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Exhibit
10.1
Certain portions hereof
denoted with “[***]” have been omitted pursuant to a
Request for
Confidential Treatment and
have been filed separately with the Commission
OFFICE LEASE
by and between
1450 BEASON STREET
LLC
(Landlord)
and
UNDER ARMOUR, INC.
(Tenant)
TABLE OF CONTENTS
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| 1. |
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DEFINITIONS. |
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1 |
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| 2. |
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PREMISES;
RENTABLE AREA; RIGHT OF FIRST OFFER. |
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9 |
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| 3. |
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TERM. |
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10 |
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| 4. |
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RENT. |
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12 |
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| 5. |
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TAXES. |
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16 |
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| 6. |
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USE OF
PREMISES. |
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17 |
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| 7. |
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INSURANCE
AND INDEMNIFICATION. |
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22 |
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| 8. |
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SERVICES
AND UTILITIES. |
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24 |
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| 9. |
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REPAIRS
AND MAINTENANCE. |
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26 |
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| 10. |
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IMPROVEMENTS. |
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27 |
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| 11. |
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LANDLORD’S RIGHT OF ENTRY. |
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29 |
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| 12. |
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DAMAGE OR
DESTRUCTION. |
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30 |
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| 13. |
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CONDEMNATION. |
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31 |
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| 14. |
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ASSIGNMENT AND SUBLETTING. |
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31 |
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| 15. |
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RULES AND
REGULATIONS. |
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33 |
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| 16. |
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SUBORDINATION AND ATTORNMENT. |
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33 |
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| 17. |
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DEFAULTS
AND REMEDIES. |
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34 |
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| 18. |
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ESTOPPEL
CERTIFICATE. |
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37 |
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| 19. |
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QUIET
ENJOYMENT. |
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37 |
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| 20. |
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NOTICES. |
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37 |
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| 21. |
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GENERAL |
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38 |
Exhibits
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A |
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Plan
showing Project and Building |
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A-1 |
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Bridge |
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B |
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Drawing showing approximate location of Premises |
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C |
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Landlord’s Work |
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D |
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Current
Rules and Regulations |
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E |
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Schedule
of Deliveries |
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F |
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Under
Armour Parking Area |
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ii
OFFICE LEASE
THIS OFFICE LEASE (the
“ Lease ”) is made on this 14th day of December,
2007 (the “ Effective Date ”), by and between
1450 BEASON STREET LLC, a Maryland limited liability company (the
“ Landlord ”), and UNDER ARMOUR, INC., a
Maryland corporation (the “ Tenant
”).
IN CONSIDERATION of the
agreements and covenants hereinafter set forth, Landlord and Tenant
mutually agree as follows:
1.
DEFINITIONS.
1.1. As used herein, the
following terms shall have the following meanings:
“ Base Operating
Costs ” means Operating Costs incurred for the 2008
calendar year (the “ Base Year ”), provided that
if the Phase I Rent Commencement Date is later than June 30,
2008, the Base Operating Costs will be reset based on the 2009
calendar year actual Operating Costs. If less than 100% of the
rentable square feet in the Building is occupied by tenants or
Landlord is not supplying services to 100% of the rentable square
feet of the Building at any time during the Base Year, then
Operating Costs for the Base Year shall be an amount equal to the
Operating Costs which would normally be expected to be incurred
using reasonable projections and reasonable extrapolations from
existing cost data had 100% of the Building’s rentable square
feet been occupied and had Landlord been supplying services to 100%
of the Building’s rentable square feet throughout such
calendar year. In addition, Operating Costs for the Base Year will
also be adjusted to reflect costs that were or could have been
imposed but for the existence of warranties and/or guarantees
provided in connection with the Landlord’s Work. Furthermore,
if after the Base Year, the Landlord provides additional services
or incurs cost items in a category not otherwise covered in
Operating Costs as defined herein, the Base Operating Costs shall
be increased in a manner as reasonably determined by Landlord to
include such additional matter.
“ Base Rent
” has the meaning given it in subsection 4.1.
“ Base Taxes
” means Taxes on the Building and the underlying tax parcel
for the 2008 state fiscal tax year, which Base Taxes shall be reset
at such time as the Building is first re-assessed to reflect the
Landlord’s complete rehabilitation of the Building and
Tenant’s occupancy of the Premises.
“ Building
” means The Overflo Building located at 1450 Beason Street,
Baltimore, Maryland 21230, as more particularly shown on Exhibit
A , subject to adjustment from time to time.
“ Building Service
Equipment ” means all apparatus, machinery, devices,
fixtures, appurtenances, equipment and personal property now or
hereafter located on the Premises and owned by the
Landlord.
“ Business Day
” means any day other than a Saturday, a Sunday or any other
day on which federal, state or city offices are not open for
business.
“ Common Areas
” means those areas and facilities of the Building and/or the
Project which may be designated by the Landlord from time to time
as common areas (portions of which may from time to time be
relocated and/or reconfigured by the Landlord in its sole
discretion so long as reasonable access to and from the Premises is
maintained and the obligations regarding the Required Parking
Spaces and the Under Armour Parking Area as provided in
Section 6.6.3(b) of this Lease are maintained), which Common
Areas include footways, sidewalks, Parking Areas, lobbies,
elevators, stairwells, corridors,
1
restrooms, water-related features,
including water taxis, bulkheads and docks, and certain exterior
areas on the Project (and/or the Building), subject, however, to
the Rules and Regulations.
“ Default Rate
” means an annual floating rate of interest equal to four
(4) percentage points in excess of the prime rate of interest
as announced from time to time by Bank of America, or its
successor.
“ force majeure
event ” means an event which results in a delay in
performance by a party due to or by reason of strikes, acts of God,
acts of terrorism, shortages of labor or materials, civil
disturbance, labor troubles or by any cause reasonably beyond the
party’s control; provided, however, the failure to obtain
funds or funding will not constitute a force majeure event and the
period of excused delay must be directly related to the timing and
duration of the event causing the delay.
“ Guarantor
” means Struever Bros. Eccles & Rouse, Inc., a
Maryland corporation.
“ Insurance
Premiums ” means the aggregate of any and all premiums
paid by the Landlord for hazard, liability, loss-of-rent,
workmens’ compensation, boiler and machinery or similar
insurance upon any or all of the Project.
“ Landlord
” means the Person hereinabove named as such and its
successors and assigns.
“ Lease Year
” means (a) the period commencing on the Phase III Rent
Commencement Date and terminating at 11:59 p.m. on the first
anniversary of the last day of the month in which the Phase III
Rent Commencement Date occurs, and (b) each successive period
of twelve (12) calendar months thereafter during the
Term.
“Legal
Requirements” means all laws, statutes, ordinances,
orders, rules, regulations and requirements of all federal, state
and municipal governments, whether now or hereafter in force,
including but not limited to The Americans with Disabilities Act,
42 U.S.C. §12101 et. seq., and the ADA Disability Guidelines
promulgated with respect thereto and the rules and regulations of
the National Board of Fire Underwriters or other bodies exercising
similar functions.
“ Operating
Costs ” means any and all costs and expenses incurred by
the Landlord for services performed by the Landlord or by others on
behalf of the Landlord with respect to the operation and
maintenance of the Premises, Building, the Project, and the Common
Areas located therein and serving and allocable to the Premises
(but specifically excluding the Parking Areas, whether surface or
structured and whether covered or open, for the purpose of
calculating Operating Costs) in a manner deemed reasonable and
appropriate by Landlord, including, without limitation, all costs
and expenses of:
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(a) |
operating, maintaining, repairing, lighting, signing, cleaning,
removing trash from, painting, striping, controlling of traffic in,
controlling of rodents in, policing and securing the Common
Areas; |
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(b) |
purchasing and maintaining in full force insurance for the
Project as deemed necessary in Landlord’s
discretion; |
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(c) |
operating, maintaining, repairing and replacing machinery,
furniture, accessories and equipment used in the operation and
maintenance of the Project, and the personal property taxes and
other charges incurred in connection with such machinery,
furniture, accessories and equipment; |
2
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(d) |
maintaining and repairing roofs (other than over the Parking
Areas), awnings, paving, curbs, walkways, drainage pipes, ducts,
conduits, grease traps and lighting fixtures throughout the Common
Areas; |
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(e) |
interior and exterior planting, replanting and replacing
flowers, shrubbery, trees, grass and planters in the Common
Areas; |
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(f) |
providing electricity, heating, ventilation and air
conditioning to the Common Areas (it being understood that Tenant
shall pay for all costs of Tenant Electric, as defined below, and
that such costs shall not be counted and/or paid twice by Tenant),
and operating, maintaining and repairing any equipment used in
connection therewith; it is further understood that the maintenance
of the HVAC in the Premises shall be an Operating Cost, provided
however that maintenance of specialized HVAC equipment installed in
the Premises, if any, shall not be an Operating Cost; |
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(g) |
water and sanitary sewer services and other services, if any,
furnished to the Premises, Common Areas and all rentable square
feet of office space in the Project for the non-exclusive use of
tenants; |
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(h) |
cleaning, maintaining and repairing the Project; |
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(i) |
accounting and audit fees and expenses, including a four
percent (4%) property management fee, payroll, payroll taxes,
employee benefits and related expenses of all personnel engaged in
the operation, maintenance, and management of the
Project; |
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(j) |
the cost and expense of complying with all Legal Requirements
applicable to the Project that are amended or made applicable to
the Project after the Phase I Rent Commencement Date; provided,
however, to the extent the cost of any improvement to be made to
comply with such Legal Requirement is required to be capitalized
under generally accepted accounting principles, such cost shall be
amortized over the useful economic life of such improvement as
reasonably estimated by Landlord, and the annual amortization shall
be deemed an Operating Cost in each of the Operating Years during
which the cost of the improvement is amortized; |
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(k) |
the cost (including legal, architectural and engineering fees
incurred in connection therewith) of any improvement made to the
Project during any Operating Year either (x) with the
reasonable expectation by Landlord of reducing Operating Costs (as,
for example, a labor-saving improvement) or enhancing services, or
(y) in lieu of a repair; provided, however, (i) to the
extent the cost of such improvement is required to be capitalized
under generally accepted accounting principles, such cost shall be
amortized over the useful economic life of such improvement as
reasonably estimated by Landlord, and the annual amortization shall
be deemed an Operating Cost in each of the Operating Years during
which the cost of the improvement is amortized; and (ii) in no
event shall the amount included in Operating Costs in connection
with a capital improvement of the nature described in clause
(x) above exceed the annual amount by which Operating Costs
were reduced as a result of such capital improvement; |
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(l) |
providing janitorial and trash removal services to the Common
Areas and the Premises; and |
3
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(m) |
all other commercially reasonable costs of maintaining,
repairing or operating any or all of the Building and Common Areas
(including expenses of landscaping, snow, ice, water and debris
removal, outdoor lighting, road maintenance and maintenance of
exterior signage relating to the Project). |
Notwithstanding the
foregoing, the following items shall be excluded from Operating
Costs:
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(a) |
Taxes; franchise taxes, income or gains taxes, or excess profit
taxes imposed upon Landlord; or any special taxes imposed in
connection with tax-increment financing on any part of the Project,
or any special taxes on the Project or any part
thereof; |
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(b) |
debt service on Mortgages and any costs and expenses relating
to a refinancing or debt modification, including legal fees, title
insurance premiums, survey expenses, appraisal, environmental
report, or engineering report; |
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(c) |
leasing commissions, brokerage fees or legal fees incurred in
connection with the negotiation and preparation of letters, deal
memos, letters of intent, leases and related documents with respect
to the leasing, assignment or subletting of space for any occupant
of the Building or the Project; |
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(d) |
the cost of tenant installations incurred in connection with
preparing space for a new tenant or refurbishing or renovating
space for an existing tenant; |
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(e) |
salaries and other compensations of personnel not involved in
the day-to-day management and operations of the Building or the
Project and any other general overhead and general administrative
expenses; |
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(f) |
costs of compliance with the Americans with Disabilities
Act; |
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(g) |
capital costs, depreciation or amortization and other costs not
considered an operating expense under GAAP (except as provided in
the list of inclusions for Operating Costs under items (j) and
(k) above); |
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(h) |
all costs applicable solely to any buildings other than the
Building constructed on the Project, or to any expansion of the
Building or any other building in the Project; |
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(i) |
any expense for which Landlord is otherwise compensated through
the proceeds of insurance or condemnation awards, or is otherwise
compensated by any tenant (including Tenant) of the Building for
services in excess of the services Landlord is obligated to furnish
to Tenant hereunder; |
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(j) |
costs incurred by Landlord due to a violation of any lease in
the Building or the Project, or any superior lease or mortgage or
penalties or fines arising due to a continuing violation of any
Legal Requirement with respect to the Premises or any insurance
requirement required to be complied with by Landlord which becomes
effective prior to the Phase I Rent Commencement Date with respect
to the Premises; |
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(k) |
costs incurred from Landlord’s charitable or political
contributions or as fees to community or real estate
associations; |
4
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(l) |
attorneys fees and disbursements and other expenses, including
settlements, incurred in connection with disputes with the
Mortgagee, any lender on the Project or other tenants or occupants
of the Building or the Project, or associated with the enforcement
of any leases or the defense of Landlord’s title or interest
in the Project or any part thereof; |
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(m) |
bad debt losses or reserves; |
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(n) |
accounting fees incurred in preparing Landlord’s
financial reports for Landlord, its partners, affiliates or any
Mortgagee or lender or in preparing Landlord’s tax returns or
other third party accounting fees not directly related to the
preparation of Operating Cost statements; |
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(o) |
travel and meal expenses of Landlord’s management and
leasing employees; |
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(p) |
cost of removal of Hazardous Materials from the Project which
were performed or should have been performed pursuant to
environmental studies and recommendations received by Landlord in
connection with the initial renovation of the Building or the cost
of remediating any Hazardous Materials which are the
Landlord’s responsibility to remediate under this Lease or
due to any other pre-existing environmental condition and costs of
any insurance relating thereto; |
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(q) |
costs incurred in performing work or furnishing services or
utilities for any tenant or other occupant or for any other
building or portion of a building located in the Project, whether
at such tenant’s or other occupant’s or at
Landlord’s expense, to the extent that such work or service
or utility benefits only an individual tenant or group of tenants
and not the Project as a whole (unless a fair allocation is made
between what is benefiting the Building, and what is benefiting
another party); |
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(r) |
any expense for which Landlord is entitled to be reimbursed by
any tenant as an additional charge in excess of rent; |
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(s) |
overhead and profit increment paid to affiliates of Landlord
for services to the extent that such costs exceed the market costs
of such services; |
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(t) |
cost of permanent works of art; |
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(u) |
costs with respect to a sale of all or part of the Building or
all or any part of the Project; |
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(v) |
any costs and compensation paid to clerks, attendants or other
persons in commercial concessions operated Landlord or located
within the Project; |
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(w) |
costs incurred with respect to installing, operating or
maintaining any observatory, broadcasting, cafeteria, hotel or
dining facility, or athletic, luncheon or recreational club in the
Project; |
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(x) |
expenses of constructing tenant improvements for any tenant in
the Building; |
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(y) |
costs incurred with respect to any alterations pursuant to
Section 6.6.4; |
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(z) |
costs of correcting defects (including latent defects) in the
construction of the Building or in the equipment used
therein; |
5
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(aa) |
professional fees for property tax assessment appeal
proceedings (unless requested by Tenant pursuant to
Section 5.5 hereof, and then only to the extent not deducted
from any refunds); |
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(bb) |
advertising and promotional expenses with respect to the
Project; |
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(cc) |
charges, costs and damages imposed on Landlord as a result of a
judgment, settlement or arbitration award resulting from a claim of
tort liability against Landlord; and |
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(dd) |
any increase in Insurance Premiums to the extent that such
increase is caused by or attributable to the use, occupancy or act
of another tenant |
“ Operating Year
” means each respective calendar year or part thereof during
the Term, or, at the Landlord’s option, any other 12-month
period or part thereof designated by the Landlord during the
Term.
“ Parking Areas
” means those portions of the Common Areas or other areas
under Landlord’s control which from time to time are
designated by the Landlord for the parking of automobiles and other
automotive vehicles while engaged in business upon the Premises
(other than while being used to make deliveries to and from the
Premises).
“ Person ”
means a natural person, a trustee, a corporation, a limited
liability company, a partnership and/or any other form of legal
entity.
“ Premises
” means that certain space having a rentable area of
approximately 138,198 square feet (subject to measurement as
provided in Section 2.2) and located in the Building, as more
particularly depicted on Exhibit B ; provided, that
(a) if at any time hereafter any portion of the Premises
becomes no longer subject to this Lease, “Premises”
shall thereafter mean so much thereof as remains subject to this
Lease, and (b) prior to the Phase III Rent Commencement Date,
the “Premises” shall be based on the portions of the
space theretofore Substantially Completed, as more particularly
described in Sections 2.1 and 4.1. Tenant shall have the exclusive
right to use the bridge connecting the Dawn Building to the
Building (the “ Bridge ”), as more particularly
shown on Exhibit A-1 , subject to the terms and conditions
more particularly set forth herein.
“ Project
” means that certain project located in Baltimore City, which
project includes a parcel of land known as the Overflo Parcel
containing approximately seven (7) acres, more or less,
together with the Building thereon. The Project is more
particularly shown on Exhibit A .
“ Punch List
” means the list of minor items, none of which materially
interferes with Tenant’s use of the Premises, to be completed
by Landlord and confirmed by Tenant.
“ Rent ”
means Base Rent, Tenant Improvement Rent, Parking Rent and
Additional Rent.
“ Rules and
Regulations ” means the reasonable rules and regulations
having uniform applicability to all tenants of the Project (subject
to their respective leases) and governing their use and enjoyment
of the Project; provided that such rules and regulations shall not
materially interfere with the Tenant’s use and enjoyment of
the Premises in accordance with this Lease for the purposes listed
in subsection 6.1.
“Substantial
Completion”, “Substantially Complete” and
“ Substantially Completed ” means substantial
completion of the applicable Landlord’s Work as evidenced by
(i) a certificate of substantial completion issued by
Landlord’s architect indicating that the Premises (or the
Phase I Premises, Phase II
6
Premises or Phase III Premises, as
applicable) are complete except for minor items identified on the
Punch List, and (ii) a temporary or permanent certificate of
use and occupancy issued by appropriate local government agencies
of Baltimore City.
“ Tax Year
” means the 12-month period beginning July 1 of each
year or such other 12-month period (deemed for the purposes of this
Lease to have 365 days) established as a real estate tax year by
the taxing authority having lawful jurisdiction over the
Project.
“ Taxes ”
means the aggregate of any and all real property, metropolitan
district charges, front-foot benefit assessments, special
assessments and other taxes or public or private assessments or
charges levied against any or all of the tax parcel containing the
Premises (the “ Tax Parcel ”), but excluding any
taxes levied on (i) the Parking Areas, or (ii) the tax
parcel containing the Premises due to tax increment financing
arrangements or taxes payable in connection with a special taxing
district. In the event the Tax Parcel is modified, Base Taxes must
be modified as well to reflect the impact of such change, as
reasonably agreed to by Tenant.
“ Tenant ”
means the Person hereinabove named as such and its successors and
permitted assigns hereunder.
“ Tenant
Electric ” means Tenant’s pro rata share of
electric current and gas service supplied to or used in the
Building during normal business hours, including, but not limited
to, lights, outlets, VAV boxes with electric heat, compressorized
air handling units, HVAC rooftop units, any primary electric
service charge, any specialized HVAC equipment serving the
Premises, the lighting of signs installed by Tenant, and any
charges related to any generator installed by Tenant at the
Premises.
“ Tenant Improvement
Rent ” means the amount payable by Tenant as Rent
pursuant to Section 10.1(a)(ii) hereof.
“ Tenant’s
Proportionate Share ” means a fraction, the numerator of
which is the number of rentable square feet in the Premises and the
denominator of which is the number of square feet in the Building,
the Project or such other areas deriving a benefit of the
applicable Operating Cost or Taxes as Landlord determines in its
reasonable judgment, subject to adjustment from time to time as
such areas may change. Landlord reserves the right to adjust
Tenant’s Proportionate Share in order to allocate the
Operating Costs and Taxes for the Project or part thereof, and
Tenant’s Proportionate Share may vary depending upon the type
of expense being allocated. In each instance, the fraction that
represents Tenant’s Proportionate Share has as the
denominator, the number of square feet in the applicable area that
is either (a) deriving a benefit of the applicable Operating
Cost or (b) within the tax parcel subject to the
Taxes.
“ Tenant’s
Share of Increased Operating Costs ” shall be the amount
of (i) the Operating Costs for the Operating Year in question
less the Base Operating Costs multiplied by (ii) the
Tenant’s Proportionate Share. Notwithstanding the actual
Operating Costs, Tenant’s Share of Increased Operating Costs
will not increase by more than [***] percent ([***]%) from one
calendar year to the next calendar year.
“ Tenant’s
Share of Increased Taxes ” shall be the amount of
(i) the Taxes for the Tax Year in question that are assessed
against the Project less the Base Taxes multiplied by (ii) the
Tenant’s Proportionate Share.
“ Term ”
means the Original Term plus any exercised renewals
thereof.
7
1.2. For a definition of the
following terms, see the applicable Section of the Lease as set
forth below:
|
|
|
| “ADA” |
|
Section
6.2(a) |
| “Additional Rent” |
|
Section
4.2 |
| “Alterations” |
|
Section
10.2 |
| “Base Rent” |
|
Section
4.1(a) |
| “Condemnation” |
|
Section
13.1 |
| “Event of Default” |
|
Section
17.1 |
| “Existing Lease” |
|
Section
3.1 |
| “Hazardous Materials” |
|
Section
6.10 |
| “Landlord’s Offer Notice” |
|
Section
2.3 |
| “Landlord’s Work” |
|
Section
10.1(a) |
| “Liquidated Damages” |
|
Section
17.4(a) |
| “Market Rent” |
|
Section
4.1(c) |
| “Mortgage” |
|
Section
16.1.1 |
| “Mortgagee” |
|
Section
16.1.1 |
| “Normal business hours” |
|
Section
8(a) |
| “Non-Related Entity Transfer” |
|
Section
14.1 |
| “Offer Space” |
|
Section
2.3 |
| “Original Term” |
|
Section
3.1 |
| “Outside Negotiation Date” |
|
Section
4.1(c) |
| “Overflo Alterations” |
|
Section
6.6.4 |
| “Parking Rent” |
|
Section
6.6.3(b) |
| “Phase I Premises” |
|
Section
2.1 |
| “Phase II Premises” |
|
Section
2.1 |
| “Phase III Premises” |
|
Section
2.1 |
| “Phase I Rent Commencement Date” |
|
Section
3.1 |
| “Phase II Rent Commencement
Date” |
|
Section
3.1 |
| “Phase III Rent Commencement
Date” |
|
Section
3.1 |
| “Project Operating Records” |
|
Section
4.3.1 |
| “Radius Requirement” |
|
Section
6.6.3(b) |
| “Renewal Term” |
|
Section
3.3 |
| “Required Parking Spaces” |
|
Section
6.1 |
| “Rules and Regulations” |
|
Section
15 |
| “Schedule of Deliveries” |
|
Section
10.1(a)(v) |
| “SNDA” |
|
Section
16.1.1 |
| “Superior Leases” |
|
Section
16.4 |
| “Tenant Costs” |
|
Section
10.1(a)(ii) |
| “Tenant’s Program” |
|
Section
6.1 |
| “Tenant’s Response Notice” |
|
Section
2.3 |
| “Tenant’s Work” |
|
Section
10.1(a)(ii) |
| “Termination Damages” |
|
Section
17.4(a) |
| “Termination Date” |
|
Section
3.1 |
| “Transfer” |
|
Section
14.1 |
| “Under Armour Parking Area” |
|
Section
6.6.3(b) |
8
2. PREMISES; RENTABLE
AREA; RIGHT OF FIRST OFFER.
2.1. Premises . The
Landlord hereby leases to the Tenant, and the Tenant hereby leases
from the Landlord, the Premises, together with the right to use, in
common with others, the Common Areas. Landlord and Tenant
acknowledge that the Premises will be delivered in three
(3) phases as follows:
|
|
|
| “
Phase I Premises ”: |
|
67,092 r.s.f. of office and showroom
space
April 30, 2008 (estimated
delivery)
|
|
|
| “
Phase II Premises ”: |
|
40,335 r.s.f. of office space
August 31, 2008 (estimated
delivery)
|
|
|
| “
Phase III Premises ”: |
|
30,771 r.s.f. of office, showroom and
retail space
November 30, 2008 (estimated
delivery)
|
2.2. Rentable Area .
The rentable area of the Premises shall be reasonably determined by
the Landlord’s architect and shall be equal to the usable
square feet of the Premises, determined in accordance with
Baltimore Building Owners and Managers Association, International
“Standard Method for Measuring Floor Area in Office
Buildings.” The Tenant shall have the right to verify the
usable square feet of the Premises at the Tenant’s sole cost.
The area as so determined is herein called the “Rentable
Area”. Once the Rentable Area of the Premises has been
verified and jointly agreed to, the parties shall enter into a
confirmation agreement setting forth (i) the area of the
Premises, (ii) the calculation of the Base Rent and
(iii) the Tenants’ Proportionate Share.
Landlord and Tenant hereby
agree that the no rentable area shall be attributed to the Bridge
and no Rent shall be payable in connection with the
Bridge.
2.3. Right of First
Offer . Provided that both on the date of Tenant’s
exercise of its option in regard hereto, and on the date upon which
such space is to be occupied by Tenant hereunder, (i) the
Lease is in full force and effect, (ii) Tenant is not then in
material default under the Lease after applicable notice and cure
periods have expired, Tenant shall have the right, upon the
conditions, and subject to the terms, set forth herein, to lease
additional office space which may be available for leasing (as
hereinafter defined) at the Project (the “ Offer Space
”). If any such Offer Space is available for leasing, the
Landlord shall provide the Tenant with written notice (the “
Landlord’s Offer Notice ”), which notice shall
describe the Offer Space expected to become available for occupancy
by Tenant, the time of its availability and all of the terms,
covenants, and conditions of such lease of the Offer Space,
including the amount of the rent for such Offer Space.
In the event that Tenant
desires to lease any such Offer Space, Tenant shall notify Landlord
in writing within fifteen (15) business days following its
receipt of the Landlord’s Offer Notice of Tenant’s
desire to lease such Offer Space (the “ Tenant’s
Response Notice ”). Time shall be of the essence with
respect to the giving of any Tenant’s Response Notice.
Tenant’s failure to timely deliver a Tenant’s Response
Notice to Landlord shall be deemed a decision not to exercise, and
also to waive, Tenant’s right to exercise such option with
respect to such Offer Space but only for the occasion identified in
such Landlord’s Offer Notice. Within ten (10) days of
Landlord’s receipt of Tenant’s written notice, Landlord
shall deliver to Tenant written notice confirming receipt of
Tenant’s notice with respect to such Offer Space.
If, pursuant to the
Tenant’s Response Notice, Tenant elects to lease the Offer
Space, then and in such event, Landlord and Tenant shall enter into
an amendment to this Lease, within thirty (30) days following
the date of the Tenant’s Response Notice for the lease of
such Offer Space. This amendment,
9
among other terms, covenants and
conditions therein contained, shall provide for the Offer Space to
be incorporated into the Premises and the Base Rent (which shall be
at the rate set forth in Landlord’s Offer Notice) and
Tenant’s Proportionate Share shall be modified to reflect the
inclusion of the Offer Space. In addition, Tenant’s options
to renew the Term of this Lease shall apply to the Offer
Space.
If Landlord is unable to give
possession of any Offer Space to Tenant because of the holding over
or retention of possession thereof by any tenant, subtenant or
other occupant or for any other reason, Landlord shall not be
subject to any liability for failure to give possession and the
validity of this Lease shall not be impaired under such
circumstances, but in no event shall Tenant be obligated to pay
rent on the Offer Space until the Landlord delivers possession
thereof. The provisions of this paragraph shall survive the entry
into by Landlord and Tenant of an amendment to the Lease which
pertains to the subject portion of the Offer Space.
As used herein, the term
“available for leasing” shall mean office space which
is under development by Landlord at the Project and is or is
reasonably expected to be available for leasing to tenants. In no
event will Landlord provide an Offer Notice earlier than eight
(8) months prior to the expected date of delivery of the
certificate of occupancy for any Offer Space, except that in the
case of a newly developed building at the Project which constitutes
the Offer Space, in no event will Landlord provide an Offer Notice
earlier than twenty-four (24) months prior to the expected
date of the certificate of occupancy for such Offer Space. If
Tenant fails to lease the Offer Space and Landlord leases such
Offer Space to another tenant(s), such space shall be
“available for leasing” if such space (i) has or
is reasonably expected to become vacant, and (ii) is or is
reasonably expected to be available for leasing to
tenants.
3. TERM.
3.1. Original Term; Rent
Commencement Date . This Lease shall be for a term (the “
Original Term ”) commencing on the Effective Date and
ending at 11:59 p.m. on the sixth (6th) anniversary of the
last day of the month in which the Phase III Rent Commencement Date
(as defined below) shall occur (which date is hereinafter referred
to as the “ Termination Date ”).
Phase I Premises :
Monthly payments of Base Rent, Additional Rent, and Tenant
Improvement Rent for the Phase I Premises and all other charges
under this Lease shall commence as to the Phase I Premises on the
“ Phase I Rent Commencement Date ” which shall
be the earlier to occur of: (i) thirty (30) days
following the date upon which the Landlord’s Work to the
Phase I Premises is Substantially Complete or (ii) the date
upon which the Tenant actually moves into occupancy of the Phase I
Premises and conducts business therein.
Phase II Premises :
Monthly payments of Base Rent, Additional Rent, and Tenant
Improvement Rent for the Phase II Premises and all other charges
under this Lease shall commence as to the Phase II Premises on the
“ Phase II Rent Commencement Date ” which shall
be the earlier to occur of: (i) thirty (30) days
following the date upon which the Landlord’s Work to the
Phase II Premises is Substantially Complete, or (ii) the date
upon which the Tenant actually moves into occupancy of the Phase II
Premises and conducts business therein.
Phase III Premises :
Monthly payments of Base Rent, Additional Rent and Tenant
Improvement Rent for the Phase III Premises and all other charges
under this Lease shall commence as to the Phase III Premises on the
“ Phase III Rent Commencement Date ” which shall
be the earlier to occur of: (i) thirty (30) days
following the date upon which the Landlord’s Work to the
Phase III Premises is Substantially
10
Complete or (ii) the date upon
which the Tenant actually moves into occupancy of the Phase III
Premises and conducts business therein.
Landlord and Tenant
acknowledge that Tenant currently leases other space at the project
known as Tide Point which is located adjacent to the Project
pursuant to that certain Office Lease dated March 29, 2002, as
amended by and between Hull Point LLC and Tenant (the “
Existing Lease ”). At Tenant’s written request,
the provisions addressing the term and/or renewal options under the
Existing Lease may be amended to coincide with the term and renewal
options under this Lease.
3.2. Confirmation of
Commencement and Termination . After (a) each of the Phase
I Rent Commencement Date, Phase II Rent Commencement Date or Phase
III Rent Commencement Date or (b) the expiration of the Term
or any earlier termination of this Lease by action of law or in any
other manner, the Landlord shall confirm in writing by instrument
in recordable form that, respectively, such rent commencement or
such termination has occurred, setting forth therein, respectively,
the Phase I Rent Commencement Date, the Phase II Rent Commencement
Date, the Phase III Rent Commencement Date, and the Termination
Date. This written confirmation may be combined with the
confirmation of rentable area required by Section 2.2
hereof.
3.3. Renewal . Tenant
shall have the option to renew the Term of this Lease for two
(2) periods of two (2) years each (each, a “
Renewal Term ”). Tenant shall exercise each option by
providing written notice to Landlord of its election to exercise
such option no later than eighteen (18) months prior to the
expiration of the Term or the Renewal Term, as applicable,
provided, however, that Tenant’s option to renew shall be
subject to the condition that no default shall have occurred and be
continuing after applicable notice and cure periods have expired as
of the date of Tenant’s exercise of such option or as of the
date of commencement of the Renewal Term. Tenant shall have no
other right to renew this Lease after the second Renewal
Term.
Except as otherwise expressly
provided in this Lease, all terms, covenants, and conditions of
this Lease shall remain in full force and effect during each
Renewal Term, except that the Rent applicable to each Renewal Term
shall be as set forth in Section 4.1(b). In no event shall the
Rent for each Renewal Term be less than the Rent in effect at the
expiration of the immediately preceding Term or Renewal Term, as
applicable, of the Lease. If the Tenant fails to give notice
exercising such foregoing option by the date required herein, or if
at the time Tenant exercises such option or at commencement of the
applicable Renewal Term the Tenant is in default beyond applicable
notice and cure periods of any term of this Lease, or if this Lease
is assigned by Tenant or the Premises is sublet in whole or part in
violation of Section 14, then Tenant’s rights and
options to renew shall be automatically terminated and of no
further force or effect.
3.4. Surrender . The
Tenant, at its expense at the expiration of the Term or any earlier
termination of this Lease, shall (a) promptly surrender to the
Landlord possession of the Premises (including any fixtures or
other improvements which, under Section 10, are owned by the
Landlord) in good order and repair (ordinary wear and tear
excepted) and broom clean, (b) remove therefrom all signs,
goods, effects, machinery, fixtures and equipment used in
conducting the Tenant’s trade or business which are neither
part of the Building Service Equipment nor owned by the Landlord,
and (c) repair any damage caused by such removal.
3.5. Holding Over . If
the Tenant continues to occupy the Premises after the expiration of
the Term or any earlier termination of this Lease after obtaining
the Landlord’s express, written consent thereto,
then:
11
(a) such occupancy (unless
the parties hereto otherwise agree in writing) shall be deemed to
be under a month-to-month tenancy, which shall continue until
either party hereto notifies the other in writing, at least two
months before the end of any calendar month, that the notifying
party elects to terminate such tenancy at the end of such calendar
month, in which event such tenancy shall so terminate;
(b) anything in this section
to the contrary notwithstanding, the Rent payable for each such
monthly period shall equal the sum of (a) one-twelfth
(1/12) of that amount which is equal to 150% of the Base Rent
for the Lease Year during which such expiration of the Term or
termination of this Lease occurs, plus (b) the Additional Rent
payable under subsection 4.2; and
(c) except as provided
herein, such month-to-month tenancy shall be on the same terms and
subject to the same conditions as those set forth in this Lease;
provided, however, that if the Landlord gives the Tenant, at least
one month before the end of any calendar month during such
month-to-month tenancy, written notice that such terms and
conditions (including any thereof relating to the amount and
payment of Rent) shall, after such month, be modified in any manner
specified in such notice, then such tenancy shall, after such
month, be upon the said terms and subject to the said conditions,
as so modified.
4. RENT.
As Rent for the Premises, the
Tenant shall pay to the Landlord all of the following:
4.1. Base Rent
.
(a) An annual rent (the
“ Base Rent ”) for the Lease Year shall be
determined by multiplying the actual rentable square footage as
determined in accordance with Section 2.2 hereof by the
“Per Square Foot” as stated below applicable to the
particular Lease Year. The following chart illustrates Base Rent
based on a rentable area of 138,198 square feet, but shall be
adjusted based on the actual rentable square footage of the
Premises:
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|
|
|
|
|
|
|
Lease Year
|
|
Per Square
Foot |
|
Monthly |
|
Annual |
|
1
|
|
$ |
[***] |
|
$ |
[***] |
|
$ |
[***] |
|
2
|
|
$ |
[***] |
|
$ |
[***] |
|
$ |
[***] |
|
3
|
|
$ |
[***] |
|
$ |
[***] |
|
$ |
[***] |
|
4
|
|
$ |
[***] |
|
$ |
[***] |
|
$ |
[***] |
|
5
|
|
$ |
[***] |
|
$ |
[***] |
|
$ |
[***] |
|
6
|
|
$ |
[***] |
|
$ |
[***] |
|
$ |
[***] |
Prior to commencement of the
first Lease Year, the Base Rent shall be calculated by multiplying
the actual rentable square footage of the Premises by $[***] and
dividing the product by twelve (12), such Base Rent to be paid
monthly. Such amount shall be adjusted as Substantial Completion of
the Phase II Premises and the Phase III Premises occurs.
(b) The Base Rent for the
Renewal Term shall be the Market Rent as described in
Section 4.1(c) below.
(c) The “ Market
Rent ” shall be the prevailing market rate of rent and
all charges for comparable space at the end of the Term as
increased in accordance with market rate annual escalations. If
Tenant exercises its option to renew hereunder, Tenant and Landlord
shall make a good faith effort to agree on the Market Rent on or
before a date (the “ Outside Negotiation Date ”)
which is no later than twelve (12) months prior to the
expiration of the Term, and prior to implementing the procedures
set forth
12
below if the parties are unable to
agree. If Landlord and Tenant are unable to agree upon the Market
Rent by the Outside Negotiation Date, then Landlord and Tenant
shall determine the Market Rent in accordance with the appraisal
procedure set forth herein. Within ten (10) days after the
Outside Negotiation Date, the parties shall appoint an broker who
shall be mutually agreeable to both Landlord and Tenant, shall have
at least ten (10) years’ experience as a broker of
commercial leasehold estates, and shall be knowledgeable in office
rentals in the Baltimore, Maryland market. If the parties are
unable to agree on a broker within such ten (10) day period,
then each party, within five (5) days after the expiration of
such ten (10) day period, shall appoint a broker (with the
same qualifications) and the two (2) brokers (or the one
broker if either Landlord or Tenant fails timely to appoint a
broker) shall together appoint a third broker with the same
qualifications. The broker or brokers so appointed then shall
determine, within sixty (60) days after the appointment of
such broker or brokers, the then Market Rent for the Premises.
Among the factors to be considered by the broker(s) in determining
the fair market base rent for the Premises shall be those factors
set out below. The figure arrived at by the broker (or the average
of the figures arrived at by the three brokers, if applicable)
shall be used as the Market Rent for such renewal term. If the
three broker method is chosen, then if any broker’s estimate
of fair Market Rent is either (x) less than ninety percent
(90%) of the average figure or (y) more than one hundred
ten percent (110%) of such average, then the fair market rent
will be either (1) the average of the remaining two
(2) appraisal figures falling within such a range of
percentages, (2) the remaining appraisal that is within such
range of percentages or (3) if none of the figures are within
such range, the average of the three (3) appraisals. Landlord
and Tenant shall each bear the cost of its broker and shall share
equally the cost of the third broker.
In determining the Market
Rent, the parties hereto and such brokers shall be guided by the
following principles: the Market Rent shall be determined by
reference to newly finished built-out office space in office
buildings in Baltimore, Maryland or neighborhoods in the Baltimore,
Maryland metropolitan area most comparable to the quality,
location, amenities, stature, reputation, visibility and services
of the Building. The Market Rent shall take into account the fact
that there are no new tenant improvements to be constructed by
Landlord nor other lease-up costs (except broker commissions, if
any) and shall provide for updating the Base Year Operating Costs
to the first year of each renewal term, if such factors are
considered market concessions at such time. The valuation shall be
conducted in accordance with the provisions of this Section and, to
the extent not inconsistent herewith, in accordance with the then
prevailing rules of the American Arbitration Association in
Maryland (or any successor thereto). The final determination of
such brokers shall be in writing and shall be binding and
conclusive on the parties, each of whom shall receive counterpart
copies thereof. In rendering such decision the brokers shall not
add to, subtract from, or otherwise modify the provisions of this
Lease. In determining the Market Rent, the brokers shall consider
all the items set forth above for consideration in determining the
Market Rent. Instructions to such effect shall be given to the
brokers.
Notwithstanding the above,
Tenant shall have the right to rescind its renewal option at any
time within ten (10) calendar days after a final written
determination is made of the Market Rent in accordance with the
above procedures.
4.2. Additional Rent .
Additional rent (“ Additional Rent ”) shall
include any and all charges or other amounts which the Tenant is
obligated to pay to the Landlord under this Lease, other than the
Base Rent.
4.3. Operating Costs
.
4.3.1. Computation .
Within one hundred twenty (120) days after the end of each
calendar year during the Term, the Landlord shall compute the total
of the Operating Costs incurred for the Building during such
calendar year, and the Landlord shall allocate them to each
separate rentable space within the
13
Building in proportion to the respective
operating costs percentages assigned to such spaces; provided that
anything in this subsection 4.3 to the contrary notwithstanding,
wherever the Tenant and/or any other tenant of space within the
Building has agreed in its lease or otherwise to provide any item
of such services partially or entirely at its own expense, or
wherever in the Landlord’s reasonable judgment any such
significant item of expense is not incurred with respect to or for
the benefit of all of the net rentable space within the Building,
in allocating the Operating Costs pursuant to this subsection, the
Landlord shall make an appropriate adjustment, using generally
accepted accounting principles and/or sound commercial office lease
management practices so as to avoid allocating to the Tenant or to
such other tenant (as the case may be) those Operating Costs
covering such services already being provided by the Tenant or by
such other tenant at its own expense, or to avoid allocating to all
of the net rentable space within the Project those Operating Costs
incurred only with respect to a portion thereof, as aforesaid. The
Tenant shall have the right to review the books and records of the
Landlord (collectively, the “ Project Operating
Records ”) with respect to the calculation of Operating
Costs for the prior Lease Year at the Landlord’s office
during normal business hours, at the Tenant’s sole expense,
provided (i) the Tenant provides at least five
(5) business days’ advance written notice to the
Landlord of its desire to inspect the Project Operating Records,
and (ii) such request is made within one hundred twenty
(120) days after the Operating Costs Statement is delivered by
the Landlord to the Tenant.
If, upon Tenant’s
review of the Project Operating Records, it is ultimately
determined that the Operating Costs were overstated by more than
five percent (5%), then the reasonable cost of the review shall be
paid for by Landlord. If during Tenant’s review of the
Project Operating Records an error is uncovered, then Tenant may
review the Project Operating Records relating to Operating Costs
for the prior calendar year, and if the same error was made in such
prior year, then the Operating Costs for such prior year shall be
recalculated for such year and any overpayment to Tenant determined
from the recalculation shall be paid to Tenant; provided, however,
that if Operating Costs for the prior year had previously been
reviewed by Tenant, no such second review shall be
permitted.
4.3.2. Payment as
Additional Rent . For each Operating Year, the Tenant shall pay
as Additional Rent to the Landlord, in the manner provided herein,
Tenant’s Share of Increased Operating Costs, subject to the
“cap” described in the Section 1.1 definition. The
Landlord shall send to the Tenant an annual statement setting forth
the Operating Costs for the applicable calendar year.
Tenant’s Share of Increased Operating Costs will not apply
until commencement of the second full Operating Year of the Term
unless an “unforeseen event” has occurred prior to such
second full Operating Year. For purposes of this
Section 4.3.2, an “unforeseen event” shall include
things such as an extraordinary increase in utility rates or
extreme maintenance costs due to inclement weather. In the case of
an unforeseen event that occurs prior to the commencement of the
second full Operating Year, Tenant shall be obligated to pay
Tenant’s Share of Increased Operating Costs prior to the
second full Operating Year as reasonably determined by
Landlord.
4.3.3. Proration . If
only part of any calendar year falls within the Term, the amount
computed as Tenant’s Share of Increased Operating Costs for
such calendar year under this subsection shall be prorated in
proportion to the portion of such calendar year falling within the
Term (but the expiration of the Term before the end of a calendar
year shall not impair the Tenant’s obligation hereunder to
pay such prorated portion of Tenant’s Share of Increased
Operating Costs for that portion of such calendar year falling
within the Term, which amount shall be paid on demand).
4.3.4. Landlord’s
Right to Estimate . Anything in this subsection to the contrary
notwithstanding, the Landlord, at its reasonable discretion, may
(a) make from time to time during the Term a reasonable
estimate of the Additional Rent which may become due under this
subsection for any calendar year, (b) require the Tenant to
pay to the Landlord for each calendar month during such year one
twelfth (1/12) of such Additional Rent, at the time and in the
manner that the Tenant is required hereunder
14
to pay the monthly installment of the
Base Rent for such month, and (c) increase or decrease from
time to time during such calendar year the amount initially so
estimated for such calendar year, all by giving the Tenant written
notice thereof, accompanied by a schedule setting forth in
reasonable detail the expenses comprising the Operating Costs, as
so estimated. In such event, the Landlord shall cause the actual
amount of such Additional Rent to be computed and certified to the
Tenant within one hundred twenty (120) days after the end of
such calendar year. Any overpayment or deficiency in the
Tenant’s payment of Tenant’s Share of Increased
Operating Costs shall be adjusted between the Landlord and the
Tenant; the Tenant shall pay the Landlord or the Landlord shall
credit to the Tenant’s account (or, if such adjustment is at
the end of the Term, the Landlord shall pay to the Tenant), as the
case may be, within thirty (30) days after such notice to the
Tenant, such amount necessary to effect such adjustment. The
Landlord’s failure to provide such notice within the time
prescribed above shall not relieve the Tenant of any of its
obligations hereunder.
4.4. When Due and
Payable .
4.4.1. Base Rent . The
Base Rent for any Lease Year shall be due and payable in twelve
(12) consecutive, equal monthly installments, in advance, on
the first (1st) day of each calendar month during such Lease
Year. In addition, if the Phase I Rent Commencement Date, Phase II
Rent Commencement Date or Phase III Rent Commencement Date falls on
a day other than the first day of a calendar month, then the Base
Rent for the first month of the Term shall be prorated based on the
number of days remaining in that month and such amount shall be due
and payable on the applicable Phase I Rent Commencement Date, Phase
II Rent Commencement Date or Phase III Rent Commencement Date, as
applicable.
4.4.2. Additional Rent
. Any Additional Rent accruing to the Landlord under this Lease,
except as is otherwise set forth herein, shall be due and payable
when the installment of Base Rent next falling due after such
Additional Rent accrues and becomes due and payable, unless the
Landlord makes written demand upon the Tenant for payment thereof
at any earlier time, in which event such Additional Rent shall be
due and payable at such time.
4.4.3. No Set-Off; Late
Payment . Each such payment shall be made promptly when due,
without any deduction or setoff whatsoever, and without demand,
failing which the Tenant shall pay to the Landlord as Additional
Rent, after the fifth (5th) day after such payment remains due
but unpaid, a late charge equal to five percent (5%) of such
payment which remains due but unpaid. In addition, any payment that
is not paid by the tenth (10th) day after such payment is due
shall bear interest at the Default Rate. Any payment made by the
Tenant to the Landlord on account of Rent may be credited by the
Landlord to the payment of any Rent then past due before being
credited to Rent currently falling due. Any such payment which is
less than the amount of Rent then due shall constitute a payment
made on account thereof, the parties hereto hereby agreeing that
the Landlord’s acceptance of such payment (whether or not
with or accompanied by an endorsement or statement that such lesser
amount or the Landlord’s acceptance thereof constitutes
payment in full of the amount of Rent then due) shall not alter or
impair the Landlord’s rights hereunder to be paid all of such
amount then due, or in any other respect.
4.5. Where Payable .
The Tenant shall pay the Rent, in lawful currency of the United
States of America, to the Landlord by delivering or mailing it to
the Landlord’s address which is set forth in section 20, or
to such other address or in such other manner as the Landlord from
time to time specifies by written notice to the Tenant.
4.6. Tax on Lease . If
federal, state or local law now or hereafter imposes any tax,
assessment, levy or other charge directly or indirectly upon
(a) the Landlord with respect to this Lease or the value
thereof, (b) the Tenant’s use or occupancy of the
Premises, (c) the Base Rent, Additional Rent or any
15
other sum payable under this Lease, or
(d) this transaction, then the Tenant shall pay the amount
thereof as Additional Rent to the Landlord upon demand, unless the
Tenant is prohibited by law from doing so, in which event the
Landlord at its election may terminate this Lease by giving written
notice thereof to the Tenant. This provision shall not apply to
Taxes or to any form of charge or tax imposed in lieu of
Taxes.
5. TAXES.
5.1. Payment . For
each Tax Year, the Tenant shall pay to the Landlord, in the manner
provided herein, Tenant’s Share of Increased Taxes.
Tenant’s Share of Increased Taxes will not apply until the
commencement of the second full Tax Year unless an
“unforeseen event” has occurred prior to such second
full Tax Year. For purposes of this Section 5.1, an
“unforeseen event” shall include things such as an
increase in the rate of taxation or an increase in the assessment
beyond that first established to reflect the complete
rehabilitation of the Building and the occupancy of the Premises by
Tenant. In the case of an unforeseen event that occurs prior to the
commencement of the second full Tax Year, Tenant shall be obligated
to pay Tenant’s Share of Increased Taxes prior to the second
full Tax Year as reasonably determined by Landlord.
5.2. Proration . If
only part of any Tax Year falls within the Term, the amount
computed as Tenant’s Share of Increased Taxes for such Tax
Year under this subsection shall be prorated in proportion to the
portion of such Tax Year falling within the Term (but the
expiration of the Term before the end of a Tax Year shall not
impair the Tenant’s obligations hereunder to pay such
prorated portion of Tenant’s Share of Increased Taxes for
that portion of such Tax Year falling within the Term, which amount
shall be paid on demand).
5.3. Method of Payment
. Tenant’s Share of Increased Taxes shall be paid by the
Tenant, at the Landlord’s election (i) in advance, in
equal monthly installments in such amounts as are estimated and
billed for each Tax Year by the Landlord at the commencement of the
Term and at the beginning of each successive Tax Year during the
Term, each such installment being due on the first day of each
calendar month or (ii) in a lump sum, following the
Landlord’s receipt of the tax bill for the Tax Year in
question, and calculation of Tenant’s Share of Increased
Taxes with respect thereto. If the Landlord has elected that the
Tenant pay Tenant’s Share of Increased Taxes in installments,
in advance, then, at any time during a Tax Year, the Landlord may
re-estimate Tenant’s Share of Increased Taxes and thereafter
adjust the Tenant’s monthly installments payable during the
Tax Year to reflect more accurately Tenant’s Share of
Increased Taxes. Landlord shall provide Tenant with reasonable
explanation of the Landlord’s calculation of Tenant’s
Share of Increased Taxes including assumptions for the increase.
Within ninety (90) days after the Landlord’s receipt of
tax bills for each Tax Year, the Landlord will notify the Tenant of
the amount of Taxes for the Tax Year in question and the amount of
Tenant’s Share of Increased Taxes thereof. Any overpayment or
deficiency in the Tenant’s payment of Tenant’s Share of
Increased Taxes for each Tax Year shall be adjusted between the
Landlord and the Tenant; the Tenant shall pay the Landlord or the
Landlord shall credit to the Tenant’s account (or, if such
adjustment is at the end of the Term, the Landlord shall pay the
Tenant), as the case may be, within thirty (30) days after
such notice to the Tenant, such amount necessary to effect such
adjustment. The Landlord’s failure to provide such notice
within the time prescribed above shall not relieve the Tenant of
any of its obligations hereunder.
5.4. Taxes on Rent .
In addition to Tenant’s Share of Increased Taxes, the Tenant
shall pay to the appropriate agency any sales, excise and other tax
(not including, however, the Landlord’s income taxes) levied,
imposed or assessed by the State of Maryland or any political
subdivision thereof or other taxing authority upon any Rent payable
hereunder. The Tenant shall also pay, prior to the time the same
shall become delinquent or payable with penalty, all taxes imposed
on its inventory, furniture, trade
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fixtures, apparatus, equipment,
leasehold improvements installed by the Tenant or by the Landlord
on behalf of the Tenant and any other property of the
Tenant.
5.5. Tax
Reduction/Contest . Upon written request by Tenant given with
respect to any Tax Year during the Term and provided that Tenant is
leasing fifty percent (50%) or more of the Building, Landlord
shall (i) contest the tax assessment for such Tax Year or
(ii) apply for a rebate or a reduction in Taxes. Any rebate or
reduction in Taxes that are achieved by Landlord as a result of any
proceeding shall be applied proportionately as a credit and
adjustment to Tenant’s Share of Increased Taxes, after
deducting Landlord’s reasonable expenses including without
limitation, reasonable attorneys’ fees and disbursements in
connection with such proceeding. If Tenant is to receive such a
rebate, credit or reimbursement and such rebate, credit or
reimbursement exceeds Tenant’s payment obligation for
Tenant’s Share of Increased Taxes for such Tax Year, Tenant
shall be credited such savings against Tenant’s future
payments of Tenant’s Share of Increased Taxes for each Tax
Year thereafter until the amount of such savings is
exhausted.
5.6. Tax Credits .
Landlord agrees to apply for Enterprise Zone tax credits for the
Project. If the Project qualifies for such tax credits, such
credits will inure to Tenant’s benefit by virtue of lower
Taxes. In addition, if Landlord chooses to utilize tax increment
financing for the Project, Tenant shall not be responsible for any
special taxes or taxes payable in connection with a special taxing
district.
6. USE OF
PREMISES.
6.1. Nature of Use .
The Tenant shall use the Premises for general office purposes, a
showroom, a retail store for the purpose of offering for sale Under
Armour products, and any other uses consistent with Tenant’s
business operations set forth below, but for no other purpose
without Landlord’s prior written consent.
The parties acknowledge that
Landlord has received approval from the Board of Municipal and
Zoning Appeals to use the Premises for office, showroom and retail
uses. Tenant has advised Landlord that Tenant intends to use the
Premises as follows: 90,294 rentable square feet of office space,
40,904 square feet of showroom space and 7,000 rentable square feet
of retail space (“ Tenant’s Program ”).
Based on Tenant’s Program, Landlord has received approval for
319 parking spaces at the Project for Tenant’s use (the
“ Required Parking Spaces ”). Tenant shall have
the right to change Tenant’s Program during the Term, but
Tenant shall be responsible, at its sole cost and expense, for
securing any permits, approvals (zoning or otherwise) and/or
additional parking spaces (over and above the Required Parking
Spaces) resulting from such change in Tenant’s Program.
Landlord agrees to cooperate with Tenant, at no expense to the
Landlord, in securing any such permits and/or parking spaces,
provided that any change to Tenant’s Program does not
conflict with such of Landlord’s plans for the Project as
disclosed and described to Tenant.
6.2. Compliance with Law
and Covenants .
(a) The Tenant, throughout
the Term and at its sole expense, in its use and possession of the
Premises, shall:
(i) comply promptly and fully
with all Legal Requirements applicable to the Premises;
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(ii) pay when due all
personal property taxes, income taxes, license fees and other taxes
assessed, levied or imposed upon the Tenant or any other person in
connection with the operation of Tenant’s business upon the
Premises or its use thereof in any other manner; and
(iii) not obstruct, annoy or
interfere with the rights of other tenants.
(b) Notwithstanding the
provisions of Section 6.2(a), Tenant, at its own cost and
expense, may contest, in any manner permitted by law (including
appeals to a court, or governmental department or authority having
jurisdiction in the matter), the validity or the enforcement of any
Legal Requirements with which Tenant is required to comply pursuant
to this Lease, and may defer compliance therewith provided
that:
(i) such non-compliance shall
not have a material adverse affect on Landlord, any Mortgagee, the
Building, or the Project (by way of example, non-compliance
resulting in fines, revocation of any permits or certificates of
occupancy, civil or criminal prosecution, or which would subject
the Building to sale shall be deemed material for purposes of this
subsection);
(ii) Tenant shall indemnify
Landlord against any actual cost or any injury resulting from such
non-compliance; and
(iii) Tenant shall promptly,
reasonably diligently and continuously prosecute such
contest.
At Tenant’s request,
Landlord shall cooperate with Tenant and execute any documents or
pleadings required for such purpose, provided that Landlord shall
reasonably be satisfied that the facts set forth in any such
documents or pleadings are accurate.
6.3. Landlord’s
Obligation . Landlord represents and warrants that as of the
Phase III Rent Commencement Date, the Building and the Premises
shall be in compliance with all Legal Requirements. Thereafter,
except for Tenant obligations pursuant to Section 6.2 above,
Landlord shall comply with all Legal Requirements which are
applicable to any or all of the Building or the Common Areas, or
imposed by any policy of insurance regarding the Building, other
than Tenant’s policy covering its interest in the
Premises.
6.4. Mechanics’
Liens . Without limiting the generality of the foregoing
provisions of this section, the Tenant shall not create or permit
to be created, and if created shall discharge or have released, any
mechanics’ or materialmens’ lien arising while this
Lease is in effect and affecting any or all of the Premises, the
Building and/or the Project, and the Tenant shall not permit any
other matter or thing whereby the Landlord’s estate, right
and interest in any or all of the Premises, the Building and/or the
Project might be impaired. The Tenant shall defend, indemnify and
hold harmless the Landlord against and from any and all liability,
claim of liability or expense (including but not limited to that of
reasonable attorneys’ fees) incurred by the Landlord on
account of any such lien or claim.
Notwithstanding the foregoing
provision, Tenant shall not be responsible for any mechanics’
or materialmen’s lien arising from work that is the
responsibility of Landlord under this Lease or otherwise. The
Landlord shall discharge or have released any such mechanics’
or materialmen’s lien arising while this Lease is in effect
and affecting any or all of the Premises, the Building and/or the
Project, and the Landlord shall not permit any other matter or
thing whereby the Tenant’s estate, right and interest in any
or all of the Premises, the Building and/or the Project might be
impaired. The Landlord shall defend, indemnify and hold harmless
the Tenant against and from any and all liability, claim of
liability or
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expense (including but not limited to
that of reasonable attorneys’ fees) incurred by the Tenant on
account of any such lien or claim.
6.5. Signs . Landlord
and Tenant shall work together in good faith to design signage and
branding for the Building and Bridge. All costs for design and
installation of signage, branding and related lighting (and all
permits required to be obtained by Tenant related thereto) shall be
at Tenant’s sole cost and expense and subject to
Landlord’s prior written consent. Tenant shall also pay all
costs of de-installation of such signs at the expiration or earlier
termination of the Lease and for any repairs to the Building,
Bridge and Project after such de-installation.
6.6. License
.
6.6.1. Grant of
License . The Landlord hereby grants to the Tenant a
non-exclusive license to use (and to permit its officers,
directors, agents, employees and invitees to use), in the course of
conducting business at the Premises, the Common Areas. Landlord
will maintain in good order and condition the Common Areas and will
perform such repairs and maintenance as may be required.
6.6.2. Non-Exclusive
License . Such license shall be exercised in common with the
exercise thereof by the Landlord, the other tenants or occupants of
the Project, and their respective officers, directors, agents,
employees and invitees.
6.6.3. Parking Areas;
Changes .
(a) Subject to compliance
with the Radius Requirement and providing the Required Parking
Spaces, the Landlord reserves the right to change the entrances,
exits, traffic lanes, boundaries and locations of the Parking
Areas. The Landlord reserves the right to designate for the
specific account of the Tenant, and/or of other tenants of the
Project, specific parking areas or spaces constructed around,
within or under the Project. All Parking Areas and facilities which
may be furnished by the Landlord in or near the Project, including
any employee parking areas, truckways, loading docks, pedestrian
sidewalks and ramps, landscaped areas and other areas and
improvements which may be provided by the Landlord for the
Tenant’s exclusive use or for general use, in common with
other tenants, their officers, agents, employees and visitors,
shall at all times be subject to the Landlord’s exclusive
control and management, and the Landlord shall have the right from
time to time to establish, modify and enforce reasonable rules and
regulations with respect thereto. The Landlord shall have the right
to (i) police the Common Areas, (ii) establish and from
time to time to change the level of parking surfaces,
(iii) close all or any portion of the Common Areas to such
extent as, in the opinion of the Landlord’s counsel, may be
legally sufficient to prevent a dedication thereof or the accrual
of any rights to any person or to the public therein,
(iv) close temporarily all or any portion of the Common Areas,
(v) discourage non-tenant parking, and (vi) do and
perform such other acts in and to the Common Areas as, in the use
of good business judgment, the Landlord determines to be advisable
with a view to the improvement of the convenience and use thereof
by tenants, their officers, agents, employees and visitors. The
Tenant shall cause its employees to park their automobiles only in
the Under Armour Parking Area (as defined below) or in such
relocated Parking Area as Landlord from time to time may designate
by written notice to the Tenant as provided in
Section 6.6.3(b) below, and the Tenant shall not use or permit
the use of any of the Common Areas in any manner which will
obstruct the driveways or throughways serving the Parking Areas or
any other portion of the Common Areas allocated for use of
others.
(b) Upon completion of the
Phase I Premises, Landlord shall provide Tenant with forty
(40) of the Required Parking Spaces. Upon completion of the
Phase II Premises, Landlord shall provide Tenant with an additional
one hundred (100) of the Required Parking Spaces. Upon
completion of the Phase III Premises, Landlord shall provide Tenant
with the remainder of the Required Parking Spaces.
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The Required Parking Spaces shall
initially be located in the Parking Areas shown on Exhibit F
(the “ Under Armour Parking Area ”), and
Tenant shall have exclusive use of the Required Parking Spaces in
the Under Armour Parking Area for its employees and visitors.
Landlord shall have the right to relocate all or any portion of the
Under Armour Parking Area during the Term, provided that Landlord
delivers at least five (5) days prior written notice to Tenant
and provided further that the relocated Parking Area shall at all
times be located within 1,000 feet of any portion of the Premises
(the “ Radius Requirement ”). Landlord shall
designate exclusive parking spaces for Tenant’s employees
within such relocated Parking Area. Tenant agrees to pay to
Landlord $[***] per actual parking space provided to Tenant, per
month (collectively, the “ Parking Rent ”). The
Parking Rent shall escalate by [***] percent ([***]%) annually
commencing with the second Lease Year [***]
The Parking Rent shall be deemed
Additional Rent and payable in accordance with Section 4.4.2.
At Landlord’s request, Tenant shall provide license plate
numbers for its employees and otherwise cooperate with
Landlord’s management of the Parking Areas, which may include
attended parking service. Except as provided above, all operating
costs and expenses, including Taxes, incurred in connection with
the Parking Areas shall be excluded from Operating Costs.
Notwithstanding the foregoing, Tenant acknowledges and agrees that
the church members from the Christ United Church of Christ at 1308
Beason Street located adjacent to the Project may park in the
surface parking spaces at the Project in the evenings during the
week (i.e. 6:00 p.m. or later, but not beyond 2:00 a.m. the next
morning) and on the weekends (until 2:00 a.m. Monday morning),
provided that Landlord will be responsible for policing and
enforcing such limited usage rights.
6.6.4. Alterations .
The Landlord reserves the right at any time and from time to time
(i) to change or alter the location, layout, nature or
arrangement of the Common Areas or any portion thereof, including
but not limited to the arrangement and/or location of entrances,
passageways, doors, corridors, stairs, lavatories, elevators,
Parking Areas, and other public areas of the Building (collectively
referred to herein as the “ Overflo Alterations
”), and (ii) to construct additional improvements on the
Project and make alterations thereof or additions thereto and build
additional stories on or in any such buildings adjoining the same;
provided, however, that no such change or alteration shall deprive
the Tenant of access to the Premises. To the extent that any
Overflo Alteration materially impacts Tenant’s right to use
the Premises as contemplated in this Lease, Tenant shall have the
right to review and approve such Overflo Alteration, such approval
not to be unreasonably withheld. The alterations made in accordance
with this Section shall not be included in Operating Costs. Tenant
hereby agrees that any future subdivision of the Project, so as to
create two or more separate subdivided lots within the Project,
shall not be deemed an Overflo Alteration, and Tenant, therefore,
shall have no approval rights over any such future subdivision;
provided, however, that such waiver does not apply to any
improvements made or to be made to the subdivided lots that will
conflict with the terms of this Lease.
6.6.5. Use of Common
Areas .
(a) The Landlord shall at all
times have full and exclusive control, management and direction of
the Common Areas.
(b) The Tenant shall maintain
in a neat and clean condition any refuse collection area within the
Premises. Tenant shall not place or maintain anywhere within the
Project, other than within the area
20
which may be designated by Landlord from
time to time as such refuse collection area, any trash, garbage or
other items, except as may otherwise be expressly permitted by this
Lease.
6.7. Liability of
Landlord . Except as to extent covered by insurance that
Landlord is required to maintain in accordance with this Lease, the
Landlord and its agents and employees shall not be liable to the
Tenant or any other person whatsoever (a) for any injury to
person or damage to the Project caused by any defect in or failure
of equipment, pipes, wiring or broken glass, or the backing up of
any drains, or by gas, water, steam, electricity or oil leaking,
escapin
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