|
Exhibit 10.01
AGREEMENT OF
LEASE
by and
between
6721 GATEWAY,
LLC
and
INTEGRAL SYSTEMS,
INC.
GATEWAY EXCHANGE
III
6721 COLUMBIA GATEWAY
DRIVE
AGREEMENT OF
LEASE
6721 GATEWAY,
LLC
INTEGRAL SYSTEMS,
INC.
TABLE OF
CONTENTS
|
|
|
|
|
|
1.
|
|
Definitions and Attachments |
|
1 |
|
2.
|
|
Demise |
|
3 |
|
3.
|
|
Term |
|
3 |
|
4.
|
|
Intentionally Deleted |
|
5 |
|
5.
|
|
Use |
|
5 |
|
6.
|
|
Rent |
|
5 |
|
7.
|
|
Requirements of Applicable Law |
|
13 |
|
8.
|
|
Certificate of Occupancy |
|
13 |
|
9.
|
|
Contest-Statute, Ordinance, Etc. |
|
13 |
|
10.
|
|
Tenant’s Improvements |
|
13 |
|
11.
|
|
Repairs
and Maintenance |
|
14 |
|
12.
|
|
Conduct
on Premises |
|
15 |
|
13.
|
|
Insurance |
|
16 |
|
14.
|
|
Rules and
Regulations |
|
17 |
|
15.
|
|
Mechanics’ Liens |
|
17 |
|
16.
|
|
Failure
to Repair |
|
17 |
|
17.
|
|
Property
– Loss, Damage |
|
18 |
|
18.
|
|
Destruction – Fire or Other Casualty |
|
18 |
|
19.
|
|
Eminent
Domain |
|
18 |
|
20.
|
|
Assignment |
|
19 |
|
21.
|
|
Default;
Remedies; Bankruptcy of Tenant |
|
20 |
|
22.
|
|
Damages |
|
21 |
|
23.
|
|
Services
and Utilities |
|
22 |
|
24.
|
|
Electric
Current |
|
23 |
|
25.
|
|
Telephone
and Telecommunications |
|
23 |
|
26.
|
|
Acceptance of Premises |
|
24 |
|
27.
|
|
Inability
to Perform |
|
24 |
|
28.
|
|
No
Waivers |
|
24 |
|
29.
|
|
Access to
Premises and Change in Services |
|
24 |
|
30.
|
|
Estoppel
Certificates |
|
25 |
|
31.
|
|
Subordination |
|
25 |
|
32.
|
|
Attornment |
|
25 |
|
33.
|
|
Notices |
|
26 |
|
34.
|
|
Intentionally Deleted |
|
26 |
|
35.
|
|
Tenant’s Space |
|
26 |
|
36.
|
|
Quiet
Enjoyment |
|
27 |
|
37.
|
|
Vacation
of Premises |
|
27 |
|
38.
|
|
Members’ Liability |
|
28 |
|
39.
|
|
Separability |
|
28 |
|
40.
|
|
Indemnification |
|
28 |
|
41.
|
|
Captions |
|
29 |
|
42.
|
|
Brokers |
|
29 |
|
43.
|
|
Recordation |
|
29 |
|
44.
|
|
Successors and Assigns |
|
29 |
|
45.
|
|
Integration of Agreements |
|
29 |
|
46.
|
|
Hazardous
Material; Indemnity |
|
30 |
|
47.
|
|
Americans
With Disabilities Act |
|
31 |
|
48.
|
|
Several
Liability |
|
32 |
|
49.
|
|
Financial
Statements |
|
32 |
|
50.
|
|
Definition of Day and Days |
|
32 |
|
51.
|
|
Exterior
Signage |
|
32 |
|
52.
|
|
Reimbursement Agreement |
|
33 |
|
53.
|
|
Tax Rent
Credits |
|
33 |
|
54.
|
|
Secure
Area |
|
33 |
|
55.
|
|
Attorneys’ Fees |
|
33 |
|
56.
|
|
Telecommunications Equipment |
|
34 |
AGREEMENT OF
LEASE
THIS AGREEMENT OF
LEASE (this “Lease”) made this
day of
, 2008 (“Effective Date”), by and between 6721
GATEWAY, LLC (the “Landlord”) and INTEGRAL
SYSTEMS, INC. (the “Tenant”) , witnesseth that the
parties hereby agree as follows:
W I T N E S S E T
H:
THAT FOR AND IN CONSIDERATION
of the mutual covenants and agreements herein contained, the
parties hereto do hereby covenant and agree as follows:
1. Definitions and Attachments
.
1.1 Certain Defined
Terms.
1.1.1 “Building”
means the office building known as Gateway Exchange III located at
6721 Columbia Gateway Drive, Columbia, Maryland 21046, which is
located within Howard County, Maryland.
1.1.2 “Rentable Area of
the Building” means 131,451 rentable square feet, measured in
accordance with BOMA standards.
1.1.3 “Premises”
means the Building.
1.1.4 “Rentable Area of
the Premises” means 131,451 rentable square feet measured in
accordance with BOMA standards.
1.1.5 “Initial
Term” means a period of eleven (11) years plus the part
of a month mentioned in Section 3.1 , commencing and
ending as provided in Section 3.1 .
1.1.6 “Renewal
Term” means an additional period of five (5) years,
commencing and ending as provided in Section 3.3
.
1.1.7 “Annual Base
Rent” means the amount set forth on the following
schedule:
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Year
|
|
PSF Rent |
|
Annual
Base Rent |
|
Monthly
Installments
of Annual
Base Rent |
|
|
|
1
|
|
$ |
28.00 |
|
$ |
3,680,628.00 |
|
$ |
306,719.00 |
|
|
2
|
|
$ |
28.77 |
|
$ |
3,781,845.27 |
|
$ |
315,153.77 |
|
|
3
|
|
$ |
29.56 |
|
$ |
3,885,691.56 |
|
$ |
323,807.63 |
|
|
4
|
|
$ |
30.37 |
|
$ |
3,992,166.87 |
|
$ |
332,680.57 |
|
|
5
|
|
$ |
31.21 |
|
$ |
4,102,585.71 |
|
$ |
341,882.14 |
|
|
6
|
|
$ |
32.15 |
|
$ |
4,226,149.65 |
|
$ |
352,179.14 |
|
|
7
|
|
$ |
33.11 |
|
$ |
4,352,342.61 |
|
$ |
362,695.22 |
|
|
8
|
|
$ |
34.10 |
|
$ |
4,482,479.10 |
|
$ |
373,539.93 |
|
|
9
|
|
$ |
35.13 |
|
$ |
4,617,873.63 |
|
$ |
384,822.80 |
|
|
10
|
|
$ |
36.18 |
|
$ |
4,755,897.18 |
|
$ |
396,324.77 |
|
|
11
|
|
$ |
37.27 |
|
$ |
4,899,178.77 |
|
$ |
408,264.90 |
|
1.1.8 “Target
Date” means February 15, 2009.
1
1.1.9 “Tenant
Notice Address” means
Before
Commencement:
Integral Systems,
Inc.
5000 Philadelphia
Way
Lanham, MD
20706-4417
Attn:_William M. Bambarger,
Jr.
Telephone:
(301) 731-4233
Telecopier:
(301) 731-3183
After
Commencement:
6721 Columbia Gateway Drive,
Suite 500
Columbia, MD 21046
Attn:
Telephone: (
)
Telecopier (
)
With a copy (both before and
after commencement) to:
Howard B. Adler,
Esq.
Gibson, Dunn &
Crutcher LLP
1050 Connecticut Avenue,
N.W.
Washington, DC
20036-5306
Telephone:
(202) 955-8589
Telecopier:
(202) 530-9526
1.1.10 “Base Year
Building Expenses” shall mean, collectively, the Base Year
Controllable Expenses and the Base Year Non-Controllable Expenses.
See Section 6 .
1.1.11 “Base Year
Taxes” shall mean the actual Taxes incurred by Landlord
divided by the Rentable Area of the Building for the 2009 calendar
year.
1.1.12
“Allowance” means the sum of $7,405,117. See
Section 35 .
1.1.13 “Broker”
means The Michael Companies, Inc..
1.2 Additional Defined
Terms .
The following additional
terms are defined in the places in this Lease noted
below:
|
|
|
|
|
|
Term
|
|
Section |
|
|
|
“ADA”
|
|
47 |
|
|
|
“Applicable Laws”
|
|
7 |
|
|
|
“Approved Plans and
Specifications”
|
|
35 |
|
|
|
“Building
Expenses”
|
|
6.2.2 |
|
|
|
“Commencement
Date”
|
|
3.1 |
|
|
|
“Common Areas”
|
|
6.2.4 |
|
|
|
“Cost of Building Expenses Per
Square Foot”
|
|
6.4.1 |
|
|
|
“Cost of Taxes Per Square
Foot”
|
|
6.3.1 |
|
|
|
“Default Rate”
|
|
6.6 |
|
|
|
“Hazardous
Material”
|
|
46 |
|
|
|
“HVAC”
|
|
23 |
|
|
|
“Landlord’s
Notice”
|
|
3.3 |
|
|
|
“Lease Year”
|
|
6.2.5 |
|
|
|
“Mortgagee”
|
|
31 |
|
|
|
“Normal Business
Hours”
|
|
23 |
|
|
|
“Prevailing Market
Rate”
|
|
3.3 |
|
|
|
“Property”
|
|
6.2.1 |
|
|
|
“Substantially
Complete”
|
|
3.2 |
|
|
|
“Successor”
|
|
32 |
|
|
|
“Taxes”
|
|
6.2.3 |
|
|
|
“Tenant
Improvements”
|
|
35 |
|
|
|
“Term”
|
|
3.4 |
|
|
2
1.3 Attachments
.
The following documents are
attached hereto, and such documents, as well as all drawings and
documents prepared pursuant thereto, shall be deemed to be a part
hereof:
|
|
|
|
|
|
|
|
|
Exhibit “A”
|
|
— |
|
Intentionally Deleted |
|
|
|
|
|
|
Exhibit “B”
|
|
— |
|
Rules and
Regulations |
|
|
|
|
|
|
Exhibit “C”
|
|
— |
|
Base
Building Specifications |
|
|
|
|
|
|
Exhibit “C-1”
|
|
— |
|
Tenant
Improvement Plans |
|
|
|
|
|
|
Exhibit “C-2”
|
|
— |
|
Schedule
of Obligations for Tenant Improvements |
|
|
|
|
|
|
Exhibit “D”
|
|
— |
|
Estoppel
Certificate |
|
|
|
|
|
|
Exhibit “E”
|
|
— |
|
Commencement Date Agreement |
|
|
|
|
|
|
Exhibit “F”
|
|
— |
|
Form of
Sublease Agreement |
|
|
|
|
|
|
Exhibit “G”
|
|
— |
|
Scope And
Description Of Base Building HVAC System |
2. Demise . Landlord hereby
leases unto Tenant, and Tenant does hereby rent from Landlord, the
Premises. In addition thereto, Tenant shall have the right to use,
on a non-exclusive basis, and in common with the other tenants of
the Building (except with respect to the parking facilities,
including the garage, in common with other tenants of the Project),
the Common Areas of the Building (as that term is defined in
Section 6.2.4 hereof).
3. Term .
3.1 Commencement Date and
Term . This Lease shall commence on the
“Commencement Date” (as herein defined) and shall be
for the Initial Term, plus the portion of a calendar month, if any,
from the Commencement Date to the last day of the calendar month in
which such Commencement Date occurs. As used in this Lease,
the term “Commencement Date,” as advanced or postponed
pursuant to the terms hereof, shall be defined as the earlier to
occur of (a) the date on which Tenant takes possession and
occupancy of the Premises for the ordinary conduct of its business
(rather than for the performance of improvements to prepare for
such occupancy), or (b) the date which is five (5) days
following that date which is the first on which all of the
following events have occurred, namely (i) the Premises are
“substantially completed”, as defined in
Section 3.2 following, and (ii) Landlord has given
Tenant written notice that the Premises are “substantially
completed”. Within fifteen (15) days after request from
Landlord or Tenant, Tenant and Landlord shall execute and deliver
the Commencement Date Agreement in substantially the form attached
hereto as Exhibit “E” .
3.2 Substantial
Completion . Subject to the provisions of
Section 35 , Landlord shall use its reasonable efforts
to “substantially complete” the Premises by the Target
Date, provided that the Target Date shall be extended for the
number of days that Tenant fails to satisfy its obligations under
Section 35 . “Substantially complete” means
that: (i) the construction of the improvements described in
Section 35 , including Building Systems, has been
completed in accordance with the Approved Plans and Specifications
(as defined in Section 35 ) so that Tenant can use the
Premises for its intended purposes without material interference to
Tenant conducting its ordinary business activities, (ii) the
Premises have been approved for occupancy by governmental
authorities having jurisdiction, (iii) Tenant has ready access
to the Building and Premises, and (iv) the Premises are ready
for installation of any equipment, furniture, fixtures or
decoration that Tenant will install. Landlord shall keep Tenant
advised as to its progress with regard to “substantially
completing” the Premises by the Target Date. Notwithstanding
the foregoing, the requirements of subsection (ii) shall be
deemed satisfied if all of the other subsections have been
satisfied and the government approval is delayed solely as a result
of either (x) the installation of furniture, fixtures or
equipment which is not included within the scope of
Landlord’s responsibilities under Section 35
below or (y) certification of the Secure Area (as defined in
Section 54 below). If Landlord fails to Substantially
Complete the Premises by May 1, 2009 (as extended by any
Tenant Delays or force majeure events, as described in
Section 27 ) (such date, the “Outside Completion
Date”), then an abatement equal to one day of
3
Base Rent for every day after the
Outside Completion Date that Substantial Completion fails to occur.
Notwithstanding the foregoing, if a Tenant Caused Delay (below
defined) shall occur, and as a result thereof substantial
completion of the Premises shall not occur by the Target Date, then
and in such event the Commencement Date shall be deemed to be the
date that substantial completion of the Premises would have
occurred (but in no event prior to the Target Date or later than
July 1, 2009) in the absence of the Tenant Caused Delay. For
purposes hereof, a Tenant Caused Delay shall occur on a day for day
basis for each day of delay in the substantial completion of the
Premises resulting from (i) Tenant’s failure to provide
Landlord with the information necessary for Landlord to prepare
final (subject to modifications resulting by reason of county code
review) construction design drawings for the Premises within thirty
(30) days following the Effective Date of this Lease;
(ii) Tenant’s failure to provide Landlord with its final
finish selections within fifteen (15) days following receipt
by Tenant of Landlord’s written approval of the final
construction design drawings of the Premises; (iii) Tenant
withholding its written authorization to proceed with a change
order affecting the construction of the Premises or otherwise
modifying the Tenant Improvements for more than three
(3) business days after its receipt of a written request
therefor; or (iv) Tenant’s written direction to
“stop-work” at the Premises.
3.3 Option to Extend Lease
Term . Provided Tenant is not in default of any material term,
covenant or condition of this Lease after the expiration of any
applicable notice and/or cure period, Tenant shall have the option
to extend the Initial Term of this Lease for one
(1) additional period of five (5) years (the
“Renewal Term”) to commence immediately upon the
expiration of the Initial Term.
Tenant’s rental of the
Premises during the Renewal Term shall be upon the same terms,
covenants and conditions contained in this Lease, except that
Tenant shall pay to Landlord as Base Rent that amount equal to the
“Prevailing Market Rate” for the Premises for the
Renewal Term as hereinafter defined (including annual adjustments).
For purposes of this Section 3.3 , the term
“Prevailing Market Rate” shall mean the then prevailing
market rate being charged for comparable space on comparable lease
terms in comparable office buildings in the Columbia, Maryland
market, with consideration given for construction allowances,
commissions, free rent, and other concessions or premiums and
actual savings to Landlord from such renewal ). In order to
exercise its option granted herein, Tenant shall notify Landlord in
writing of its intent to renew not less than three hundred
sixty-five (365) days prior to the expiration of the Initial
Term. Within thirty (30) days following the delivery by Tenant
of such notice of its intent to renew the Lease for the Renewal
Term, Landlord shall notify Tenant in writing of its determination
of the Prevailing Market Rate for the Renewal Term as reasonably
determined by Landlord (“Landlord’s Notice”).
Within seven (7) business days after receipt of
Landlord’s Notice, Tenant shall notify Landlord in writing of
Tenant’s acceptance or rejection of such rate. If Tenant
shall accept such Prevailing Market Rate, Landlord and Tenant shall
enter into an amendment to this Lease acknowledging such renewal
and setting forth any terms at variance with the terms of this
Lease. If within the seven (7) business day period, Tenant
shall reject such Prevailing Market Rate as determined by Landlord
for the Renewal Term, then within twenty (20) days thereafter,
Landlord and Tenant shall meet at a mutually acceptable time and
place and shall use their reasonable efforts to agree upon the
Prevailing Market Rate. If Landlord and Tenant shall fail to agree
upon such Prevailing Market Rate within the twenty (20) day
period, Landlord and Tenant shall each appoint an independent
commercial leasing broker or appraiser licensed in the Maryland
area within the next ten (10) days (the
“Brokers”). Such Brokers shall deliver their respective
estimates of the Prevailing Market Rate within ten (10) days
after being appointed. If the estimates of the Prevailing Market
Rate as quoted by the Brokers are within five percent (5%) of
each other, the Prevailing Market Rate shall be deemed to be the
average of the estimates presented by the Brokers. If the estimates
of the Prevailing Market Rate as quoted by the Brokers differ by
more than five percent (5%), then Landlord and Tenant shall jointly
appoint a third independent commercial leasing broker or appraiser
licensed in the Maryland area within ten (10) days after the
receipt of the initial brokers’ estimates (the “Third
Broker”) who shall deliver its estimate of the Prevailing
Market Rate within seven (7) business days after being
appointed and the Prevailing Market Rate for purposes of this Lease
shall be deemed to be whichever of the estimates presented by the
Brokers that is closest to the Third Broker’s estimate.
Tenant shall notify Landlord within ten (10) days after
determination of the Prevailing
4
Market Rate (whether as resulting from
the average of the Brokers or from the Third Broker, as
applicable), whether Tenant shall accept such Prevailing Market
Rate, whereupon Landlord and Tenant shall enter into an amendment
to this Lease acknowledging such renewal and setting forth any
terms at variance with the terms of this Lease. If (i) Tenant
shall fail to respond to Landlord’s Notice as provided above,
(ii) Tenant shall fail to deliver the requisite notice
exercising its option to extend by the date prescribed above,
(iii) Tenant does not respond within seven (7) business
days following receipt of Landlord’s Notice or
(iv) Tenant does not accept the Prevailing Market Rate within
ten (10) days following Landlord’s notification of the
Prevailing Market Rate, as determined either by the average of the
Brokers or from the Third Broker, as applicable, then
Tenant’s option to extend this Lease for the Renewal Term
shall be void and inoperable. Landlord and Tenant shall each pay
the fee of the broker designated by them originally and shall split
the fees of the Third Broker.
3.4 Definition of
“Term” . As used herein, the word
“Term” shall refer to the Initial Term and the Renewal
Term, if applicable.
4. Intentionally Deleted
.
5. Use . Tenant
covenants that it shall use the Premises during the Term of this
Lease solely for general office purposes and the intended uses
shown on Exhibit “C-1” (“Tenant’s
Permitted Use”) in accordance with applicable zoning
regulations and for no other purpose. For purposes of this Lease,
the term “general office use” shall not include use as
a school, college, university or educational institution of any
type, use for any purposes which is not consistent with the
operation of the Building as a first class office building, use as
an recruitment or temporary help service or agency, or any use
involving regular traffic by the general public.
6. Rent .
6.1 Base Rent
. As rent for the Premises during each year of the Term,
Tenant shall pay to Landlord an Annual Base Rent, in equal monthly
installments, in advance on the first day of each calendar month
during the Term, and without deduction, setoff or demand in
accordance with the schedule set forth in Section 1.1.7
above. In addition to the Base Rent, if the Term should
commence on a day other than the first day of a calendar month,
Tenant shall pay to Landlord upon the Commencement Date, a sum
equaling that percentage of the monthly rent installment which
equals the percentage of such calendar month falling within the
Term.
6.2 Definitions
. For the purposes hereof, the following definitions shall
apply:
6.2.1 “Property”
shall mean the Building, the Project, the land upon which same is
situated and all fixtures and equipment thereon or therein, all
commonly owned or shared appurtenances, including but not limited
to, parking areas, walkways, landscaping and utilities, whether
located on the land upon which the Building is situated or
elsewhere. “Project” shall mean the Building, 6711
Columbia Gateway Drive and 6731 Columbia Gateway Drive.
6.2.2 “Building
Expenses” shall be all those expenses paid or incurred by
Landlord in connection with the owning, maintaining, operating and
repairing of the Property or any part thereof, in a manner deemed
reasonable and necessary by Landlord and shall include, without
limitation, the following:
6.2.2.1 All costs and
expenses of operating, repairing, lighting, cleaning, and insuring
(including liability for personal injury, death and property damage
and workers’ compensation insurance covering personnel) the
Property or any part thereof, as well as all costs incurred in
removing snow, ice and debris therefrom and of policing and
regulating traffic with respect thereto, and depreciation of all
machinery and equipment used therein or thereon, replacing or
repairing of pavement, parking areas, curbs, walkways, drainage,
lighting facilities, landscaping (including replanting and
replacing flowers and other planting);
6.2.2.2 Electricity, steam
and fuel used in lighting, heating, ventilating and air
conditioning and all costs, charges, and expenses incurred by
Landlord in connection with
5
any change of any company providing
electricity service, including, without limitation, maintenance,
repair, installation and service costs associated therewith, as
well as all expenses associated with the installation of any energy
or cost savings devices;
6.2.2.3 Maintenance and
repair of mechanical and electrical equipment including heating,
ventilating and air conditioning equipment;
6.2.2.4 Window cleaning
and janitor service, including equipment, uniforms, and supplies
and sundries;
6.2.2.5 Maintenance of
elevators, stairways, rest rooms, lobbies, hallways and other
Common Areas;
6.2.2.6 Repainting and
redecoration of all Common Areas;
6.2.2.7 Repair and
maintenance of the parking areas, including without limitation, the
resurfacing and striping of said areas;
6.2.2.8 Sales or use
taxes on supplies or services;
6.2.2.9 Management fees,
wages, salaries and compensation of all persons engaged in the
maintenance, operation or repair of the Property and the provision
of amenities to all tenants in the Property (including
Landlord’s share of all payroll taxes and the cost of an
on-site or near-site office and segregated storage area for
Landlord’s parts, tools and supplies);
6.2.2.10 Legal,
accounting and engineering fees and expenses, except for those
related to disputes with tenants or which are a result of and/or
are based on Landlord’s negligence or other tortious
conduct;
6.2.2.11 Costs and expenses
that may result from compliance with any governmental laws or
regulations that were not applicable to the Common Areas at the
time same were originally constructed; and
6.2.2.12 All other expenses
which under generally accepted accounting principles would be
considered as an expense of maintaining, operating, or repairing
the Property. Notwithstanding the foregoing, (x) all expenses
(whether or not such expenses are enumerated on items 1 through 11
of this Section 6.2.2 ) which would be considered
capital in nature under generally accepted accounting principles
shall be excluded from “Building Expenses” unless same
are amortized in accordance with generally accepted accounting
principles (“Amortized Portion”) and (y) with
regard to any Lease Year, the inclusion of any capital expenditures
in “Building Expenses” for such Lease Year shall be
limited to the Amortized Portion.
Notwithstanding the foregoing, the
following items shall not be included in Building
Expenses:
6.2.2.13 Taxes;
6.2.2.14 any expenses
incurred in connection with placing or maintaining any mortgage or
other financing or refinancing securing the Building, and the
payments of interest on and amortization of indebtedness of
Landlord, financing and refinancing costs in respect of any
indebtedness of Landlord, whether secured or unsecured, including
legal and accounting fees and expenses, prepayment penalties and
interest and amortization payments in connection
therewith;
6.2.2.15 leasing commissions
paid to agents of Landlord, other brokers or any other persons in
connection with the leasing of premises in the Building or any
portion of the Property;
6
6.2.2.16 expenses relating to
leasing, improving or demolishing any tenant spaces in the Building
(including the cost of tenant installations and decorations,
workletters, allowances, leasing commissions, advertising or
promotional expenses, costs of take-over or take back expenses with
respect to tenant obligations under leases in other buildings, and
concessions) or any other costs incurred in the leasing or sale of
the Building or any portion thereof or the Property underlying the
same, or any direct or indirect interest therein;
6.2.2.17 fixed rent,
percentage rent and all other rent (except those items of rent
which otherwise constitute Building Expenses or Taxes under this
Lease) under superior leases, if any;
6.2.2.18 wages, salaries and
benefits paid to any persons above the grade of senior property
manager;
6.2.2.19 legal and accounting
fees relating to, and disbursements, court costs and expenses
incurred in connection with the preparation for, negotiation of,
defending against or resolving of (in each instance whether through
legal proceeding, audit or arbitration) (A) disputes with
tenants, prospective tenants or other occupants of the Building,
(B) disputes with purchasers, prospective purchasers,
mortgagees or prospective mortgagees of the Building or the
Property or any part of either, (C) the negotiation or
enforcement of leases, space leases, lease amendments, consents to
assignments and subleases, or any modifications, renewals or
surrenders thereof, or contracts of sale or mortgages, or
(D) judgments, settlements or arbitrations resulting from any
tort liability on the part of Landlord and the amounts of such
judgments or settlements;
6.2.2.20 costs of services
provided to other tenants of the Building on a
“rent-inclusion” basis which are not provided to Tenant
on such basis;
6.2.2.21 costs that are
reimbursed out of insurance, warranty or condemnation proceeds, or
which are reimbursed by any third parties, Tenant or other tenants
other than pursuant to an expense escalation clause;
6.2.2.22 costs in the nature
of penalties or fines, including, without limitation, fines and
penalties incurred because of violations of legal requirements that
arise by reason of Landlord’s failure to construct, maintain
or operate the Building or any part thereof in compliance with such
requirements, but excluding the costs of compliance, permits and
approvals required to comply with such requirements in the ordinary
course of the operation or maintenance of the Building (which
excluded costs of compliance, permits and approvals shall be
included in Building Expenses);
6.2.2.23 costs for services,
supplies or repairs paid to any related entity in excess of costs
that would be payable in an “arm’s length” or
unrelated situation for comparable services, supplies or
repairs;
6.2.2.24 allowances,
concessions or other costs (inclusive of permits, licenses and
inspections) and expenses of improving, renovating or decorating
any demised or demisable space in the Building (including rental
paid for or reimbursed to any tenant and any other consideration,
incentive or amount paid or given to any tenant in consideration of
moving into or out of the Building;
6.2.2.25 appraisal,
advertising and promotional expenses;
6.2.2.26 the costs of
installing, operating and maintaining a specialty improvement,
including a cafeteria, broadcasting, child care, auditorium,
lodging or private dining facility, observatory, private balconies,
rooftop decks or an athletic, luncheon or recreational club unless
Tenant is permitted to make use of such facility without additional
cost or on a subsidized basis consistent with other users; provided
that, the costs of operating and maintaining any conference center
shall be included in Building Expenses, except to the extent of any
fees or charges paid by users of such conference center (which fees
and charges shall offset such included costs and expenses of
operating and maintaining such conference center);
7
6.2.2.27 any costs or
expenses (including fines, interest, charges, penalties and legal
fees) arising out of Landlord’s failure to timely pay any of
its obligations, including, without limitation, Building Expenses
or Taxes;
6.2.2.28 costs incurred to
comply with applicable requirements relating to any Hazardous
Materials which were in existence in the Building or on the
Property prior to the Effective Date of this Lease, and were of
such a nature that a federal, State or municipal governmental
authority, if it had then had knowledge of the presence of such
Hazardous Materials, in the state, and under the conditions that it
then existed in the Building or on the Property, would have then
required the removal of such Hazardous Materials or other remedial
or containment action with respect thereto;
6.2.2.29 costs incurred to
remove, remedy, contain, or treat Hazardous Materials (as defined
herein), which Hazardous Materials are brought into the Building or
onto the Property after the Effective Date of this Lease by
Landlord, any other tenant of the Building or any third party and
is of such a nature, at that time, that a federal, State or
municipal governmental authority, if it had then had knowledge of
the presence of such Hazardous Materials, in the state, and under
the conditions, that it then existed in the Building or on the
Property, would have then required the removal of such Hazardous
Materials or other remedial or containment action with respect
thereto;
6.2.2.30 expenses in
connection with services or other benefits which are not offered to
Tenant or for which Tenant is charged directly but which are
provided to another tenant or occupant of the Building, without
charge;
6.2.2.31 costs incurred by
Landlord due to the violation by Landlord or any tenant of the
terms and conditions of any lease of space in the
Building;
6.2.2.32 any compensation
paid to clerks, attendants or other persons in commercial
concessions operated by Landlord or by others, provided that any
commercially reasonable compensation paid to any concierge at the
Building shall be includable as a Building Expense;
6.2.2.33 costs of third party
non-tenant parties or events, which are not consented to by an
authorized representative of Tenant;
6.2.2.34 any bad debt loss,
rent loss, or reserves for bad debts or rent loss or any reserves
of any kind;
6.2.2.35 overhead and profit
increment paid to the Landlord or to subsidiaries or affiliates of
the Landlord for services in the Building to the extent the same
exceeds the costs of such services rendered by qualified,
first-class unaffiliated third parties on a competitive
basis;
6.2.2.36 costs associated
with the operation of the business of the partnership or entity
which constitutes the Landlord, as the same are distinguished from
the costs of operation of the Building (which Building operational
costs shall specifically include, but not be limited to, accounting
costs associated with the operation of the Building); it being
understood that costs associated with the operation of the business
of the partnership or entity which constitutes the Landlord include
costs of partnership accounting and legal matters, costs of
defending any lawsuits with any mortgagee or tenant (except as the
actions of the Tenant may be in issue), costs of selling,
syndicating, financing, mortgaging or hypothecating any of the
Landlord’s interest in the Building or the Property, and
costs incurred in connection with any disputes between Landlord and
its employees, between Landlord and Building management, or between
Landlord and other tenants or occupants, and Landlord’s
general corporate overhead and general and administrative expenses
shall be excluded from Building Expenses;
6.2.2.37 advertising and
promotional expenditures, and the costs of promotional signs (and
the reasonable allocation of utilities thereto), excluding the
costs associated with building directories, general building
signage and signage for equipment rooms and Common Areas, in or on
the Building or the Property which identify other tenants or
entities;
8
6.2.2.39 costs arising from
charitable contributions made by Landlord on behalf of tenants of
the Building in excess of Five Thousand Dollars ($5,000) per
calendar year (subject to CPI Adjustment), political contributions
or dues to professional or lobbying associations (other than
Building Owners and Managers Association);
6.2.2.40 costs associated
with the acquisition and/or rental of sculptures, paintings and
other objects of art;
6.2.2.41 entertainment and
travel expenses incurred by Landlord, its employees, agents,
partners and affiliates, other than local travel expenses incurred
directly in connection with the operation, maintenance or repair of
the Building or the Property;
6.2.2.42 costs incurred by
Landlord in connection with the purchase of any flowers, balloons
or any other types of gifts for any entity whatsoever, including,
but not limited to, Tenant, other tenants, employees, vendors,
contractors, prospective tenants or agents;
6.2.2.43 reserves of any kind
in excess of amounts included in the Base Year Building
Expenses;
6.2.2.44 the depreciation of
the Building and other structures on the Real Property, and any
other depreciation or amortization;
6.2.2.45 expenses incurred by
Landlord for use of any portions of the Building to accommodate
events including, but not limited to shows, promotions, kiosks,
displays, filming, photography, private events or parties,
ceremonies, and advertising beyond the normal expenses otherwise
attributable to providing Building services, such as lighting and
HVAC to such public portions of the Building in normal Building
operations during Normal Business Hours (as defined
herein);
6.2.2.46 costs arising from
Landlord’s breach of this Lease, including, without
limitation, breach of Landlord’s representations made
hereunder;
6.2.2.47 costs of validated
parking for Landlord’s visitors to the Building;
6.2.2.48 costs allocable to
any facility other than the Building, except to the extent that
such costs relate to both the Building and such other facility and
such costs are reasonably allocated to reflect that portion thereof
which relates to the Building;
6.2.2.49 the wages and
benefits of any employee who does not devote substantially all of
his or her employed time to the Building, unless such wages and
benefits are prorated to reflect time spent on operating and
managing the Building vis-à-vis time spent on matters
unrelated to operating and managing the Building;
6.2.2.50 costs in connection
with the acquisition of air or development rights or any zoning or
tax lot changes;
6.2.2.51 costs and expenses
otherwise includable in Building Expenses, to the extent that
Landlord is reimbursed by Tenant, other tenants or from other
sources for such costs and expenses, other than as fixed rent or as
additional rent for operating expense recoveries for the
Building;
6.2.2.52 costs and expenses
arising from the gross negligence or willful acts of Landlord, any
affiliate of Landlord, or any such party’s agents,
contractors, employees or representatives, and the cost of any
judgment, settlement, or arbitration award resulting from any
liability of Landlord and all expenses incurred in connection
therewith; and
9
6.2.2.53 costs relating to
withdrawal liability or unfunded pension liability under the
Multi-Employer Pension Plan Act or similar law.
6.2.3 “Taxes” shall mean all real property
taxes imposed on the Property including currently due installments
of assessments, sewer rents, ad valorem charges, water rates, rents
and charges, front foot benefit charges, and all other governmental
impositions in the nature of any of the foregoing. Excluded from
Taxes are (i) federal, state or local income taxes,
(ii) franchise, gift, transfer, excise, capital stock, estate
or inheritance taxes, and (iii) penalties or interest charged
for late payment of Taxes. If at any time during the Term the
method of taxation prevailing at the commencement of the Term shall
be altered so as to cause the whole or any part of the items listed
in the first sentence of this subparagraph to be levied, assessed
or imposed, wholly or partly as a capital levy, or otherwise, on
the rents received from the Building, wholly or partly in lieu of
imposition of or in addition to the increase of taxes in the nature
of real estate taxes issued against the Property, then the charge
to Landlord resulting from such altered additional method of
taxation shall be deemed to be within the definition of
“Taxes.”
6.2.4 “Common
Areas” shall mean those areas and facilities which may be
from time to time furnished to the Building and the Project by
Landlord for the non-exclusive general common use of tenants and
other occupants of the Building, their officers, employees, and
invitees, including (without limitation) the hallways, stairs,
parking facilities including the garage, washrooms, and
elevators.
6.2.5 “Lease
Year” shall mean the first twelve (12) month period
following the Commencement Date and each succeeding twelve
(12) month period thereafter up to the end of the Term;
provided, however, that if the Commencement Date shall occur on a
day other than the first day of a calendar month, then the first
Lease Year shall include that portion of a calendar month in which
the Commencement Date occurs in addition to the first twelve
(12) month period.
6.2.6 “Base Year
Controllable Expenses” shall mean the actual Controllable
Expenses incurred by Landlord for the 2009 calendar year divided by
the Rentable Area of the Building.
6.2.7 “Base Year
Non-Controllable Expenses” shall mean the actual
Non-Controllable Expenses incurred by Landlord for the 2009
calendar year divided by the Rentable Area of the
Building.
6.3 Rent Adjustments for
Taxes .
6.3.1 On or before
July 31 of each Lease Year, Landlord shall total the Taxes and
shall allocate such Taxes to the Rentable Area of the Building in
the following manner: Taxes for the foregoing calendar year
shall be totaled and such total shall be divided by the total
Rentable Area of the Building thereby deriving the “Cost of
Taxes Per Square Foot” of rentable area.
6.3.2 For so long as
this Lease has not been amended to reduce the size of the Premises,
Tenant shall be responsible for one hundred percent of the Cost of
Taxes that are greater than the Base Year Taxes. Otherwise, in the
event that the Cost of Taxes Per Square Foot assessed for any
calendar year which is wholly or partly within the Term are greater
than the Base Year Taxes, Tenant shall pay to Landlord, as
additional rent at the time such Taxes are due and payable, the
amount of such excess times the number of Rentable Area of the
Premises. Any additional rent due Landlord under this Section
shall be due and payable within thirty (30) days after
Landlord shall have submitted a written statement to Tenant showing
the amount due. For Tenant’s obligation for such
additional rent at the beginning or end of the Lease, see
Section 6.5 . Landlord may, in its discretion,
make a reasonable estimate of such additional rent with respect to
Taxes, and require Tenant to pay each month during such year
1 /
12 of
such amount, at the time of payment of monthly installments of Base
Rent. In such event, Tenant shall pay, or Landlord shall refund or
credit to Tenant’s account, any underpayment or overpayment
of such additional rent within thirty (30) days of
Landlord’s annual written statement of Taxes
due.
10
Tenant shall have the right to examine,
at Tenant’s sole expense, Landlord’s records with
respect to any such increases in additional rent; provided,
however, that unless Tenant shall have given Landlord written
notice of exception to any such statement within thirty
(30) days after delivery thereof, the same shall be conclusive
and binding on Tenant (subject to any subsequent reduction in
Taxes). No credit shall be given to Tenant if the Cost of Taxes Per
Square Foot are less than the Base Year Taxes. Failure of Landlord
to provide any statement within the time prescribed will not
relieve Tenant of its obligations under this
Section 6.3 ; provided, however, that Tenant will have
no obligation to pay its portion of any increase in Taxes until
receipt of a statement from Landlord as described above.
All reasonable expenses
incurred by Landlord (including attorneys’, appraisers’
and consultants’ fees, and other costs) in contesting any
increase in Taxes or any increase in the assessment of the Property
shall be included as an item of Taxes for the purpose of computing
additional rent due hereunder. If any refunds are paid or credits
made to Landlord for any Taxes for which Tenant has made any
payment of additional rent pursuant to this Section 6.3.2,
Landlord shall promptly thereafter refund to Tenant the amount that
Tenant overpaid such additional rent after taking into account such
refund or credit.
Tenant shall have the right
to direct Landlord to appeal any assessment for Taxes hereunder,
and Tenant shall have the right to approve any settlement pursuant
to such appeal that is outside of the normal assessment appeal
process.
6.4 Rent Adjustments for
Building Expenses .
6.4.1 On or before
April 30 of each Lease Year, Landlord shall compute the
Building Expenses for such year and shall allocate such costs to
the Rentable Area of the Building in the following
manner: Building Expenses shall be totaled and such total
shall be divided by the total Rentable Area of the Building thereby
deriving the “Cost of Building Expenses Per Square
Foot”. If Landlord incurs an extraordinary, uncontrollable
expense during the Base Year to determine Building Expenses (
e.g. , excessive snow or blizzard), such extraordinary
expenses shall not be included in the computation of Base Year
Building Expenses, but such item shall be included in Base Year
Building Expenses in an amount equal to the average amount of
ordinary expenses for such item by averaging the three
(3) prior years’ expenses for such item.
6.4.2 For so long as
this Lease has not been amended to reduce the size of the Premises,
Tenant shall be responsible for one hundred percent of the Cost of
Building Expenses that are greater than the Base Year Building
Expenses. Otherwise, in the event that the Cost of Building
Expenses Per Square Foot of rentable area for any year which is
wholly or partly within the Term are greater than the Base Year
Building Expenses, Tenant shall pay to Landlord, as additional
rent, the amount of such excess times the number of square feet of
Rentable Area of the Premises, as set forth in
Section 1.1.4 above. If occupancy of the Building
during any calendar year, including the Base Year for Building
Expenses, is less than ninety-five percent (95%), then Building
Expenses for that calendar year shall be “grossed up”
to that amount of Building Expenses that, using reasonable
projections, would normally be expected to be incurred during the
calendar year in question if the Building was ninety-five percent
(95%) occupied during the applicable calendar year period, as
determined under generally accepted accounting principles; it being
understood that the written statement submitted to Tenant shall
provide a reasonably detailed description of how the Building
Expenses were grossed up and that only those component expenses
that are affected by variations in occupancy levels shall be
grossed up. Such additional rent shall be computed on a
year-to-year basis. Any such additional rent shall be due
within thirty (30) days after Landlord has submitted a written
statement to Tenant showing the amount due. Landlord may, in
its discretion, make a reasonable estimate of such additional rent
with respect to any calendar year, and require Tenant to pay each
month during such year 1/12 of such amount, at the time of payment
of monthly installments of Base Rent. In such event, Tenant
shall pay, or Landlord shall refund or credit to Tenant’s
account, any underpayment or overpayment of such additional rent
within thirty (30) days of Landlord’s written statement
of actual Building Expenses for the Calendar year. Tenant, at
Tenant’s sole expense, shall have the right to examine
Landlord’s records with respect to any such increases
in
11
additional rent; provided, however, that
unless Tenant shall have given Landlord written notice of exception
to any such statement within forty-five (45) days after
delivery thereof, the same shall be conclusive and binding on
Tenant and Landlord. No credit shall be given to Tenant if the
cost of Building Expenses Per Square Foot are less than the Base
Year Building Expenses. Notwithstanding anything to the contrary
contained herein, Landlord shall use diligent efforts to keep
Building Expenses at reasonable amounts, while maintaining the
Building as a first class building. Tenant acknowledges that with
regard to certain Building Expenses, some tenants may be paying
various fees directly to the service provider (including, without
limitation, janitorial services and electricity charges), in which
event the computation of Building Expenses per rentable square foot
for such items shall be determined by using the total rentable
square footage of the Building reduced by the rentable square
footage of the tenants who are paying such fees directly to the
service provider. Failure of Landlord to provide any statement
within the time prescribed will not relieve Tenant of its
obligations under this Section 6.4 ; provided, however,
that Tenant will have no obligation to pay its portion of any
increase in Building Expenses until receipt of a statement from
Landlord as described above.
Notwithstanding anything to
the contrary set forth in this Section 6 of this Lease
for purposes of determining the amount of Building Expenses, with
respect to any expense that is not a Non-Controllable Expense, as
hereinafter defined (the “Controllable Expenses”),
Tenant shall not be responsible for paying any increase of more
than seven percent (7%) over the amount of the previous
calendar year’s Controllable Expenses. The parties agree and
acknowledge that only the following are non-controllable Building
Expenses and shall not be subject to the foregoing cap: Taxes,
insurance, common area utilities, snow removal and labor, including
security, expenses (the “Non-Controllable Expenses”).
The parties acknowledge that for purposes of this
Section 6.4.2 , the Building Expenses shall be computed
separately as between the Controllable Expenses and the
Non-Controllable Expenses. The annual statement provided to Tenant
pursuant to this Section 6.4.2 shall include
computation for both the Controllable Expenses and the
Non-Controllable Expenses as well as a combined total thereof
reflecting Tenant’s overpayment or underpayment for the
applicable calendar year. At Tenant’s request, Landlord will
use reasonable efforts to provide Tenant with the annual budget for
Building Expenses.
6.5 Tenant’s Right
to Review Books and Records . Tenant shall be entitled at any
reasonable time during regular business hours, on an annual basis
after giving prior written notice thereof to Landlord of at least
five (5) business days, to inspect in Landlord’s
business office (or at such other location as they may be kept)
Landlord’s books and records relating to the Building
Expenses for the Building and the allocation thereof to Tenant for
the prior two (2) years, and to obtain an audit thereof by an
independent certified public accountant selected by Tenant on a
non-contingency basis to determine the accuracy of the amount of
such Building Expenses attributed by Landlord to Tenant. If any
such audit discloses a liability for Tenant’s proportionate
share of Building Expenses for any calendar year which is less than
that amount which Landlord has attributed to Tenant for such
calendar year, Landlord shall promptly refund to Tenant so much of
such amount paid by Tenant for such calendar year as exceeds the
amount for which Tenant is actually liable, as disclosed by such
audit, with interest which would have accrued on the amount of the
overpayment in the amount of ten percent (10%) per annum from
the date such overpayment was made by Tenant. If any such audit
discloses a liability for Tenant’s proportionate share of
Building Expenses for either such calendar year which is less than
ninety-five (95%) of that amount which Landlord has attributed
to Tenant for such calendar year, Landlord shall, in addition to
the refund of such excess, pay to Tenant the reasonable cost of
such audit for such calendar year. Tenant’s right to audit
shall include a one-time right to audit the Base Year Building
Expenses during the Term of the Lease. Accordingly, if
Tenant’s audit includes an audit of the Base Year Building
Expenses, Tenant shall not be permitted to re-audit such Base Year
Building Expenses during the Term of the Lease.
6.6 Additional Rent
Payments . Tenant’s obligation to pay any additional
rent accruing during the Term pursuant to Sections 6.3 and
6.4 hereof shall apply pro rata to the proportionate part of
a calendar year as to Taxes and Building Expenses, in which this
Lease begins or ends, for the portion of each such year during
which this Lease is in effect. Such obligation to make
payments of such additional rent shall survive the expiration or
sooner termination of the Term.
12
6.7 Payments
. All payments or installments of any rent hereunder and all
sums whatsoever due under this Lease (including but not limited to
court costs and attorneys’ fees) shall be deemed rent and
shall be paid to Landlord at the address designated by Landlord. If
any amount of Annual Base Rent or additional rent shall remain
unpaid for five (5) calendar days after such payment becomes
due, Tenant shall pay Landlord, without notice or demand, a late
charge equal to the greater of (i) $35.00 and (ii) five
percent (5%) of the such overdue amount to partially
compensate Landlord for its administrative costs in connection with
such overdue payment; which administrative costs Tenant expressly
acknowledges are reasonable and do not constitute a penalty. In
addition, such overdue amounts shall bear interest at the rate of
18% per annum (but not more than the maximum allowable legal
rate applicable to Tenant) (the “Default Rate”) until
paid. Additionally, if any of Tenant’s checks for payment of
rent or additional rent are returned to Landlord for insufficient
funds, Tenant shall pay to Landlord as additional rent the greater
of (i) $50.00 or (ii) the amount of actual charges
incurred by Landlord, for each such check returned for insufficient
funds, and if two or more of Tenant’s checks in payment of
rent or additional rent due hereunder are returned for insufficient
funds in any calendar year, Landlord reserves the right upon ten
(10) days advance written notice to Tenant to thereafter
require Tenant to pay all rent and additional rent and other sums
whatsoever due under this Lease in cash, by money order or by
certified check or cashier’s check.
7. Requirements of Applicable
Law . Landlord warrants that on the Commencement Date, the
Property shall comply with all applicable laws, ordinances, rules
and regulations of governmental authorities having jurisdiction
over the Property (“Applicable Laws”). Tenant, at its
sole cost and expense, shall thereafter comply promptly with all
Applicable Laws now in force or which may hereafter be in force,
which impose, due to the particular manner of use of the Premises
by Tenant, any duty upon Landlord or Tenant with respect to the
use, occupancy or alteration of the Premises or any part thereof
and for the prevention of fires; provided, however, that Landlord
and not Tenant shall correct all structural defects in the Building
necessary to comply with Applicable Laws, and make all repairs,
changes or alterations necessary because the Building was not
constructed in compliance with any of the Applicable Laws or
applicable other than due to the particular manner of use of the
Premises by Tenant. Tenant’s Permitted Use is in compliance
with the zoning regulations in effect as of the Effective
Date.
8. Certificate of Occupancy
. Subject to the provisions of Sections 7 and 9 ,
Tenant shall not use or occupy the Premises in violation of any
certificate of occupancy, permit, or other governmental consent
issued for the Building. Subject to the provisions of
Section 9 below, if any governmental authority, after the
commencement of the Term, shall contend or declare that the
Premises are being used for a purpose which is in violation of such
certificate of occupancy, permit, or consent, then Tenant shall,
upon five (5) days’ notice from Landlord, immediately
discontinue such use of the Premises. Subject to the
provisions of Section 9 below, if thereafter the governmental
authority asserting such violation threatens, commences or
continues criminal or civil proceedings against Landlord for
Tenant’s failure to discontinue such use, in addition to any
and all rights, privileges and remedies given to Landlord under
this Lease for default therein, Landlord shall have the right to
terminate this Lease forthwith. Tenant shall indemnify and
hold Landlord harmless of and from any and all liability for any
such violation or violations.
9. Contest-Statute, Ordinance,
Etc . Tenant may, after notice to Landlord, by appropriate
proceedings conducted promptly at Tenant’s own expense in
Tenant’s name and whenever necessary in Landlord’s
name, contest in good faith the validity or enforcement of any such
statute, ordinance, law, order, regulation or requirement and may
similarly contest any assertion of violation of any certificate of
occupancy, permit, or any consent issued for the
Building. Tenant may, pending such contest, defer compliance
therewith if, in the opinion of counsel for Landlord, such deferral
shall not subject either Landlord or the Premises or the Property
(or any part thereof) to any penalty, fine or forfeiture, and if
Tenant shall post a bond with corporate surety approved by Landlord
sufficient, in Landlord’s opinion, fully to indemnify
Landlord from loss.
10. Tenant’s Improvements
. Except to the extent that Landlord is responsible for
making
13
improvements to the Premises pursuant to
Section 35 of this Lease, Tenant shall have the right
to make such non-structural improvements to the Premises as it may
deem necessary at its sole cost and expense. Tenant shall not
make any alterations, decorations, installations, additions or
improvements to the Premises, including but not limited to, the
installation of any fixtures, amenities, equipment, appliances, or
other apparatus, the cost of which exceeds the greater of
(1) Five Dollars ($5.00) per square foot of the area being
altered and (2) $250,000 (increased by three percent
(3%) each Lease Year), without Landlord’s prior written
consent (such consent not to be unreasonably conditioned, delayed
or withheld), and then only by contractors or mechanics employed or
reasonably approved by Landlord and provided that Landlord is given
plans and CADD drawings for such alterations. All such work,
alterations, decorations, installations, additions or improvements
shall be done at Tenant’s sole expense and at such times and
in such manner as Landlord may from time to time reasonably
designate. Landlord’s consent to and/or approval of
Tenant’s plans and specifications for the aforesaid
improvements shall create no responsibility or liability on the
part of Landlord for their completeness, design sufficiency, or
compliance with all laws, rules and regulations of governmental
agencies or authorities. All alterations, decorations,
installations, additions or improvements made by either of the
parties hereto upon the Premises, except movable office furniture
put in at the expense of Tenant and other items as mutually agreed
upon in writing, shall be the property of Landlord and shall remain
upon and be surrendered with the Premises at the termination of
this Lease without molestation or injury. Upon request by Landlord,
Tenant, at Tenant’s expense, shall remove any and all special
improvements to the Premises or Common Areas made by or on behalf
of Tenant, including, without limitation, supplemental HVAC and
raised flooring. If Tenant fails to remove any such items, Landlord
shall have the right, but not the obligation, to remove and dispose
of such items, and restore the Premises accordingly and Tenant
shall reimburse Landlord for the costs of such removal, disposal
and restoration within thirty (30) days after receipt of an
invoice therefore, together with interest at the Default Rate if
not paid within said 30 day period. Notwithstanding the foregoing,
no work performed pursuant to Section 35 hereof shall be
required to be removed by Tenant at the end of the Term, except at
Landlord’s option, internal stairwells constructed as part of
the Tenant Improvements.
11. Repairs and Maintenance
.
11.1 Tenant’s Care
of the Premises and Building . During the Term Tenant
shall:
(i) keep the Premises and the
fixtures, appurtenances and improvements therein (other than roof,
foundation, exterior walls, interior structural walls, all
structural components, windows and the Building Systems, as
hereinafter defined) in good order and condition;
(ii) make repairs and
replacements to the Premises required because of Tenant’s
misuse or primary negligence, except to the extent that the repairs
or replacements are covered by Landlord’s insurance as
required hereunder;
(iii) repair and replace
special equipment or decorative treatments installed by or at
Tenant’s request and that serve the Premises only, except to
the extent the repairs or replacements are needed because of
Landlord’s misuse or primary negligence, and are not covered
by Tenant’s insurance as required hereunder;
(iv) pay for all damage to
the Building, its fixtures and appurtenances, as well as all
damages sustained by Tenant or occupants of the Building due to any
waste, misuse or neglect of the Premises, its fixtures and
appurtenances by Tenant, except to the extent that the repair of
such damage is covered by Landlord’s insurance as required
hereunder to the extent that Landlord actually receives proceeds
therefrom or would have been covered had Landlord maintained the
insurance required hereunder; and
(v) not commit
waste.
In addition Tenant shall not
place a load upon any floor of the Premises exceeding the floor
load per square foot area, which is 100 pounds live load, which
such floor was designed to
14
carry and which may be allowed under
Applicable Laws. Landlord reserves the right to prescribe the
weight and position of all heavy equipment brought onto the
Premises and prescribe any reinforcing required under the
circumstances, all such reinforcing to be at Tenant’s
expense.
11.2 Landlord’s
Repairs . Except for the repairs and replacements that Tenant
is required to make pursuant to Section 11.1 above,
Landlord shall make all other repairs and replacements to the
Premises, Common Areas and Building (including Building fixtures
and equipment) as shall be reasonably deemed necessary to maintain
the Building in a condition comparable to other first class
suburban office buildings in the Baltimore-Washington corridor
area. This maintenance shall include the roof, foundation, exterior
walls, windows, interior structural walls, all structural
components, and all systems such as mechanical, electrical,
multi-tenant HVAC, and plumbing, (the “Building
Systems”), provided that Building Systems shall expressly
exclude any supplementary HVAC units or other electrical equipment
installed by Tenant or as part of the Tenant Improvements. The
costs associated with such repairs shall be deemed a part of
Building Expenses; provided, however, that costs of all of such
repairs which would be considered capital in nature under generally
accepted accounting principles shall be paid by Landlord. There
shall be no allowance to Tenant for a diminution of rental value,
no abatement of rent, and no liability on the part of Landlord by
reason of inconvenience, annoyance or injury to business arising
from Landlord, Tenant or others making any repairs or performing
maintenance as provided for herein.
11.3 Time for Repairs
. Repairs or replacements required pursuant to
Section 11.1 and 11.2 above shall be made within
a reasonable time (depending on the nature of the repair or
replacement needed—generally no more than fifteen
(15) days) after receiving notice or having actual knowledge
of the need for a repair or replacement.
11.4 Surrender of the
Premises . Upon the termination of this Lease, without the need
for prior notice from Landlord, Tenant shall surrender the Premises
to Landlord in the same broom clean condition that the Premises
were in on the Commencement Date except for:
(i) ordinary wear and
tear;
(ii) damage by the elements,
fire, and other casualty unless Tenant would be required to repair
under the provisions of this Lease;
(iii) damage arising from any
cause not required to be repaired or replaced by Tenant;
and
(iv) alterations as permitted
by this Lease unless consent was conditioned on their
removal.
On surrender Tenant shall
remove from the Premises its personal property, trade fixtures and
any alterations required to be removed pursuant to the terms of
this Lease and repair any damage to the Premises caused by this
removal. Any items not removed by Tenant as required above shall be
considered abandoned. Landlord may dispose of abandoned items as
Landlord chooses and bill Tenant for the cost of their
disposal.
12. Conduct on Premises
. Tenant shall not do, or permit anything to be done in the
Premises, or bring or keep anything therein which shall, in any
way, increase the rate of fire insurance on the Building, or
invalidate or conflict with the fire insurance policies on the
Building, fixtures or on property kept therein, or obstruct or
interfere with the rights of Landlord or of other tenants, or in
any other way injure or annoy Landlord or the other tenants, or
subject Landlord to any liability for injury to persons or damage
to property, or interfere with the good order of the Building, or
conflict with Applicable Laws, or the Maryland Fire Underwriters
Rating Bureau. Tenant agrees that any increase of fire insurance
premiums on the Building or contents caused by the occupancy of
Tenant and any expense or cost incurred in consequence of
negligence or carelessness or the willful action of Tenant,
Tenant’s employees, agents, servants, or invitees shall, as
they 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.
15
13. Insurance .
13.1 Tenant’s
Insurance . Tenant shall keep in force at its own expense, so
long as this Lease remains in effect, (a) public liability
insurance, including insurance against assumed or contractual
liability under this Lease, with respect to the Premises, to afford
protection with limits, per person and for each occurrence, of not
less than Two Million Dollars ($2,000,000), combined single limit,
with respect to personal injury and death and property damage, such
insurance to provide for only a reasonable deductible,
(b) all-risk property and casualty insurance, including theft,
written at replacement cost value and with replacement cost
endorsement, covering all of Tenant’s personal property in
the Premises and all improvements installed in the Premises by or
on behalf of Tenant whether pursuant to the terms of
Section 35 , Section 10 , or otherwise,
such insurance to provide for only a reasonable deductible,
(c) if, and to the extent, required by law, workmen’s
compensation or similar insurance offering statutory coverage and
containing statutory limits (d) insurance covering all plate
and other interior glass in the Premises for and in the name of
Landlord and (e) business interruption insurance in an amount
sufficient to reimburse Tenant for loss of earnings attributable to
prevention of access to the Building or the Premises for a period
of at least twelve (12) months. Such policies shall be
maintained with companies and in form reasonably acceptable to
Landlord and shall be written as primary policy coverage and not
contributing with, or in excess of, any coverage which Landlord
shall carry. Tenant shall deposit the policy or policies of
such required insurance or certificates thereof with Landlord prior
to the Commencement Date, which policies shall name Landlord or its
designee and, at the request of Landlord, its mortgagees, as
additional insured and shall also contain a provision stating that
such policy or policies shall not be canceled except after thirty
(30) days’ written notice to Landlord or its
designees. All such policies of insurance shall be effective
as of the date Tenant occupies the Premises and shall be maintained
in force at all times during the Term of this Lease and all other
times during which Tenant shall occupy the Premises. In
addition to the foregoing insurance coverage, Tenant shall require
any contractor retained by it to perform work on the Premises to
carry and maintain, at no expense to Landlord, during such times as
contractor is working in the Premises, a non-deductible
(i) comprehensive general liability insurance policy,
including, but not limited to, contractor’s liability
coverage, contractual liability coverage, completed operations
coverage, broad form property damage endorsement and
contractor’s protective liability coverage, to afford
protection with limits per person and for each occurrence, of not
less than Two Hundred Thousand Dollars ($200,000.00), combined
single limit, with respect to personal injury and death and
property damage, such insurance to provide for no deductible, and
(ii) workmen’s compensation insurance or similar
insurance in form and amounts as required by law. In the event
of damage to or destruction of the Premises and the termination of
this Lease by Landlord pursuant to Section 18 herein,
Tenant agrees that it shall pay Landlord all of its insurance
proceeds relating to improvements made in the Premises by or on
behalf of Tenant whether pursuant to the terms of
Section 35 , Section 10 , or
otherwise. If Tenant fails to comply with its covenants made
in this Section, if such insurance would terminate or if Landlord
has reason to believe such insurance is about to be terminated,
Landlord may at its option cause such insurance as it in its sole
judgment deems necessary to be issued, and in such event Tenant
agrees to pay promptly upon Landlord’s demand, as additional
rent the premiums for such insurance.
13.2 Landlord’s
Insurance . Landlord shall keep in force at its own expense
(a) contractual and comprehensive general liability insurance,
including public liability and property damage, with a minimum
combined single limit of liability of Two Million Dollars
($2,000,000.00) for personal injuries or death of persons occurring
in or about the Building and Premises, and (b) all-risk
property and casualty insurance written at replacement cost value
covering the Building and all of Landlord’s improvements in
and about same.
13.3 Waiver of
Subrogation . Each party hereto waives claims arising in any
manner in its favor and against the other party and agrees that
neither party hereto shall be liable to the other party or to any
insurance company (by way of subrogation or otherwise) insuring the
other party for any loss or damage to the Building, the Premises or
other tangible property, or any
16
resulting loss of income, or losses
under worker’s compensation laws and benefits, or against
liability on or about the Building, even though such loss or damage
might have been occasioned by the negligence of such party, its
agents or employees if any such loss or damage is covered by
insurance benefiting the party suffering such loss or damage as was
required to be covered by insurance carried pursuant to this Lease.
Landlord shall cause each insurance policy carried by it insuring
against liability on or about the Building or insuring the Premises
and the Building or income resulting therefrom against loss by fire
or any of the casualties covered by the all-risk insurance carried
by it hereunder to be written in such a manner as to provide that
the insurer waives all right of recovery by way of subrogation
against Tenant in connection with any loss or damage covered by
such policies. Tenant shall cause each insurance policy
carried by it insuring against liability or insuring the Premises
(including the contents thereof and Tenant’s Improvements
installed therein by Tenant or on its behalf) against loss by fire
or any of the casualties covered by the all-risk insurance required
hereunder to be written in such a manner as to provide that the
insurer waives all right of recovery by way of subrogation against
Landlord in connection with any loss or damage covered by such
policies.
14. Rules and Regulations
. If the Building becomes multi-tenanted building, Tenant
shall be bound by the rules and regulations set forth on the
schedule attached hereto as Exhibit “B” and made
a part hereof. Landlord shall have the right, from time to
time, to issue additional or amended rules and regulations
regarding the use of the Building, so long as the rules shall be
reasonable, non-discriminatory between tenants and do not
materially interfere with Tenant’s use of the Premises as
contemplated by this Lease. When so issued the same shall be
considered a part of this Lease and Tenant covenants that the
additional or amended rules and regulations shall likewise be
faithfully observed by Tenant, the employees of Tenant and all
persons invited by Tenant into the Building, provided, that the
additional or amended rules are made applicable to all office
tenants similarly situated as Tenant. Landlord shall not be
liable to Tenant for the violation of any of the rules and
regulations, or the breach of any covenant or condition in any
lease, by any other tenant in the Building.
15. Mechanics’ Liens
. Tenant shall not do or suffer to be done any act, matter or
thing whereby Tenant’s interest in the Premises, or any part
thereof, may be encumbered by any mechanics’
lien. Tenant shall discharge or bond off, within ten
(10) days after the date of filing, any mechanics’ liens
filed against Tenant’s interest in the Premises, or any part
thereof, purporting to be for labor or material furnished or to be
furnished to Tenant. Landlord shall not be liable for any
labor or materials furnished or to be furnished to Tenant upon
credit, and no mechanics’ or other lien for labor or
materials shall attach to or affect the reversionary or other
estate or interest of Landlord in and to the Premises, or the
Property.
16. Failure to Repair . In
the event that Tenant fails after reasonable prior written notice
from Landlord, to keep the Premises in a good state of condition
and repair pursuant to Section 11 above, or to do any
act or make any payment required under this Lease or otherwise
fails to comply herewith, Landlord may, at its option (but without
being obliged to do so) immediately, or at any time thereafter and
without notice, perform the same for the account of Tenant,
including the right to enter upon the Premises at all reasonable
hours to make such repairs, or do
|