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Sample Business ContractsHome: Sample Business Contracts:
MARYLAND FULL-SERVICE OFFICE LEASE
HARBORPLACE TOWER
by and between
BALTIMORE CENTER ASSOCIATES LIMITED PARTNERSHIP, Landlord
by ROUSE OFFICE MANAGEMENT, INC. Managing Agent,
and
EARTHSHELL CORPORATION, Tenant
<PAGE>
Table of Contents
<CAPTION>
1. SUMMARY OF TERMS ......................................... 1
2. DEFINITIONS .............................................. 3
3. LEASED PREMISES: MEASUREMENT ............................. 4
4. TERM AND COMMENCEMENT OF TERM ............................ 4
4.1 TERM ................................................ 4
4.2. READY FOR OCCUPANCY ................................. 5
4.3. OPTION TO RENEW ..................................... 5
5. TENANT IMPROVEMENTS AND ACCEPTANCE OF PREMISES............ 6
5.1. TENANT IMPROVEMENTS ................................. 6
5.2. ACCEPTANCE OF PREMISES .............................. 6
6. RENT ..................................................... 7
6.1. ANNUAL BASIC RENT ................................... 7
6.2. INTENTIONALLY OMITTED ............................... 7
6.3. ADDITIONAL RENT ..................................... 7
6.4. ADVANCE RENT AND SECURITY DEPOSIT ................... 7
6.5. LATE CHARGE ......................................... 8
7. OPERATING COST ESCALATIONS ............................... 8
7.1. DEFINITIONS ......................................... 8
7.2. PAYMENT OF OPERATING COST ESCALATION ................ 13
8. USE, CARE AND REPAIR OF PREMISES BY TENANT ............... 14
8.1. PERMITTED USES ...................................... 14
8.2. CARE OF PREMISES .................................... 14
8.3. HAZARDOUS SUBSTANCES ................................ 15
8.4. COMPLIANCE WITH LAWS ................................ 16
9. RULES AND REGULATIONS .................................... 16
10. COMMON AREA .............................................. 16
10.1. DEFINITION OF COMMON AREA .......................... 16
10.2. USE OF COMMON AREA ................................. 16
10.3. ALTERATIONS TO THE COMMON AREA ..................... 17
10.4. MAINTENANCE ........................................ 17
11. SERVICES AND UTILITIES ................................... 17
12. ELECTRIC CURRENT ......................................... 18
13. LOSS, DAMAGE AND INJURY .................................. 19
14. REPAIRS BY LANDLORD ...................................... 19
15. ALTERATIONS, TITLE AND PERSONAL PROPERTY ................. 20
15.1. ALTERATIONS ........................................ 20
15.2. TITLE .............................................. 21
15.3. TENANT'S PERSONAL PROPERTY ......................... 21
16. INSURANCE ................................................ 21
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<CAPTION>
16.1. TENANT'S INSURANCE ................................ 21
16.2. TENANT'S FAILURE TO INSURE ........................ 21
16.3. COMPLIANCE WITH POLICIES .......................... 22
16.4. WAIVER OF RIGHT OF RECOVERY ....................... 23
16.5. LANDLORD'S INSURANCE .............................. 23
17. DAMAGE AND DESTRUCTION ................................. 23
17.1. LANDLORD'S OBLIGATION TO REPAIR AND RECONSTRUCT.... 23
17.2. TERMINATION OF LEASE............................... 24
17.3. DEMOLITION OF THE BUILDING ........................ 24
17.4. INSURANCE PROCEEDS ................................ 24
18. CONDEMNATION ........................................... 24
18.1 TERMINATION ....................................... 24
18.2 RIGHTS TO AWARD.................................... 25
19. BANKRUPTCY ............................................. 26
19.1. EVENT OF BANKRUPTCY ............................... 25
19.2. ASSUMPTION BY TRUSTEE ............................. 26
19.3 TENANT'S GUARANTOR'S BANKRUPTCY ................... 26
20. DEFAULT PROVISIONS AND REMEDIES ........................ 26
20.1. EVENTS OF DEFAULT ................................. 26
20.2. REMEDIES .......................................... 27
20.3. DAMAGES............................................ 28
20.4. NO WAIVER.......................................... 29
20.5. REMEDIES NOT EXCLUSIVE ............................ 29
20.6. PERSISTENT FAILURE TO PAY RENT .................... 30
21. INTENTIONALLY DELETED .................................. 30
22. INDEMNITY .............................................. 30
23. LIMITATION ON LANDLORD LIABILITY ....................... 30
24. LANDLORD OBLIGATIONS ................................... 31
25. ASSIGNMENT AND SUBLETTING .............................. 31
25.1. PROHIBITED WITHOUT LANDLORD'S CONSENT ............. 31
25.2. STOCK TRANSFER .................................... 32
25.3. RENTS FROM TRANSFER ............................... 32
25.4 PROCEDURE FOR OBTAINING LANDLORD'S CONSENT......... 32
26. HOLDING OVER ........................................... 33
27. SUBORDINATION AND ATTORNMENT ........................... 33
28. ESTOPPEL CERTIFICATES .................................. 34
29. PEACEFUL AND QUIET POSSESSION .......................... 34
30. LANDLORD'S ACCESS TO PREMISES .......................... 35
31. RELOCATION ............................................. 35
32. BROKERS, COMMISSIONS, ETC .............................. 35
33. RECORDATION ............................................ 35
34. MISCELLANEOUS .......................................... 36
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<CAPTION>
34.1. SEPARABILITY ...................................... 36
34.2. APPLICABLE LAW .................................... 36
34.3. AUTHORITY ......................................... 36
34.4. NO DISCRIMINATION ................................. 36
34.5. INTEGRATION OF AGREEMENTS ......................... 36
34.6. THIRD PARTY BENEFICIARY ........................... 37
34.7. CAPTIONS: GENDER .................................. 37
34.8. SUCCESSORS AND ASSIGNS ............................ 37
34.9. WAIVER OF JURY TRIAL .............................. 37
34.10. JOINT AND SEVERAL LIABILITY ....................... 37
34.11. NOTICES ........................................... 37
34.12. EFFECTIVE DATE OF THIS LEASE ...................... 37
34.13. MECHANICS' LIENS................................... 37
34.14. WAIVER OF RIGHT OF REDEMPTION ..................... 38
34.15. CITY'S OR MORTGAGEE'S PERFORMANCE.................. 38
34.16. CITY'S OR MORTGAGEE'S LIABILITY ................... 38
34.17. SCHEDULES ......................................... 38
34.18. TIME OF ESSENCE ................................... 38
34.19. AMENDMENT ......................................... 38
34.20. PARKING ........................................... 38
SCHEDULES
---------
A - Plat showing location of the Premises
B - Plans and Specifications for Tenant Improvements
C - Rules and Regulations
D - Intentionally Omitted
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<PAGE>
MARYLAND FULL-SERVICE OFFICE LEASE
HARBORPLACE TOWER
THIS LEASE is made and entered into as of by and between
BALTIMORE CENTER ASSOCIATES LIMITED PARTNERSHIP, a Maryland limited
partnership ("Landlord") by ROUSE OFFICE MANAGEMENT, INC. Managing Agent. and
EARTHSHELL CORPORATION, a Delaware corporation ("Tenant").
In consideration of the rents hereinafter reserved and the agreements
hereinafter set forth. Landlord and Tenant mutually agree as follows:
1. SUMMARY OF TERMS.
The following is a summary of the principal terms of the Lease. Any
capitalized term set forth below shall,for the purposes of this Lease, have
the meaning ascribed to it in this Section 1.
A. DESCRIPTION OF PREMISES
(1) BUILDING: The building known as Harborplace Tower, formerly
known as Legg Mason Tower and located at 111 S. Calvert Street, Baltimore,
Maryland 21202.
(2) BUSINESS COMMUNITY: not applicable.
(3) PREMISES: Approximately 8,066 square feet of Rental Area on the
nineteenth floor of the Building as shown on SCHEDULE A.
B. RENT
(1) ANNUAL BASIC RENT:
<CAPTION>
Term Annual Basic Rent Monthly Installment
---- ----------------- -------------------
Rental Year 1: $209,715.96 $17,476.33
Rental Years 2-3: $217,782.00 $18,148.50
Rental Years 4-5: $225,848.04 $18,820.67
Rental Year 6: $233,913.96 $19,492.83
Rental Year 7: $241,980.00 $20,165.00
Rental Year 8: $250,046.04 $20,837.17
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(2) ADVANCE RENT: Seventeen Thousand Four Hundred Seventy-six
Dollars and Thirty-three Cents ($17,476.33) representing the installment of
Annual Basic Rent for the first leasehold month of the Term.
(3) SECURITY DEPOSIT: Seventeen Thousand Four Hundred Seventy-six
Dollars and Thirty-three Cents ($17,476.33) to be held by Landlord as provided
in Section 6.4
C. ADJUSTMENT.
(1) BASE OPERATING COSTS: The Base Operating Costs for the Premises
shall be the Operating Costs for the Operating Year which commences January 1,
1998, multiplied by Tenant's Fractional Share.
(2) ADJUSTMENT PERIOD CONSUMER PRICE INDEX. Intentionally omitted.
D. TERM
(1) TERM: Eight (8) years, subject to Section 4.
(2) LEASE COMMENCEMENT DATE: August 1, 1998, subject to Section 4.
(3) TERMINATION DATE: July 31, 2006, subject to Section 4.
E. NOTICE AND PAYMENT
(1) Tenant Notice Address:
Earthshell Corporation
111 S. Calvert Street
Baltimore, Maryland 21202
with a copy to:
General Counsel
Earthshell Corporation
800 Miramonte Drive
Santa Barbara, California 93109
(2) Landlord Notice Address:
Rouse Office Management, Inc.
300 East Lombard Street
Baltimore, Maryland 21202-3211
with a copy to:
Rouse Office Management, Inc.
c/o The Rouse Company
10275 Little Pautxent Pkwy
Columbia, Maryland 21044
Attention: General Counsel
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(3) Landlord Payment Address:
Rouse Office Management, Inc.
P.O. Box 64078
Columbia, Maryland 21264-4078
F. BROKER
Colliers Pinkard
100 Light Street, Suite 1400
Baltimore, Maryland 21202
Attn: David Downey
2. DEFINITIONS.
For purposes of this Lease, the Schedules attached and made a part hereof
and all agreements supplemental to this Lease, the following terms shall have
the respective meanings as set forth in the following Section, subsection,
paragraph and Schedule references:
<CAPTION>
Reference
Additional Rent............................................................6.3
Advance Rent...........................................................1.B.(2)
Alterations...............................................................15.1
Annual Basic Rent......................................................1.B.(1)
Bankruptcy Code...........................................................19.1
Base Operating Cost....................................................1.C.(2)
Building...............................................................1.A.(1)
BOMA Standard..............................................................3.1
Casualty..................................................................17.1
Common Area...............................................................10.1
Default Rate...............................................................6.5
Event of Default..........................................................20.1
Event of Tenant's Bankruptcy..............................................19.1
Fractional Share...........................................................7.1
Insolvency Laws...........................................................19.1
Landlord Notice Address...................................................1.E.
Landlord Payment Address..................................................1.E.
Lease Commencement Date................................................1.D.(2)
Mortgage....................................................................27
Mortgagee...................................................................27
Operating Costs............................................................7.1
Operating Costs Statement..................................................7.2
Operating Year.............................................................7.1
Plans and Specifications...................................................5.1
Premises...............................................................1.A.(3)
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Prevailing Market Rate-(Renewal Term)......................................4.3
Property...................................................................7.1
Public Areas........................................................Schedule C
Ready for Occupancy........................................................4.2
Renewal Term...............................................................4.3
Rental Area..................................................................3
Rental Year................................................................6.1
Rules and Regulations........................................................9
Security Deposit.......................................................1.B.(3)
Tenant Allowance...........................................................5.1
Tenant Improvements........................................................5.1
Tenant Notice Address.....................................................1.E.
Tenant's Share of Increased Operating Costs................................7.2
Tenant's Personal Property................................................15.3
Term.......................................................................4.1
Termination Date.......................................................1.D.(3)
Transfer....................................................................25
3. LEASED PREMISES: MEASUREMENT.
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord,
the Premises as shown on the plan attached hereto as SCHEDULE A, together
with the right to use, in common with others, the Common Area. The rental
area of the Premises ("Rental Area") has been computed in accordance with the
Standard Method for Measuring Floor Area In Office Buildings, BOMA, American
National Standard. 1981 ("BOMA Standard").
4. TERM AND COMMENCEMENT OF TERM.
4.1. TERM. The term of this Lease (the "Term") shall commence on the Lease
Commencement Date: provided, however, that if the Premises are not Ready for
Occupancy as of such Lease Commencement Date for any reason, except for
delays caused solely by Tenant, then the Lease Commencement Date shall be
delayed until the earlier of:
a. the date on which Tenant shall take possession of all or any portion
of the Premises, provided that such possession shall be only with the written
approval of Landlord; or
b. the date the Premises are Ready for Occupancy;
and, if necessary, the Termination Date shall be adjusted to effect the total
number of years in the Term, as set forth in subsection 1.D. plus the part of
the month, if any, from the adjusted Lease. Commencement Date to the first
full month of the Term.
If the Premises are Ready for Occupancy prior to the Lease Commencement
Date, the Term shall commence on the date the Premises are Ready for
Occupancy, and if necessary, the Termination Date shall be adjusted to effect
the total number of years in the Term, as set forth in subsection 1.D. plus
the part of the month, if any, from the adjusted Lease C commencement Date to
the first full month of the Term.
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In the event the Premises are not Ready for Occupancy by the Lease
Commencement Date, as initially set forth above, because of a delay caused
solely by Tenant, then said Lease Commencement Date shall not be delayed and
Tenant's obligations shall commence as of said date, notwithstanding the
status of construction.
The Term shall be for the period of time specified in Section 1.D.(1)
plus the part of the month, if any, from the Lease Commencement Date to the
first day of the first full calendar month in the Term, unless earlier
terminated pursuant to any other provision of this Lease or pursuant to law.
At Landlord's request, Tenant shall promptly enter into one or more
supplementary written agreements, in such form as Landlord shall reasonably
prescribe, specifying the Lease Commencement Date and the Termination Date.
4.2. READY FOR OCCUPANCY. For purposes hereof, the Premises shall be
deemed conclusively ready for occupancy ("Ready for Occupancy") upon the
completion of the following conditions:
a. Landlord has substantially completed its work on the Tenant's
Improvements except for incomplete items that are minor or non-substantial
details of construction, mechanical adjustments, or finishing touches; and
b. Landlord shall have received any governmental approvals which are
necessary in order for Tenant to occupy the Premises without material
interference to Tenant conducting its ordinary business activities, unless
Tenant's acts or omissions have caused such approvals to be denied, in which
case Tenant shall be deemed to have waived this condition 4.2.b.
4.3. OPTION TO RENEW. Provided Tenant is in possession of the Premises
and is not then in default of any term, covenant or condition of this Lease
beyond any applicable notice and cure period, Tenant shall have the option to
renew the Term of this Lease for one (1) additional period of five (5) years
("Renewal Term") to commence immediately upon the expiration of the initial
Term, upon the same terms, convenants and conditions as contained in this
Lease, except that (i) the Annual Basic Rent during said Renewal Term shall
be at the "Prevailing Market Rate" and (ii) there shall be no further option
to renew except as specifically provided herein and (iii) Landlord shall not
be obligated to construct, pay for or grant an allowance with respect to
tenant improvements unless otherwise specifically provided for in this Lease
or negotiated at the time Tenant exercises such option. "Prevailing Market
Rate" shall mean the current market rental rate for the Premises as
determined by Landlord or for similar space in comparable first-class office
buildings in the Inner Harbor/Pratt Street area, but shall not be more than
the rate at which Landlord would offer such space or space of approximately
the same size and location to a third party in a bona fide arm's length
transaction.
In order to exercise the option granted herein, Tenant shall notify
Landlord, in writing, not less then twelve (12) months prior to the
expiration of the initial Term, that it is considering exercising its option
to renew the Term. On receipt of such notice, Landlord will, in writing, not
later than thirty (30) days after receipt of the notice from Tenant, quote to
Tenant what the new Annual Basic Rent will be for the ensuing Renewal Term.
Tenant shall then notify Landlord, in writing, not later than fifteen (15)
days after notice received of such Annual Basic Rent, as to whether or not it
will exercise the option herein granted and if no such notice of exercise of
the option is received, the option shall be deemed waived. In the event
Tenant exercises the option, Landlord and Tenant shall execute a modification
to this Lease acknowledging such renewal and setting forth the new Annual
Basic Rent.
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The option shall be void if, at the time of exercise of such option.
Tenant is not in possession of the Premises (unless Landlord has consented to
a subletting of the Premises or an assignment of this Lease) or is in default
under this Lease or if Tenant fails to deliver the requisite notice thereof
within the time period specified above. The option granted herein shall not
be severed from this Lease, separately sold, assigned or transferred.
5. TENANT IMPROVEMENTS AND ACCEPTANCE OF PREMISES
5.1. TENANT IMPROVEMENTS. Prior to the Lease Commencement Date, Landlord
shall, in a good and workmanlike manner and with building-standard materials,
make improvements to the Premises ("Tenant Improvements") in accordance with
plans and specifications ("Plans and Specifications") to be prepared by
Landlord and approved in writing by Tenant, which approval shall not be
unreasonably withheld. In connection therewith, Landlord will prepare a
budget for Tenant's review and approval. Once the Plans and Specifications
are acceptable to both parties, it is agreed that same shall be attached
hereto and become a part of this Lease, being identified as SCHEDULE B.
Except as otherwise specifically provided in this Lease, Landlord shall not
be responsible for performing or paying for the moving or installation of
telephone and computer systems, wiring or cabling, or the acquisition, moving
or installation of Tenant's furnishings, fixtures and equipment in the
Premises; provided, however, to the extent the Tenant Allowance (hereinafter
defined) is not fully utilized to pay for the cost of the Tenant
Improvements, up to Eight Thousand Sixty-Six Dollars ($8,066.00) may be
applied to Tenant's moving and cabling expenses provided Tenant submits to
Landlord invoices evidencing such cabling and/or moving expenses. Landlord
agrees to bear the cost of the Tenant Improvements in an amount not to exceed
Two Hundred One Thousand Six Hundred Fifty Dollars and No Cents
($201,650.00)("Tenant Allowance"), which amount includes demolition costs,
Landlord's construction management fee and any other costs (exclusive of
Common Area and corridor costs) required to improve the Premises from its
current "as-is" condition. Tenant covenants and agrees to pay to Landlord, as
Additional Rent, all costs and expenses incurred by Landlord in performing
the Tenant Improvements in excess of the Tenant Allowance and to make such
payment within thirty (30) days after receipt of a reasonably detailed
invoice for same from Landlord. Except as otherwise provided in this Section
5.1., any excess of the Tenant Allowance over the total cost of constructing
the Tenants Improvement shall belong solely to Landlord.
Any other initial improvements to the Premises not shown on the Plans
and Specifications are subject to Landlord's prior written approval, which
approval shall not be unreasonably withheld or delayed, and such improvements
shall be performed by Landlord, and the cost thereof shall be paid by Tenant
to Landlord within thirty (30) days following receipt of an invoice for same
from Landlord. Any amounts payable by Tenant hereunder shall include
Landlord's standard construction management fee computed on the total cost of
construction (currently 13.5%), including but not limited to the cost of
developing, preparing and modifying construction drawings.
5.2. ACCEPTANCE OF PREMISES. Prior to occupancy, Landlord and Tenant
shall conduct a joint inspection of the Premises during which they shall
develop a mutually agreeable punchlist of items to be completed by Landlord.
Tenant may amend such punchlist up to thirty (30) days after Tenant takes
possession of the Premises. Tenant's occupancy of the Premises shall be
deemed to constitute acceptance of the Premises and acknowledgment by Tenant
that Landlord has fully complied with its obligations hereunder to construct
and deliver the Premises to Tenant, except for the punchlist items, which
shall be completed by Landlord within a reasonable time thereafter and except
for latent defects, the existence of which Tenant gives Landlord notice
within one (1) year following Tenant's opening for business in the Premises.
After first notifying Tenant by telephone, Landlord shall have the right to
enter the Premises to complete or repair any such punchlist items and entry
by Landlord, its agents,
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<PAGE>
employees or contractors for such purpose shall not constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of rent or relieve Tenant of any of its obligations
under this Lease, or impose any liability upon Landlord or its agents,
employees or contractors. Landlord shall use its reasonable efforts to
minimize any disruption to Tenant's business activities and normal use of the
Premises.
If the Lease Commencement Date has not occurred within ninety (90) days
following the date set forth in Section 1.D.(2), subject to the provisions of
Section 24 and except for delays caused solely by Tenant, Tenant may elect to
terminate this Lease by giving written notice of such intent to Landlord
within fifteen (15) days after said ninety-day period. Upon any termination
as aforesaid, this Lease shall be of no further force and effect, and,
following the return to Tenant of the Advance Rent and Security Deposit, if
any, neither party shall be liable to the other for damages of any type
whatsoever on account of such termination.
6. RENT.
6.1. ANNUAL BASIC RENT. Tenant shall pay to Landlord during each Rental
Year of the Term fixed rent equal to the Annual Basic Rent as set forth in
Section 1.B.(1). Annual Basic Rent shall be payable in advance on the first
day of each month of the Term in equal monthly installments, without notice,
demand, abatement (except as otherwise specifically provided in this Lease),
deduction or set-off. If the Term of this Lease shall commence on a day other
than the first day of a month, the first payment shall include any prorated
Annual Basic Rent for the period from the Lease Commencement Date to the
first day of the first full calendar month of the Term.
"Rental Year" shall mean each successive twelve (12) calendar month
period occurring during the Term of this Lease, or portion of such a period,
with the first Rental Year commencing as of the Lease Commencement Date and
ending on the last day of the twelfth full calendar month thereafter and the
last Rental Year ending on the Termination Date. For any Rental Year of less
or more than twelve full months, Annual Basic Rent and Tenant's Increased
Share of Operating Costs shall be adjusted accordingly. All Annual Basic Rent
and Additional Rent shall be paid to Landlord at the Landlord Payment Address.
6.2. INTENTIONALLY OMITTED.
6.3. ADDITIONAL RENT. Tenant shall pay to Landlord as additional rent
("Additional Rent") all other sums of money which shall become due and
payable hereunder, including but not limited to the payment of Tenant's
Share of Increased Operating Costs. Unless a date for payment is otherwise
specified herein, all Additional Rent shall be due and payable within thirty
(30) days of invoicing by Landlord.
6.4. ADVANCE RENT AND SECURITY DEPOSIT.
A. ADVANCE RENT. Tenant shall, upon execution of this Lease, pay to
Landlord an amount equal to the Advance Rent which shall be held by Landlord
as security for the performance by Tenant of all of its obligations occurring
prior to the Lease Commencement Date. If Tenant shall default in the
performance of such obligations, Landlord may retain the Advance Rent as an
offset against any actual damages thereby incurred by Landlord provided that
the retention of such Advance Rent shall not preclude Landlord from pursuing
any other remedy which it might have against Tenant. If no default shall
occur by Tenant then the Advance Rent shall be applied against the
installment of Annual Basic Rent payable for the month identified in Section
1.B.(2).
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B. SECURITY DEPOSIT. Tenant shall, upon execution of this Lease, deposit
with Landlord the Security Deposit to assure Tenant's performance of all
terms, provisions and conditions of this Lease. Landlord shall have the
right, but not the obligation, at any time, to apply the Security Deposit to
cure any breach by Tenant under this Lease and, in that event, Tenant shall,
within fifteen (15) days after request therefor, pay Landlord any amount
necessary to restore the Security Deposit to its original amount. To the
extent permitted by law, Landlord shall be entitled to the full use of the
Security Deposit and shall not be required either to keep the Security
Deposit in a separate account or to pay interest on account thereof. Any
portion of the Security Deposit which is not utilized by Landlord for any
purpose permitted under this Lease shall be returned to Tenant within sixty
(60) days after the end of the Term provided Tenant has performed all of the
obligations imposed upon Tenant pursuant to this Lease.
6.5. LATE CHARGE. If Tenant fails to make any payment of Annual Basic
Rent, Additional Rent, or other sums required to be paid hereunder on or
before the date when payment is due, Tenant shall pay to Landlord, as
Additional Rent, a late charge to cover extra administrative costs and loss
of use of funds equal to (a) six percent (6%) of the amount due for the first
month or portion thereof that such amount is past due plus (b) interest on
the amount remaining unpaid thereafter at the rate of eighteen percent (18%)
per annum or six percent (6%) above the prime rate charged by Citibank, N.A.,
as of the due date of such amount, whichever rate is the greater; provided,
however, that should such late charge at any time violate any applicable law,
the late charge shall be reduced to the highest rate permitted by law (the
foregoing rate being herein referred to as the "Default Rate"). Landlord's
acceptance of any rent after it has become due and payable shall not excuse
any delays with respect to future rental payments or constitute a waiver of
any of Landlord's rights under this Lease.
Notwithstanding the above, the late charge set forth above shall be
waived up to two (2) times in any twelve (12) month period, provided that
Tenant pays the above described sums within five (5) days after the date due.
7. OPERATING COST ESCALATIONS.
7.1. DEFINITIONS. For purposes of this Lease, the following definitions
shall apply:
a. "Operating Year" means each respective calendar year or part
thereof during the Term of this Lease or any renewal thereof, or at the
option of Landlord, any other twelve month period or part thereof designated
by Landlord during the Term of this Lease or any renewal thereof.
b. "Property" means the Building, the Office Parcel upon which the
Building is situated, as shown and described on the subdivision Plan of the
Gallery at Harborplace, and recorded among the Land Records of Baltimore
City, Maryland in Plat Folder S.E.B. No. 3074, recorded February 13, 1986,
and also such additional facilities in subsequent years as may be determined
by Landlord to be reasonably necessary or desirable for the management,
maintenance or operation of the Building.
c. "Operating Costs" means all expenses and costs (but not specific
costs which are allocated or separately billed to and paid by specific
tenants) of every kind and nature which Landlord shall pay or become
obligated to pay because of or in connection with owning, operating,
managing, painting, repairing, insuring and cleaning the Property, including,
but not limited to, the following:
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(i) cost of all supplies and materials used, and labor charges
incurred, in the operation, maintenance, decoration, repairing and cleaning
of the Property, including janitorial service for all floor area leased to
tenants;
(ii) cost of all equipment purchased or rented which is utilized in
the performance of Landlord's obligations hereunder, and the cost of
maintenance and operation of any such equipment, but any equipment not
exclusively engaged in the operation, maintenance, security and management of
the Property shall be apportioned as deemed reasonably appropriate by
Landlord;
(iii) cost of all maintenance and service agreements for the
Property and the equipment therein, including, without limitation, alarm
service, security service, window cleaning, and elevator maintenance;
(iv) accounting costs, including the cost of audits by certified
public accountants, outside legal and engineering fees and expenses incurred
in connection with the operation and management of the Property.
(v) wages, salaries and related expenses including the costs of all
on-site and off-site agents or employees engaged in the operation,
maintenance, security and management of the Property; provided, however, the
wages, salaries and related expenses of any agents or employees not
exclusively engaged in the operation, maintenance, security and management of
the Property shall be apportioned as deemed reasonably appropriate by
Landlord;
(vi) cost of all insurance coverage for the Property from time to
time maintained by Landlord, including but not limited to the costs of
premiums for insurance with respect to personal injury, bodily injury,
including death, property damage, business interruption, workmen's
compensation insurance covering personnel and such other insurance as
Landlord shall deem reasonably necessary, which insurance Landlord may
maintain under policies covering other properties owned by Landlord in which
event the premium shall be reasonably allocated;
(vii) cost of repairs, replacements and general maintenance to the
Property, including without limitation the mechanical, electrical and
heating, ventilating and air-conditioning equipment and/or systems (excluding
alterations attributable solely to tenants, capital improvements unless they
are included under c(xi), and repairs and general maintenance paid by proceeds
of insurance or by tenants or other third parties);
(viii) any and all Common Area maintenance, repair or redecoration
(including repainting) and exterior and interior landscaping, and all charges
assessed against the Property pursuant to the Construction, Operation and
Reciprocal Easement Agreement ("COREA") by and among Landlord, Gallery Hotel
Limited Partnership, Baltimore Center Garage Limited Partnership and the
Mayor and City Council of Baltimore dated February 13, 1986, and recorded
among the Land Records of Baltimore City, in Liber No. 792, Folio 465, as
amended, or pursuant to any laws, rules or regulations of any Federal, state
or city authority.
(ix) cost of removal of trash, rubbish, garbage and other refuse
from the Property as well as removal of ice and snow from the sidewalks on or
adjacent to the Property;
(x) all charges for electricity, gas, water, sewerage service,
heating, ventilation and air-conditioning and other utilities furnished to
the Property (including legal, architectural and engineering fees incurred
in connection therewith);
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(xi) amortization of capital improvements made to the Building
after the year of substantial completion of the Building, which improvements
were undertaken by Landlord with the reasonable expectation that the same
would result in more efficient operation of the Building or are made by
Landlord pursuant to any governmental law, regulation or action not
applicable to the Building at commencement of construction of the Building;
provided that the cost of each such capital improvement, together with any
reasonable financing charges incurred in connection therewith, shall be
amortized over the useful life thereof and only that portion attributable to
each Operating Year shall be included herein for such Operating Year;
(xii) a management fee for the operation and management of the
Property which is currently three and one-half percent (3.5%) of the gross
revenues of the Property, which management will not be increased to exceed a
commercially reasonable management fee charged for comparable buildings in
the central business district of Baltimore offering comparable services;
(xiii) costs and expenses incurred in order to comply with covenants
and conditions contained in liens, encumbrances and other manners of public
record affecting the Property; and
(xiv) all real estate taxes, assessments (special or otherwise),
levies, ad valorem charges, benefit charges, water and sewer rents, rates and
charges, privilege permits and any other governmental liens, impositions or
charges of a similar or dissimilar nature, and any payments in lieu of such
charges, regardless of whether any such items shall be extraordinary or
ordinary, general or special, foreseen or unforeseen, levied, assessed, or
imposed on or with respect to all or any part of the Property or upon the
rent due and payable hereunder by any governmental authority (all of the
aforesaid being hereinafter referred to as "Taxes"); provided, however, that
if at any time during the Term or any extension thereof the method of
taxation prevailing at the commencement of the Term shall be altered or
eliminated so as to cause the whole or any part of the above items which
would otherwise be included in Taxes to be replaced by a levy, assessment or
imposition, which is (A) a tax assessment, levy, imposition or charge based
on the rents received from the Property whether or not wholly or partially a
capital levy or otherwise, or (B) a tax, assessment, levy, imposition or
charge measured by or based in whole or in part upon all or any portion of
the Property and imposed on Landlord, or (C) a license fee measured by the
rent payable by Tenant to Landlord, or (D) any other tax, levy, imposition,
charge or license fee, however described or imposed, then such levy,
assessment or imposition shall be included in Taxes; provided, however, in no
event shall Tenant be required to pay any inheritance, estate, succession,
income, profits or franchise taxes unless they are in lieu of or in
substitution for any of the above items which would otherwise be included in
Taxes (Within a reasonable time after receipt of Tenant's written request,
Landlord shall furnish copies of paid real estate tax bills to Tenant
evidencing the payment of such bills);
Any of the foregoing costs which under generally accepted
accounting principles would be considered capital expenditures shall be
amortized in accordance with generally accepted accounting principles.
Notwithstanding the above, Operating Costs shall not include:
(a) payments of principal, interest, points and fees on any
mortgages, deeds of trust or other financing instruments relating to the
financing of the Property:
(b) leasing commissions or brokerage fees:
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(c) costs associated with preparing: improving or altering space
for any leasing or releasing of any space within the Building;
(d) any increase in real estate taxes based on a re-assessment of
the Property resulting from the sale of the Property;
(e) any ground lease rental;
(f) costs of capital improvements and equipment, except for those
(i) required by laws enacted on or after the date hereof (amortized over the
useful life of the improvement and/or equipment), together with interest at
the actual interest rate incurred by Landlord in connection with such capital
improvements, and (ii) acquired to reduce Operating Expenses amortized over
the useful life of the improvement to equal the amount of Operating Expenses
to be saved in each calendar year throughout the Term (as determined at the
time Landlord elected to proceed with the capital improvement or acquisition
of the capital equipment to reduce Operating Expenses), together with
interest at the actual interest rate incurred by Landlord;
(g) rentals for items (except when needed in connection with normal
repairs and maintenance of permanent systems) which if purchased, rather than
rented, would constitute a capital improvement which is specifically excluded
in Subsection (f) above (excluding, however, equipment not affixed to the
Building which is used in providing janitorial or similar services);
(h) costs incurred by Landlord for the repair of damage to the
Building, to the extent that Landlord is reimbursed by insurance proceeds;
(i) costs, including permit, license and inspection costs, incurred
with respect to the installation of tenant improvements in the Building or
incurred in renovating or otherwise improving, decorating, painting or
redecorating vacant leasable space for tenants or other occupants of leasable
premises in the Building;
(j) depreciation, amortization and interest payments, except as
provided herein and except on materials, tools, supplies and vendor-type
equipment purchased by Landlord to enable Landlord to supply services
Landlord might otherwise contract for with a third party where such
depreciation, amortization and interest payments would otherwise have been
included in the charge for such third party's services, all as determined in
accordance with generally accepted accounting principles, consistently
applied, and when depreciation or amortization is permitted or required, the
item shall be amortized over its reasonably anticipated useful life;
(k) marketing costs, including leasing commissions, attorney's fees
in connection with the negotiation and preparation of letters, deal memos,
letters of intent, leases, subleases and/or assignments, space planning
costs, and other costs and expenses incurred in connection with lease,
sublease and/or assignment negotiations and transaction with present or
prospective tenants or other occupants of the Building;
(l) costs incurred by Landlord for alterations which are considered
capital improvements, and replacements under generally accepted accounting
principles, consistently applied, except as permitted in (f) and (g) above;
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(m) costs of a capital nature, including costs of a capital nature
relating to "Year 2000" costs, including without limitation, capital
improvements, capital repairs, capital equipment and capital tools, all as
determined in accordance with generally accepted accounting principles,
consistently applied, excepted as permitted in (f) and (g) above;
(n) costs incurred by Landlord due to a violation by any other
tenant of the terms and conditions of any lease;
(o) any amounts paid by Landlord for, materials, labor or
equipment shall be limited to the amounts which would have been paid for the
aforesaid, based upon their procurement from an unaffiliated party in an arms
length transaction;
(p) Landlord's general corporate overhead and corporate general
and administrative expenses, to the extent such overhead and expenses exceeds
the management fee;
(q) any compensation paid to clerks, attendants or other persons,
rendering services on behalf of Landlord in commercial concessions operated
by Landlord, or any compensation paid to attendants working in a parking
garage in the Building or any other parking facility operated by Landlord;
(r) except for making repairs or keeping permanent systems in
operation while repairs are being made, rentals and other related expenses
incurred in leasing air conditioning systems, elevators or other equipment
ordinarily considered to be of a capital nature, except equipment not affixed
to the Building which is used in providing janitorial or similar services:
(s) All items and services for which Tenant or any other tenant
in the Building reimburses Landlord (other than through Tenant's Percentage
Share of Operating Expenses), or which Landlord provides selectively to one
or more tenants (other than Tenant) without reimbursement:
(t) Advertising of a non-employment nature and promotional
expenditures, and procurement costs of signs in or on the Building
identifying the owner of the Building;
(u) Electric power costs for which any tenant directly contracts
with the local public service company;
(v) Tax penalties incurred as a result of Landlord's negligence,
inability or unwillingness to make payments when due;
(w) Costs arising from the negligence or fault of Landlord or its
agents, or any vendors, contractors, or providers of materials or services
selected, hired or engaged by Landlord or its agents including, without
limitation, in connection with the selection of building materials;
(x) Costs incurred in curing a violation of environmental laws
regarding the storage, use or disposal of hazardous materials or substances
(as defined by applicable laws) in effect in or about the Building or
Property including, without limitation, hazardous substances in the ground
water or soil, unless such violation of environmental laws are caused by
Tenant;
(y) Costs arising from Landlord's charitable or political
contributions;
(z) Costs arising from latent defects in the base, shell or core
of the Building;
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(aa) Costs for procuring sculpture, paintings or other objects of
art;
(bb) attorney fees, costs, and disbursements (including
settlements) and other expenses incurred in connection with proposals,
negotiations, or disputes with other tenants or occupants or prospective
tenants or other occupants, or associated with the enforcement of any leases
or the defense of Landlord's title to or interest in the Premises, the
Building or its appurtenances, or any part thereof.
Landlord further agrees that since one of the purposes of Operating
Expenses and the increase in Operating Costs provision is to allow the
Landlord to require the Tenant to pay for the costs attributable to its
Premises, Landlord agrees that (i) Landlord will not collect or be entitled
to collect Operating Costs from all of its tenants in an amount which is in
excess of 100% of the Operating Costs actually paid by Landlord in connection
with the operation of the Building.
For any Operating Year during which less than ninety-five percent
(95%) of the Rental Area of the Building is occupied, the calculation of
that portion of Operating Costs which vary with occupancy shall be adjusted
to equal the Operating Costs which Landlord projects would have been incurred
had the Building been ninety-five percent occupied during such Operating Year.
d. "Fractional Share" shall mean a fraction, the numerator of which
is the Rental Area of the Premises and the denominator of which is the Rental
Area of the Building (currently 265, 168 square feet). For the purposes of
this subparagraph, the Rental Area of the Building shall mean the sum of the
Rental Area on all floors of the building as determined by Landlord in
accordance with the measurement method set forth in Section 3.
7.2. PAYMENT OF OPERATING COST ESCALATION. For each Operating Year,
commencing January 1, 1999, Tenant shall pay to Landlord, in the manner
provided herein, Tenant's share of increased operating costs which shall be
computed by multiplying the Operating Costs for the Operating Year by
Tenant's Fractional Share and subtracting the Base Operating Costs from the
result obtained ("Tenant's Share of Increased Operating Costs") but in no
event less than the Base Operating Costs; provided, however, that for the
Operating Years during which the Term begins and ends, Tenant's Share of
Increased Operating Costs shall be prorated based upon the actual number of
days Tenant occupied, or could have occupied, the premises during each such
Operating Year.
Tenant's Share of Increased Operating Costs shall be paid, in
advance, without notice, demand, abatement (except as otherwise specifically
provided in this Lease), deduction or set-off, on the first day of each
calendar month during the Term, said monthly amounts to be determined on the
basis of reasonable estimates prepared by Landlord on an annual basis and
delivered to Tenant prior to the commencement of each Operating Year.
Landlord shall provide Tenant with reasonably detailed documentation to
support Landlord's estimates. If, however, Landlord fails to furnish any such
estimate prior to the commencement of an Operating Year, then (a) until the
first day of the month following the month in which such estimate is
furnished to Tenant, Tenant shall pay to Landlord on the first day of each
month an amount equal to the monthly sum payable by Tenant to Landlord under
this subsection 7.2 in respect of the last month of the preceding Operating
Year; (b) promptly after such estimate is furnished to Tenant, Landlord shall
give notice to Tenant whether the installments of Tenant's Share of Increased
Operating Costs paid by Tenant for the current Operating Year have resulted
in a deficiency or overpayment compared to payments which would have been
paid under such estimate, and Tenant, within ten (10) business days after
receipt of such estimate, shall pay any deficiency to Landlord and any
overpayment shall be credited against future payments required by Tenant
under such estimate; and (c) on the first day of the month following the
month in which such estimate is furnished to Tenant and monthly thereafter
throughout the remainder of the Operating Year, Tenant shall pay to Landlord
the
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monthly payment shown on such estimate. Landlord may at any time or from time
to time furnish to Tenant a revised estimate of Tenant's Share of Increased
Operating Costs for such Operating Year with a written explanation of the
reason for such revised estimates, and in such case, Tenant's monthly
payments shall be adjusted and paid or credited, as the case may be,
substantially in the same manner as provided in the preceding sentence.
Within a reasonable time after the end of each Operating Year, Landlord
shall determine actual Operating Costs for such Operating Year and shall
provide to Tenant an "Operating Costs Statement" setting forth in reasonable
detail the actual Tenant's Share of Increased Operating Costs for such
Operating Year. Within thirty (30) days after delivery of the Operating Costs
Statement, Tenant shall pay Landlord any deficiency between the amount shown
as Tenant's Share of Increased Operating Costs in the Operating Costs
Statement and the total of the estimated payments made by Tenant during the
Operating Year. In the event of overpayment, such amount shall be credited
against future payments required on account of Tenant's Share of Increased
Operating Costs, or if the Term has expired, Landlord shall refund to Tenant
the amount of any overpayment.
Each Operating Costs Statement provided by Landlord shall be conclusive
and binding upon Tenant unless within ninety (90) days after receipt thereof,
Tenant notifies Landlord that it disputes the correctness thereof, specifying
those respects in which it claims the Operating Costs Statement to be
incorrect. Unless promptly resolved by the parties, such dispute shall be
determined by arbitration in accordance with the then prevailing rules of the
American Arbitration Association. If the arbitration proceedings result in a
determination that the Operating Costs Statement contained an aggregate
discrepancy of less than five percent (5%), Tenant shall bear all costs in
connection with such arbitration. If the arbitration proceedings result in a
determination that the Operating Costs Statement contained an aggregate
discrepancy of greater than five percent (5%), Landlord shall bear all costs
in connection with such arbitration. Pending determination of the dispute,
Tenant shall pay any amounts due from Tenant in accordance with the Operating
Costs Statement, but such payment shall be without prejudice to Tenant's
claims. Tenant, for a period of ninety (90) days after delivery of the
Operating Costs Statement in each Operating Year and upon at least ten (10)
days written notice to Landlord, shall have reasonable access during normal
business hours to the books and records of Landlord relating to Operating
Costs for the purpose of verifying the Operating Costs Statement, which shall
be in accordance with generally accepted accounting principles consistently
applied, Tenant shall bear all costs relating to such inspection. Tenant
shall reimburse Landlord for any cost for photocopying that it desires.
8. USE CARE AND REPAIR OF PREMISES BY TENANT.
8.1. PERMITTED USES. Tenant shall use and occupy the Premises solely for
general office purposes in accordance with applicable zoning regulations and
for no other purpose. Tenant shall not do anything or permit anything to be
done in or on the Premises, or bring or keep anything therein which will,
in any way, materially obstruct, injure, annoy or interfere with the rights
of Landlord or 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 the laws, rules or regulations of any Federal,
state or city authority.
8.2. CARE OF PREMISES. Tenant shall, at its sole expense, keep the
Premises and the improvements and appurtenances therein in good order and
condition consistent with the operation of a first-class office building, and
at the expiration of the Term, or at the sooner termination of this Lease as
herein provided, delivery up the same broom clean and in as good order and
condition as at the beginning of the Term, ordinary wear and tear and damage
by fire or other casualty excepted. Tenant, at its sole
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expense, shall promptly replace damaged or broken doors and glass (excluding
exterior plate glass windows) in and about the interior of the Premises and
shall be responsible for the repair and maintenance of all special or custom
Tenant Improvements and Alterations, including, without limitation, the
repair and replacement of appliances and equipment installed specifically for
Tenant such as refrigerators, disposals, computer room air conditioning,
sinks and special plumbing, special light fixtures and bulbs for those
fixtures, non-standard outlets and plug-in strips, and special cabinetry.
Consistent with the provisions of Section 22 and subject to and except for
ordinary wear and tear, Tenant shall pay for all property damage sustained by
other tenants or occupants of the Building, due to any waste, misuse or
neglect by Tenant of the Premises and any fixtures and appurtenances related
thereto or due to any breach of this Lease by Tenant, its employees, agents,
representatives or invitees. Tenant shall not place a load upon any floor
that exceeds either the floor load per square foot that such floor was
designed to carry or which is allowed by any laws, rules, building codes or
regulations of any Federal, state or city authority promulgated subsequent to
the date hereof. Business machines and mechanical equipment in the Premises
shall be placed and maintained by Tenant, at tenant's sole expense, in such
manner as shall be sufficient, in Landlord's reasonable judgement, to prevent
the vibration and noise therefrom from being a nuisance to Landlord and the
other tenants.
8.3. HAZARDOUS SUBSTANCES. For purposes of this provision, "Hazardous
Substances" shall mean any hazardous or toxic substance, material or waste,
now or hereafter defined or regulated under the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901 ET SEQ.), the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section
9601 ET SEQ.), the Clean Water Act (33 U.S.C. Section 1251 ET SEQ.), the
Clean Air Act (42 U.S.C. Section 7401 ET SEQ.), and the Toxic Substances
Control Act (15 U.S.C. Section 2601 ET SEQ.), and all similar federal, state
and local statutes, laws, rules and regulations in connection with
environmental conditions, health and safety, including without limitation,
asbestos and petroleum products (collectively, "Environmental Laws"). Tenant
convenants and agrees that it will not use or allow the Premises to be used
for the storage, use, treatment or disposal of any Hazardous Substance,
without Landlord's prior written consent. Notwithstanding the foregoing,
Landlord's prior written consent shall not be required with respect to
Tenant's use, storage or sale of certain supplies or products, which might
contain or might be considered a Hazardous Substance, in the normal course of
Tenant's business in accordance with the specific use permitted by this
Lease, provided, however, that Tenant shall (i) comply with all other
provisions of this Section; (ii) notify Landlord in writing from time to time
of the identity and approximate quantity of such Hazardous Substance; and
(iii) keep each such Hazardous Substance on the Premsies in quantities as
small as reasonably practicable, but in no event large enough to activate
reporting requirements under any Environmental Law. Tenant, at Tenant's sole
cost and expense shall promptly contain and remediate any release of a
Hazardous Substance on the Property to the extent such release arises
directly from the actions of Tenant, its agents, servants and employees.
Tenant shall indemnify, reimburse and hold harmless Landlord, its
partners and affiliates agents from and against any damages, claims,
judgments, fines, penalties, costs, liabilities (including sums paid in
settlement of claims) or loss including reasonable attorneys' fees,
reasonable consultants' fees, and reasonable expert fees incurred by any of
them to the extent resulting from Tenant's use, handling, generation,
treatment, storage, disposal, other management or release of any Hazardous
Substance at or from the Premises or the Property, whether or not Tenant has
acted negligently with respect to such Hazardous Substance. This indemnity
shall survive the expiration or earlier termination of this Lease.
Landlord warrants and represents to Tenant that to Landlord's
actual knowledge, there are no Hazardous Substances in violation of any
Environmental Laws in the Property of which the Premises are a part.
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8.4. COMPLIANCE WITH LAWS.
Tenant, at its sole cost and expense, shall conform to and comply
with and shall cause the Premises to conform to and comply with all federal,
state, county, municipal and other governmental statues, laws, rules, orders,
regulations, and ordinances applicable to Tenant or resulting from Tenant's
use or occupancy of the Premises or the Property or any part thereof. If
there is a change in any governmental statute, law, rule, order, regulation
or ordinance affecting the Premises which requires the making of a change to
any structural element in the Premises, Landlord shall be responsible for and
bear the cost of any such change.
Landlord warrants and represents to Tenant that, as of the Lease
Commencement Date, Landlord is in the process of implementing a compliance
plan for the Property, which is intended to comply substantially with the
requirements of The Americans With Disabilities Act of 1990, and Landlord
will proceed to execute such plan throughout the Term, subject to the
provisions of Sections 7 and 15.1 of this Lease.
9. RULES AND REGULATIONS.
Tenant and it agents and invitees shall abide by and observe the
rules and regulations attached hereto as SCHEDULE C for the operation and
maintenance of the Building or any new rules and regulations which may from
time to time be issued by Landlord ("Rules and Regulations"), provided that
any new rules or regulations are not inconsistent with common practice or
usage in comparable office buildings in Baltimore City and the provisions of
this Lease. Nothing in this Lease shall be interpreted to impose upon
Landlord any duty or obligation to enforce any such rules and regulations
against any other tenant in the Building, and Landlord shall not be liable to
Tenant for any violation of these rules and regulations by any other tenant
or its agents or invitees.
All rules and regulations promulgated by Landlord shall be
reasonable, shall not materially alter the terms of this Lease and any
enforcement shall be uniform with respect to all tenants' use and occupancy
of the Building and Common Area.
Tenant hereby acknowledges and confirms for Landlord that Tenant
has heretofore received a copy of the COREA, to which the Project is subject
and to which this Lease is subordinate, setting forth the various easements
among the various users of the components of the Project and the allocation
of operating costs among such components, and Tenant agrees to be bound by
the COREA.
10. COMMON AREA.
10.1. DEFINITION OF COMMON AREA. As used herein, "Common Area" means
those areas and facilities which may be furnished by Landlord on or near the
Property, as designated by Landlord from time to time, intended for the
general common use and benefit of all tenants of the Building and their
agents, representatives, licenses, employees and invitees, including, without
limitation, any and all stairs, landings, roofs, utility and mechanical rooms
and equipment, service closets, corridors, elevators, lobbies, lavatories and
other public areas of the Building and all parking areas, access roads,
pedestrian walkways, plazas and landscaped areas.
10.2. USE OF COMMON AREA. Tenant shall have the non-exclusive right to
use the Common Area in common with Landlord, other tenants in the Building,
and others entitled to the use thereof, subject to such reasonable rules and
regulations governing the use of the Common Area as Landlord may
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from time to time prescribe and subject to such easements therein as Landlord
may from time to time grant to others. Tenant shall not obstruct in any
material way any portion of the Common Area or in any way interfere with the
rights of other persons entitled to use the Common Area and shall not,
without the prior written consent of Landlord, use the Common Area in any
manner, directly or indirectly, for the location or display of any
merchandise or property belonging to Tenant or for the location of signs
relating to Tenant's operations in the Premises. The Common Area shall at all
times be subject to the exclusive control and management of Landlord.
10.3. ALTERATIONS TO THE COMMON AREA. 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 Area 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, and (ii) to construct additional improvements
on the Property and make alterations thereof or additions thereto and build
additional stories on or in any such buildings or build adjoining same;
provided, however, that no such change or alteration shall deprive Tenant of
reasonable access to the Premises or reduce the Rental Area of the Premises,
unless such reduction is required by Federal, State or local laws or
regulations, in which event, a reduction in the Premises shall be permitted
with a commensurate reduction in rent and Tenant's Share of Increased
Operating Costs. Landlord shall have the right to close temporarily all or
any portion of the Common Area to such extent as may, in the reasonable
opinion of Landlord, be necessary to prevent a dedication thereof to the
public, provided that Tenant is not thereby denied reasonable access to, or
use of, the Premises, or for repairs, replacements or maintenance to the
Common Area, provided such repairs, replacements or maintenance are performed
expeditiously and in such a manner as not to deprive Tenant of reasonable
access to, or use of, the Premises.
10.4. MAINTENANCE. Landlord covnenants to keep, maintain, manage and
operate the Common Area in a manner consistent with the operation of a first
class office building and to keep the sidewalks and driveways, if any,
constituting a portion of the Common Area clean and reasonably clear of snow
and ice. Landlord reserves the right of access to the Common Area through the
Premises for the purposes of operation, decoration, cleaning, maintenance,
safety, security, alterations and repairs.
11. SERVICES AND UTILITIES.
So long as Tenant is not in an Event of Default under this Lease,
Landlord shall provide the following facilities and services to Tenant, the
cost of such facilities and services to be included in Landlord's Operating
Costs (except as otherwise provided herein):
a. At least one elevator (if the building contains an elevator)
subject to call at all times, including Sundays and holidays. The holidays
observed by Landlord are New Year's Day, President's Day, Memorial Day
observed, Independence Day, Labor Day, Thanksgiving, and Christmas.
b. During "normal business hours" as hereinafter defined, central
heating and air conditioning during the seasons of the year when these
services are normally and usually furnished, and within the temperature
ranges and in such amounts normally or usually furnished in comparable
first-class office buildings in the immediate vicinity. For the purposes of
this paragraph b, the term "normal business hours" shall mean the periods
from 8:00 a.m. until 6:00 p.m. on business days and from 8:00 a.m. until
12:00 p.m. on Saturdays. Landlord shall provide the aforesaid services at
other times, at Tenant's expense, provided Tenant gives Landlord notice by
1:00 p.m. on weekdays for after-hour service on the next weekday, by 1:00
p.m. the day before a holiday for service on a holiday, and by 1:00 p.m. on
Friday for after-hour service on Saturday or service on Sunday. Such
after-hour, holiday or special
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weekend service shall be charged to Tenant at rates to be calculated by
Landlord based on Landlord's costs, which rates shall be given to Tenant on
request. As of the Lease Commencement Date, the rate is Sixty-Five Dollars
($65.00) per hour. Landlord reserves the right to adjust, from time to time,
the rate at which such services shall be provided corresponding to
adjustments in Landlord's costs. Tenant shall pay for such service, as
Additional Rent, promptly upon receipt of an invoice with respect thereto.
c. Reasonable amounts of electric current for lighting and normal
and customary items of office equipment (subject to the provisions of Section
12 below). Landlord warrants that the cost to Tenant for electrical energy
used in the Premises will not be greater than the cost would be to Tenant if
the energy was supplied directly to Tenant by a public utility or public
authority in the area in which the Property is located, but in no event, will
such cost be more than the cost to Landlord to provide such service.
d. Cleaning in Landlord's standard manner, consistent with other
first-class office buildings.
e. Replacement of light tubes or bulbs for building standard
lighting fixtures. All light tube or bulb replacements for special
non-standard lighting fixtures shall be furnished and installed by Landlord
at Tenant's expense.
f. Rest room facilities and necessary lavatory supplies, including
hot and cold running water at the points of supply, as provided for general
use of all tenants in the Building and routine maintenance, painting, and
electric lighting service for all public areas of the Building in such manner
as Landlord deems reasonable.
Except as provided in this Lease, any failure by Landlord to
furnish the foregoing services, resulting from circumstances beyond
Landlord's reasonable control or from interruption of such services due to
repairs or maintenance, shall not render Landlord liable in any respect for
damages to either person or property, nor be construed as an eviction of
Tenant, nor cause an abatement of rent hereunder, nor relieve Tenant from any
of its obligations hereunder. If any public utility or governmental body
shall require Landlord or Tenant to restrict the consumption of any utility
or reduce any service for the Premises or the Building, Landlord and Tenant
shall comply with such requirements, whether or not the utilities and
services referred to in this Section 11 are thereby reduced or otherwise
affected, without any liability on the part of Landlord to Tenant or any
other person or any reduction or otherwise affected without any liability on
the part of Landlord to Tenant or any other person or any reduction or
adjustment in rent payable hereunder. Landlord and its agents shall be
permitted reasonable access to the Premises for the purpose of installing and
servicing systems within the Premises deemed reasonably necessary by Landlord
to provide the services and utilities referred to in this Section 11 to
Tenant and other tenants in the Building. In the event any failure to supply
services continues uninterrupted for a period of greater than seven (7)
consecutive calendar days and thereby renders the Premises wholly or
partially untenantable, the rent shall be abated to the extent of such
untenantability.
Landlord reserves the right to charge Tenant the reasonable cost,
based on usage, of the removal of all trash and the reasonable cost of
water/sewerage or electric service to the extent Tenant's trash disposal,
water/sewerage and/or electrical usage exceeds, in Landlord's reasonable
opinion, normal usage for an office renant.
12. ELECTRIC CURRENT.
Landlord and its agents shall be permitted reasonable access to the
Premises for the purpose of installing and servicing systems within the
Premises reasonably deemed necessary by Landlord to provide the services and
utilities referred to in this Section 12 to Tenant and other tenants in the
Building.
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Tenant covenants that, unless permitted pursuant to the terms of this
section 12, it shall not use more than four (4) watts of electrical energy
per square foot of Rental Area within the Premises ("Base Current"). Landlord
shall be under no obligation to furnish electrical energy other than the Base
Current, and Tenant shall not install or use on the Premises any electrical
equipment, appliance or machine, for example, word processing or data
processing equipment, requiring more electrical energy than the Base Current,
unless the installation and use of such additional electrical equipment,
appliance, or machine has been approved by Landlord pursuant to terms and
conditions set forth in a separate agreement, which approval may be
conditioned upon the payment by Tenant, as Additional Rent, of the cost of
the additional electrical energy and modifications to the Building's
electrical system required for the operation of such electrical equipment,
appliance, or machine.
13. LOSS, DAMAGE AND INJURY.
To the maximum extent permitted by law, Tenant shall occupy and use the
Premises, the Building and the Common Area at Tenant's own risk. Consistent
with the provisions of Section 16.4, Tenant's Personal Property and personal
items of those claiming by, through or under Tenant, located in or on the
Premises or the Building, shall be and remain at the sole risk of Tenant or
such other person.
Further consistent with Section 16.4 and except as otherwise provided in
this Lease, Tenant hereby expressly agrees that Landlord and its agents,
employees and the parties to the COREA shall not be liable or responsible for,
and Tenant does hereby save them harmless from, any damage to the property of
Tenant, or its agents, employees, licensees, invitees or contractors,
directly or indirectly caused by (a) dampness or water in any part of the
Premises or Building; (b) bursting, leaking or overflowing of water, sewer,
steam, gas or sprinkler pipes and heating or plumbing fixtures; (c) air
conditioning or heating failures; (d) interference with light, air or other
incorporeal hereditaments; (e) operations in the construction of any public
or quasi-public work; (f) theft or other crime whether violent or non-violent
in nature; (g) fire, accident or natural disorder or other casualty; (h)
latent or apparent defect or change of condition in the Premises and/or the
Building; (i) the acts or omissions of other persons in the Building; and
(j) any other source, circumstance, or cause whatsoever except for damage or
loss caused by the negligence or willful misconduct of the Landlord and not
covered by tenant's insurance as required under Section 16.1 hereof.
No representation, guaranty, assurance, or warranty is made or given by
Landlord that the communications or security systems, devices or procedures
used, if any, will be effective to prevent injury to Tenant or any other
person or damage to, or loss (by theft or otherwise) of any of Tenant's
Personal Property or of the property of any other person, and Landlord
reserves the right to discontinue or modify at any time such communications
or security systems, devices, or procedures without liability to Tenant.
14. REPAIRS BY LANDLORD.
Landlord shall keep the Premises and the Building and all machinery,
equipment, fixtures and systems of every kind attached to, or used in
connection with the operation of, the Building, including all electrical,
heating, mechanical, sanitary, sprinkler, utility, power, plumbing, cleaning,
refrigeration, ventilating, air conditioning and elevator systems and
equipment (excluding, however, lines, improvements, systems and machinery for
water, gas, steam and electricity owned and maintained by any public utility
company or governmental agency or body) in good order and repair consistent
with the operation of the Building as a first-class office building.
Landlord, at its expense (subject to reimbursement by Tenant pursuant to
Section 7), shall make all repairs and replacements necessary to
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comply with its obligations set forth in the immediately preceding sentence,
except for (a) repairs required to be made by Tenant pursuant to Section 8
and (b) repairs caused by the willful misconduct of Tenant, its agents,
employees, invitees and guests, which repairs shall be made by Landlord at
the cost of Tenant, and for which Tenant shall pay promptly, as Additional
Rent, upon receipt of an invoice setting forth the cost of such repairs.
There shall be no abatement in rents due and payable hereunder and no
liability on the part of Landlord by reason of any inconvenience or annoyance
arising from Landlord's making repairs, additions or improvements to the
Building in accordance with its obligations hereunder.
In an emergency, Landlord shall use all reasonable efforts to commence
the repair within twenty-four (24) hours after notification from Tenant and
shall diligently work to complete the same. In all other instances, Landlord
shall commence repairs as soon as reasonably possible after notice from
Tenant and shall diligently work to complete the same. In the event Landlord
fails to commence and diligently pursue any repairs or provide services for
which Landlord is responsible within thirty (30) days after written notice
from Tenant of the need for repair or such services. Tenant shall have the
right with notice to Landlord at the notice address to perform the repairs or
provide such services and Landlord shall reimburse Tenant for the reasonable
cost of repair or provision of services within sixty (60) days after request
therefor.
15. ALTERATIONS, TITLE AND PERSONAL PROPERTY.
15.1. ALTERATIONS. Tenant shall in no event make or permit to be made
any alteration, modification, substitution or other change of any nature to
the mechanical, electrical, plumbing, HVAC and sprinkler systems within or
serving the Premises. After completion of Tenant's Improvements within the
Premises. Tenant shall not make or permit any other improvements, alterations,
fixed decorations, substitutions or modifications, structural or otherwise,
to the Premises or the Building ("Alterations") without the prior written
approval of Landlord. Landlord shall not unreasonably withhold or delay its
consent to Alterations which do not affect the structural, mechanical,
plumbing or electrical elements or systems of the Building and which are not
visible from outside the Premises, provided such Alterations conform with the
design criteria, standards and architectural guidelines for the Building.
Landlord's approval shall include the conditions under which acceptable
Alterations may be made. Alterations shall include, but not be limited to,
the installation or modification of carpeting, walls, partitions, counters,
doors, shelves, lighting fixtures, hardware, locks, ceiling, window and wall
coverings; but shall not include the initial Tenant's Improvements placed
within the Premises pursuant to Section 5.1. All Alterations shall be based
on complete plans and specifications prepared and submitted by Tenant to
Landlord for approval, except in the instance of cosmetic changes, such as
painting and carpeting, in which case Tenant shall provide Landlord with
samples showing colors, styles, etc. All Alterations shall be made by
Landlord at Tenant's sole cost, which cost shall be approved by Tenant before
the commencement of any work by Landlord. Such costs shall be payable by
Tenant, as Additional Rent, within thirty (30) days after receipt of an
invoice for same from Landlord, which cost shall include Landlord's standard
construction management fee, which fee is currently thirteen and one-half
percent (13.5%). Tenant shall be responsible for the cost of any additional
improvements within the Premises or the Common Area required by The Americans
with Disabilities Act of 1990 as a result of Tenant's Alterations.
If Tenant makes any Alterations without the prior consent of Landlord,
then, in addition to Landlord's other remedies, Landlord may correct or
remove such Alterations and Tenant shall pay the cost thereof, as Additional
Rent, within five (5) days after written demand by Landlord.
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15.2. TITLE. The Tenant Improvements, all Alterations and all
equipment, machinery, furniture, furnishings, and other property or
improvements installed or located in the Premises by or on behalf of Landlord
or Tenant, other than Tenant's Personal Property, (a) shall immediately
become the property of Landlord and (b) shall remain upon and be surrendered
to Landlord with the Premises as a part thereof at the end of the Term.
Notwithstanding the foregoing, Landlord shall, upon notice to Tenant at the
time when Tenant proposes to make Alterations, elect that any Alterations be
removed at the end of the Term, and thereupon, Landlord shall at Tenant's
sole expense, cause such Alterations to be removed and restore the Premises
to its condition prior to the making of such Alterations, reasonable wear
and tear excepted. Tenant shall promptly reimburse Landlord, as Additional
Rent, for the direct and verifiable cost of such work, which reimbursement
obligation shall survive termination of the Lease.
15.3. TENANT'S PERSONAL PROPERTY. "Tenant's Personal Property" means
all equipment, machinery, trade fixtures, furniture, furnishings and/or other
property now or hereafter installed or placed in or on the Premises by and at
the sole expense of Tenant with respect to which Tenant has not been granted
any credit or allowance by Landlord and which (a) is not used, or was not
procured for use, in connection with the operation, maintenance or protection
of the Premises or the Building; (b) is removable without damage to the
Premises or the Building; and (c) is not a replacement of any property of
Landlord, whether such replacement is made at Tenant's expense or otherwise.
Notwithstanding any other provision of this Lease, Tenant's Personal
Property shall not include any Alterations or any improvements or other
property installed or placed in or on the Premises as part of Tenant's
Improvements, whether or not installed at Tenant's expense. Tenant shall
promptly pay all personal property taxes on Tenant's Personal Property, as
applicable. Any property belonging to Tenant or any other person which is
left in the Premises after the date the Lease is terminated for any reason
shall be deemed to have been abandoned. In such event, Landlord shall have
the right to declare itself the owner of such property and to dispose of it in
whatever manner Landlord considers appropriate without waiving its right to
claim from Tenant all expenses and damages caused by Tenant's failure to
remove such property, and Tenant shall not have any right to compensation or
claim against Landlord as a result.
16. INSURANCE.
16.1. TENANT'S INSURANCE. Tenant, at its expense, shall obtain and
maintain in effect as long as this Lease remains in effect and during such
other time as Tenant occupies the Premises or any part thereof insurance
policies in accordance with the following provisions.
A. COVERAGE.
(i) commercial general liability insurance policy, including
insurance against assumed or contractual liability under this Lease, with
respect to the Property, to afford protection with limits per occurrence, of
not less than Two Million Dollars ($2,000,000), combined single limit, with
respect to personal injury, bodily injury, including death, and property
damage and Four Million Dollars ($4,000,000) aggregate (occurrence form),
such insurance to provide for no deductible;
(ii) all-risk property insurance policy, including theft, written
at replacement cost value and with replacement cost endorsement, covering all
of Tenant's Personal Property in the Premises, and covering loss of income
resulting from casualty, such insurance to provide for no deductible greater
than Five Thousand Dollars ($5,000).
(iii) worker's compensation or similar insurance policy offering
statutory coverage and containing statutory limits, which policy shall also
provide Employer's Liability Coverage of not less than Five Hundred Thousand
Dollars ($500,000) per occurrence.
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(iv) Tenant shall require any construction 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 (a) commercial 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 Million Dollars ($2,000,000), combined single limit, and with respect to
personal injury and death and property damage, Four Million Dollars
($4,000,000) aggregate (occurrence form) and Two Million Dollars ($2,000,000)
aggregate completed operations; (b) automobile liability insurance in the
amount of One Million Dollars ($1,000,000) combined single limit for bodily
injury and property damage; (c) worker's compensation insurance or similar
insurance in form and amounts as required by law; and (d) any other insurance
reasonably required of Tenant by Landlord or any Mortgagee.
(v) Notwithstanding anything set forth above in this subsection
16.1 to the contrary, all dollar limits specified herein shall be increased
from time to time as reasonably necessary to effect economically equivalent
insurance coverage, or coverage deemed reasonably adequate in light of then
existing circumstances. In no event, however, shall such limits be changed
more frequently than once each Rental Year. Tenant shall not be subject to
such increase unless at least ninety percent (90%) of the leases for tenants
in the Property executed concurrently herewith and subsequent hereto contain
a similar provision.
B. POLICIES.
Such policies shall be maintained with companies licensed to do business
in the State where the Premises are located and in form reasonably acceptable
to Landlord and will be written as primary policy coverage and not
contributing with, or in excess of, any coverage which Landlord shall carry.
Such policies shall be provided on an occurrence form basis unless otherwise
approved by Landlord and shall include Landlord and its managing agent as
additional insured as to coverage under paragraphs 16.1.A.(i) and
16.1.A.(iv). Such policies shall also contain a waiver of subrogation
provision and a provision stating that such policy or policies shall not be
canceled, non-renewed, reduced in coverage or materially altered except after
thirty (30) day's written notice, said notice to be given in the manner
required by this Lease to Landlord, Attention: Risk Management Department. 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.
Tenant shall deposit the policy or policies of such required insurance or
certificates thereof with Landlord prior to the Lease Commencement Date.
Tenant may maintain the required liability and all-risks property
insurance in the form of a blanket policy covering other locations of Tenant
in addition to the Premises; provided, however, that Tenant shall provide
Landlord with a certificate of insurance specifically naming the location of
the Premises, the limits of which coverage are to be at least in the amounts
set forth in Section 16.1.A.
Notwithstanding anything to the contrary contained in Section 16.1.A.,
so long as Earthshell Corporation is the Tenant under this Lease, Tenant may
carry the insurance required under Section 16.1.A. in a deductible form, so
long as the amount of the deductible does not exceed $5,000.00, and so long
as Tenant agrees not to hold Landlord, its officers, agents, contractors or
employees liable for any losses which would otherwise be covered by such
deductible. Tenant hereby expressly waives all right of recovery against
Landlord, its officers, agents, employees or contractors for damage which
would otherwise be covered by any deductible contained in Tenant's insurance
policies covering the Premises.
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16.2. TENANT'S FAILURE TO INSURE. If Tenant shall fail to obtain
insurance as required under this Section 16, Landlord may, but shall not be
obligated to, obtain such insurance, and in such event, Tenant shall pay, as
Additional Rent, the premium for such insurance within five (5) days after
demand by Landlord.
16.3. COMPLIANCE WITH POLICIES. Tenant shall not do or allow to be
done, or keep, or allow to be kept, anything in, upon or about the Premises
which will contravene Landlord's policies insuring against loss or damage by
fire, other casualty, or any other cause, including without limitation,
public liability, or which will prevent Landlord from procuring such policies
in companies acceptable to Landlord. If any act or failure to act by Tenant
in and about the Building and the Premises shall cause the rates with respect
to Landlord's insurance policies to be increased beyond those rates that
would normally be applicable for such limits of coverage, Tenant shall pay,
as Additional Rent, the amount of any such increases within five (5) days
after demand by Landlord.
16.4. WAIVER OF RIGHT OF RECOVERY. Except as provided in Section 8.3,
neither party, including Landlord's managing agent, shall be liable to the
other party, including Landlord's managing agent, or to any insurance company
(by way of subrogation or otherwise) insuring the other party, for any loss
or damage to any building, structure or other tangible property, or loss of
income resulting therefrom, or losses under worker's compensation laws and
benefits even though such loss or damage might have been occasioned by the
negligence of such party, its agents or employees. The provisions of this
Section 16.4 shall not limit the indemnification for liability to third
parties pursuant to Section 22.
16.5. LANDLORD'S INSURANCE. Landlord shall carry commercial general
liability insurance with regard to the Property and all-risk property
insurance on the Property, including Tenant Improvements and Alterations but
excluding Tenant's Personal Property. Landlord warrants that it maintains,
and during the Term it covenants to maintain, all-risks property insurance
covering the Building in an amount equal to at least eighty percent (80%) of
its full replacement value, or such greater percent as is necessary to
prevent the applicable of the co-insurance provisions.
Landlord shall not be obligated to repair any damage to Tenant's
Personal Property or replace the same.
17. DAMAGE AND DESTRUCTION.
17.1. LANDLORD'S OBLIGATION TO REPAIR AND RECONSTRUCT. If as the
result of fire, the elements, accident or other casualty (any of such causes
being referred to herein as a "Casualty"), the Premises shall be rendered
wholly or partially untenantable (damaged to such an extent as to preclude
Tenant's use of the Premises for the purposes originally intended), then,
subject to the provisions of Section 17.2, Landlord shall cause such damage
to be repaired, including Tenant Improvements and Alterations, and the Annual
Basic Rent and Additional Rent (but not any Additional Rent due Landlord
either by reason of Tenant's failure to perform any of its obligations
hereunder or by reason of Landlord's having provided Tenant with additional
services hereunder) shall be abated proportionately as to the portion of the
Premises rendered untenantable during the period of such untenantability.
All such repairs shall be made at the expense of Landlord, subject to the
availability of insurance proceeds and Tenant's responsibilities set forth
herein. Landlord shall not be liable for interruption to Tenant's business
or for damage to or replacement or repair of Tenant's Personal Property, all
of which replacement or repair shall be undertaken and completed by Tenant,
at Tenant's expense.
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If the Premises shall be damaged by Casualty, but the Premises shall
not be thereby rendered wholly or partially untenantable, Landlord shall
promptly cause such damage to be repaired and there shall be no abatement of
rent reserved hereunder.
17.2. TERMINATION OF LEASE. (A) If the Premises are (1) rendered
wholly untenantable, or (2) materially damaged as a result of any cause which
is not covered by Landlord's insurance, or (B) if the Building is damaged to
the extent of fifty percent (50%) or more of the gross leasable area thereof,
or (C) if, for reasons beyond Landlord's control or by virtue of the terms of
any financing of the Building, sufficient insurance proceeds are not
available for the reconstruction or restoration of the Building or Premises,
then, in any of such events, Landlord may elect to terminate this Lease by
giving to Tenant notice of such election within ninety (90) days after the
occurrence of such event, or after the insufficiency of such proceeds becomes
known to Landlord, whichever is applicable. If such notice is given, the
rights and obligations of the parties shall cease as of the date set forth in
such notice, and the Annual Basic Rent and Additional Rent (but not any
Additional Rent due Landlord either by reason of Tenant's failure to perform
any of its obligations hereunder or by reason of Landlord's having provided
Tenant with additional services hereunder) shall be adjusted as of the date
set forth in such notice, or, if the Premises were rendered untenantable, as of
the date of the Casualty.
Within ninety (90) days following a Casualty, Landlord shall notify
Tenant in writing of the date on which Landlord, in its best professional
judgment, estimates restoration will be substantially completed. If
restoration is expected to exceed one hundred eighty (180) days from the date
of Landlord's notice, then Tenant shall have the right to terminate this
Lease on written notice to Landlord within fifteen (15) days after receipt of
Landlord's notice.
Tenant shall have the right to terminate this Lease if the Premises are
damaged in whole or in part and are thereby rendered untenantable during the
last twelve (12) months of the Term, by giving Landlord written notice of
such termination within thirty (30) days after the date of the Casualty. If
Tenant so terminates this Lease, both parties shall be relieved of all
obligations under this Lease except those obligations occurring or accruing
before the date of such termination.
17.3. DEMOLITION OF THE BUILDING. If the Building shall be so
substantially damaged that it is reasonably necessary, in Landlord's
judgment, to demolish the Building for the purpose of reconstruction,
Landlord may demolish the same, in which event the Annual Basic Rent and
Additional Rent (but not any Additional Rent due Landlord either by reason of
Tenant's failure to perform any of its obligations hereunder or by reason of
Landlord's having provided Tenant with additional services hereunder) shall
be abated to the same extent as if the Premises were rendered wholly
untenantable by a Casualty.
17.4. INSURANCE PROCEEDS. If the Lease is not terminated pursuant to
subsection 17.2, Landlord shall, subject to the terms of any Mortgage,
disburse and apply any insurance proceeds received by Landlord to the
restoration and rebuilding of the Building in accordance with subsection 17.1
hereof. All insurance proceeds payable with respect to the Premises and the
Building shall belong to and shall be payable to Landlord. Notwithstanding
anything to the contrary, Tenant shall be entitled to receive all proceeds
payable with respect to Tenant's Personal Property.
18. CONDEMNATION.
18.1. TERMINATION. If either the entire Premises or the Building shall
be acquired or condemned by any governmental authority under its power of
eminent domain for any public or quasi-public use or purpose, this Lease
shall terminate as of the date of vesting or acquisition of title in the
condemning
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authority and the rents hereunder shall be abated on that date. If less than
the whole but more than thirty percent (30%) of the Rental Area of the
Premises or more than fifty percent (50%) of the total area of the Building
(even if the Premises are unaffected) of such portion of the Common Area as
shall render the Premises or the Building untenantable should be so acquired
or condemned, or if the taking materially interferes with Tenant's ability to
continue its normal business operations in substantially the same manner,
Landlord and Tenant shall each have the option to terminate this Lease by
notice given to the other within ninety (90) days of such taking. In the
event that such a notice of termination is given, this Lease shall terminate
as of the date of vesting or acquisition of title in the condemning authority
and the Annual Basic Rent and Additional Rent (but not any Additional Rent
due Landlord either by reason of Tenant's failure to perform any of its
obligations hereunder, or by reason of Landlord's having provided Tenant with
additional services hereunder) shall be adjusted as of such date. Landlord
shall make, or cause to be made, at its expense, such repairs and alterations
as may be necessary to restore the part not taken to useful condition.
If (a) neither Landlord nor Tenant shall exercise their respective
options to terminate this Lease, as hereinabove set forth, or (b) some lesser
portion of the Premises or the Building or Common Area, which does not give
rise to a right to terminate pursuant to this subsection 18.1, is taken by
the condemning authority, this Lease shall continue in force and effect, but
from and after the date of the vesting of title in the condemning authority,
the Annual Basic Rent payable hereunder during the unexpired portion of the
Term shall be reduced in proportion to the reduction in the total Rental Area
of the Premises, and any Additional Rent (but not any Additional Rent due
Landlord either by reason of Tenant's failure to perform any of its
obligations hereunder, or by reason of Landlord's having provided Tenant with
additional services hereunder) payable pursuant to the terms hereof shall be
adjusted to reflect the diminution of the Premises and/or the Building, as
the case may be.
18.2. RIGHTS TO AWARD. Tenant shall have no claim against Landlord
arising out of the taking or condemnation, or arising out of the cancellation
of this Lease as a result of any such taking or condemnation, or for any
portion of the amount that may be awarded as damages as a result of any
taking or condemnation, or for the value of any unexpired portion of the
Term, or for any property lost through condemnation, and Tenant hereby
assigns to Landlord all its right, title and interest in and to any such
award with regard to the Premises; provided, however, that Tenant may assert
any claim it may have against the condemning authority for compensation for
Tenant's Personal Property lost thereby, loss of income, and for any
relocation expenses compensable by statute and receive such awards therefor
as may be allowed in the condemnation proceedings provided that such awards
shall be made in addition to, and stated separately from, the award made for
the Building, the underlying land and the Premises. Landlord shall have no
obligation to contest any taking or condemnation.
19. BANKRUPTCY.
19.1. EVENT OF BANKRUPTCY. For purposes of this Lease, each of the
following shall be deemed an "Event of Tenant's Bankruptcy":
(a) if Tenant becomes insolvent, as defined in the Bankruptcy
code, or under the Insolvency Laws;
(b) the commencement of any action or proceeding for the
dissolution or liquidation of Tenant or for the appointment
of a receiver or trustee of the property of Tenant, whether
instituted by or against Tenant, if not bonded or discharged
within ninety (90) days of the date of the commencement of
such proceeding or action;
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(c) if Tenant files a voluntary petition under the Bankruptcy
Code or Insolvency Laws;
(d) if there is filed an involuntary petition against Tenant as
the subject debtor under the Bankruptcy Code or Insolvency
laws, which is not dismissed within ninety (90) days of
filing, or results in issuance of an order for relief
against the debtor; and
(e) if Tenant makes or consents to an assignment of its assets,
in whole or in part, for the benefit of creditors, or to a
common law composition of creditors.
As used herein, (i) "Bankruptcy Code" means title 11 of the United
States Code, 11 U.S.C. Section 101 et seq. as amended or any successor
statute and (ii) Insolvency Laws means the insolvency laws of any state or
territory of the United States.
19.2. ASSUMPTION BY TRUSTEE. If Tenant becomes the subject debtor in a
case pending under the Bankruptcy Code, Landlord's right to terminate this
Lease under Section 20 hereof shall be subject to the applicable rights (if
any) of the Trustee in Bankruptcy to assume or assign this Lease as then
provided for in the Bankruptcy Code. However, the Trustee in Bankruptcy must
give to Landlord and Landlord must receive proper written notice of the
Trustee's assumption or rejection of this Lease, within sixty (60) days (or
such other applicable period as is provided for in the Bankruptcy Code) after
the date of the Trustee's appointment. The failure of the Trustee to give
notice of the assumption within the period shall conclusively and irrevocably
constitute the Trustee's rejection of this Lease and waiver of any rights of
the Trustee to assume or assign this Lease. The Trustee shall not have the
right to assume or assign this Lease unless the Trustee (i) promptly and
fully cures all defaults under this Lease, (ii) promptly and fully
compensates Landlord for all monetary damages incurred as a result of such
default, and (iii) provides to Landlord adequate assurance of future
performance. In the event Tenant is unable to: (i) cure its defaults, (ii)
reimbures Landlord for its monetary damages, or (iii) pay the Rent due under
this Lease on time, then Tenant hereby agrees in advance that it has not met
its burden to provide adequate assurance of future performance, and this
Lease may be terminated by Landlord in accordance with Section 20.
19.3. TENANT'S GUARANTOR'S BANKRUPTCY. Notwithstanding any of the
other provisions of this Lease, in the event Tenant's obligations under this
Lease are guaranteed by a guarantor, and said guarantor shall voluntarily or
involuntarily come under the jurisdiction of the Bankruptcy Code, and
thereafter said guarantor or its trustee in bankruptcy, under the authority
of and pursuant to applicable provisions thereof, shall determine to assign
the guarantee obligations of said guarantor hereunder, Tenant and its said
guarantor agree that (a) said guarantor or its trustee will provide Landlord
sufficient information enabling it to independently determine whether
Landlord will incur actual and substantial detriment by reason of such
assignment, and (b) "adequate assurance of future performance" in regard to
such guarantee obligations of said guarantor, as that term is generally
defined under the Bankruptcy Code, will be provided to Landlord by said
guarantor or its trustee and its assignee as a condition of said assignment.
20. DEFAULT PROVISIONS AND REMEDIES.
20.1. EVENTS OF DEFAULT. Each of the following shall be deemed an
Event of Default by Tenant under this Lease:
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a. failure of Tenants to pay Annual Basic Rent, Additional Rent, or
any other sum required to be paid under the terms of this Lease, including
late charges, within ten (10) days after notice from Landlord of non-payment;
b. failure by Tenant to perform or observe any other term, covenant,
agreement or condition of this Lease, on the part of Tenant to be performed
(other than those obligations of Tenant set forth in subsection 16.2 for
which Tenant shall be entitled to receive no prior notice, and other than the
conditions set forth in paragraphs 20.1.a, c, d, e, f and g, which shall be
governed solely by the provisions set forth herein), within ten (10) days
after notice thereof from the Landlord specifying in reasonable detail the
nature of such default, unless such performance shall reasonable require a
longer period, in which case Tenant shall not be deemed in default if Tenant
commences the required performance promptly and thereafter pursues and
completes such action diligently and expeditiously;
c. the filing of a tax or mechanic's lien against any property of
Tenant which is not bonded or discharged within thirty (30) days of the date
such lien is filed;
d. abandonment of the Premises by Tenant; provided, however, that
Tenant shall not be deemed to be in default hereunder so long as Tenant shall
continue the payment of Annual Basic Rent and Additional Rent under this Lease;
e. an Event of Tenant's Bankruptcy;
f. the sale of Tenant's interest in the Premises under attachment,
execution or similar legal process; and
g. the failure of Tenant to vacate the premises upon the expiration of
the Term, or the earlier termination thereof pursuant to the other provisions
hereof.
20.2. REMEDIES. Upon the occurrence of an Event of Default, Landlord,
without notice to Tenant in any instance (except where expressly provided for
below or by applicable law) may do any one or more of the following:
(a) Sell at public or private sale all or any part of the
goods, channels, fixtures and other Tenant's Personal
Property which are or may be put into the premises during
the Term, whether exempt or not from sale under execution
or attachment and apply the proceeds of such sale, first,
to the payment of all costs and expenses of conducting the
sale or caring for or storing said property (including all
reasonable attorneys' fees), second, toward the payment of
any indebtedness, including (without limitation)
indebtedness for Annual Basic Rent, which may be or may
become due from Tenant to Landlord, and third, to pay
Tenant, on demand in writing, any surplus remaining after
all indebtedness of Tenant to Landlord has been fully paid;
(b) perform, on behalf and at the expense of Tenant, any
obligation of Tenant under this Lease which Tenant has
failed to perform and of which Landlord shall have given
Tenant notice, the cost of which performance by Landlord,
together with interest thereon at the Default Rate from the
date of such expenditure, shall be payable by Tenant to
Landlord, as Additional Rent, within fifteen (15) days
after demand.
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Notwithstanding the provisions of this clause (b) and
regardless of whether an Event of Default shall have
occurred, Landlord may exercise the remedy described in
clause (b) without any notice to Tenant (but with notice to
Tenant s soon as reasonably practicable under the
circumstances) if Landlord, in its good faith judgment,
believes it would be materially injured by failure to take
rapid action or if the unperformed obligation of Tenant
constitutes an emergency;
(c) elect to terminate this Lease and the tenancy created
hereby by giving notice of such election to Tenant, and
reenter the Premises, by summary proceedings or otherwise,
and remove Tenant and all other persons and property from
the Premises, and store such property in a public warehouse
or elsewhere at the cost of and without Landlord being
deemed guilty of trespass or becoming liable for any loss
or damage occasioned thereby;
(d) declare any option which Tenant may have to renew the Term
or expand the Premises to be null and void and of no
further force and effect; or
(e) exercise any other legal or equitable right or remedy which
it may have.
20.3. DAMAGES. If this Lease is terminated by Landlord pursuant to Section
20.2.(c), Tenant nevertheless shall remain liable for (a) any Annual Basic
Rent, Additional Rent, and damages which may be due or sustained prior to
such termination, and (b) all reasonable costs, fees and expenses including,
but not limited to, reasonable attorneys' fees, costs and expenses incurred by
Landlord in pursuit of its remedies hereunder or in renting the premises to
others from time to time. In addition, Landlord may recover from Tenant
additional damages to compensate Landlord for loss of rent resulting from
termination of the Lease, which, at the election of Landlord, shall be either:
(i) An amount equal to the rent which, but for termination of
this Lease, would have become due during the remainder of
the Term, less the amount of rent, if any, which Landlord
shall receive during such period from others to whom the
Premises may be rented(other than any Additional Rent
received by Landlord as a result of any failure of such
other person to perform any of its obligations to
Landlord), in which case such damages shall be computed and
payable in monthly installments, in advance, on the first
day of each calendar month following termination of the
Lease and continuing until the date on which the Term would
have expired but for such termination; and suit or action
brought to collect any such damages for any month shall not
in any manner prejudice the right of Landlord to collect
any damages for any subsequent month by a similar
proceeding; or
(ii) an amount equal to the present worth (as of the date of
such termination) of rent which, but for termination of
this Lease, would have become due
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during the remainder of the Term, in which case such
damages shall be payable to Landlord in one lump sum on
demand and shall bear interest at the Default Rate until
paid. For purposes of this clause (ii), "present worth"
shall be computed by discounting such amount to present
worth at a discount rate equal to one percentage point
above the discount rate then in effect at the Federal
Reserve Bank nearest to the location of the Property.
Damages shall be due and payable immdiately upon demand by Landlord
following any termination of this Lease pursuant to Section 20.2. In the
event Landlord re-leases the Premises prior to the expiration of the Term at
an Annual Basic Rent (annualized to account for any rent abatement, free rent
period or similar concession) equal to or greater than that reserved under
this Lease, Landlord shall refund to Tenant any amounts paid by Tenants
pursuant to Section 20.3. (ii) applicable to the portion of the Term
coinciding with the term of the replacement lease.
If this Lease is terminated pursuant to Section 20.2., Landlord may
re-lease the Premises or any part thereof, alone or together with other
premises, for such term(s) (which may be greater or less than the period
which otherwise would have constituted the balance of the Term) and on such
terms and conditions (which may include concessions of free rent and
alterations of the Premises) as Landlord, in its sole discretion, may
determine. The failure or refusal of Landlord to re-lease the Premises or any
part or parts thereof shall not release or affect Tenant's liability for
damages.
Notwithstanding anything to the contrary in this Section 20.3, Landlord
shall use reasonable efforts to re-lease the Premises, provided that Landlord
shall not be required to (i) use methods or procedures other than its usual
methods and procedures for finding tenants for comparable space in the
Building; (ii) lease the Premises in preference to any other space in the
Building available for lease, regardless of when such other space became
available for lease; (iii) lease the Premises at rents lower than the rate at
which Landlord would otherwise offer such space to a third party; (iv) to
make improvements to the Premises at Landlord's expense; and (v) lease the
Premises for any purpose or use other than that specifically permitted by
this Lease. Landlord shall not be liable to Tenant for Landlord's failure to
re-lease the Premises despite the exercise of reasonable efforts pursuant to
this paragraph, and no such re-leasing shall relieve Tenant of its
obligations under the terms of this Lease, including, without limitation, the
payment of rent as set forth herein.
Nothing contained in this Lease shall limit or prejudice the right of
Landlord to prove and obtain in proceedings for the termination of this Lease
by reason of bankruptcy or insolvency, an amount equal to the maximum allowed
by any statute or rule of law in effect at the time when, and governing the
proceedings in which, the damages are to be proved, whether or not the amount
be greater, equal to, or less than the amount of the loss or damages referred
to above.
20.4. NO WAIVER. No act or omission by Landlord shall be deemed to be an
acceptance of surrender of the Premises or a termination of Tenant's
liabilities hereunder, unless Landlord shall execute a written release of
Tenant. Tenant's liability hereunder shall not be terminated by the execution
by Landlord of any new lease for all or any portion of the Premises or the
acceptance of rent from any assignee or subtenant.
20.5. REMEDIES NOT EXCLUSIVE. All rights and remedies of Landlord set
forth in this Lease shall be cumulative, and none shall exclude any other
right or remedy, now or hereafter allowed by or available under any statute,
ordinance, rule of court, or the common law, either at law or in equity, or
both. For the purposes of any suit brought or based hereon, this Lease shall
be construed to be a
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divisible contract, to the end that successive actions may be maintained on
this Lease as successive periodic sums shall mature hereunder. The failure of
Landlord to insist, in any one or more instances, upon a strict performance
of any of the covenants, terms and conditions of this Lease or to exercise
any right or option herein contained shall not be construed as a waiver or a
relinquishment for the future, of such covenant, term, condition, right or
option, but the same shall continue and remain in full force and such
covenant, term, condition, right or option, but the same shall continue and
remain in full force and effect unless the contrary is expressed by Landlord
in writing. The receipt by Landlord of rents hereunder, with knowledge of the
breach of any covenant hereof or the receipt by Landlord of less than the
full rent due hereunder, shall not be deemed a waiver of such breach or of
Landlord's right to receive the full rents hereunder, and no waiver by
Landlord of any provision hereof shall be deemed to have been made unless
expressed in writing and signed by Landlord.
20.6 PERSISTENT FAILURE TO PAY RENT. In addition to any other remedies
available to Landlord pursuant to this Lease or by law, Landlord may, at any
time throughout the Term of this Lease terminate this Lease upon Tenant's
default on three (3) separate occasions during any twelve (12) calendar month
period under subsection 20.1.a., regardless of whether or not such prior
defaults have been cured. Termination, pursuant to this subsection 20.6,
shall be effective upon Landlord's delivery to Tenant of a notice of
termination.
21. Intentionally deleted.
22. INDEMNITY.
To the maximum extent permitted by law, Tenant shall indemnify, hold
harmless and (at Landlord's option) defend Landlord, it agents, servants and
employes from and against all claims, actions, losses, costs and expenses
(including reasonable attorneys' and other professional fees), judgments,
settlement payments, and, whether or not reduced to final judgment, all
liabilities, damages, or fines paid, incurred or suffered by any third
parties to the extent arising directly or indirectly from (a) any default by
Tenant under the terms of this Lease, (b) the use or occupancy of the property
by Tenant or any person claiming through or under Tenant, and/or 9c) any acts
or omissions of Tenant or any contractor, agent, employee, invitee or
licensee of Tenant in or about the property. The foregoing indemnity is in
addition to, and not in substitution for any indemnity given by Tenants to
Landlord under Section 8.3.
To the maximum extent permitted by law, Landlord shall indemnify, hold
harmless and defend Tenant, its agents, servants and employees from and
against all claims, actions, losses, costs and expenses (including
reasonable attorneys' and other professional fees), judgments, settlement
payments, and, whether or not reduced to final judgment, all liabilities,
damages, or fines paid, incurred or suffered by any third party, including
Landlord's employees, to the extent arising directly or indirectly from (a)
any default by Landlord under the terms of this Lease, (b) the use of
occupancy of the Common Area or the Premises by Landlord or its contractors,
agents, or employees, and/or (c) any acts or omissions of Landlord or any
contractor, agent, or employee of Landlord in or about the Common Area or the
Premises.
23. LIMITATION ON LANDLORD LIABILITY.
The term "Landlord" as used in this Lease shall mean only the owner or the
Mortgagee or its trustees, as the case may be, then in possession of the
property so that in the event of any transfer by Landlord of its interest in
the Property, the Landlord in possession immediately prior to such transfer
shall be, and hereby is, entirely released and discharged from all covenants,
obligations and liabilities of
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actual or alleged failure, breach or default hereunder by the Landlord, and
notwithstanding anything to the contrary contained elsewhere in this Lease,
the remedies of Tenant under this Lease shall be solely and exclusively
limited to Landlord's interest in the Property, (provided that any right of
Tenant thereto shall always be subject and subordinate to the right of
Baltimore City under that certain Disposition and Development Agreement
between Landlord and the Mayor and City Council of Baltimore dated April 17,
1984, regarding Development Areas 5 and 6, Inner Harbor, and |
