All charges and expenses incurred in connection with any
change orders authorized by Tenant will be paid by Tenant at the time Tenant
executes such change order. Landlord further agrees to provide to Tenant a
refurbishment allowance of $18,018.00 at the end of the fifth lease year; said
allowance shall be paid to Tenant upon submission
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by Tenant of invoices and other documentation for such refurbishment work to
the Leased Premises.
(c) Landlord hereby agrees that, with respect to
Landlord's Work or latent defects, Landlord, for a period of one hundred eighty
(180) days from the Commencement Date, will repair or have repaired, all
defects in Landlord's Work or latent defects in the Leased Premises, to the
extent that the need therefor is not caused by the negligence or willful
misconduct of Tenant, its employees and invitees (in which case, such defects
will be repaired at Tenant's sole cost).
2. Term. This Lease shall be for a term of ten (10) years (the
"Lease Term") commencing on or about five weeks after the date on which Tenant
delivers to Landlord this Lease, executed by Tenant, together with all payments
due at such time (the "Commencement Date") and terminating at 11:59 p.m. on the
last day of the tenth (10th) full lease year, unless otherwise terminated or
extended in accordance with the provisions hereof. The term "Lease Year" means
each respective period of twelve (12) successive calendar months during the
Lease Term or any renewals thereof. If the Commencement Date does not occur on
the first day of a month, the first Lease Year will include the twelve (12)
calendar months and the period from the Commencement Date until the first day
of the following month. SEE RIDER NO. 1 - RIGHT OF CANCELLATION; RIDER NO. 2 -
RIGHT OF FIRST OFFER; AND, RIDER NO. 3 - RENEWAL OPTION
Landlord shall deliver the Leased Premises to Tenant on the
Commencement Date in good condition (i) with all Landlord's Work complete in
accordance with "Exhibit C-1" and "Exhibit C-2", as applicable (minor punchlist
items excepted) and (ii) upon the Leased Premises passing final inspection, as
may be required by ▇▇▇▇▇▇ County. At the time the Leased Premises are
delivered to Tenant, Landlord, Tenant and Landlord's architect shall conduct a
walk-through of the Leased Premises and agree upon a "punchlist" of items, if
any, relating to Landlord's Work that need to be corrected or completed. All
items on the punchlist shall promptly be completed by Landlord.
In the event that Landlord shall be unable, by reason of
construction delays or otherwise, to deliver possession of the Leased Premises
on the estimated Commencement Date set forth in the first paragraph of this
Section 2, then this Lease shall nevertheless continue in full force and
effect, and Tenant shall have no right to rescind, cancel or terminate the same
if possession is given within forty-five (45) days thereafter; provided,
however, that in such event Tenant's liability for rent shall commence on the
date on which Landlord shall deliver possession to Tenant, as provided in the
preceding paragraph, which date shall thereafter be deemed the Commencement
Date for all purposes of this Lease. Whether or not Landlord shall deliver
possession of the Leased Premises on the Commencement Date, or within such
additional forty-five (45) day period, Tenant agrees that in no event shall
Landlord be liable for damages, if any, sustained by Tenant as a result of
Landlord's failure to deliver possession.
In the event Landlord does not deliver the Leased Premises to Tenant
within such five-week period, then Landlord shall provide Tenant with at least
five (5) days written notice of the date on which it will deliver the Leased
Premises to Tenant.
In the event Landlord shall not deliver the Leased Premises to
Tenant as provided hereinabove, on or before December
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1, 1996, then Tenant shall have the right to terminate this Lease by written
notice sent to Landlord prior to Landlord's delivery of the Leased Premises, in
which event Landlord and Tenant shall have no further obligations to one
another under this Lease.
Landlord agrees and warrants to Tenant, to Landlord's knowledge,
the Building and Leased Premises (as modified by Landlord's Work) comply (to
the extent, if any, so required) with all applicable local, state and federal
laws (including the law known as the Americans with Disabilities Act and the
regulations promulgated thereunder (the "ADA")).
On the Commencement Date or such later date as Landlord may
request, Tenant shall promptly enter into one or more supplementary written
agreements in such form as Landlord shall prescribe, thereby specifying the
date as of which the Lease Term shall have begun, and as of which the Lease
Term shall end.
3. Security Deposit. Tenant, contemporaneously with the execution
of this Lease, shall deposit with Landlord the sum of Nine Thousand Five
Hundred Nine Dollars and Fifty Cents ($9,509.50) as a security deposit (the
"Deposit"), which, to the extent the same has not been applied or exhausted
pursuant to the further terms hereof, shall be returned by Landlord to Tenant
within forty-five (45) days following the expiration of the Lease Term.
Landlord shall have the right to apply the Deposit to cure any breach by Tenant
of any of Tenant's obligations or duties pursuant to this Lease, upon any such
application of the Deposit by Landlord, Tenant shall immediately restore the
same to the dollar amount set forth in this Section. Landlord shall be
entitled to the full use of the Deposit, shall not be required to escrow or
otherwise segregate the Deposit, and no interest shall accrue thereon or be
paid or payable by Landlord with respect to the Deposit.
4. Use. Landlord and Tenant expressly agree that the Leased
Premises shall be used or occupied by Tenant for the following purposes and
none other: general office, warehouse and laboratory. Notwithstanding the
foregoing, Tenant shall be allowed to perform vaccine and/or pharmaceutical
testing on only the following animals: mice, rats, rabbits and guinea pigs
(with there being a prohibition against the presence of any other animals or
animal testing on the Leased Premises); and, further provided, that no more
than five hundred (500) contiguous square feet of the Leased Premises
(regardless of whether such original Leased Premises have been expanded) may be
used for animal testing and/or caging of such animals. The laboratory area
shall be subject to Landlord's reasonable approval in all respects, including
without limitation, as to sound control, odor, controlled access, venting and
other environmental or aesthetic conditions. Landlord hereby agrees that Tenant
may use those portions (and only those portions) of the Leased Premises so
designated on Exhibit "A" for laboratory purposes.
The Real Property (defined herein) is subject to certain
covenants and restrictions, referred to as the General Restrictions and the
Special Restrictions (hereafter together the "Restrictions"), copies of which
have been provided to Tenant by Landlord. Tenant acknowledges receipt of same
and that it is cognizant of the terms and provisions of those Restrictions and
covenants and agrees to be bound by them. Landlord and Tenant agree that The
▇▇▇▇▇▇ Research And Development Corporation ("HRD") is a third party
beneficiary to the covenants and representations herein made by Tenant and may
remedy any violation of the Restrictions occasioned by Tenant's use and
occupancy of the
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Leased Premises, in the manner and to the extent provided in the Restrictions,
including but not limited to, bringing suit, at law or in equity, directly
against Tenant.
5. Basic Annual Rent. Tenant shall pay to Landlord during the
Lease Term "Basic Annual Rent" as follows:
===========================================================================
Basic Annual Rent Monthly Annual
Installment Square foot
Amount
---------------------------------------------------------------------------
Lease Year 1 $119,759.64 $9,979.97 $9.97
---------------------------------------------------------------------------
Lease Year 2 $119,759.64 $9,979.97 $9.97
---------------------------------------------------------------------------
Lease Year 3 $125,165.04 $10,430.42 $10.42
---------------------------------------------------------------------------
Lease Year 4 $128,768.64 $10,730.72 $10.72
---------------------------------------------------------------------------
Lease Year 5 $132,492.36 $11,041.03 $11.03
---------------------------------------------------------------------------
Lease Year 6 $136,216.08 $11,351.34 $11.34
---------------------------------------------------------------------------
Lease Year 7 $140,180.04 $11,681.67 $11.67
---------------------------------------------------------------------------
Lease Year 8 $144,264.12 $12,022.01 $12.01
---------------------------------------------------------------------------
Lease Year 9 $148,348.20 $12,362.35 $12.35
---------------------------------------------------------------------------
Lease Year 10 $152,672.52 $12,722.71 $12.71
===========================================================================
All monthly installments of Basic Annual Rent shall be made without
any deductions or set-offs, and without demand, in advance on the first (1st)
day of each and every month for which payment is applicable; provided, however,
that if the Lease Term shall commence on a day other than the first day of a
month, Tenant shall pay on the Commencement Date for the fractional part of a
month at the beginning of the term, a prorated amount of one month's rent.
The annual square foot amount shown for each Lease Year includes
$0.47, which represents that certain portion of Landlord's Contribution equal
to $36,036.00, which has been amortized at ten percent (10%) per annum over the
ten (10) year Lease Term; such amount of $0.47 shall be referred to in Rider
No. 2 as the "Additional Improvement Allowance" and shall be deducted from the
Basic Annual Rent for the Expansion Space, if Tenant elects to lease the
Expansion Space as provided in Rider No. 2.
5.1. Definitions. For purposes of this Lease, the
following meanings or definitions shall apply:
(a) "Rentable Area of the Building" shall, as
confirmed by Landlord's architect, for all purposes of this Lease, be deemed to
be thirty-nine thousand six hundred fifty (39,650) square feet. The Rentable
Area of the three research/development buildings on the Real Property with
which Tenant shares certain common maintenance and repair expenses shall be
deemed to be, as confirmed by Landlord's architect, 116,350 square feet.
(b) "Rentable Area of the Leased Premises" shall,
for all purposes of this Lease, as confirmed by Landlord's architect, be deemed
to be twelve thousand twelve (12,012) square feet. Therefore, Tenant's
pro-rata portion of those expenses payable in accordance with Section 5.2 shall
be thirty and three-tenths percent (30.3%) (12,012/39,650) ("Tenant's
Portion").
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(c) The term "Common Area Expenses" shall mean all
actual expenses directly paid or incurred by Landlord in connection with
Landlord's management of the Real Property and the management, maintenance,
operation and repair of the common areas of the Real Property, including, but
not limited to, (i) keeping the driveways, parking areas, sidewalks and steps
free and clear of ice, snow and debris; (ii) maintaining all grass and
landscaping on the Real Property; (iii) maintaining the common areas of the
buildings of the Real Property (including the Building), including the utility
rooms and security systems, if any, and repair of normal wear and tear of the
roof and caulking; (iv) trash removal from dumpsters on the Real Property, if
any; (v) monitoring, repairing and payment of all common utilities, including
water, sewerage, unmetered or metered sprinkler and exterior electrical
utilities on the Real Property; (vi) repairing and maintaining the driveways
and parking areas of the Real Property; (vii) reasonable reserves for
non-recurring expenses; and, (viii) a management fee not to exceed three
percent (3%) of the Basic Annual Rent for the applicable Lease Year.
Notwithstanding the foregoing, Landlord will be allowed reasonably to allocate
the costs of trash removal based on actual use of such service. SEE RIDER NO. 4
- EXCLUSIONS.
(d) The term "HVAC Expense" shall mean the total
costs and expenses incurred by Landlord in maintaining a full service contract
on the heating, ventilating and air conditioning systems servicing the Leased
Premises (the "HVAC System"). Landlord shall provide Tenant with copies of any
service contract it is then maintaining on the HVAC System.
(e) "Taxes" shall mean any present or future
federal, state, municipal, local and/or any other taxes, assessments, levies,
benefit charges, and/or other governmental and/or private impositions
(including business park charges and dues), levied, assessed and/or agreed to
be imposed upon the Real Property of which the Leased Premises are a part or
any part or parts of said Real Property, or upon the rent due and payable
hereunder (other than income taxes thereon), whether or not now customary or
within the contemplation of the parties hereto and regardless of whether the
same shall be extraordinary or ordinary, general or special, foreseen or
unforeseen, or similar or dissimilar to any of the foregoing but shall not
include any inheritance, estate, succession, income, profits or franchise tax,
provided, however, if at any time during the Lease Term or any extension
thereof the method of taxation prevailing at the commencement of the Term shall
be altered or eliminated so as to cause the whole or any part of the items
defined as Taxes above to be replaced by a levy, assessment or imposition,
wholly or partly as a capital levy, or otherwise, on the rents or income
(provided the tax on such income is not a tax levied on taxable income
generally) received from the Building, wholly or partly in place of an
imposition on or as a substitute for, or an increase of, taxes in the nature of
real estate taxes issued against the Real Property, then the charge to Landlord
resulting from such altered or replacement method of taxation shall be deemed
to be within the definition of "Taxes". All reasonable expenses incurred by
Landlord (including attorneys' fees and costs) in contesting any increase in
Taxes or any increase in the assessment of the Real Property shall be included
as an item of Taxes for the purpose of computing additional rent due hereunder.
(f) "Real Property" shall mean the two lots (the
"lots") more particularly described as Parcels N-1 and N-2 on plat 5473 of
Rivers Corporate ▇▇▇▇, ▇▇▇▇▇▇ County, Maryland, and all fixtures, equipment and
other improvements in or upon said
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lots, and shall include the sidewalks, areaways, parking areas, loading areas,
gardens and lawns.
(g) "Insurance" shall mean all insurance, that
are of the types and amounts of insurance coverage reasonable and customary for
a first-class office/warehouse/research and development complex in the
Columbia, Maryland area, kept or caused to be kept by Landlord out of or in
connection with its ownership of the Real Property, the buildings, equipment,
fixtures and other improvements installed and/or owned by Landlord and used in
connection with the buildings and/or the Real Property and/or all alterations,
rebuildings, replacements and additions thereto, including, but not limited to,
insurance insuring the same against loss or damage by, resulting from fire, and
other such hazards, casualties and contingencies (including, but not limited
to, war risk insurance, if available), liability and indemnity insurance.
(h) "Lot" shall mean Parcel N-2 upon which the
Building is situated.
(i) The term "Operating Year" shall mean: (i)
when used in context with Common Area Expenses, Insurance and HVAC Expense,
such applicable fiscal year as Landlord may adopt from time to time during the
Lease Term, and (ii) when used in context with Taxes, each respective tax year
(i.e., the fiscal year beginning July 1) during the Lease Term, or such other
fiscal year as the applicable authorities may select.
5.2. Rent Adjustment. Tenant agrees to pay to Landlord,
as additional rent, with and at the same time as the payments of Basic Annual
Rent, the following amounts:
(a) Seven Hundred Eighty Dollars and
Seventy-eight Cents ($780.78) per month as one-twelfth of Tenant's estimated
Portion of Common Area Expenses (calculated on the basis of $0.78 per square
foot); and
(b) Seventy Dollars and Seven Cents ($70.07) per
month as one-twelfth of Tenant's estimated Portion of Insurance premiums
(calculated on the basis of $0.07 per square foot); and
(c) Two Hundred Dollars and Twenty Cents
($200.20) per month as one-twelfth of Tenant's estimated HVAC Expense
(calculated on the basis of $0.20 per square foot).
At any time during a Lease Year (but not more often than once
per calendar year), Landlord may revise its estimate of Tenant's Portion of
Common Area Expenses, Insurance and of Tenant's HVAC Expense (collectively, the
"Expenses") as set forth above and adjust Tenant's monthly installments to
reflect the revised estimate. Landlord will give Tenant prior written notice of
the revised estimate and the amount by which Tenant's monthly installments will
be adjusted, and Tenant will pay the adjusted installments with each payment of
the rent, beginning with the first payment of the Basic Annual Rent to come due
after Tenant's receipt of such notice. Notwithstanding anything to the
contrary in the foregoing, those Common Area Expenses within Landlord's
reasonable control shall not increase by more than five percent (5%) of the
cost of such controllable item during the previous Operating Year.
Landlord will deliver to Tenant, within one hundred twenty (120)
days (or such longer time as is reasonable under the circumstances) after the
end of each applicable
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Operating Year for the Expenses, a statement for such Operating Year (the
"Statement"), showing Tenant's applicable portion of such Expenses (that is,
either its applicable percentage or with respect to the HVAC Expense, 100%).
Tenant will pay Landlord within thirty (30) days of the receipt of the
Statement, such amounts as may be necessary to adjust Tenant's estimated
payments for such preceding Operating Year so that such payments will equal
Tenant's applicable portion of the actual Expenses for such Operating Year. If
the actual amount of Tenant's applicable portion of such Expenses is less than
the amounts paid by Tenant as installments of its applicable portion of such
Expenses, then Landlord will credit Tenant's account by the amount of the
excess or, if at the end of the Lease Term, refund to Tenant the amount of the
excess.
Failure of Landlord to provide any Statement within
the time prescribed will not relieve Tenant of its obligations under this
Section 5.2.
Upon reasonable written notice, Landlord shall make
available for Tenant's inspection or audit at Landlord's office, during normal
business hours, Landlord's records relating to the Expenses for the immediately
preceding Lease Year; provided, however, that unless Tenant shall have given
Landlord written notice of its exception to any such Statement for additional
rent within sixty (60) days after delivery thereof, the same shall be
conclusive and binding on Tenant; and provided further, that in the event that
Tenant shall give to Landlord written notice of its exception to such Statement
within such sixty (60) day period, Tenant shall nevertheless be obligated to
pay the additional rent pursuant to the provisions of this Section, but shall
have the right, following such payment, to contest the amount set forth in such
Statement in a court of competent jurisdiction without being in breach or
default of this Lease. In the event as a result of such audit it shall be
determined that Landlord overcharged Tenant more than three percent (3%) of
Tenant's share of any such items, Landlord shall reimburse Tenant all
reasonable costs incurred by Tenant with respect to its audit. Any amounts due
Landlord or Tenant, determined as a result of such audit, shall be paid or
credited as provided above for reconciliation of Tenant's estimated payments
with the actual costs.
5.3. Tax Adjustment. Tenant acknowledges that
Landlord must pay the Taxes for an entire tax year (i.e., July 1 - June 30) in
advance. Therefore, on the Commencement Date, Tenant shall reimburse Landlord
for Tenant's Portion of Taxes for the portion of the tax year (the
"Commencement Tax Year") from the Commencement Date to the next succeeding June
30. Thereafter, Tenant shall pay to, or reimburse, Landlord for Tenant's
Portion of Taxes, by paying to Landlord, within thirty (30) days after receipt
of Landlord's invoice therefor (to be sent on or about July 1 of each year)
such Tenant's Portion of Taxes for each of the next succeeding Tax Years.
Following termination of the Lease Term by passage of time or for any reason
other than Tenant's default of this Lease (the "Termination Date"), Tenant
shall be reimbursed by Landlord to the extent of any Portion of Taxes which it
has pre-paid as of such Termination Date for the period beyond such Termination
Date.
5.4. Summary of Payments. The following is a list
of the various payments and installments of Basic Annual Rent and additional
rent under this Lease pursuant to this Section 5 as of the Commencement Date.
The amounts for Common Area Expenses, Insurance and HVAC Expense may change
during the Lease Term.
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Monthly Annual s.f.
Installments Amounts
---------------------------------------------------------------------------
Basic Annual Rent -
Lease Year 1 $9,979.97 $9.97
Lease Year 2 $9,979.97 $9.97
Lease Year 3 $10,430.42 $10.42
Lease Year 4 $10,730.72 $10.72
Lease Year 5 $11,041.03 $11.03
Lease Year 6 $11,351.34 $11.34
Lease Year 7 $11,681.67 $11.67
Lease Year 8 $12,022.01 $12.01
Lease Year 9 $12,362.35 $12.35
Lease Year 10 $12,722.71 $12.71
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Common Area Expenses $780.78 $0.78
(estimate)
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Insurance (estimate) $70.07 $.07
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HVAC Expense (estimate) $200.20 $.20
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Total - Lease Year 1 $11,031.02 $11.02
Lease Year 2 $11,031.02 $11.02
Lease Year 3 $11,481.47 $11.47
Lease Year 4 $11,781.77 $11.77
Lease Year 5 $12,092.08 $12.08
Lease Year 6 $12,402.39 $12.39
Lease Year 7 $12,732.72 $12.72
Lease Year 8 $13,073.06 $13.06
Lease Year 9 $13,413.40 $13.40
Lease Year 10 $13,773.76 $13.76
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5.5. Utilities.
(a) Notwithstanding that certain
utilities are commonly metered on the Real Property and the costs of such
utilities are included within the Common Area Expenses set forth above,
Landlord (if it reasonably determines that Tenant's water usage is excessive,
as compared to other tenants of the Building) or Tenant shall have the right,
at Tenant's sole cost and expense, to have a water meter (but only one (1) such
water meter, if so required by Landlord) installed upon the Leased Premises and
thereafter to pay to Landlord all charges respecting the Leased Premises based
upon readings of said meter.
(b) Tenant shall pay on a timely basis to
the appropriate utility or other supplier, all charges for gas, steam,
electricity, light, heat, power, telephone and all other utility and
communication services, used, rendered and/or supplied upon or in connection
with the Leased Premises.
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5.6. Payments. All payments or installments of
any rent hereunder (except Basic Annual Rent) and all sums whatsoever due under
this Lease (including attorneys' fees) shall be deemed additional rent and
shall be paid to Landlord at the address designated for notice to Landlord
herein, or as otherwise designated by Landlord. If any rent or additional rent
is not paid within five days of when due, such arrearage shall bear a late
charge equal to $25.00 for each day such sum is in arrears in consideration of
Landlord's additional expense caused by such failure to pay. Such late charges
shall be payable simultaneously with the arrearage payment, without demand.
Time is of the essence with respect to Tenant's monetary obligations in this
Lease. Unless otherwise stated, any additional rent shall be due within thirty
(30) days after the Landlord has submitted a written statement to Tenant
showing the amount due, and Tenant's obligation to pay any such additional rent
shall survive the termination of this Lease.
6. Requirements of Law. Tenant shall, at Tenant's sole
cost and expense, observe and comply with all laws, requirements, rules,
orders, ordinances and regulations applicable to its use of the Leased
Premises, the Real Property or the Building.
7. Tenant's Improvements. Tenant shall not make any
alterations, decorations, installations, additions and/or improvements to the
Leased Premises, including, but not limited to, the installation of any
fixtures (except trade fixtures), equipment (except movable equipment), or
other apparatus (collectively, the "Work"), without Landlord's prior written
consent (which consent shall not be unreasonably withheld or delayed), and then
only by contractors or mechanics reasonably acceptable to Landlord. All such
Work shall be done at Tenant's sole cost and expense and at such times and in
such manner as Landlord may from time to time reasonably and timely designate.
All such Work shall be done under the general supervision of Landlord to assure
standard quality improvements on the Real Property for which Landlord shall be
paid a reasonable supervisory fee, which supervisory fee shall be at prevailing
market rates for such services (but not to exceed $150 per hour); Landlord
agrees to cause such supervision to be limited to such periodic inspections as
may be required based on the Work and otherwise to use its best efforts to
minimize the fees in connection therewith. All such Work done by either of the
parties hereto upon the Leased Premises (including those items set forth in
Exhibits C-1 and C-2), except other movable furniture and trade fixtures put in
at the expense of Tenant, shall be the property of Landlord and shall remain
upon and be surrendered with the Leased Premises at the termination of this
Lease without molestation or injury; provided, however, that Landlord may
elect, at the time it approves such Work, to require Tenant to remove all or
any part of said Work (including those items set forth on Exhibits C-1 and C-2)
at the expiration of this Lease, in which event such removal shall be done at
Tenant's sole cost and expense. Tenant shall, at its sole cost and expense,
repair any damage to the Leased Premises and/or the Building caused by such
removal or by the removal of its personalty.
8. Condition of Premises.
(a) Except as otherwise expressly provided in
this Lease, Tenant shall at all times during the Lease Term take good care of
and keep the Leased Premises and the improvements, fixtures, equipment and
appurtenances therein and thereto (including, but not limited to, interior and
exterior windows, interior and exterior doors, including locks and hardware,
pipes,
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plumbing, water and sewer connections, and light fixtures) in the same order
and condition it received the Leased Premises (normal wear and tear and insured
casualty excepted) and, at Tenant's sole cost and expense, shall make all
necessary repairs thereto, which repairs shall be in quality and class at least
equal to the original work. Tenant shall not commit or suffer any waste of the
Leased Premises. At the expiration of the Lease Term, or at the sooner
termination of this Lease as herein provided, Tenant shall deliver up the
Leased Premises in the same order and condition, reasonable wear and tear
excepted, as at the beginning of the tenancy, broom clean and (subject to the
provisions of the preceding Section hereof) Tenant shall remove all of its
property and/or property maintained and/or stored for or on the account of
others therefrom prior to such termination. Any items of Tenant's personalty
remaining in the Leased Premises after the termination of the Lease shall be
deemed abandoned by Tenant and become the sole property of Landlord. Landlord
shall maintain exterior walls (excluding windows), downspouts and the roof as
well as all common areas of the Building and Real Property (including, without
limitation, the parking areas and sidewalks servicing the Building), so long as
such maintenance is not required as a result of any negligent or willful acts
of Tenant, or Tenant's agents, employees or invitees. Notwithstanding the
foregoing, any costs incurred by Landlord in storing and/or disposing of such
abandoned property shall remain the sole obligation of Tenant, which obligation
shall survive the termination of this Lease.
(b) Landlord will secure and maintain a full service
contract on the HVAC System, the cost of which will be paid by Tenant as the
HVAC Expense as set forth above. Landlord will make all necessary repairs or
replacements to the HVAC System which are not covered under the full service
contract (a copy of which was previously delivered to Tenant). All costs
incurred which are not covered by the full service contract shall be paid for
by Tenant except for the cost of replacing or making any repairs of a capital
nature to the compressor or heat exchanger (the "Shared Expenses"), the cost of
which shall be shared between Tenant and Landlord as described below. Tenant
will pay that percentage of the cost of any Shared Expenses which is equal to
the ratio by which the length of the remaining years of Tenant's Lease Term
(without taking into consideration any renewal or cancellation options not yet
exercised by Tenant) bears to the useful life of such repair or replacement, as
determined in accordance with generally accepted accounting principles;
provided, however, in no event may such percentage be greater than 100%.
Notwithstanding the foregoing, any maintenance or repair to the HVAC System
which is required as a result of any acts or omissions of Tenant, or Tenant's
agents, employees or visitors, or as a result of Tenant's use of such HVAC
System in excess of the customary use of 12 hours per day, six days per week,
will be made by Landlord at Tenant's sole cost and expense. Notwithstanding the
foregoing, Landlord (i) warrants that the HVAC System shall be in good and
operable condition as of the Commencement Date and operating in conformity with
the specifications for such HVAC equipment a copy of which is attached hereto
as "Exhibit D", and incorporated herein by reference, and (ii) agrees that any
repair or replacement of the HVAC System, that may be required to maintain the
HVAC System in good operating condition during the six (6) month period
commencing with the Commencement Date, shall be made at Landlord's sole cost
and expense.
9. Conduct on Premises. Tenant shall not do, or permit
anything to be done in the Leased Premises, or bring or keep anything therein
which will, in any way invalidate or conflict with the fire insurance policies
on the Real Property;
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14
obstruct or interfere with the rights of Landlord or other tenants; or
interfere with the good order of the Building. Tenant agrees that any increase
in fire or other insurance premiums on the Real Property and/or the contents
thereof caused by the use or occupancy of Tenant shall, as they occur or
accrue, be added to the rent heretofore reserved and be paid as a part thereof;
and Landlord shall have all the rights and remedies for the collection of same
as are conferred upon Landlord for the collection of rent provided to be paid
pursuant to the terms of this Lease.
Notwithstanding the foregoing, Landlord has been advised by
its insurance carrier that the uses of the Leased Premises as described in
Section 4 of this Lease, will not cause, at this time, any increase in any
insurance premiums on the Real Property. Landlord warrants, in reliance solely
on the letter dated August 23, 1996 (the "Zoning Letter") from the Department
of Planning & Zoning of ▇▇▇▇▇▇ County, Maryland, a copy of which is attached
hereto as "Exhibit E", that the proposed uses of the Leased Premises as
described in the Zoning Letter are permitted under current applicable laws,
ordinances and the Restrictions.
10. Insurance.
(a) At all times during the Lease Term, Tenant,
at its sole cost and expense, shall provide and keep in full force and effect a
policy of public liability and property damage insurance, naming Landlord and
Manekin Corporation as insureds, as their interests may appear, with respect to
the Leased Premises and the business of Tenant in, on, within, from or
connected with the Leased Premises, pursuant to which the limits of liability
shall be $1,000,000.00 in respect to any one occurrence, and in respect to the
aggregate, at least $2,000,000.00 in respect to the combined limit of
liability. Tenant shall use its best efforts to cause all insurance policies to
contain a clause that the insurer will not cancel or change the insurance
without first giving Landlord thirty (30) days' prior written notice. Said
insurance policy shall be carried with an insurance company reasonably
satisfactory to Landlord, and a certificate of insurance shall be delivered to
Landlord at the inception of each policy and renewal thereof.
(b) Landlord shall maintain fire and extended
coverage insurance covering the Building for one hundred percent (100%)
replacement value.
11. Mechanics' and Materialmen's Liens and Other Liens.
Tenant shall not do or suffer to be done any act, matter or thing whereby the
Leased Premises (or Tenant's interest therein), or any part thereof, may be
encumbered by any mechanics' or materialmen's lien and/or any other lien or
encumbrance. Tenant shall discharge, within ten (10) days after notice
thereof, any mechanics' or materialmen's liens filed against the Leased
Premises (or Tenant's interest therein), or any part thereof, purporting to be
for work or material furnished or to be furnished to Tenant.
12. Failure to Perform.
(a) In the event that Tenant shall fail, after
fifteen (15) days written notice from Landlord, to keep the Leased Premises in
the state of condition and repair required by this Lease; to do any act; make
any payment; and/or perform any term or covenant on Tenant's part required
under this Lease, Landlord may (at its option, but without being required to do
so) immediately, or at any time thereafter and without notice, perform
- 11 -
15
the same for the account of Tenant (including, but not limited to, entering
upon the Leased Premises at any time to make repairs). Any costs incurred by
Landlord in so performing Tenant's obligations, together with a reasonable rate
of interest on such sums, shall be deemed additional rent and shall be due
within ten (10) days of receipt of a statement therefor from Landlord. All
rights given to Landlord in this Section shall be in addition to any other
right or remedy of Landlord herein contained.
(b) In addition to all other remedies available
at law, Tenant shall have the right, after providing thirty days written notice
to Landlord (which period may be extended for whatever period of time is
reasonably required if such default cannot be reasonably cured within thirty
days so long as Landlord commences such cure within said thirty day period and
thereafter diligently prosecutes such cure until completion), to cure a default
of Landlord in which event Landlord shall be liable to Tenant for all
reasonable costs and expenses incurred by Tenant in curing such default;
provided, however, in no event shall Tenant be entitled to deduct the costs and
expenses of curing such default from any amounts payable by Tenant pursuant to
the terms of the Lease, including all Basic Annual Rent and additional rent.
13. Loss, Damage, Injury.
(a) Tenant hereby expressly agrees that Landlord
shall not be liable or responsible in any manner for any damage or destruction
to the property of Tenant or of any other person or entity and/or for injury or
death to the person of Tenant or of any other person or entity directly or
indirectly due to any cause whatsoever other than the willful misconduct or
negligence of Landlord or Landlord's contractors, agents, servants, employees,
licensees or invitees.
(b) Subject to Section 13(c) below, Tenant shall
indemnify and hold harmless Landlord for all losses, costs and expenses
(including reasonable attorneys' fees), settlement payments and, whether or not
reduced to final judgment, all liabilities, damages and/or fines paid, incurred
or suffered by Landlord: (i) by reason of any breach, violation and/or
nonperformance by Tenant and/or Tenant's servants, employees, agents, licensees
or invitees, of any covenant or provision of this Lease; (ii) by reason of or
arising out of the occupancy or use by Tenant of the Leased Premises, the
Building and/or the Real Property, or any part thereof; (iii) by reason of or
arising out of any claim, action, suit or proceeding, threatened, instituted
and/or made against Landlord arising out of or in connection with Tenant's use
and/or occupancy of the Leased Premises; and/or (iv) from any other cause
whatsoever due to the negligence or intentional act or omission of Tenant
and/or Tenant's contractors, servants, employees, agents, licensees and/or
invitees. This indemnification by Tenant shall survive the termination or
expiration of this Lease.
(c) Landlord and Tenant hereby mutually waive all
claims for recovery from the other for any insured or insurable loss or damage
to any of Landlord's property or Tenant's property and each party agrees to
look to its own insurance for collection and, to that end, the parties agree to
a mutual subrogation clause to be inserted or endorsed on each policy setting
forth that the insurance shall not be invalidated in the event that the insured
should waive in writing prior to any loss, any or all right of recovery against
the other party for any insured loss.
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(d) Notwithstanding anything in this Lease to the
contrary, neither party shall be liable to the other for, and hereby waives its
rights to any, incidental, consequential or special damages or lost profits.
14. Destruction--Fire or Other Casualty. In the event of
partial or total damage or destruction insured against by Landlord to the
Leased Premises by fire, other casualty, or any other cause whatsoever (except
condemnation), Tenant shall give immediate notice thereof to Landlord and: (a)
this Lease shall continue in full force and effect, and (b) Landlord, to the
extent that insurance proceeds respecting such damage or destruction are
subject to being utilized for and, in fact, may be utilized by Landlord
therefor, shall thereupon cause such damage or destruction to property owned by
Landlord to be repaired with reasonable speed at the expense of Landlord, due
allowance being made for reasonable delay which may arise by reason of
adjustment of loss under insurance policies on the part of Landlord and/or
Tenant, and for reasonable delay on account of "labor troubles" or any other
cause beyond Landlord's control. To the extent that the Leased Premises are
rendered untenable, in whole or in part, the rent shall proportionately ▇▇▇▇▇.
In the event the damage or destruction shall be so extensive to the Building as
to render it uneconomical, in Landlord's reasonable opinion, to restore the
Building, or Landlord shall decide within sixty (60) days after the date of
such damage not to repair or rebuild the Building, this Lease, at the option of
Landlord, shall be terminated upon written notice to Tenant within seventy-five
(75) days after the date of such damage and the rent shall, in such event, be
paid to or adjusted as of the date of such damage, and the terms of this Lease
shall expire by lapse of time upon the third day after such notice is mailed.
Tenant shall thereupon vacate the Leased Premises and surrender the same to
Landlord, but no such termination shall release Tenant from any liability to
Landlord arising from such damage or from any of the obligations or duties
imposed on Tenant hereunder prior to such termination.
Notwithstanding the foregoing, Tenant shall have the
right to terminate this Lease (i) if it can reasonably be expected, as
determined by Landlord, that the repair, restoration or reconstruction of the
Building cannot be completed within one hundred eighty days from the date of
such damage, provided Tenant is not then in default and Tenant gives Landlord
written notice of such election within forty-five (45) days after the date of
such damage, or, (ii) Landlord is unable to restore the Leased Premises within
two hundred ten (210) days after the date of such damage.
15. Eminent Domain. If the entire Leased Premises shall
be substantially taken (either temporarily or permanently) for public purposes,
or in the event Landlord shall convey or lease the Leased Premises to any
public authority in settlement of a threat of condemnation or taking, the rent
shall be adjusted to the date of such taking or leasing or conveyance, and this
Lease shall thereupon terminate. If only a portion of the Leased Premises shall
be so taken, leased or condemned, and as a result of such partial taking,
Tenant, in Tenant's reasonable judgment, is reasonably able to conduct its
business in the ordinary course, then this Lease shall not terminate but,
effective as of the date of such taking, leasing or condemnation, the rent
hereunder shall be abated in an amount thereof proportionate to the area of the
Leased Premises so taken, leased or condemned, and Landlord, at Landlord's
expense, shall construct any necessary demising walls. If, following such
partial taking, Tenant, in Tenant's reasonable judgment, is not reasonably able
to conduct its business in the ordinary course, then this Lease shall terminate
as if the entire
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17
Leased Premises had been taken, leased or condemned. In the event of a taking,
leasing or condemnation as described in this Section, whether or not there is a
termination hereunder, Tenant shall have no claim against Landlord, other than
an adjustment of rent, to the date of taking, leasing or condemnation, and
Tenant shall not be entitled to any portion of any amount that may be awarded
as damages or paid as a result or in settlement of such proceedings or threat,
except that Tenant may assert a separate claim to an award for its moving
expenses and for fixtures and personal property installed by Tenant at its
expense.
16. Environmental Assurances.
(a) Covenants. Tenant covenants with Landlord:
(1) that it shall not Generate Hazardous
Substances at, to or from the Leased Premises unless the same is specifically
approved in advance by Landlord in writing, which approval shall not be
unreasonably withheld or delayed; provided, however, that Landlord hereby
consents to Tenant's use on the Leased Premises of Hazardous Substances
associated or otherwise used in connection with the operation of Tenant's
vaccine and/or pharmaceutical testing laboratory, so long as such Hazardous
Substances are used, kept and stored in a manner that complies with all laws,
rules, statutes and ordinances regulating any such Hazardous Substances or
otherwise regulating bio-pharmaceutical research and development including all
applicable laws and regulations of the United States Food and Drug
Administration (collectively, the "Environmental Laws"), so brought upon or
used or kept in or about the Leased Premises;
(2) to comply with all obligations
imposed by applicable law, and regulations promulgated thereunder, and all
other restrictions and regulations upon the Generation of Hazardous Substances
(whether or not at, to or from the Leased Premises);
(3) to deliver promptly to Landlord true
and complete copies of all notices received by Tenant from any governmental
authority with respect to the Generation by Tenant of Hazardous Substances
(whether or not at, to or from the Leased Premises);
(4) to complete fully, truthfully and
promptly any questionnaires sent by Landlord with respect to Tenant's use of
the Leased Premises and Generation of Hazardous Substances;
(5) to permit entry onto the Leased
Premises by Landlord or Landlord's representatives at any reasonable time with
reasonable notice (which may be verbal) and accompanied by a representative of
Tenant (and otherwise in conformity with Tenant's security requirements of
which Tenant has provided Landlord notice) to verify and monitor Tenant's
compliance with its representations, warranties and covenants set forth in this
Section;
(6) to pay to Landlord, as additional
rent, the reasonable actual costs incurred by Landlord hereunder, including the
costs of such monitoring and verification (such routine monitoring costs not to
exceed $1,000.00 in any twelve (12) month period); and
(7) to furnish to Landlord, at the
expiration of the Lease Term or at the sooner termination of the
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Lease Term as herein provided, a certification in form and content reasonably
satisfactory to Landlord from an environmental audit company reasonably
acceptable to Landlord to the effect that, based upon an inspection conducted
by such environmental audit company not more than thirty (30) days prior to the
expiration or termination of the Lease Term, the Leased Premises are free from
Hazardous Substances.
(b) Compliance and Indemnification by Tenant. If
as a result of an inspection conducted pursuant to Sections 16(a)(5) or (6) or
otherwise, it appears that Tenant is in violation of any Environmental Laws,
(i) Landlord shall notify Tenant and Tenant shall promptly take all actions as
may be necessary to conform in all respects to the Environmental Laws and (ii)
Landlord may request and Tenant shall then provide Landlord with reasonable
financial assurances (for example, but without limitation, a bond for
Landlord's and its lender's benefit; an increase in the security deposit; a
letter of credit, etc.) with regard to such use of Hazardous Substances as may
be reasonably requested in writing by Landlord (or Landlord's lenders) as
reasonably believed necessary by Landlord (or Landlord's lenders) based upon
the actual business practices of Tenant at the Leased Premises as determined by
an inspection thereof by Landlord's environmental consultants. Tenant agrees to
indemnify and defend Landlord (with legal counsel reasonably acceptable to
Landlord) from and against any costs, fees or expenses (including, without
limitation, environmental assessment, investigation and environmental
remediation expenses, third party claims and environmental impairment expenses
and reasonable attorneys' fees and expenses) incurred by Landlord in connection
with Tenant's Generation of Hazardous Substances at, to or from the Leased
Premises or in connection with Tenant's failure to comply with its
representations, warranties and covenants set forth in this Section. This
indemnification by Tenant shall survive the termination or expiration of this
Lease.
(c) Indemnification by Landlord.. Landlord
agrees to indemnify and defend Tenant (with legal counsel reasonably acceptable
to Tenant) from and against any costs, fees or expenses (including, without
limitation, environmental assessment, investigation and environmental
remediation expenses, third party claims and environmental impairment expenses
and reasonable attorneys' fees and expenses) incurred by Tenant in connection
with Landlord's Generation of Hazardous Substances at, to or from the Leased
Premises. This indemnification by Landlord will remain in effect after the
termination or expiration of this Lease.
(d) Representation by Landlord. Landlord, to its
actual knowledge, and without investigation, warrants to Tenant that as of the
Commencement Date no Hazardous Substances exist on the Leased Premises except
as set forth in the Environmental Report dated July 25, 1996, prepared by E.A.
Engineering, Science and Technology. If the Leased Premises, the Building or
the Real Property is found to be contaminated or otherwise affected by
Hazardous Substances, through no fault of Tenant or Tenant's agents, employees,
contractors or invitees, then Landlord shall diligently institute or cause to
be instituted proper clean-up procedures at no cost to Tenant. Landlord further
agrees that neither it nor its agents, employees or contractors will introduce,
store or dispose of Hazardous Substances within the Leased Premises, the
Building or the Real Property in violation of any federal, state or local law,
ordinance or other statute of a governmental or quasi-governmental authority
relating to pollution or protection of the environment, and Landlord agrees to
indemnify
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and hold Tenant harmless from all claims, demands, actions, liabilities, costs,
expenses, damages and obligations of any nature arising from or as a result of
any breach of the foregoing covenant by Landlord. The foregoing indemnification
and the responsibility of Landlord shall survive the termination or expiration
of this Lease.
(e) Office Supplies . Notwithstanding anything to
the contrary contained in this Section 16, Tenant may use and store within the
Leased Premises such reasonable quantities of consumable Hazardous Substances
as are used by Tenant in the ordinary course of its office operations (and not
in its laboratory or testing operations) and which are customarily found in
first-class offices; provided such reasonable quantities and use do not
constitute a danger to health of individuals or a danger to the environment and
which are used, stored and disposed of in accordance with all applicable
governmental laws, rules and regulations.
(f) Definitions. The term "Hazardous Substance"
means (i) any "hazardous waste" as defined by the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), as amended from time to
time, and regulations promulgated thereunder; (ii) any "hazardous substance"
as defined by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), as amended from time to
time, and regulations promulgated thereunder; (iii) any "oil, petroleum
products, and their by-products" as defined by the Maryland Environment Code
▇▇▇. Section 4-411(3)(i), as amended from time to time, and regulations
promulgated thereunder; (iv) any "controlled hazardous substance" or "hazardous
substance" as defined by the Maryland Environment Code ▇▇▇., Title 7, subtitle
2, as amended from time to time, and regulations promulgated thereunder; (v) any
"infectious waste" as defined by the Maryland Environment Code ▇▇▇. Section
9-227, as amended from time to time, and regulations promulgated thereunder;
(vi) any substance the presence of which on the Real Property is prohibited,
regulated or restricted by any law or regulation similar to those set forth in
this definition; and (vii) any other substance which by law or regulation
requires special handling in its Generation. The term "To Generate" means to
use, collect, generate, store, transport, treat or dispose of.
17. Assignment/Subletting. Except as otherwise provided
in this Section 17, Tenant is the only party that may use or occupy the Leased
Premises. No assignment of this Lease or subletting of all or any part of the
Leased Premises is permitted without the prior written consent of Landlord. The
granting or withholding of such consent will be given solely within the
discretion of Landlord. Notwithstanding the foregoing, Landlord's consent to an
Assignment of the types described in clauses (1), (2) and (6) of the following
paragraph shall not be unreasonably withheld, delayed or conditioned so long as
the proposed assignee is no less creditworthy than Tenant as of the date
hereof, and the proposed use is acceptable to Landlord, in each instance as
determined by Landlord in its sole, but reasonable, discretion.
The foregoing restriction will include, but not be
limited to, the following (all of which will be deemed to be an "Assignment"):
(1) any assignment of this Lease or a subletting of the Leased Premises; (2)
any permission to a third party to use all or part of the Leased Premises; (3)
any mortgage or other encumbrance of this Lease or of the Leased Premises; (4)
the appointment of a receiver or trustee of any of the Tenant's property; (5)
any assignment or sale in bankruptcy or insolvency;
- 16 -
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and (6) if Tenant is privately held, the transfer of majority control of Tenant
by any means, including operation of law, to parties other than those
maintaining majority control on the date on which the last party executes this
Lease.
Notwithstanding the foregoing, so long as Landlord
receives prior written notice of such Assignment and Tenant remains primarily
liable for all of the terms of this Lease, Tenant may assign all or part of
this Lease, or sublease all or part of the Leased Premises without the consent
of Landlord, to:
(a) any corporation that has the power
to direct Tenant's management and operations, or any corporation whose
management and operations are controlled by Tenant;
(b) any corporation, a majority of whose
voting stock is owned by Tenant;
(c) any corporation in which or with
which Tenant, its corporate successors or assigns, is merged or consolidated in
accordance with applicable statutory provisions for merger or consolidation of
corporations, so long as the liabilities of the corporations participating in
such merger or consolidation are assumed by the corporation surviving such
merger or created by such consolidation; or
(d) any corporation acquiring this Lease
and a substantial portion of Tenant's assets.
Even if Landlord consents to an Assignment, Tenant
will remain primarily liable under this Lease. Also, Tenant will bear all
reasonable legal costs incurred by Landlord in connection with Landlord's
review of documents concerning an Assignment, whether or not Landlord consents
to it, provided such costs and expenses do not exceed $1,000.00. Landlord's
consent to a specific Assignment does not waive Landlord's right to withhold
consent to any future or additional Assignment. Tenant will give Landlord
notice of its intention to make an Assignment at least thirty (30) days prior
to such Assignment, which notice will contain such details as Landlord may
reasonably request. If Tenant intends to Assign this Lease, Landlord may
terminate this Lease by giving fifteen (15) days prior written notice to Tenant
after Landlord has received written notice from Tenant of an intended
Assignment; provided, however, that Landlord's right to terminate this Lease
pursuant to this sentence shall not apply if Tenant wishes to sublet a portion,
but not all, of the Leased Premises.
If the amount of rent and other sums received by
Tenant under any Assignment is more than the Rent due from Tenant under this
Lease, then Tenant will pay fifty percent (50%) of the full amount of the
excess to Landlord on a monthly basis and promptly upon Tenant's receipt of
such excess amounts.
If, without Landlord's consent, this Lease is
Assigned, or if the Leased Premises are occupied or used by any party other
than Tenant, then all resulting expenses (including reasonable attorneys' and
brokerage fees) incurred by Landlord will be immediately due and payable by
Tenant upon receipt of an invoice. If Tenant defaults, Landlord may collect
rent from the assignee, subtenant, occupant or user (the "Assignee") of the
Leased Premises and apply it towards the Rent due under this Lease. Such
collection will not be deemed an acceptance of the Assignee as tenant, will not
waive or prejudice Landlord's right to initiate legal action against Tenant to
enforce Tenant's
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21
fulfillment of its obligations under this Lease and will not release Tenant
from such obligations.
18. Defaults.
(a) Each of the following shall be deemed a
material default by Tenant under this Lease and a substantial breach of this
Lease:
(1) The filing of a petition by or
against Tenant for debtor relief as defined under the Federal Bankruptcy Code,
as now or hereafter amended or supplemented, or for reorganization, arrangement
or other rehabilitation within the meaning of the Bankruptcy Code, or the
commencement of any action or proceeding for the dissolution or liquidation of
Tenant, whether instituted by or against Tenant, or for the appointment of a
receiver or trustee of the property of Tenant, in each case filed by a party
other than Tenant, if not bonded or discharged within thirty (30) days of the
date of filing; for purposes of this subsection, the word "Tenant" shall
include any guarantor of Tenant's obligations under this Lease;
(2) The making by Tenant of an
assignment for the benefit of creditors;
(3) The suspension of business by Tenant
or any act by Tenant amount to a business failure;
(4) The filing of a tax lien against any
property of Tenant, which is not removed within fifteen (15) days of notice of
the filing;
(5) If the "Net Asset Value" (as
hereinafter defined) of Tenant is less than Two Million Dollars ($2,000,000.00),
provided, however, that such shall not be a default if Tenant provides Landlord,
within five (5) days of Landlord's request therefor, with reasonable financial
assurances (for example, but without limitation, a bond for Landlord's benefit,
an increase in the Deposit, a letter of credit, etc.) as reasonably believed
necessary by Landlord or its lenders. For purposes of this Section 18(a)(5),
the term "Net Asset Value" shall mean the difference between the Total Assets
of Tenant less the Total Liabilities of Tenant as shown on Tenant's most recent
Form 10-Q filed with the Securities and Exchange Commission. Tenant shall
furnish Landlord with such Forms promptly after request therefor by Landlord.
(6) Failure of Tenant to make payment of
the rent herein reserved, or any part thereof, or any other sum required by the
terms of this Lease (including late charges on the foregoing as provided
herein) within five (5) business days after Landlord has given Tenant written
notice that such payment is due, provided, however, that no notice shall be
required to be given to Tenant, and Tenant shall be in immediate default, if
Landlord has given such notice to Tenant two (2) times in the preceding twelve
(12) months;
(7) A breach by Tenant in the
performance of any other term, covenant, agreement or condition of this Lease,
on the part of Tenant to be performed, for a period of ten (10) days after
service of notice by Landlord upon Tenant; provided, however, no default shall
be deemed to exist if Tenant shall use its best efforts to commence to cure the
same within the ten (10) day period and provided such efforts shall be
prosecuted to
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22
completion with reasonable diligence, but in any event, within ninety (90)
days.
(b) All rights and remedies of Landlord in this
Lease enumerated shall be cumulative, and none shall exclude any other right or
remedy, now or hereafter allowed by or available under any statute, ordinance,
rule of court, or the common law, either at law or in equity or both. For the
purposes of any suit brought or based hereon, this Lease shall be construed to
be a divisible contract, to the end that successive actions may be maintained
on this Lease as successive periodic sums shall mature hereunder. The failure
of Landlord to insist, in any one or more instances, upon a strict performance
of any of the covenants, terms and conditions of this Lease, or to exercise any
right or option herein contained, shall not be construed as a waiver, or a
relinquishment for the future, of such covenant, term, condition, right or
option, but the same shall continue and remain in full force and effect unless
the contrary is expressed by Landlord in writing. The receipt by Landlord of
rent, with knowledge of the breach of any covenant hereof, shall not be deemed
a waiver of such breach, and no waiver by Landlord of any provision hereof
shall be deemed to have been made unless expressed in writing and signed by
Landlord.
(c) In the event of a default of the nature set
forth above, Landlord may, at any time thereafter, at its election, without
further notice to Tenant, terminate this Lease and Tenant's right to possession
of the Leased Premises, and take possession of the Leased Premises, and remove
Tenant, any occupant, and any property therefrom, without relinquishing any
rights of Landlord against Tenant.
(d) Tenant shall be obligated to, and shall pay
to Landlord as damages, upon demand, and Landlord shall be entitled to recover
of and from Tenant at the election of Landlord all expenses which shall have
been incurred in connection with such breach including the expenses of
rerenting the Leased Premises (including, but not limited to, any commissions
paid to any real estate agent in connection therewith), and actual attorneys'
fees at said attorneys' usual and customary rates; plus, in the event this
Lease is terminated as set forth above, either:
(1) liquidated damages, in an amount
which, at the time of such termination is equal to the installments of Basic
Annual Rent and the aggregate of all sums payable hereunder as additional
rental (the "Additional Rental") (for such purpose considering the annual
amount of such Additional Rental to be equal to the amount thereof due during
the twelve months preceding such default, or if less than twelve months have
elapsed at such time, such amounts as would have been due on an annual basis)
reserved hereunder, for the period which would otherwise have constituted the
unexpired portion of the then current term of this Lease, said amount to be
discounted at the discount rate then in effect at the Federal Reserve Bank in
Baltimore; or
(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 then current term of this Lease) in an amount or amounts
equal to the excess, if any, of the sum of (i) the aggregate expenses (other
than Additional Rental) paid by Landlord during the month immediately preceding
such calendar month for all such items as, by the terms of this Lease, are
required to be paid by Tenant, plus (ii) an
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23
amount equal to the amount of the installment of Basic Annual Rent which would
have been payable by Tenant hereunder in respect of such calendar month had
this Lease and the Lease Term not been so terminated, and (iii) the monthly
average of the Additional Rental payable in the twelve months immediately
preceding such default, over the rents, if any, in fact, collected by Landlord
in respect of such calendar month pursuant to either rerenting, or from any
existing permitted subleases. Any suit, action or proceeding brought to
collect the amount of the deficiency for any calendar month shall not prejudice
in any way the rights of Landlord to collect the deficiency for any subsequent
month by a similar proceeding.
(e) No act or thing done by Landlord shall be
deemed to be an acceptance of a surrender of the Leased Premises, unless
Landlord shall execute a written release of Tenant. Tenant's liability
hereunder shall not be terminated by the execution of a new lease of the Leased
Premises by Landlord, regardless of the term of such new lease. Separate
actions may be maintained each month by Landlord against Tenant to recover the
damages then due, without waiting until the end of the Term of this Lease to
determine the aggregate amount of such damages.
(f) Notwithstanding anything in this Section 18
to the contrary, upon the occurrence of any breach by Tenant that is not cured
within any applicable grace period, Landlord shall use its reasonable efforts
to mitigate its damages, including using reasonable efforts to relet the Leased
Premises so long as there is no comparable space then available for leasing
within the Rivers Corporate Park. If all amounts required to be paid by Tenant
under this Lease as damages and liquidated damages are actually paid to and
collected by Landlord, then any rent collected by Landlord with regard to the
Leased Premises from a subsequent tenant and attributable to the period for
which Tenant has paid liquidated damages, up to a maximum amount equal to the
amount of rental paid by Tenant as liquidated damages for such period, shall be
rebated to Tenant as and when such amounts are actually collected by Landlord.
19. Acceptance of Leased Premises. Tenant's occupancy of
the Leased Premises shall constitute acceptance thereof, subject to the
provisions of Section 1(c) and punchlist items as provided in Section 2, as
complying with all requirements of Tenant and Landlord with respect to the
condition, order and repair thereof.
20. Access to Premises and Change in Services. Landlord
and/or the authorized representative of Landlord or any mortgagee or deed of
trust holder shall have the right, without abatement of rent, to enter the
Leased Premises at any reasonable hour with reasonable prior notice (which may
be verbal) and accompanied by a representative of Tenant, or otherwise in
conformity with Tenant's security requirements of which Tenant has provided
Landlord notice (or at any time without notice in the event of an emergency) to
examine the same and/or to make such repairs, improvements and alterations as
Landlord and/or such authorized representatives shall deem necessary (but
Landlord shall not be obligated to do so) for the safety and preservation of
the Building, or for any other reasonable purpose whatsoever, including, but
not limited to, showing the Leased Premises to prospective tenants during the
last six (6) months of the Lease Term. In connection with the foregoing,
Landlord agrees to use it best efforts to minimize any interference to Tenant's
activities on the Leased Premises.
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24
21. Estoppel Certificates. Tenant agrees at any time and
from time to time upon not less than ten (10) days prior notice by Landlord to
execute, acknowledge and deliver to Landlord a statement in writing certifying,
among other factual matters, that this Lease is unmodified and in full force
and effect (or if there have been modifications, that the same is in full force
and effect as modified and stating the modifications) and the dates to which
the rent and other charges have been paid in advance, if any, and stating
whether or not, to the best knowledge of the signer of such certificate,
Landlord is in breach and/or default in performance of any covenant, agreement
or condition contained in this Lease and, if so, specifying each such breach
and/or default of which the signer may have knowledge, and any other matters
reasonably requested in such estoppel certificate, it being intended that any
such statement delivered hereunder may be relied upon by any party not a party
to this Lease.
22. Subordination and Non-Disturbance. Tenant accepts
this Lease, and the tenancy created hereunder, subject and subordinate to any
ground leases, security interests, mortgages, deeds of trust or other financing
arrangements now or hereafter a lien upon or affecting the Building or any part
or parts thereof and to any extensions, modifications or amendments thereof.
Tenant shall, at any time hereafter, on request, execute any instruments which
may be required to subordinate, or render prior, Tenant's interest hereunder to
such lien and the failure of Tenant to execute any such instruments shall
constitute a default hereunder. Landlord agrees to use its best efforts, with
Landlord and Tenant to equally bear any lender's charges, to obtain a
non-disturbance agreement in form and substance acceptable to Landlord's
lender.
23. Attornment. Tenant agrees that upon any termination
of Landlord's interest in the Leased Premises, Tenant shall, upon request,
attorn to the person or entity then holding title to the reversion of the
Leased Premises (the "Successor") and to all subsequent Successors, and shall
pay to the Successor all rents and other monies required to be paid by the
Tenant, hereunder and perform all of the other covenants, agreements,
provisions, conditions, obligations and/or duties of Tenant in this Lease
contained.
24. Notices. Except as otherwise provided in this Lease,
any requirement for a notice, demand or request under this Lease will be
satisfied by a writing (a) hand delivered with receipt; (b) mailed by United
States registered or certified mail or Express Mail, return receipt requested,
postage prepaid; or (c) sent by Federal Express or any other nationally
recognized overnight courier service, and addressed: (i) if to Landlord, c/o
Manekin Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel with a copy to ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Esquire c/▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and (ii) if to
Tenant, at the Leased Premises. All notices that are sent in accordance with
this Section 24 will be deemed received by the other party on the earliest of
the following applicable time periods (a) three business days after being
mailed in the aforesaid manner; (b) the date the return receipt is executed; or
(c) the date delivered as documented by the overnight courier service or the
hand delivery receipt. All rental payments and other charges payable by Tenant
under this Lease will be delivered to Landlord at Landlord's address set forth
above: Attention: Accounting Department. Either party may designate a change
of address by written notice to the other party.
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25. Landlord's Liability. The term "Landlord" as used in
this Lease means only the owner, the mortgagee, or the trustee or the
beneficiary under a deed of trust, as the case may be, for the time being, of
the Building, so that in the event of any transfer of title to the Building,
the transferring entity shall be and hereby is entirely freed and relieved of
all covenants and obligations of Landlord hereunder accruing after such
transfer. It is understood that Landlord on the date hereof is a Maryland
limited partnership, and that no partner, general or limited, of said limited
partnership, as it may now or hereafter be constituted, shall have any personal
liability to Tenant and/or any person or entity claiming under, by or through
Tenant upon any action, claim, suit or demand brought under or pursuant to the
terms and conditions of this Lease and/or arising out of the use or occupancy
by Tenant of the Leased Premises and as to Landlord, recourse shall be had only
to the extent of Landlord's interest in the Building.
26. Separability, Enforceability. If any term or
provision of this Lease or the application thereof to any person or
circumstances shall, to any extent, be invalid or unenforceable, the remainder
of this Lease or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term and provision of this Lease shall
be valid and enforceable to the fullest extent permitted by law.
Notwithstanding any language in this Lease to the contrary, if the Lease Term
does not commence by January 1, 2010, this Lease shall terminate automatically
and neither party shall have any further liability to the other.
27. Captions. All headings anywhere contained in this
Lease are intended for convenience of reference only and are not to be deemed
or taken as a summary of the provisions to which they pertain or as a
construction thereof.
28. Recordation. Tenant covenants that if at any time
any mortgagee of Landlord's interest in the Leased Premises, any trustee or
beneficiary under a deed of trust constituting a lien upon the Building of
which deed of trust Landlord is grantor, or a landlord of Landlord in respect
of the real property upon which the Building is situate, shall require the
recordation of this Lease, or if the recordation of this Lease shall be
required by any valid governmental order, or if any governmental authority
having jurisdiction in the matter shall assess and be entitled to collect
transfer taxes or documentary stamp taxes, or both such taxes on this Lease,
Tenant shall execute such acknowledgments as may be necessary to effect such
recordations and whichever party requires such recordation shall pay the cost
of all recording fees, transfer taxes and/or documentary stamp taxes payable
on, and/or in connection with this Lease and/or such recordation.
29. Successors and Assigns. The covenants, conditions
and agreements contained in this Lease shall bind and inure to the benefit of
Landlord and Tenant, and their respective heirs, distributees, executors,
administrators, successors, personal and legal representatives and their
permitted assigns.
30. Holding Over. If Tenant holds possession of the
Leased Premises after the termination of this Lease without Landlord's written
consent, Tenant shall become a tenant from month to month at one and one-half
times the rent due during the last year of the Term, and upon all other terms
herein specified and shall continue to be such tenant from month to month until
such tenancy shall be terminated by either party giving the other
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26
a written notice of at least thirty (30) days of its intention to terminate
such tenancy. Nothing contained in this Lease shall be construed as a consent
by Landlord to the occupancy or possession of the Leased Premises by Tenant
after termination of this Lease. Upon the termination of this Lease, Landlord
shall be entitled to the benefit of all public general or public local laws
relating to the speedy recovery of the possession of lands and tenements held
over by tenants, that may now or hereafter be in force.
31. Commissions. Tenant represents that Tenant has dealt
directly with, and only with, MANEKIN CORPORATION and THE ▇▇▇▇ ▇▇▇▇ COMPANY as
brokers in connection with this Lease (which commissions Landlord shall pay
pursuant to a separate agreement), and that insofar as Tenant knows, no other
broker negotiated this Lease or is entitled to any commissions in connection
with it. Tenant shall hold Landlord harmless from and indemnify Landlord for
any costs incurred by Landlord arising out of any other broker's claim that
such other broker has assisted Tenant with respect to this Lease.
32. Waiver of Jury Trial. Landlord and Tenant desire a
prompt resolution of any litigation between them with respect to this Lease.
To that end, Landlord and Tenant waive trial by jury in any action, suit,
proceeding and/or counterclaim brought by either against the other on any
matters whatsoever arising out of or in any way connected with this Lease, the
relationship of Landlord and Tenant, Tenant's use or occupancy of the Leased
Premises, any claim of injury or damage and/or any statutory remedy. This
waiver is knowingly, intentionally and voluntarily made by Tenant. Tenant
acknowledges that neither Landlord nor any person acting on behalf of Landlord
has made any representations of fact to induce this waiver of trial by jury or
in any way to modify or nullify its effect. Tenant further acknowledges that
it has been represented (or has had the opportunity to be represented) in the
signing of this Lease and the making of this waiver by independent legal
counsel, selected of its own free will, and that it has had the opportunity to
discuss this waiver with counsel. Tenant further acknowledges that it has read
and understands the meaning and ramifications of this waiver of jury trial.
33. Miscellaneous.
(a) As used in this Lease, and where the context
requires: (1) the masculine shall be deemed to include the feminine and neuter
and vice- versa; and (2) the singular shall be deemed to include the plural and
vice- versa.
(b) This Lease was made in the State of Maryland
and shall be governed by and construed in all respects in accordance with the
laws of the State of Maryland.
(c) Tenant covenants and agrees that it shall not
inscribe, affix, or otherwise display signs, advertisements or notices in, on,
upon or behind any windows or on any door, partition or other part of the
interior or exterior of the Building without the prior written consent of
Landlord and HRD (if required). If such consent be given by Landlord, any such
sign, advertisement, or notice shall be inscribed, painted or affixed by
Landlord, or a company approved by Landlord, but the cost of the same shall be
charged to and be paid by Tenant, and Tenant agrees to pay the same promptly,
on demand.
(d) Tenant covenants and agrees that it shall not
attach or place awnings, antennas or other projections to the
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27
outside walls or any exterior portion of the Building, without the prior
written consent of Landlord. No curtains, blinds, shades or screens shall be
attached to or hung in, or used in connection with, any window or door of the
Leased Premises, without the prior written consent of Landlord and HRD (if
required).
(e) Tenant further covenants and agrees that it
shall not pile or place or permit to be placed any goods on the sidewalks or
parking lots in the front, rear or sides of the Building or in a place in any
manner so as to block said sidewalks, parking lots and loading areas and/or not
to do anything that directly or indirectly will take away any of the rights of
ingress or egress or of light from any other tenant of Landlord on the Real
Property.
(f) Tenant, Tenant's servants, agents, invitees,
employees and/or licensees shall not park on, store on, or otherwise utilize
any parking or loading areas on the Real Property, except as shown on Exhibit A
and then only in the parking places designated by Landlord for such parking and
in accordance with such rules and regulations as Landlord may from time to time
promulgate with respect thereto.
(g) Except as otherwise specifically provided in
this Lease or to a counterclaim which is mandatory or would be lost if not
asserted, no abatement, refund, offset, counter-claim, recoupment, diminution
or any reduction of rent, charges or other compensation shall be claimed by or
allowed to Tenant, or any person claiming under it, under any circumstances,
whether for inconvenience, discomfort, interruption of business, or otherwise,
arising from the making of alterations, changes, additions, improvements or
repairs to the Building or the Leased Premises, by virtue or because of any
present or future governmental laws, ordinances, or for any other cause or
reason.
(h) All plats, exhibits, riders or other
attachments to this Lease shall be deemed a part hereof and incorporated by
reference herein.
(i) This Lease contains the entire agreement
among the parties regarding the subject matter of this Lease. There are no
promises, agreements, conditions, undertakings, warranties or representations,
oral or written, express or implied, among them, relating to this subject
matter, other than as herein set forth. This Lease is intended by the parties
to be an integration of all prior or contemporaneous promises, agreements,
conditions, negotiations and undertakings between them. This Lease may not be
modified orally or in any other manner than by an agreement in writing signed
by all the parties or their respective successors in interest. This Lease may
be executed in several counterparts, each of which shall be an original, but
all of which shall constitute one and the same instrument.
34. Confidentiality. Landlord (to the extent within its
reasonable control) and Tenant agree not to disclose to third parties (except
if required by Landlord's lender, HRD, or any governmental authority),
including without limitation, other tenants of the Building and Rivers
Corporate Park, the purposes for which Tenant is utilizing the Leased Premises.
35. Parking. Landlord agrees that, upon the payment of
Basic Annual Rent and additional rent provided herein and the performance by
Tenant of all the covenants, agreements and provisions of the Lease on Tenant's
part to be kept and performed,
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28
Tenant shall be provided three (3) surface parking spaces (around the perimeter
of the building) per each 1,000 square feet of leased space; ten (10) of such
parking spaces shall have signage reserving said spaces for Tenant and shall be
located as shown on Exhibit "A", provided, however, that Landlord shall have no
obligation to enforce such reserved parking. The balance of such spaces shall
be available to Tenant in common with other tenants of the Real Property on a
first-come, first-served basis.
36. Signage. Tenant shall have the right, at its sole
cost and expense, to erect an identification sign on the exterior of the
Building, subject, however, to Tenant's obtaining the prior written approval of
such signs from Landlord and HRD and provided that Tenant is then occupying
more than fifty percent (50%) of the Building (or such lesser percentage as is
approved by HRD). Landlord shall not unreasonably withhold its consent to such
signs provided same are reasonably similar to other corporate identification
signs within Rivers Corporate Park. Such signs shall be installed by a
reputable contractor reasonably acceptable to Landlord. Tenant shall hold
Landlord harmless from any damage caused to the Building as a result of the
installation of such signs. Upon termination of the Lease, it shall be
Tenant's obligation, at its sole expense, to remove such signs and to restore
the exterior face of the Building to its condition prior to erecting such
signs, normal wear and tear excepted.
37. Roof Access. Tenant shall have a limited right of
access to the roof of the Building to install, repair or replace any
communications equipment (such as satellite dishes or other devices) on the
roof of the Building used in connection with the Tenant's use and occupancy of
the Leased Premises, provided the same is permitted by applicable law,
regulations and other restrictions applicable to the Building; Tenant first
obtains the prior written consent of Landlord and HRD; and, such access,
installation, repair or replacement is in accordance with all reasonable rules
and regulations therefor promulgated from time to time by Landlord.
38. Authority. (a) Tenant warrants to Landlord that
Tenant is a corporation organized and validly existing in good standing under
the laws of the State of Delaware and qualified to transact business in the
State of Maryland. In addition, Tenant warrants to Landlord that this Lease
has been properly authorized and executed by Tenant and is binding upon Tenant
in accordance with its terms. Tenant's resident agent's name and address in the
State of Maryland are The Corporation Trust Incorporated, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇. Tenant agrees to notify Landlord in writing of any
change with respect to its resident agent.
(b) Landlord warrants to Tenant that Landlord is
a limited partnership formed and validly existing in good standing under the
laws of the State of Maryland. In addition, Landlord warrants to Tenant that
this Lease has been properly authorized and executed by Landlord and is binding
upon Landlord in accordance with its terms.
39. Intentionally Deleted.
40. Riders. Four riders, numbered 1 through 4 and
consisting of seven (7) pages, are attached hereto and incorporated by
reference herein.
41. Quiet Enjoyment. Landlord represents to Tenant that,
so long as Tenant pays the Basic Annual Rent and all
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29
additional rent and performs all other obligations imposed on Tenant under this
Lease, Tenant will peaceably hold and enjoy the Leased Premises throughout the
Lease Term without hindrance or impairment from Landlord or those claiming
through Landlord.
42. Loading Dock. Subject to the consent and
requirements of HRD, and Landlord's prior written approval, Landlord shall
permit the location of equipment in or on the exterior loading dock area of the
Building; provided, however, that the expense in connection therewith shall be
borne by Tenant. Tenant acknowledges that HRD may require the loading dock area
(or any other area) to be modified to accommodate such equipment (such as, by
way of example only, erection of permanent screening).
IN WITNESS WHEREOF, Landlord and Tenant have respectively
signed this Lease under seal as of the day and year first above written.
ATTEST: RIVERS CENTER ASSOCIATES LIMITED
PARTNERSHIP
By: M.O.R. XX Associates Limited
Partnership, a general partner
By: RA & DM, INC., general partner
[SIG] By: /s/ R. Colfax ▇▇▇▇▇▇▇,Jr. (SEAL)
------------------------- -----------------------------
Name: R.Colfax ▇▇▇▇▇▇▇, Jr.
------------------------------
Title: Vice President
------------------------------
Landlord
WITNESS/ATTEST: NOVAVAX, INC.
[SIG] By: /s/ ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇, MD (SEAL)
-------------------------- ------------------------------
Name: ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇, MD
------------------------------
Title: President
------------------------------
Tenant
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇/▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, TO WIT:
I HEREBY CERTIFY that on this 25th day of September, 1996, before me,
the subscriber, a Notary Public of the State of Maryland, City/County of ▇▇▇▇▇▇,
personally appeared R. Colfax ▇▇▇▇▇▇▇, Jr., Vice President of RA & DM, Inc.,
general partner of M.O.R. XX Associates Limited Partnership, a general partner
of RIVERS CENTER ASSOCIATES LIMITED PARTNERSHIP, Landlord, and he acknowledged
the foregoing Lease Agreement to be the act and deed of said limited
partnership.
WITNESS my hand and Notarial Seal.
My Commission Expires:
07/1/99 /s/ Jo ▇▇▇ ▇▇▇▇
---------------------------------- -------------------------------
Notary Public
STATE OF MARYLAND, CITY/COUNTY OF ▇▇▇▇▇▇, TO WIT:
I HEREBY CERTIFY that on this 25th day of September, 1996, before me,
the subscriber, a Notary Public of the State of Maryland, City/County of ▇▇▇▇▇▇,
personally appeared ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇,President of NOVAVAX, INC., Tenant, and
she/he acknowledged the foregoing Lease Agreement to be the act and deed of said
body corporate.
WITNESS my hand and Notarial Seal.
My Commission Expires:
07/1/99 /s/ Jo ▇▇▇ ▇▇▇▇
------------------------------ ------------------------------
Notary Public
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EXHIBIT A
Site Plan and Leased Premises
32
EXHIBIT B
Intentionally Omitted
33
EXHIBIT C-1
Base Finish Work
34
EXHIBIT C-2
Additional Finish Work
35
EXHIBIT D
HVAC Specifications
36
EXHIBIT E
▇▇▇▇▇▇ County Zoning Letter
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RIDER NO. 1
Right of Cancellation
Rider to Section 2 - Term
Tenant shall have the right to terminate this Lease as of the
last day of the fifth (5) Lease Year (which date is hereinafter referred to as
the "Cancellation Date"), provided that:
(a) Tenant shall have given to Landlord written notice of
such election to terminate at least six (6) months prior to the Cancellation
Date (the "Notice"); and
(b) Tenant, on the date Landlord receives such Notice and
on the Cancellation Date, shall not be in breach or default of any agreement,
condition or covenant by which Tenant is obligated under this Lease; and
(c) Tenant shall have paid to Landlord on or before the
Cancellation Date, in addition to any other amounts that may be due under this
Lease prior to the Cancellation Date, the unamortized balance of Landlord's
cost in finishing the Leased Premises pursuant to Section 1 of this Lease, plus
the unamortized balance of brokers' commission as of the Cancellation Date plus
$41,161.12 (being equal to four (4) monthly installments of Basic Annual Rent
for the Sixth Lease Year). Such amounts so payable by Tenant represent
liquidated damages for terminating this Lease prior to the expiration of the
original Lease Term, such damages not otherwise being susceptible to reasonable
calculation.
Time is of the essence with respect to Tenant's exercise of
its rights under this Rider, and Tenant acknowledges that Landlord requires
strict adherence to the requirement that the Notice be timely made and in
writing.
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RIDER NO. 2
RIGHT OF FIRST OFFER
Tenant shall have the right of first offer (the "Expansion Space
First Offer") to lease space (the "Expansion Space") contiguous to the Leased
Premises at a Basic Annual Rent equal to the Basic Annual Rent (as then
escalated but exclusive of the Additional Improvement Allowance of $0.47 per
square foot per annum described in Section 5 for the Leased Premises as
described in the chart below), plus additional rent as provided in the Lease.
Tenant must provide written notice to Landlord on or before November 30, 1996
(the "Expansion Notice") if it wants to expand into the approximately 6,780
rentable square feet contiguous to the Leased Premises that will be available
for lease commencing on or about January 1, 1997.
In addition, throughout the Lease Term (including any renewals),
Tenant shall have the right of first offer (the "First Offer") to lease any
space in the Building that becomes available (the "Offer Space") before it is
offered for lease by Landlord. Said rent shall be payable at a Basic Annual
Rent equal to the Basic Annual Rent (as then escalated but exclusive of the
Additional Improvement Allowance of $0.47 per square foot per annum described
in Section 5 for the Leased Premises as described in the chart below) plus
additional rent as provided for in the Lease in equal monthly installments (and
fractions thereof), at the times and subject to the terms and conditions as
provided with respect to, and in addition to, the monthly installments of the
Basic Annual Rent as set forth in Section 5 of this Lease.
The Basic Annual Rent for the Expansion Space and any Offer
Space shall be determined in accordance with the then Lease Year for the Leased
Premises, at the following rates:
Lease Year Annual Square Foot Amount
---------- -------------------------
1 $9.50
2 $9.50
3 $9.95
4 $10.25
5 $10.56
6 $10.87
7 $11.20
8 $11.54
9 $11.88
10 $12.24
Tenant's exercise of the First Offer shall be effective only
upon written notification by Tenant to Landlord thereof (the "Notice"). Such
notification must be given to Landlord before the close of business on the
second full business day after Tenant's receipt of Landlord's written
notification to Tenant of the availability of the Offer Space and the terms on
which Landlord intends to offer the Offer Space for rental (the "Offer"). An
Offer does not include the exercise by another tenant of its right of refusal
or expansion.
In the event Tenant fails to so notify Landlord within said two
business day period with respect to an offer, or by November 30, 1996 as to the
Expansion Notice, Landlord shall be free to offer said Expansion Space or Offer
Space to third parties and Tenant shall have no further rights in such space.
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This Expansion Space First Offer and First Offer are personal to
Tenant and shall not be separated from the Lease or transferred by Tenant
independently of the leasehold interest without the prior written consent of
Landlord.
Notwithstanding any other provision hereof, the following
provisions shall apply to the First Offer and Expansion Space First Offer and
to Tenant's lease, if any, of the Expansion Space or Option Space:
(i) Tenant shall not be entitled to exercise the rights
accorded to Tenant in the first paragraph, unless at the date of such exercise
or at the date on which Tenant's lease, if any, of the Expansion Space or Offer
Space becomes effective, Tenant is in possession of the Leased Premises and
Tenant is not in default in the payment of any sums due hereunder or any other
obligation imposed upon Tenant by the Lease;
(ii) Tenant shall have the right to lease and occupy the
Offer Space commencing on the date set forth in Landlord's Offer of such space
to Tenant and terminating on the termination of the Lease Term, on the same
terms, conditions, and provisions as are in this Lease set forth, except to the
extent modified by the Offer, with the same force and effect as though this
Lease had originally provided for the rental of the Leased Premises and the
Offer Space;
(iii) The Expansion Space shall be delivered to Tenant in
"as is" condition, provided, however, that Landlord shall provide a
reconstruction/finishing allowance of $3.00 per square foot. The Offer Space
shall be delivered to Tenant in the condition set forth in the Offer, provided,
however, that Landlord shall provide a reconstruction allowance of $3.00 per
square foot so long as five or more years remain in the Lease Term, or a
prorated amount thereof if less than five years remain; and
(iv) The Lease shall be amended, as may be appropriate, to
reflect the leasing of the Expansion Space or Offer Space.
Time is of the essence with respect to Tenant's exercise of its rights
under this Rider and Tenant acknowledges that Landlord requires strict
adherence to the requirement that the Notice and the Expansion Notice be timely
made and in writing.
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RIDER NO. 3
Renewal Option
Rider to Section 2 (Term)
Provided (i) this Lease is then in full force and effect, (ii) Tenant
is not in default respecting any provision or condition of this Lease either on
the date Tenant elects to renew or on the date the renewal term commences, and,
(iii) Tenant has not failed more than two times during the last two Lease Years
of the original term of this Lease to pay any payments called for by this Lease
on the date such payment is due subject to any notice or grace period
provisions, then Tenant shall have the right to renew this Lease for two (2)
renewal terms of five (5) years each immediately following the expiration of
the original term or the first renewal term, as the case may be, on the same
terms, conditions, and provisions as are set forth in this Lease with the same
force and effect as though this Lease had originally provided for a fifteen
(15) year or twenty (20) year term, save that:
(i) there shall be no further right of renewal, after the
renewal term, and
(ii) the Basic Annual Rent payable with respect to the
Leased Premises shall be adjusted to reflect ninety-five percent (95%) of the
prevailing market rental rate for comparable space within Columbia, Maryland as
of the commencement of the renewal term (as determined below), provided,
however that in no event shall the Basic Annual Rent be less than $12.76 per
square foot per annum.
Tenant shall be deemed to have waived the right to exercise this
renewal option unless not less than nine (9) months prior to the date of
termination of the original Term or the first renewal term, as the case may be,
Tenant shall have notified Landlord in writing of Tenant's election to renew
(the "Renewal Notice"). Landlord shall give Tenant written notice of the
prevailing rental rate within thirty (30) days after Landlord's receipt of the
Renewal Notice (the "Rent Notice"). Tenant may elect to have the prevailing
rent determined as set forth below if it does not agree with Landlord's
determination thereof provided it gives Landlord written notice (the "Appraisal
Notice") within five (5) business days after Tenant's receipt of the Rent
Notice.
Within five (5) business days after the Landlord receives the
Appraisal Notice from Tenant, Landlord and Tenant shall give written notice to
the other that each, at its own expense, has hired and appointed a
disinterested real estate broker of recognized competence and professional
experience as a broker of comparable commercial and industrial real estate in
the Baltimore-Washington Metropolitan Area. The two brokers thus appointed
shall mutually agree upon the appointment of a third broker, the cost of which
shall be shared equally by Landlord and Tenant, which broker shall also be a
disinterested person of recognized competence and professional experience as a
broker of comparable commercial and industrial real estate in the
Baltimore-Washington Metropolitan Area. In the event that the two brokers
shall be unable to agree within ten (10) days after their appointment, on the
appointment of the third broker, then Tenant shall choose three brokers from
which Landlord shall choose one who shall serve as the third broker. Landlord
shall notify Tenant of the selection of the third broker within ten (10) days
of Tenant's notice to Landlord of the selection of such
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three brokers from which Landlord is to choose. The third broker shall as
promptly as possible, but in no event more than thirty (30) days after the date
of his selection, conduct an appraisal of the Building for purposes of
determining the then prevailing rental rate therein. Upon completion of his
appraisal, the third broker shall immediately give written notice to the
parties hereto stating his determination, and shall furnish to each party
hereto a copy of such determination signed by him which determination shall be
final and binding on the parties, provided, however, that Tenant shall have the
right to withdraw its election to renew provided (i) it sends notice thereof to
Landlord with five (5) days receipt of such rent determination (the "Withdrawal
Notice"), and (ii) it solely bears the cost of the appraisal.
Time is of the essence with respect to Tenant's exercise of its rights
under this Rider and Tenant acknowledges that Landlord requires strict
adherence to the requirement that the Renewal Notice, the Appraisal Notice and
the Withdrawal Notice be timely made and in writing.
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RIDER NO. 4
Exclusions
Rider to Section 5.1(c)
"Common Area Expenses" shall not include any of the following:
(i) Landlord's debt service, that is, principal or
interest payments on any mortgage, deed of trust or other borrowed funds or
other costs associated therewith;
(ii) rent payable under any ground or underlying lease;
(iii) the costs of special services separately charged to
an individual tenant of the Building or expenses incurred due to acts of an
individual tenant of the Building;
(iv) costs for structural repairs of the Building which
are the result of Landlord's negligence in the maintenance of the Building;
(v) general overhead of Landlord, that is, wages,
salaries, fees, and benefits for the operation, maintenance and management of
personnel other than those persons involved in the management of the Building;
(vi) costs of leasing or procuring tenants, that is,
marketing fees, negotiation fees, concession fees, legal expenses and brokerage
commissions;
(vii) costs incurred by Landlord which only benefit a
particular tenant in the Building;
(viii) costs incurred by Landlord due to Landlord's
negligence or violation of legal requirements in connection with the
construction of the Building;
(ix) insurance costs due to Landlord or any other tenant's
acts increasing the risk rating of any coverage carried on the Building;
(x) costs for improving or preparing space for new or
existing tenants in the Building;
(xi) any sum paid to any entity affiliated with Landlord
which is excess of the amount that would have been payable in the absence of
such affiliation with Landlord;
(xii) capital improvements, as determined under sound
accounting principles;
(xiii) original construction costs of the Building;
(xiv) accounting or legal fees incurred in tenant disputes,
in procuring tenants or otherwise not related to the operation and maintenance
of the Building;
(xv) costs of repairs to the extent Landlord receives
reimbursement therefor through insurance proceeds or condemnation awards;
(xvi) interest or penalties arising by reason of Landlord's
failure to timely pay any Common Area Expenses or Taxes.
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(xvii) costs incurred to remove hazardous materials (except
those attributable to Tenant); and
(xviii) income taxes.
Common Area Expenses shall be credited with any reimbursement,
discount, credit, reduction, warranty, insurance proceeds or other recovery of,
or allowance for, expenses received by Landlord.