Maryland-Gaithersburg-55 West Watkins Mill Road Lease - MOR Bennington LLLP and MedImmune Inc.
MOR BENNINGTON LLLP
LEASE AGREEMENT
55 West Watkins Mill Road
THIS LEASE AGREEMENT (this "Lease") is made as of the 8th day of October,
1999, between MOR BENNINGTON LLLP, a Maryland limited liability limited
partnership ("Landlord"), and MEDIMMUNE, INC., a Delaware corporation
("Tenant").
I. LEASED PREMISES
A. Location of Leased Premises. Landlord leases to Tenant and Tenant leases
from Landlord the "Leased Premises" comprised of the entire second floor of the
two-story building (the "Building") located at 55 West Watkins Mill Road,
Gaithersburg, Maryland 20879 in the Bennington Corporate Center (the "Center")
in Gaithersburg, Montgomery County, Maryland and containing, for all purposes of
this Lease, approximately nineteen thousand five hundred fifty-nine (19,559)
square feet. Tenant shall have the right, at its sole cost and expense, to
verify said square footage so long as such verification is performed in
accordance with the 1989 Washington D.C. Association of Realtors Method of
Measurement. The Leased Premises are described more specifically in the attached
Exhibit A. "Property", when used in this Lease, means the Building, Parcel J
upon which the Building is situated; and all fixtures, equipment and other
improvements in or upon such land and/or building, including sidewalks,
areaways, parking areas, loading areas, gardens and lawns. See Rider No. 1 Right
of First Offer.
B. Construction of the Leased Premises.
1. Landlord, at its sole cost and expense, has constructed the base shell
of the Building, including common areas and tenant interiors, in accordance with
the Base Building Specifications attached hereto as Exhibit B. Landlord,
additionally, has paid all amounts payable to WSSC for base building hook-up,
tap fees for common areas, and all hook-up costs and tap fees for the currently
installed water meter and service. Landlord has installed electronic card
security access on all exterior doors to the Base Building.
2. Landlord will finish the Leased Premises for Tenant (the "Tenant
Improvements") in accordance with plans and specifications (the "Plans and
Specifications") to be developed as set forth below. At such time as the Plans
and Specifications are agreed upon by the parties, they will be attached hereto
as Exhibit C and made a part of this Lease. The Plans and Specifications will be
developed as follows: Tenant's architect will prepare a schematic drawing of the
proposed Tenant Improvements which is acceptable to Tenant (the "Schematic
Drawing") and will deliver same to Landlord and Landlord's architect on or
before September 17, 1999. The Schematic Drawing is subject to the approval of
Landlord and Landlord's architect and shall be revised by Tenant's architect, as
necessary, to meet such approval. Landlord's approval of the Schematic Drawing
shall not be unreasonably withheld or conditioned and shall be granted or
withheld within fifteen (15) days following Landlord's receipt thereof. The
failure of Landlord to respond within said 15-day period shall be deemed to
constitute Landlord's approval thereof. At such time as the Schematic Drawing is
approved by Landlord, Tenant and Landlord's architect, Tenant's architect and
engineers shall prepare, from the Schematic Drawing, the construction documents
for the Leased Premises. Such construction documents are referred to herein as
the "Plans and Specifications".
3. Landlord will retain Manekin, LLC ("Manekin") to act as general
contractor in connection with the construction of the Tenant Improvements for
which Manekin will be paid a fee of five (5%) percent of all hard costs related
to such construction, plus an additional fee for general conditions of five
percent (5%) of all hard costs related to such construction. Prior to awarding a
contract for any of the major trades, Manekin shall obtain competitive bids from
at least three (3) subcontractors acceptable to Landlord, one or more of which
may be designated by Tenant. All bids shall be mutually reviewed and approved by
Landlord and Tenant, with each contract to be awarded to the lowest responsible
bid. All costs associated with the construction of the Tenant Improvements shall
be shared with Tenant on an open-book basis.
4. Landlord will contribute up to Two Hundred Sixty-Four Thousand Forty-Six
Dollars and Fifty Cents ($264,046.50) ("Landlord's Contribution") toward the
cost of finishing the Leased Premises in accordance with the Plans and
Specifications, which amount may also be applied toward all architectural and
engineering fees incurred by Landlord and/or Tenant, permitting fees, exterior
signage, telephone and data installation. Tenant agrees to pay to Landlord, as
Additional Rent (as defined below), any charges in excess of Landlord's
Contribution for this construction, which amount shall be paid by Tenant within
thirty (30) days of Tenant's receipt from Landlord of an invoice therefore.
C. Performance. Landlord shall perform or cause to be performed the Tenant
Improvements in strict accordance with the Plans and Specifications.
Additionally, Landlord shall construct the Building and common areas of the
Property in strict compliance with the provisions of all laws, rules,
regulations, orders, codes and other requirements of all governmental and
quasi-governmental authorities having jurisdiction with respect to the Building,
including the Americans With Disabilities Act and all fire and life safety
ordinances (collectively, the "Legal Requirements"); provided, however, that
Tenant and Tenant's architect shall bear full responsibility for the Plans and
Specifications and the Leased Premises, except for any preexisting violations as
improved by the Plans and Specifications as being in compliance with all
applicable Legal Requirements.
D. Landlord's Warranty. Landlord hereby agrees to and will assign to Tenant
at the termination of Landlord's Warranty Period (as defined below), to the
extent they are assignable, any and all written warranties and guarantees from
Landlord's contractors, subcontractors and suppliers of any materials and labor
to the Leased Premises for that portion, if any, of the Lease Term that such
warranties and guarantees are in effect. With regard to any new construction
performed by Landlord for the benefit of Tenant pursuant to Paragraph I.B. of
this Lease, Landlord hereby warrants ("Landlord's Warranty") to Tenant that
Landlord will be responsible for a period ("Landlord's Warranty Period") of one
(1) year from the date on which the Leased Premises are ready for Tenant's
occupancy to repair or to have repaired all defects in such construction, to the
extent such defects are not directly caused by the negligence of Tenant or any
of its agents, servants, employees or contractors (in which event such defects
will be repaired at Tenant's sole cost). To the extent that Landlord is
obligated to make repairs pursuant to Landlord's Warranty, Tenant will be
relieved during Landlord's Warranty Period of the obligations imposed upon it
pursuant to this Lease to make or pay for such repairs to the Leased Premises.
Tenant agrees to and will give Landlord prompt notice of the need for any such
repairs.
II. LEASE TERM
A. Lease Term. The Lease Term will be for approximately seven (7) years,
and will begin on the "Commencement Date" as hereinafter defined, and will
terminate at 11:59 p.m. on November 30, 2006, unless the Lease Term is renewed
or terminated earlier in accordance with this Lease. Unless specifically stated
otherwise in this Lease, the term "Lease Term" means the original term and any
and all renewal terms, whenever a renewal option has been exercised. See Rider
No. 2 -- Renewal Option.
For purposes of this Lease, the Commencement Date shall be the later of the
following dates: (i) the date that Landlord has substantially completed the
Tenant Improvements, subject only to minor punch list items, and Landlord has
tendered possession to Tenant; and (ii) the date when Landlord has provided to
Tenant a temporary certificate of occupancy or such other governmental approval
as is required in order for Tenant to occupy the Leased Premises. If Landlord
and Tenant disagree as to when Landlord's construction has been substantially
completed, the decision of Landlord's architect will be final and binding on
both Landlord and Tenant. So long as Tenant's architect delivers to Landlord, by
September 17, 1999, the Schematic Drawing which is acceptable to Landlord and
Landlord's architect, then Landlord will use its best reasonable efforts to
cause the Commencement Date to occur by November 15, 1999 (the "Estimated
Commencement Date").
B. Possession. If for any reason, including construction delays, Landlord,
with the use of its best reasonable efforts, cannot deliver possession of the
Leased Premises on the Estimated Commencement Date, then this Lease will remain
fully effective and Tenant may not cancel or rescind it so long as possession is
delivered within ninety (90) days after the Estimated Commencement Date. If
Landlord does not deliver possession of the Leased Premises within ninety (90)
days after the Estimated Commencement Date, Tenant has the option of canceling
this Lease by giving written notice of cancellation to Landlord within five (5)
days after the expiration of such ninety (90) day period; in which event the
Lease will be canceled as of such written notice, and neither Landlord nor
Tenant will have any further liability to the other. In no event will Landlord
be liable to Tenant for damages, if any, sustained by Tenant as a result of
Landlord's delay in delivering possession of the Leased Premises. Landlord will
use its reasonable efforts to give Tenant notice (which may be verbal) in
advance of the date on which Landlord expects to deliver possession of the
Leased Premises to Tenant.
The Commencement Date will be confirmed in a supplementary written
agreement, in substantially the form attached as Exhibit E, or in such other
form as Landlord shall prescribe.
Tenant shall have the right to enter the Leased Premises ten (10) business
days prior to the Commencement Date in order to install furniture, telephones,
data lines and similar equipment, provided that such work is done under the
general supervision of Landlord and does not interfere with Landlord's work.
Such entry shall be at Tenant's sole risk and expense. Commencing on the first
day of such early access, Tenant agrees that all of the terms and provisions of
this Lease shall be in full force and effect except that Tenant shall have no
obligation to pay rent during such early access period. Tenant agrees to
indemnify and hold harmless Landlord for any damage or personal injury which may
occur as a result of Tenant's entry into the Leased Premises prior to the
Commencement Date. Tenant shall deliver to Landlord evidence of the insurance
required to be maintained by Tenant pursuant to Section IV.E. of this Lease
prior to Tenant's entry into the Leased Premises.
C. Lease Year. The term "Lease Year" means each consecutive period of
twelve (12) successive calendar months during the Lease Term. If the
Commencement Date does not occur on the first day of a month, the first Lease
Year will include the twelve calendar months and the period from the
Commencement Date until the first day of the following month.
D. Acceptance of Leased Premises. Upon delivery by Landlord to Tenant of
the Leased Premises, Tenant will be deemed to have accepted the Leased Premises.
However, Landlord will remain responsible for the completion of those
"punchlist" items, if any, to which Landlord and Tenant have agreed in writing
within fifteen (15) days after Landlord delivers possession of the Leased
Premises.
III. RENT AND FINANCIAL MATTERS
A. First Month's Rent. Tenant shall deposit with Landlord at the time of
execution of this Lease the first month's rent (the "First Month's Rent") of
Twenty-Three Thousand Two Hundred Twenty-Six Dollars and Thirty-One Cents
($23,226.31) which shall be applied by Landlord, on the Commencement Date,
toward the first month's Basic Annual Rent payable by Tenant hereunder.
Landlord's receipt of the First Month's Rent shall be confirmed by Landlord in
the Lease Commencement Agreement, and shall not be deemed to have been paid by
Tenant unless and until Landlord's receipt thereof is so confirmed. Landlord is
not required to put the First Month's Rent into escrow or pay or accrue any
interest on it.
B. Rental Payments. Tenant agrees to pay Landlord Basic Annual Rent as set
forth below:
Basic Monthly Per
Lease Year Annual Rent Installments Square Foot
1 $ 278,715.75 $ 23,226.31 $ 14.25
2 $ 287,126.12 $ 23,927.18 $ 14.68
3 $ 295,732.08 $ 24,644.34 $ 15.12
4 $ 304,533.63 $ 25,377.80 $ 15.57
5 $ 313,726.36 $ 26,143.86 $ 16.04
6 $ 323,114.68 $ 26,926.22 $ 16.52
7 $ 332,894.18 $ 27,741.18 $ 17.02
Basic Annual Rent shall be paid in equal monthly installments as set forth
above. Each installment of the Basic Annual Rent is due in advance on the
twenty-fifth (25th) day of each and every month preceding the month for which
payment is applicable (e.g., April's rent is due on or before March 25). All
payments of Basic Annual Rent, Additional Rent or other sums due Landlord under
this Lease will be made by Tenant without any deductions or set-offs and without
demand, at the address designated in this Lease for such payments, or at any
other address that Landlord designates in writing to Tenant. Unless specifically
stated otherwise in this Lease, the term "Rent" means Basic Annual Rent and
Additional Rent. Because Landlord will incur additional expenses if Tenant does
not pay the Rent on the date due, Tenant will pay a late charge equal to five
percent (5%) of the arrearage. In addition, the arrearage shall bear interest
calculated at the rate of eighteen percent (18%) per annum for each day such a
payment is late. The late charge will be payable at the same time as the late
payment, without demand. Time is of the essence respecting all payments to be
made by Tenant to Landlord under this Lease.
If the Lease Term begins on a day other than the first day of a month, then
on the Commencement Date, Tenant will pay a pro-rated monthly installment of
Basic Annual Rent and of the various amounts set forth in Paragraph III.C.2. for
the fractional part of the first month.
The term "Additional Rent" includes all payments or installments due under
this Lease other than Basic Annual Rent (including attorneys' fees incurred by
Landlord in connection with Tenant's default). Unless a different period for
payment is provided for elsewhere in this Lease, any Additional Rent due will be
paid by Tenant within thirty (30) days after Landlord has notified Tenant of the
amount due. Tenant's obligation for Additional Rent and any unpaid Basic Annual
Rent will remain in effect after the termination or expiration of this Lease.
C. Rent Adjustments.
1. Definitions. For purposes of this Lease, the following meanings or
definitions will apply:
(a) The "Rentable Area of the Leased Premises" is conclusively deemed to be
nineteen thousand five hundred fifty-nine (19,559) square feet, as certified by
Landlord's architect in accordance with the 1989 Washington D.C. Association of
Realtor's Method of Measurement. The "Rentable Area of the Building" is
conclusively deemed to be thirty-eight thousand four hundred sixty-three
(38,463) square feet. Therefore, "Tenant's Portion" of those expenses payable in
accordance with Paragraph III.C.2. is fifty and eighty-five hundredths percent
(50.85%) (19,559/38,463), computed on the basis of the ratio of the Rentable
Area of the Leased Premises to the Rentable Area of the Building.
(b) The term "Common Area Expenses" means all expenses paid or incurred by
Landlord in connection with managing, maintaining, monitoring, operating,
leasing, and repairing the Building and the common areas of the Property in a
manner deemed reasonable and appropriate by Landlord and includes, without
limitation, all costs and expenses of the following: (i) operating, repairing,
lighting, and cleaning the internal and external common areas of the Property,
as well as all costs incurred in policing and regulating traffic, and
depreciation of movable machinery and equipment in accordance with generally
accepted accounting principles; (ii) keeping the driveways, parking areas,
sidewalks and steps free and clear of ice, snow and debris; (iii) maintaining
all grass and landscaping on the Property; (iv) electricity, steam and/or any
other fuel used in lighting, heating, ventilating and air conditioning the
common areas of the Property; (v) maintenance, monitoring, operation and repair
of elevators, stairways, lobbies, hallways, walkways, breezeways and all other
internal and external common areas of the Building, including (without
limitation) repair of normal wear and tear of the roof and caulking, cleaning,
repainting, retiling, recarpeting and redecorating all common areas, and
repairing the driveways and parking areas; (vi) the cost of Insurance on the
Property; (vii) sales or use taxes on supplies or services; (viii) management
fees (which shall not exceed three and one-half percent (3 1/2%) of the Basic
Annual Rent payable hereunder), wages, salaries and compensation of all persons
engaged in the maintenance, monitoring, operation or repair of the Building
(including Landlord's share of all payroll taxes); (ix) legal, accounting,
engineering and other professional fees and expenses; (x) the cost of all
capital improvements made by Landlord to the Building that result in more
efficient operation of the Building or that are required under any governmental
law or regulation that was not applicable to the Building at the time it was
constructed, the cost of which improvements will be amortized over the useful
life of such improvements as determined in accordance with generally accepted
accounting principles, together with the interest on the unamortized balance at
a fluctuating annual rate that is at all times equal to 1-1/2% over the prime
interest rate as determined from time to time by Citibank, N.A.; (xi) charges or
assessments imposed on or allocated to the Building and/or Property by the
Bennington Corporate Center Association, Inc.; and (xii) all other items which
would be considered as procured or incurred in managing, maintaining,
monitoring, operating, leasing, or repairing the Building or the common areas of
the Property under sound management and accounting principles. Notwithstanding
the foregoing, Landlord will be allowed reasonably to allocate the costs of
trash removal based on actual use of such service. "Common Area Expenses" does
not include the cost of work Landlord performs for, and/or at the expense of,
any particular tenant (including Tenant), which costs will be billed directly to
Tenant or such other tenant, as the case may be, and does not include the cost
of any capital improvements to the structural components of the Building (i.e.,
exterior walls, foundation, roof and parking surfaces).
Landlord further agrees that Common Area Expenses shall not include:
1. All capital costs or depreciation thereon relating to the original
construction of the Building or the common areas;
2. All interest, costs, charges or payments made pursuant to a deed of
trust or deed of trust note or other obligations secured by the Building, or any
other note used to finance or refinance the Leased Premises or the Building or
any part thereof;
3. Any of the Landlord's income, inheritance, estate or transfer taxes;
4. Any costs, charges or expenses relating to financing or refinancing the
Leased Premises, the Building, or any part thereof;
5. Any cost relating to a tenant in particular as contrasted to tenants in
general including without limitation build-out allowances, rent concessions, or
brokerage commissions; or attorneys' or other professional fees relating to the
negotiation of relationships with a tenant or a prospective tenant or
enforcement of rights pursuant to a lease or other obligation or defense or
settlement of any actions brought by a tenant or any other party with respect to
any lease or other contractual obligation between Landlord and any other party;
6. Leasing costs (including marketing, leasing commissions and legal fees);
7. Any rent under any ground or underlying lease;
8. Wages, bonuses and other compensation of employees over the rank of
property manager except to the extent those employees are directly involved in
the day-to-day management and operation of the Building ("Includable Wages");
9. Any cost that is reimbursed to Landlord by insurance carriers, or is
separately charged to and payable by tenants;
10. Costs of correcting initial construction defects for work performed by
Landlord;
11. Costs incurred by Landlord on other than an arms-length basis, to the
extent such costs exceed market rates for comparable items or services;
12. General overhead of Landlord, except for Includable Wages;
13. Promotional and advertising costs with respect to the Building;
14. Management fees in excess of those allowed in (viii) above;
15. Amounts paid by Landlord due to violations by Landlord of the
requirements of laws or governmental rules or regulations, except as incurred by
Landlord in successfully challenging same;
16. Costs incurred to remove or otherwise remedy Hazardous Substances or
asbestos-containing materials from the Property unless the hazardous Substances
or asbestos-containing materials were in or on the Property due to Tenant's acts
or its failure to comply with the terms of this Lease; and
17. Landlord's assessment of increased insurance premiums or taxes
attributable to a tenant, other than Tenant
(c) The term "Taxes" means any present or future federal, state, municipal,
local and/or any other taxes, assessments, levies, benefit charges and/or other
governmental and/or private impositions (including any business park charges),
imposed, levied, assessed and/or attributable directly or indirectly to the
Property and/or the Building or upon the Rent due and payable under this Lease,
whether now customary or within the contemplation of Landlord and Tenant and
whether extraordinary or ordinary, general or special, foreseen or unforeseen,
or similar or dissimilar to any of the foregoing. The term "Taxes" does not
include any inheritance, estate, succession, income, profits or franchise tax,
gift taxes, transfer taxes, capital levies or similar taxes on Landlord's
business. If, however, at any time during the Lease Term the method of taxation
prevailing on the Commencement Date is altered or eliminated so that one or more
of the items listed in the first sentence of this subparagraph C.1(c) is
replaced by a levy, assessment or imposition, wholly or partly as a capital
levy, or otherwise, on the rents or income received from the Property and/or the
Building (provided the tax on such income is not a tax levied on taxable income
generally) wholly or partly in place of an imposition on, a substitute for, or
an increase of, taxes in the nature of real estate taxes issued against the
Property and/or the Building, the charge to Landlord resulting from such altered
or replacement method of taxation will be deemed to be within the definition of
"Taxes". All reasonable expenses incurred by Landlord (including attorneys' fees
and court costs) in contesting any increase in Taxes or any increase in the
assessment of the Property and/or the Building will be included as an item of
Taxes for the purpose of computing Additional Rent due under this Lease.
Landlord shall give Tenant prompt notice of any proposed increase in Taxes and
Tenant shall be entitled, at its own expense, and through its own counsel, to
participate with Landlord or independently to contest or oppose any such
increase. Landlord shall cooperate with Tenant as may be reasonably required in
any such contest. Landlord shall, at the request and sole cost and expense of
Tenant, cooperate in Tenant's application for real property tax abatements or
deferrals, including but not limited to those arising out of the so-called
"Miller Legislation". Any resulting tax decreases or credits applicable to the
Lease Term shall be passed solely to Tenant as a decrease or credit to Tenant's
obligations hereunder.
(d) The term "Insurance" means the cost of all insurance of whatsoever
nature, as are reasonable and customary for a first-class office building in the
Baltimore-Washington metropolitan area, to be kept or caused to be kept in force
by Landlord to protect itself and/or its mortgagee(s). "Insurance" includes, but
is not limited to, coverage for physical damage to owned or leased property,
loss of rents insurance, primary and umbrella or excess liability insurance,
boiler and machinery insurance and workers compensation insurance.
(e) The term "HVAC Expense" shall mean the total of all third party costs
and expenses incurred by Landlord in maintaining a service contract on the
heating, ventilation and air conditioning system servicing the Leased Premises
(the "HVAC System")
2. Rent Adjustment--Common Area Expenses and Taxes. Tenant agrees to pay to
Landlord, in each year of the Lease Term, Tenant's Portion of Common Area
Expenses and Taxes, and Tenant's HVAC Expense (collectively, the "Expenses").
Until the actual amounts of such Expenses are determined by Landlord, Tenant
agrees to pay to Landlord, as Additional Rent, with and at the same time as the
monthly payments of Basic Annual Rent (provided, however, that such payments
shall commence on the Commencement Date whether or not the Basic Annual Rent
commences then), the following amounts:
(a) Three Thousand Thirty-One Dollars and Sixty-Five Cents ($3,031.65) per
month as one-twelfth of Tenant's estimated Portion of the Common Area Expenses
(calculated on the basis of $1.86 p.s.f.);
(b) Two Thousand Five Hundred Forty-Two Dollars and Sixty-Seven Cents
($2,542.67) per month as one-twelfth of Tenant's estimated Portion of Taxes
(calculated on the basis of $1.56 p.s.f.); and
(c) Two Hundred Ninety-Three Dollars and Thirty-Nine Cents ($293.39) per
month as one-twelfth of Tenant's estimated HVAC Expense (calculated on the basis
of $0.18 p.s.f.).
At any time, but no more frequently than one time, during a Lease Year,
Landlord may revise its estimate of Tenant's Portion of any such Expenses and
adjust Tenant's monthly installments to reflect the revised estimates. Landlord
will give Tenant no less than ten (10) business days' prior written notice of
the revised estimates and the amount by which Tenant's monthly installments will
be adjusted, and Tenant will pay the adjusted installments with each payment of
the Rent, beginning with the first payment of the Basic Annual Rent to come due
after Tenant's receipt of such notice. Notwithstanding anything herein to the
contrary, Tenant's Portion of Common Area Expenses and Taxes shall not exceed
$3.60 p.s.f. for the first year of the Lease Term.
Landlord will deliver to Tenant within one hundred twenty (120) days (or
such longer time as is reasonable under the circumstances) after the end of each
accounting period for any such Expenses, a statement for such accounting period
(the "Statement"), showing Tenant's Portion of such costs. Tenant will pay
Landlord, within thirty (30) days of the receipt of the Statement, such amounts
as may be necessary to adjust Tenant's payments of its estimated Portion of the
Expenses for such preceding period so that such payments will equal the actual
amount of Tenant's Portion of such Expenses for such period. If the actual
amount of Tenant's Portion of such costs for such preceding period is less than
the amounts paid by Tenant as installments of its Portion of such costs, then
Landlord will credit Tenant's account by the amount of the excess or, if at the
end of the Lease Term, refund to Tenant the amount of the excess. Unless Tenant
gives Landlord written notice of its exception to any Statement within sixty
(60) days after delivery thereof, the same shall be conclusive and binding on
Tenant; provided, however, that in the event that Tenant shall give Landlord
written notice of its exception to such Statement within such sixty (60) day
period, Tenant shall nevertheless be obligated to pay the Additional Rent.
Notwithstanding the foregoing, to the extent any item included within the
Common Area Expenses is subject to Landlord's reasonable control (it being
understood and agreed that the cost of Taxes, site lighting, snow and ice
removal, insurance, electricity, gas, water and sewer are examples of items not
within Landlord's reasonable control), Tenant shall not be obligated to pay
increases of more than five percent (5%) on a compounded basis of the previous
year's amount of such controllable item. Additionally, Landlord shall not
include in any Statement or revision of Expenses amounts included in Tenant's
Portion and paid by Tenant with respect to any previous period.
Upon at least ten (10) days prior notice, Landlord shall make available for
Tenant's inspection at Landlord's Office, during normal business hours and
without unreasonable interference with Landlord's or its property manager's
business operations, Landlord's records relating to the Expenses for such
preceding applicable period reflected on the Statement (the "Audit"); provided,
however, that unless Tenant shall have given Landlord written notice of its
exception to any such Statement for Additional Rent within ninety (90) days
after delivery thereof, the same shall be conclusive and binding on Tenant;
provided further that in the event that Tenant shall give Landlord written
notice of its exception to such Statement within such ninety (90) day period,
Tenant shall nevertheless be obligated to pay the Additional Rent. Any
overpayment by Tenant of Additional Rent for such period reflected by such
inspection shall be promptly corrected. If, as a result of such inspection, it
shall be determined that Landlord overcharged Tenant more than five percent (5%)
of Tenant's share of any such items, Landlord shall reimburse Tenant all
reasonable costs incurred by Tenant with respect to its inspection. All
information examined shall be kept by Tenant in the strictest confidence.
3. Summary of Payments. The following is a list of the various payments and
installments of Basic Annual Rent and Additional Rent under the Lease pursuant
to this Section III as of the Commencement Date. Some of these amounts will
change during the Lease Term.
Monthly Annual
Installments s.f. Amount
Basic Annual Rent:
(1st Lease Year) $23,226.31 $14.25
Common Area Expenses
(estimate) $ 3,031.65 $ 1.86
Taxes (estimate) $ 2,542.67 $ 1.56
HVAC Expense (estimate) $ 293.39 $ .18
TOTAL $29,094.02 $17.85
4. Utilities. (a) Although certain utilities on the Property are commonly
metered and the costs of those utilities are included within the Common Area
Expenses described above, if Tenant's use of any such utilities is other than
for normal office use and/or disproportionate to other office tenants of the
Building, then Landlord and Tenant each have the right, at Tenant's sole cost
and expense, to have a separate meter installed upon the Leased Premises. If a
separate meter is installed upon the Leased Premises, Tenant will pay to the
utility company (or, at Landlord's request, to Landlord) all charges for the
Leased Premises on the basis of such meter readings.
(b) To the extent utilities are not commonly metered, Tenant agrees to pay
promptly to the appropriate supplier all charges for water, gas, steam,
electricity or other power source, telephone and all other utility and
communication services used and/or supplied in connection with Tenant's use of
the Leased Premises.
(c) Notwithstanding the foregoing, if any utility service is suspended or
interrupted for more than two (2) consecutive days due to Landlord's negligence
or misconduct, and the Leased Premises or any material portion thereof is
rendered untenantable as a result thereof (as determined by Tenant in Tenant's
reasonable discretion) and Tenant in fact ceases operation to such extent within
the Leased Premises or such material portion thereof, then commencing on the
third (3rd) consecutive day and continuing until the earlier to occur of the
restoration of the suspended or interrupted utility or service, or the date
Tenant recommences the use of the Leased Premises (or the affected portion
thereof), Tenant's Rent shall be abated in proportion to the square footage of
the untenantable portion of the Leased Premises as Tenant's sole remedy for such
interruption of service.
IV. CONDITIONS OF TENANT'S OCCUPANCY AND POSSESSION
A. Use Restrictions and Rules. Tenant agrees to use the Leased Premises
only as an office and for no other purpose. In addition, Tenant agrees to be
bound by all laws, requirements, rules, orders, ordinances, zoning and
restrictive covenants applicable to the Property, whether in force on or after
the Commencement Date, and by the Rules and Regulations as announced by Landlord
from time to time, including those set forth in Exhibit F (collectively, the
"Restrictions"). Landlord shall use reasonable efforts to enforce the Rules and
Regulations with respect to all tenants in the Building. Notwithstanding the
foregoing, Landlord and not Tenant shall make all structural changes and correct
all structural defects in the Building necessary to comply with requirements of
law, and make all repairs, changes or alterations necessary because the Building
(including the common areas of the Building) was not constructed in compliance
with any of said laws, requirements, rules, orders, ordinances or regulations
including compliance with the Americans with Disabilities Act requirements which
affect the Building generally (i.e., to the extent such requirements are not
attributable solely to Tenant's particular use of the Leased Premises). Tenant
shall be entitled, at its own expense, and in good faith, to contest in Tenant's
name, by applicable and appropriate proceedings, the application of any such
requirement of law to Tenant's particular use of the Leased Premises. Tenant
shall indemnify and hold Landlord harmless from and against any losses, costs,
damages or claims arising out of such a contest by Tenant.
B. Improvements by Tenant. After completion of the work to be performed by
Landlord in accordance with the Plans and Specifications, Tenant will not make
any further improvements, alterations, installations or additions to the Leased
Premises unless (1) it receives Landlord's prior written consent, which will not
be unreasonably withheld; (2) the work is performed only by licensed contractors
approved in advance by Landlord; (3) the work is carried out pursuant to
properly documented drawings approved in advance by Landlord and pursuant to all
necessary permits or governmental and/or other approvals, the responsibility and
cost of obtaining which will be borne solely by Tenant; (4) Tenant pays all
costs of such work; and (5) the quiet enjoyment of other tenants in the Building
is not disturbed. If Tenant elects to use a contractor other than Landlord or
its representative, then the work performed by such contractor will be under the
general supervision of Landlord, and Tenant will pay Landlord a reasonable
supervisory fee. Notwithstanding the foregoing, Landlord's consent shall not be
required for any alterations, installations, additions and/or improvements to
the Leased Premises, including, but not limited to, the installation of any
fixtures, amenities, equipment, appliances or other apparatus, the cost of which
is less than $50,000.00 and/or is of a non-structural nature and/or which does
not involve the mechanical, electrical, plumbing and/or HVAC System
(collectively, the "Work"); provided, however, Tenant complies with all other
provisions herein with respect to such Work. All such Work shall be done under
the general supervision of Landlord to assure standard quality improvements on
the Property for which Landlord shall be paid a reasonable supervisory fee.
With the exception of movable trade fixtures and furniture, all
alterations, additions and improvements made by Tenant are hereby deemed the
property of Landlord and will remain a part of the Leased Premises upon this
Lease's termination. Notwithstanding the foregoing, prior to Tenant commencing
any work in the Leased Premises, Tenant may request Landlord's determination of
whether such work must be removed at the termination of the Lease Term, and such
determination shall be binding on Landlord. Landlord, however, may request in
writing that Tenant remove any or all of them no later than the termination date
of this Lease. In response to Landlord's request, Tenant promptly will perform
such removal and restore the Leased Premises to their original condition, all at
Tenant's sole cost.
C. Maintenance.
1. Tenant will, at its sole cost, keep the Leased Premises in good
condition and repair and will permit no damage to the Leased Premises or the
fixtures, improvements, equipment and appurtenances in and to the Leased
Premises. Tenant's responsibility under this Paragraph IV.C.1. will include, but
will not be limited to, maintenance and repair of all interior windows and
doors, hardware, locks, light fixtures, pipes, plumbing, electrical and sewer
connections. Tenant will not commit or suffer any waste of the Leased Premises.
2. Landlord, at its sole cost and expense (and not as a Common Area
Expense), will maintain and replace, as necessary, the exterior walls (including
the exterior windows and doors), downspouts, roof and structural components of
the Building, and all parking surfaces, as long as such maintenance or
replacement is not required because of the acts or omissions of Tenant or its
representatives, agents, employees, or visitors, in which event such maintenance
or replacement will be done by Landlord at Tenant's sole cost.
3. As a Common Area Expense, Landlord will maintain, repair and replace, as
necessary, all Building systems, including mechanical, electrical, heating,
ventilation, air conditioning and plumbing (collectively, the "Building
Systems"); provided, however, that replacements to same shall not be a Common
Area Expense during the initial approximately seven (7) year term but shall be a
Common Area Expense during any renewal term. In connection therewith, Landlord
will secure and maintain during the Lease Term a limited parts and labor service
contract on the HVAC System, the cost of which will be paid by Tenant as the
HVAC Expense as set forth above. Landlord will make all necessary repairs or
replacements to the HVAC System which are not covered under the service
contract, a copy of which was previously delivered to Tenant. All costs incurred
in connection with the HVAC System which are not covered by the service contract
shall be paid by Tenant. Notwithstanding the foregoing, during the first year of
the Lease Term except during the first Lease Term, which shall be paid by
Landlord. Common Area Expenses will not include any amounts incurred by Landlord
in connection with the maintenance, repair or replacement of the Building
Systems.
4. At the expiration or termination of the Lease, Tenant will leave the
Leased Premises clean and at least in the same good condition (reasonable wear
and tear excepted) as when the Lease Term began. Tenant will remove all of its
property and possessions from the Leased Premises except to the extent provided
by Paragraph IV.B. above. Any items of Tenant's personalty remaining in the
Leased Premises after the termination of the Lease shall be deemed abandoned by
Tenant and become the sole property of Landlord. Notwithstanding the foregoing,
any costs incurred by Landlord in storing and/or disposing of such abandoned
property shall remain the sole obligation of Tenant, which obligation shall
survive the termination of this Lease.
D. Conduct on Leased Premises. Tenant will neither do, nor permit anyone
else to do anything on the Leased Premises which might or would (1) interfere
with the good order of the Property; (2) interfere with the rights of other
tenants of the Property; (3) increase any insurance rates charged Landlord with
respect to the Property; or (4) conflict with or invalidate any insurance policy
maintained by Landlord for the Property. If the insurance premiums of Landlord
are increased due to Tenant's use or occupancy of the Leased Premises, then the
amount of such increase will be paid by Tenant to Landlord as Additional Rent as
it becomes due, and Landlord will have the same right to collect such amount as
Landlord has under this Lease to collect Additional Rent.
E. Insurance.
(a) At its sole cost and expense, Tenant shall maintain in full force and
effect during the term of this Lease the following insurance coverages insuring
against claims which may arise from or in connection with Tenant's operation and
use of the Leased Premises:
(i) Commercial General Liability with minimum limits of $1,000.000 per
occurrence; $3,000,000 general aggregate for bodily injury, personal injury and
property damage. If required by Landlord, liquor liability coverage will be
included.
(ii) Workers' Compensation insurance with statutory limits and Employers
Liability with a $1,000,000 per accident limit for bodily injury or disease.
(iii) Automobile Liability covering all owned, non-owned and hired vehicles
with a $1,000,000 per accident limit for bodily injury and property damage.
(iv) Property insurance against all risks of loss to any tenant
improvements or betterments and business personal property on a full replacement
cost basis with no co-insurance penalty provision.
(v) Business Interruption Insurance with a limit of liability representing
loss of at least approximately six months of income.
(b)Tenant shall deliver to Landlord certificates of all insurance
reflecting evidence of required coverages prior to initial occupancy and
annually thereafter.
(c) If, in the opinion of Landlord's insurance adviser, the amount or scope
of such coverage is deemed inadequate, Tenant shall increase such coverage to
such reasonable amounts or scope as Landlord's adviser deems adequate.
(d) All insurance required under Paragraph IV.E. (A) shall be primary and
noncontributory, (B) shall provide for severability of interests, (C) shall be
issued by insurers licensed to do business in the state in which the Leased
Premises are located and which are rated A:VII or better by Best's Key Rating
Guide, (D) shall be endorsed to include Landlord, the property manager hired by
Landlord in connection with the Property, and such other persons or entities as
Landlord may from time to time designate, as additional insureds (Commercial
General Liability only), and (E) shall be endorsed to provide at least 30 days
prior notification of cancellation or material change in coverage to said
additional insureds.
(e) During the Lease Term, Landlord shall carry a policy of general
liability insurance covering occurrences at the Center in a reasonable amount or
in such amount as may be required by Landlord's lender, if any, from time to
time.
Landlord and Tenant hereby mutually waive all claims for recovery from the
other for any loss or damage to any of Landlord's or Tenant's property insured
under valid and collectible insurance policies to the extent of any recovery for
loss insured under those policies. The parties agree that a mutual subrogation
clause will be included in each insurance policy setting forth that the
insurance will not be invalidated in the event that the insured waives in
writing, before any loss, any or all right of recovery against the other party
for any insured loss.
F. Liens. Tenant will not do anything, or permit anything to be done, which
subjects all or any part of the Leased Premises or Tenant's interest in it to
any lien or encumbrance. This includes, but is not limited to, mechanics' or
materialmen's liens. If any such lien is filed purporting to be for work or
material furnished to Tenant, then Tenant must have such lien discharged or
bonded within ten (10) days of its filing.
G. Environmental Assurances.
1. Representations. Tenant represents and warrants to Landlord that, to the
best of Tenant's knowledge, neither Tenant nor any affiliate of Tenant has
Generated (as defined below) or is Generating Hazardous Substances (as defined
below) at, to or from the Leased Premises.
2. Covenants. Tenant covenants with Landlord:
(a) that it shall not Generate Hazardous Substances at, to or from the
Leased Premises unless the same is specifically approved in advance by Landlord
in writing;
(b) to comply with all obligations imposed by applicable law, and
regulations promulgated thereunder, and all other restrictions and regulations
upon the Generation of Hazardous Substances (whether or not at, to or from the
Leased Premises);
(c) to deliver promptly to Landlord true and complete copies of all notices
received by Tenant from any governmental authority with respect to the
Generation by Tenant of Hazardous Substances (whether or not at, to or from the
Leased Premises);
(d) to complete fully, truthfully and promptly any questionnaires sent by
Landlord with respect to Tenant's use of the Leased Premises and Generation of
Hazardous Substances;
(e) to permit entry onto the Leased Premises by Landlord or Landlord's
representatives at any reasonable time to verify and monitor Tenant's compliance
with its representations, warranties and covenants set forth in this Paragraph;
and
(f) to pay to Landlord, as Additional Rent, the costs incurred by Landlord
hereunder, including the costs of such monitoring and verification, such routine
monitoring costs not to exceed Seven Hundred Dollars ($700.00) in any twelve
(12) month period.
Notwithstanding anything to the contrary contained in this Paragraph
IV.G.2., Tenant may use and store within the Premises such reasonable quantities
of consumable Hazardous Materials as are used by Tenant in the ordinary course
of its business operations and which are customarily found in first-class
offices; provided such reasonable quantities and use do not constitute a danger
to health of individuals or a danger to the environment and which are used,
stored and disposed of in accordance with all applicable governmental laws,
rules and regulations, and this Lease.
3. Tenant's Indemnification. Tenant agrees to indemnify and defend Landlord
and its managers and agents (with legal counsel reasonably acceptable to
Landlord) from and against any costs, fees or expenses (including, without
limitation, environmental assessment, investigation and environmental
remediation expenses, third party claims and environmental impairment expenses
and reasonable attorneys' fees and expenses) incurred by Landlord, or its
managers or agents, that are not a result of Landlord's or its managers or its
agents gross negligence, illegal conduct or malicious conduct as the case may
be, in connection with Tenant's Generation of Hazardous Substances at, to or
from the Leased Premises or in connection with Tenant's failure to comply with
its representations, warranties and covenants set forth in this Paragraph. This
indemnification by Tenant will remain in effect after the termination or
expiration of this Lease.
4. Landlord's IndemnificationLandlord agrees to indemnify and defend Tenant
(with legal counsel reasonably acceptable to Tenant) from and against any costs,
fees or expenses (including without limitation, environmental assessment,
investigation, and environmental remediation expenses, third party claims and
environmental impairment expenses and reasonable attorney's fees and expenses)
incurred by Tenant in connection with any Hazardous Substances contained in, on
or about the Leased Premises, the Building, or the common areas of the Property,
to the extent such Hazardous Substances was introduced on, in or about the
Leased Premises, the Building, or the common areas of the Property by Landlord.
This indemnification by Landlord shall remain in effect after the termination or
expiration of this Lease.
5. Definitions. The term "Hazardous Substance" means (a) any "hazardous
waste" as defined by the Resource Conservation and Recovery Act of 1976 (42
U.S.C. ss. 6901 et seq.), as amended from time to time, and regulations
promulgated thereunder; (b) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. ss. 9601 et seq.), as amended from time to time, and regulations
promulgated thereunder; (c) any "oil," as defined by the Maryland Environment
Code Ann. ss. 4-401(g) as amended from time to time, and regulations promulgated
thereunder; (d) any "controlled hazardous substance" or "hazardous substance" as
defined by the Maryland Environment Code Ann., ss. 7-201, as amended from time
to time, and regulations promulgated thereunder; (e) any "infectious waste" as
defined by the Maryland Environment Code Ann. ss. 9-227, as amended from time to
time, and regulations promulgated thereunder; (f) any substance the presence of
which on the Property is prohibited, regulated or restricted by any local law or
regulation or any other law or regulation similar to those set forth in this
definition; and (g) any other substance which by law or regulation requires
special handling in its Generation. The term "To Generate" means to use,
collect, generate, store, transport, treat or dispose of.
V. LANDLORD'S RIGHTS AND RESPONSIBILITIES
A. Access. Landlord or its authorized agent or representative (e.g., a
mortgagee, deed of trust holder, etc.) will have the right to enter and examine
the Leased Premises at any reasonable hour upon prior notice (which may be
verbal or written), or at any time (and without notice) in the event of an
emergency.
B. Building Repairs. Landlord may, but will not be obligated to, make such
repairs, alterations or improvements as it or its authorized representatives
deem necessary for the safety or preservation of the Building or for any other
reasonable purpose. Landlord shall use reasonable efforts not to materially and
adversely interfere with Tenant's use of the Leased Premises during such time as
Landlord is performing under the preceding sentence. The Rent will not abate
while Landlord is exercising any of its rights under this Paragraph V.B.
C. Performance of Tenant's Responsibilities by Landlord. If Tenant fails to
perform or otherwise comply with any covenant or term in this Lease, then
Landlord may perform the obligation for Tenant at any time after ten (10) days
following Landlord's giving Tenant written notice of such failure. Any
performance by Landlord under this Paragraph V.C. will be solely at the option
of Landlord, and Landlord's cost will be charged to Tenant. Tenant will pay
Landlord all costs (plus interest at a rate of two (2) percentage points above
the prime rate as announced by Citibank, N.A. from time to time) incurred by
Landlord in performing Tenant's obligations. Such payment by Tenant will be made
within ten (10) days of Landlord's delivery to Tenant of a statement for such
costs. Landlord's rights provided in this Paragraph V.C. are in addition to any
other right Landlord has under this Lease.
D. Loss, Damage, Injury. Landlord will not be liable or responsible to
Tenant, or to any other person or entity, for any damage, injury, destruction or
death due to or arising out of any cause whatsoever other than Landlord's
willful misconduct or negligence. This limitation of liability will remain in
effect after the expiration or termination of this Lease.
E. Mutual Indemnity. Landlord and Tenant agree that each will indemnify and
hold harmless the other, and Landlord's agents and managers, for all losses,
damages, liabilities, costs, payments, expenses and fines incurred by one party
(the "Indemnitee") as a result of any claim or action (whether or not such claim
or action proceeds to final judgment) brought or threatened for any of the
following acts or omissions of the other party (the "Indemnitor"), and/or of the
Indemnitor's servants, employees, agents, licensees or invitees: (1) any breach,
violation and/or nonperformance of any covenant or provision of this Lease
applicable to the Indemnitor and/or (2) negligence or any willful misconduct of
the Indemnitor. This indemnification will remain in effect after the termination
or expiration of this Lease.
VI. DAMAGE AND DESTRUCTION
If during the Lease Term, the Leased Premises or the Building becomes
damaged or destroyed in whole or in part by fire, other casualty or any other
cause (except condemnation), Tenant will immediately notify Landlord of such
event. This Lease will remain in full force and effect, except that the Rent
will be abated proportionately to the extent and for the period that all or a
portion of the Leased Premises are rendered untenantable.
If Landlord determines, in its sole discretion, that the damage or
destruction to the Leased Premises and/or to the Building is so extensive that
repair or restoration is uneconomical, or if Landlord otherwise decides not to
repair or restore the Building, then this Lease will terminate on the first day
after Landlord gives Tenant written notice of such termination. The Rent then
will be adjusted and paid to the date of the damage or destruction. Tenant will
immediately vacate and surrender the Leased Premises upon such termination.
Tenant, however, will not be released from liability for any damage caused by
Tenant or its agents or employees, or released from responsibility for any of
its obligations under this Lease for the period before such termination.
If Landlord decides to repair or restore the Leased Premises and/or the
Building, it will do so with reasonable speed, subject to reasonable delays for:
(a) adjusting losses under insurance policies; (b) labor troubles; or (c) any
other cause beyond Landlord's reasonable control.
Notwithstanding the provisions of this Paragraph VI, within sixty (60) days
after the date of material destruction of the Leased Premises, Landlord shall
obtain from Landlord's architect or contractor an estimate of the time which
will be required to repair the Leased Premises. Landlord shall promptly
communicate said estimate to Tenant. In the event that said estimate of time
exceeds one hundred eighty (180) days from the date of such destruction, then
Tenant shall have the right, within ten (10) days after receipt of said
estimate, to terminate this Lease without any further liability or obligation on
the part of the parties hereto for obligations thereafter accruing, provided
that Tenant shall give written notice to Landlord within said ten (10) days and
shall not be in breach or default of any covenant or condition by which Tenant
is obligated under this Lease.
VII. CONDEMNATION
This Lease will terminate immediately upon: (i) a taking or condemnation of
the entire Leased Premises for public purposes; (ii) a partial taking which
prevents the Tenant, from being reasonably able to use the remainder of the
Leased Premises for the purposes intended by this Lease; or (iii) upon
Landlord's conveyance or lease of the Building to any condemning authority in
settlement of a threat of condemnation or taking. The Rent will be adjusted to
the date of termination due to such taking, leasing or conveyance.
In the event of a partial taking for which this Lease is not terminated,
the Rent will abate in an amount which is proportionate to the area of the
Leased Premises so taken, leased or conveyed. Tenant, however, will not have any
claim against Landlord, nor any claim for any award from the condemning
authority arising out of any such taking, lease, conveyance or condemnation
action nor in any way arising out of its leasehold interest in the Leased
Premises, but will have the right to pursue a separate claim against the
condemning authority for its own loss of business, equipment and moving
expenses.
VIII. HOLDING OVER
This Lease is for a specific Lease Term. If Tenant, without Landlord's
specific written consent, continues its possession of the Leased Premises after
the termination date of this Lease, then all of the following conditions will
apply: (i) Tenant will occupy the Leased Premises as a month to month tenant on
the terms of this Lease, except that its occupancy will be at two times the Rent
payable during the last year of the Lease Term and will be subject to
termination on thirty (30) days' prior written notice from Landlord; (ii) Tenant
will be liable to Landlord for any damages suffered by Landlord due to such
holding over, including the loss of financial benefits from another potential
tenant occupying the Leased Premises; and (iii) Tenant will indemnify Landlord
for any losses or expenses (including reasonable attorneys' fees) incurred by
Landlord in connection with claims or litigation (e.g., due to a delayed
commencement date for a new tenant) arising because Tenant held over.
IX. DEFAULT
A. Events of Default. Each of the following constitutes a material breach
and a default by Tenant under this Lease, entitling Landlord to all remedies set
forth below or existing at law or in equity:
1. Any of the following legal actions filed by or against Tenant and not
bonded or discharged within thirty (30) days of the date of filing: (a) a
petition under the Federal Bankruptcy Code (as now or later amended or
supplemented) or for reorganization, arrangement or other rehabilitation within
the meaning of the Federal Bankruptcy Code; or (b) 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.
2. Tenant's suspension of business, or any action by Tenant amounting to a
business failure.
3. Tenant's making an assignment for the benefit of creditors.
4. The filing of a tax lien against any property of Tenant located at or
within the Leased Premises.
5. Tenant's causing or permitting the Leased Premises to be vacant, or its
abandoning or ceasing to do business (for the purpose specified in this Lease)
actively in the Leased Premises for a period in excess of five (5) days;
provided, however, that Tenant's vacating the Leased Premises shall not be
deemed an event of default so long as Tenant (i) continues to pay all sums
payable by Tenant hereunder when due; (ii) continues to perform all other
obligations of Tenant hereunder when the same are required to be performed;
(iii) provides Landlord at least 30 days prior written notice of the date of
Tenant's vacating, the reason for Tenant's vacating and Tenant's updated address
for notices in Maryland; and (iv) Tenant maintains a temperature of at least
50(degree) Fahrenheit in the Leased Premises at all times during the heating
season.
6. Tenant's failure to pay Rent and/or all or any part of any other sum
(including late charges) required by this Lease within five (5) days after
Landlord has given Tenant notice that such payment is due; provided, however,
that no notice shall be required to be given to Tenant, and Tenant shall be in
immediate default, if Landlord has given such notice to Tenant one (1) time in
the preceding twelve (12) months.
7. Tenant's failure to perform any other term, covenant or condition
required by this Lease and failure to cure within ten (10) days after Landlord
has given Tenant written notice of such failure.
For purposes of subparagraphs 1, 2, 3 and 4 of this Paragraph IX.A., the
term "Tenant" will include any guarantor of Tenant's obligations under this
Lease.
B. Effect of Default. Landlord's rights and remedies under this Lease will
be cumulative. None will exclude any other right or remedy available at any time
under this Lease or under any law.
Even if Landlord does not seek Tenant's strict performance of any provision
of this Lease, or does not exercise any right it has, Landlord will not be
construed as waiving its right to strictly enforce Tenant's performance in the
future. Similarly, if Landlord receives Rent with knowledge of Tenant's breach
of this Lease, then Landlord will not be construed as having waived such breach.
There will be no waiver by Landlord of any Lease provision unless expressed
in writing and signed by Landlord.
C. Termination of Lease and Possession of Leased Premises. Upon any default
set forth in Paragraph IX.A. above, Landlord may then, or at any later time,
without further notice to Tenant, terminate this Lease and Tenant's right to
possess the Leased Premises. Landlord may then, with legal due process, take
possession of the Leased Premises and remove Tenant or any other occupant, and
any property, without relinquishing any other rights Landlord may have against
Tenant.
D. Damages. In the event of any Tenant default set forth in Paragraph IX.A.
above, Landlord will be entitled to receive from Tenant as damages, upon demand,
all expenses which Landlord incurs as a result of such breach. These damages
include, but are not limited to, the expenses (such as real estate brokerage
commissions and retrofit costs) of rerenting the Leased Premises, together with
court costs and actual attorneys' fees (and their actual expenses) incurred at
the standard hourly rates for such attorneys. In addition to the damages set
forth in the preceding sentences of this Paragraph IX.D., if Landlord terminates
this Lease as set forth in Paragraph IX.C. above, Landlord will also be entitled
to either:
1. Liquidated damages equal to the aggregate amount of Basic Annual Rent
and Additional Rent (computed on the basis of the Additional Rent due during the
preceding 12 months or, if the Lease Term has been less than a total of 12
months, an annualized amount) due pursuant to this Lease for the unexpired
portion of the Lease Term from the date of termination. The amount of such
aggregate Rent will be discounted at the discount rate of the Federal Reserve
Bank in Washington, D.C. on the date of the computation; or
2. Damages for each month of the unexpired portion of the Lease Term from
the date of termination equal to the sum of (a) the aggregate expenses (other
than Additional Rent) paid by Landlord for items which this Lease requires
Tenant to pay for each applicable month; plus (b) the amount of the installment
of Basic Annual Rent which would have been payable by Tenant if this Lease had
not been terminated; plus (c) the monthly average of Additional Rent paid in the
Lease Year (or an annualized portion if the Lease Term has been less than a
total of 12 months to the date of termination) immediately preceding the
default, minus the rents, if any, collected by Landlord for each such month
through rerenting or through permitted subleases of the Leased Premises. The
damages under this subparagraph D.2. will be due in monthly installments, in
advance, on the first day of each calendar month following such termination and
will continue until the originally intended expiration of the Lease Term.
Landlord's action to collect, or its collection of any damages for one month
will not prejudice its rights to bring actions to collect damages for subsequent
months.
An acceptance of surrender of the Leased Premises must be in writing signed
by Landlord. Tenant's liability under this Lease will not be terminated by the
execution of a lease with a new tenant for the Leased Premises. Landlord may
bring separate actions each month to recover damages then due without waiting
until the end of the Lease Term to compute the aggregate damages. Landlord will
use its reasonable efforts to mitigate its damages hereunder, provided, however,
that Landlord shall have no obligation to attempt to relet the Leased Premises
ahead of any other then vacant space in the Center.
E. Landlord's Default. In addition to all other remedies available at law,
Tenant shall have the right after providing thirty days written notice to
Landlord (which period may be extended for whatever period of time is reasonably
required if such default cannot be reasonably cured within thirty days so long
as Landlord commences such cure within said thirty day period and thereafter
diligently prosecutes such cure until completion), to cure a default of Landlord
in which event Landlord shall be liable to Tenant for all reasonable costs and
expenses incurred by Tenant in curing such default; provided, however, in no
event shall Tenant be entitled to deduct the costs and expenses of curing such
default from any amounts payable by Tenant pursuant to the terms of the Lease,
including all Basic Annual Rent and Additional Rent.
X. LEGAL AND GENERAL PROVISIONS
A. Assignment/Subletting. No Assignment (as defined below) of this Lease is
permitted without the prior written consent of Landlord. The granting or
withholding of such consent will be given solely within the discretion of
Landlord. Landlord's criteria in determining whether to grant or withhold
consent may include, but not be limited to, credit history of a proposed
assignee or sublessee, references from prior landlords, any change or
intensification of use of the Leased Premises or the common areas, and, if
Landlord is a Real Estate Investment Trust, any limitations imposed by the
Internal Revenue Code (the "Code") and the Regulations promulgated thereunder
relating to Real Estate Investment Trusts. If Landlord is a Real Estate
Investment Trust, Tenant shall not: (i) sublet or assign or enter into other
arrangements such that the amounts to be paid by the sublessee or assignee
thereunder would be based, in whole or in part, on the income or profits derived
by the business activities of the sublessee or assignee; (ii) sublet the Leased
Premises or assign this Lease to any person in which Landlord owns an interest,
directly or indirectly [by applying constructive ownership rules set forth in
Section 856(d)(5) of the Code]; or (iii) sublet the Leased Premises or assign
this Lease in any other manner which could cause any portion of the amounts
received by Landlord pursuant to this Lease or any sublease to fail to qualify
as "rents from real property" within the meaning of Section 856(d) of the Code
or which could cause any other income received by Landlord to fail to qualify as
income described in Section 856(c)(2) of the Code. The requirements of this
Section X.A. shall apply to any further subleasing by any subtenant.
The foregoing restriction will include, but not be limited to, the
following (all of which will be deemed to be an "Assignment"): (1) any
assignment of this Lease or a subletting of the Leased Premises; (2) any
permission to a third party to use all or part of the Leased Premises; (3) any
mortgage or other encumbrance of this Lease or of the Leased Premises; (4) the
appointment of a receiver or trustee of any of the Tenant's property; and (5)
any assignment or sale in bankruptcy or insolvency.
Although an Assignment includes an assignment or sublease or usage of the
Leased Premises in whole or in part to or by a parent, subsidiary or affiliate
of Tenant (a "Related Party"), Landlord's consent to the subletting of all or a
portion of the Leased Premises by a Related Party shall not be required but all
other provisions of this Paragraph X. A. shall be applicable to such subletting.
Additionally, Landlord's consent to a subletting shall not be unreasonably
withheld, delayed or conditioned so long as the proposed sublessee is reputable
and creditworthy, in each instance as determined by Landlord in its sole, but
reasonable, discretion.
Even if Landlord consents to an Assignment, Tenant will remain primarily
liable under this Lease. Also, Tenant will bear all reasonable legal costs (not
to exceed Two Thousand Dollars ($2,000.00) per requested Assignment) incurred by
Landlord in connection with Landlord's review of documents concerning an
Assignment, whether or not Landlord consents to it. Landlord's consent to a
specific Assignment does not waive Landlord's right to withhold consent to any
future or additional Assignment. Tenant will give Landlord notice of its
intention to make an Assignment at least forty-five (45) days prior to such
Assignment, which notice will contain such details as Landlord may reasonably
request.
If the amount of rent and other sums received by Tenant under any
Assignment is more than the Rent due from Tenant under this Lease, then Tenant
will pay fifty percent (50%) of the net excess to Landlord on a monthly basis
and promptly upon Tenant's receipt of such excess amounts.
If, without Landlord's consent, this Lease is Assigned, or if the Leased
Premises are occupied or used by any party other than Tenant, then all resulting
expenses (including reasonable attorneys' and brokerage fees) incurred by
Landlord will be immediately due and payable by Tenant upon receipt of an
invoice. If Tenant defaults, Landlord may collect rent from the assignee,
subtenant, occupant or user (the "Assignee") of the Leased Premises and apply it
towards the Rent due under this Lease. Such collection will not be deemed an
acceptance of the Assignee as tenant, will not waive or prejudice Landlord's
right to initiate legal action against Tenant to enforce Tenant's fulfillment of
its obligations under this Lease and will not release Tenant from such
obligations.
B. Estoppel Certificates. At any time during the Lease Term, and after
seven (7) days' prior written notice from Landlord, Tenant will deliver to
Landlord a properly executed and acknowledged document, generally known as an
estoppel certificate. Tenant will certify in the estoppel certificate, among
other matters, that: (1) this Lease is in full force and effect and if modified,
the extent to which it is modified; (2) the dates to which the Rent and other
payments have been made; (3) to the best of its knowledge, either Landlord has
not breached this Lease or, if Landlord has breached this Lease, the nature of
the breach; and (4) any other matter reasonably requested by Landlord or its
lenders. This estoppel certificate may be relied upon by any third party.
Tenant's failure to deliver such estoppel certificate within said 7-day period
shall be deemed a material default by Tenant under this Lease.
C. Subordination. Tenant accepts this Lease, and the tenancy it creates,
subject and subordinate to any ground leases, security interests, mortgages,
deeds of trust or other financing arrangements, and/or any extensions,
modifications or amendments to them, which are or later will be a lien, or
affect or will affect all or any part of the Property. Tenant agrees to execute,
on request, any instruments which may be required to subordinate Tenant's
interest to such financing arrangement. Notwithstanding the foregoing, Landlord
agrees (i) within thirty (30) days after the date of the execution of this
Lease, to use reasonable efforts to provide Tenant with a Non-disturbance and
Attornment Agreement from Landlord's current lender, which agreement will be
reasonably satisfactory to Tenant and Landlord's current lender and (ii) with
respect to any future subordination, Landlord shall use its best reasonable
efforts to provide to Tenant at the time of the subordination a Non-disturbance
and Attornment Agreement in form and content reasonably satisfactory to Tenant
and Landlord's then-current lender.
D. Attornment. Tenant agrees, upon the termination of Landlord's interest
in the Leased Premises and upon request, to attorn to the person or entity that
holds title to the reversion of the Leased Premises (the "Successor") and to all
subsequent Successors. Tenant also will pay to the Successor all rents and other
sums required to be paid by Tenant, and perform all of the other covenants,
agreements and terms required of Tenant under this Lease.
E. Landlord's Liability. In the event of any transfer of title to the
Property or Building (or an assignment or sublease of either), Landlord will be
entirely relieved of all covenants and obligations which arise after such
transfer. In such event, Landlord shall transfer any remaining Security Deposit
to Landlord's successor-in-interest to the Property or Building.
Landlord at the time of this Lease's execution is a Maryland limited
liability limited partnership. No partner of such limited liability limited
partnership, as it may be constituted now or in the future, will have any
personal liability to Tenant and/or to anyone claiming under, by or through
Tenant. As to Landlord, recourse shall be had only to the extent of Landlord's
interest in the Building.
F. Authority. Tenant warrants to Landlord that Tenant is a corporation
organized and validly existing in good standing under the laws of the State of
Delaware and qualified to transact business in the State of Maryland. In
addition, Tenant warrants to Landlord that this Lease has been properly
authorized and executed by Tenant and is binding upon Tenant in accordance with
its terms. Tenant's resident agent's name and address in the State of Maryland
are The Corporation Trust, 300 E. Lombard Street, Baltimore, MD 21202. Tenant
agrees to notify Landlord in writing of any change with respect to its resident
agent.
G. Notices. Except as otherwise provided in this Lease, any requirement for
a notice, demand or request under this Lease will be satisfied by a writing (a)
hand delivered with receipt; (b) mailed by United States registered or certified
mail or Express Mail, return receipt requested, postage prepaid; or (c) sent by
Federal Express or any other nationally recognized overnight courier service,
and addressed: (i) if to Landlord, c/o Manekin Corporation, 7470 New Technology
Way, Suite B, Frederick, Maryland 21703; and to c/o Manekin Corporation, 7165
Columbia Gateway Drive, Columbia, Maryland 21046, Attention: General Counsel,
with a copy to Ann Clary Gordon, Esquire c/o Shapiro and Olander, 36 South
Charles Street, Baltimore, Maryland 21201; and (ii) if to Tenant, at the Leased
Premises, with a copy to Medimunne, Inc., 35 West Watkins Mill Road,
Gaithersburg, Maryland 20878, Attention: Chief Financial Officer. All notices
that are sent in accordance with this Paragraph X.G. will be deemed received by
the other party on the earliest of the following applicable time periods: (a)
three business days after being mailed in the aforesaid manner; (b) the date the
return receipt is executed; or, (c) the date delivered as documented by the
overnight courier service or the hand delivery receipt. All rental payments and
other charges payable by Tenant under this Lease will be delivered to Landlord
c/o Manekin Corporation, 7165 Columbia Gateway Drive, Columbia, Maryland 21046,
Attention: Accounting Department. Either party may designate a change of address
by written notice to the other party.
H. Severability, Enforceability. If any provision of this Lease, or its
application to any person, is found invalid or unenforceable, the remainder of
this Lease or its application will not be affected. Each term and provision of
this Lease will be valid and enforceable to the fullest extent permitted by law.
Notwithstanding any language in this Lease to the contrary, if the Lease Term
does not commence on or before January 1, 2010, this Lease will automatically
terminate, and neither party will have any further liability to the other.
I. Captions. All headings contained in this Lease are for convenience only.
They are not to be treated as a summary construction of the provisions to which
they pertain.
J. Recordation. If at any time, any lienholder or other party which has a
right to require Landlord to do so, requires the recordation of this Lease,
Tenant will execute such acknowledgements as may be necessary to effect such
recordation. If Landlord requires, or is required, to record this Lease, it will
pay all recording fees, transfer taxes and/or documentary stamp taxes payable in
connection with the recordation. If Tenant records this Lease, it will make all
such payments. Tenant will not record this Lease without Landlord's prior
consent.
K. Successors and Assigns. This Lease and all of its provisions,
individually and collectively, will bind and inure to the benefit of Landlord
and Tenant, and their respective heirs, distributees, executors, administrators,
successors, personal and legal representatives and their permitted assigns.
L. Commissions. Tenant represents that Tenant has dealt directly with only
MANEKIN, LLC and SCHEER PARTNERS, INC. as brokers in connection with this Lease
and that, insofar as Tenant knows, no other broker negotiated this Lease or is
entitled to any commissions in connection with it. Tenant and Landlord will hold
harmless and indemnify the other from any costs incurred by the other arising
out of any other broker's claim that such other broker has assisted Landlord or
Tenant with respect to this Lease.
M. Quiet Enjoyment. Landlord covenants to Tenant that, so long as Tenant
pays the Rent and performs all other obligations imposed on Tenant under this
Lease and subject to all matters of record and all mortgages and other financing
arrangements, Tenant will peaceably hold and enjoy the Leased Premises
throughout the Lease Term without hindrance or impairment from Landlord or those
claiming through Landlord.
N. Force Majeure. In the event that either party to this Lease is delayed,
hindered or prevented, by reason of strikes, lock-outs, labor troubles,
inability to produce materials, delays in transportation, failure of power,
restrictive governmental laws or regulations, riots, insurrection, war, fire or
other casualties, acts of God, rain or other weather conditions or any other
reason (excluding lack of funds) not reasonably within the control of the party
so delayed, hindered or prevented, from performing work or doing any act
required under the terms of this Lease, then performance of such act will be
excused for the period of the delay, and the period of the performance of any
such act will be extended for a period equal to the period of such delay. The
occurrence of any event described in this Paragraph X.N. will not operate to
excuse Tenant from prompt payments of Rent, Additional Rent or any other
payments required by this Lease.
O. Limited Waiver of Jury Trial. Landlord and Tenant desire a prompt
resolution of any litigation between them with respect to this Lease. To that
end, Landlord and Tenant waive trial by jury in any action, suit, proceeding
and/or counterclaim brought by Landlord against Tenant for any monetary default
under this Lease. This waiver is knowingly, intentionally and voluntarily made
by the parties. Each party acknowledges that neither the other party nor any
person acting on behalf of such other party has made any representations of fact
to induce this waiver of trial by jury or in any way to modify or nullify its
effect. Each party further acknowledges that it has been represented (or has the
opportunity to be represented) in the signing of this Lease and the making of
this waiver by independent counsel, selected of its own free will, and that it
has had the opportunity to discuss this waiver with counsel. Each party further
acknowledges that it has read and understands the meaning and ramifications of
this waiver of jury trial. Landlord acknowledges that Tenant's waiver is solely
and specifically limited to an action by Landlord against Tenant resulting from
Tenant's monetary default under this Lease and such waiver shall be inapplicable
and void in any other proceedings between the parties.
P. Parking. Throughout the Lease Term, Tenant shall have the non-exclusive
use of at least three (3) parking spaces per one thousand (1,000) square feet of
Leased Premises (exclusive of handicapped designated spaces), which parking
spaces shall be located in the front, sides and rear of the Building. Landlord
shall assign up to ten (10) of such parking spaces to Tenant for Tenant's
exclusive use, which spaces shall be designated as reserved for Tenant by
markings on the pavement. Additionally, Tenant, at its sole cost and expense,
shall be permitted to install signage (subject to Landlord's prior written
consent as to size, style and content of such signage) in the locations shown on
Exhibit A, stating that parking is limited to the visitors and employees of the
Building. Following written notice from Tenant, Landlord agrees to take
reasonable measures to enforce Tenant's exclusive right to park in designated
areas.
Q. Signage. Tenant shall have the right, at its sole cost and expense, to
erect an identification sign on the upper left-hand corner of the front exterior
of the Building and on any monument sign erected by Landlord for the Center,
subject, however, to Tenant's obtaining the prior written approval of such signs
from Landlord, which shall not be unreasonably withheld, conditioned or delayed,
and the Bennington Corporate Center Association. Additionally, Tenant's signage
must conform with the standards of the City of Gaithersburg and Montgomery
County, and be reasonably consistent with all reasonable sign criteria for the
Center. Upon completion of the West Watkins Mill Road extension, Tenant shall
have the option to relocate its building signage to face West Watkins Mill Road
or to add additional signage facing West Watkins Mill Road in a location to be
approved by Landlord. All signs shall be installed by a reputable contractor
reasonably acceptable to Landlord. Tenant shall hold Landlord harmless from any
damage caused to the Building as a result of the installation of such signs.
Upon termination of the Lease, it shall be Tenant's obligation, at its sole
expense, to remove such signs and to restore the exterior face of the Building
to its condition prior to erecting such signs, normal wear and tear excepted.
Landlord further agrees, as a member of the Bennington Corporate Center
Association, to approve Tenant's request, if any, for directional signage at the
entrance to the Center (at the intersection of West Watkins Mill Road and
Clopper Road), so long as said signage complies with all applicable codes and
ordinances, and is consistent with the standards for signage developed for the
Center.
R. Miscellaneous.
1. As used in this Lease, and where the context requires: (a) the masculine
will be deemed to include the feminine and neuter and vice-versa; and (b) the
singular will be deemed to include the plural and vice-versa.
2. This Lease is made in the State of Maryland and will be governed in all
respects by the laws of the State of Maryland.
3. Except as otherwise specifically provided in this Lease, no abatement,
refund, offset, diminution or reduction of Rent or any other payments will be
claimed by or allowed to Tenant, or any person claiming under Tenant (including
inconvenience, discomfort, interruption of business or otherwise), because of
any present or future governmental laws or ordinances, or because of any other
cause or reason whatsoever.
4. Intentionally Deleted.
5. All plats, exhibits, riders or other attachments to this Lease are a
part of this Lease and are incorporated by reference into this Lease.
6. THIS LEASE CONTAINS THE ENTIRE AGREEMENT BETWEEN LANDLORD AND TENANT
REGARDING THE SUBJECT MATTER OF THIS LEASE. THERE ARE NO PROMISES, AGREEMENTS,
CONDITIONS, UNDERTAKINGS, WARRANTIES OR REPRESENTATIONS, ORAL OR WRITTEN,
EXPRESS OR IMPLIED, BETWEEN THEM, RELATING TO THIS SUBJECT MATTER, OTHER THAN AS
SET FORTH IN THIS LEASE. THIS LEASE IS INTENDED BY LANDLORD AND TENANT TO BE AN
INTEGRATION OF ALL PRIOR OR CONTEMPORANEOUS PROMISES, AGREEMENTS, CONDITIONS,
NEGOTIATIONS AND UNDERTAKINGS BETWEEN THEM. THIS LEASE MAY NOT BE MODIFIED
ORALLY OR IN ANY MANNER OTHER THAN BY AN AGREEMENT IN WRITING SIGNED BY LANDLORD
AND TENANT OR THEIR RESPECTIVE SUCCESSORS IN INTEREST. THIS LEASE MAY BE
EXECUTED IN COUNTERPARTS, EACH OF WHICH WILL BE AN ORIGINAL, BUT ALL OF WHICH
WILL CONSTITUTE ONE AND THE SAME LEASE.
7. Three (3) riders are attached to this Lease and made a part of it.
8. Tenant, at its sole cost and expense, and subject to Landlord's
approval, shall have the right to seek installation of a telecommunications
cabling system between the Leased Premises and Tenant's location at 35 West
Watkins Mill Road.
IN WITNESS WHEREOF, Landlord and Tenant have respectively signed this Lease
Agreement under seal as of the date first above written.
LANDLORD:
WITNESS: MOR BENNINGTON LLLP
By: RA & FM, INC., General Partner
/s/Ingrid C. Hause By: /s/Alton D. Fryer(SEAL)
Name: Alton D. Fryer
Title: Vice President
TENANT:
WITNESS/ATTEST: MEDIMMUNE, INC.
/s/Mary Carol Gorham By: /s/Melvin D. Booth (SEAL)
Name: Melvin D. Booth
Title: President
Authorized Officer
<PAGE>
STATE OF MARYLAND )
) TO WIT:
COUNTY OF FREDERICK )
I HEREBY CERTIFY that on this 8 day of October , 1999, before me, the
subscriber, a Notary Public of the State of Maryland, County of Frederick,
personally appeared Alton D. Fryer, Vice President of RA & FM, Inc., general
partner of MOR BENNINGTON LLLP, Landlord, and he acknowledged the foregoing
Lease Agreement to be the act and deed of such limited liability limited
partnership.
WITNESS my hand and Notarial Seal.
By: /s/Betty A. Fandel
Notary
My Commission Expires: 12/1/01
STATE OF MARYLAND )
) TO WIT:
COUNTY OF FREDERICK )
I HEREBY CERTIFY that on this 8 day of October, 1999, before me, the
subscriber, a Notary Public of the State of Maryland, County of Frederick,
personally appeared Melvin D. Booth, the President and COO of MEDIMMUNE, INC.,
Tenant, and [she] [he] acknowledged the foregoing Lease Agreement to be the act
and deed of such corporation.
WITNESS my hand and Notarial Seal.
By: /s/Carol Iorio
Notary
My Commission Expires: ____________
<PAGE>
RIDER NO. 1
RIGHT OF FIRST OFFER
Tenant shall have the right of first offer (the "First Offer") to lease
space (the "Expansion Space") in the Building and in the building located at 65
West Watkins Mills Road, at a Basic Annual Rent equal to the price per square
foot which Landlord would offer to a bona fide prospective tenant of the
Expansion Space.
Said rent shall be payable in equal monthly installments (and fractions
thereof), at the times and subject to the terms and conditions as provided with
respect to, and in addition to, the monthly installments of the Basic Annual
Rent as set forth in Paragraph III.B. of this Lease.
Tenant's exercise of its First Offer shall be effective only upon written
notification by Tenant to Landlord thereof (the "Notice"). Such notification
must be given to Landlord before the close of business on the second full
business day after Tenant's receipt of Landlord's written notification to Tenant
of the availability of the Expansion Space and the terms on which Landlord
intends to offer the Expansion Space for rental (the "Offer"). An Offer does not
include the exercise by another tenant of its right of refusal or expansion.
In the event Tenant fails to so notify Landlord within said two business
day period, Landlord shall be free to offer said Expansion Space to third
parties and Tenant shall have no further rights in such space.
This First Offer is personal to Tenant and shall not be separated from the
Lease or transferred by Tenant independently of the leasehold interest without
the prior written consent of Landlord.
Notwithstanding any other provision hereof, the following provisions shall
apply to the First Offer and to Tenant's lease, if any, of the Expansion Space:
(i) Tenant shall not be entitled to exercise the rights accorded to Tenant
in the first paragraph, unless at the date of such exercise or at the date on
which Tenant's lease, if any, of the Expansion Space becomes effective, Tenant
is in possession of the Leased Premises and Tenant is not in default in the
payment of any sums due hereunder or any other obligation imposed upon Tenant by
the Lease;
(ii) Tenant shall have the right to lease and occupy the Expansion Space
commencing on the date set forth in Landlord's Offer (the "Expansion Space
Commencement Date"), and terminating on the later of (x) the date set forth in
the Offer, or (y) the termination of the Lease Term, on the same terms,
conditions, and provisions as are in this Lease set forth, except to the extent
modified by the Offer, with the same force and effect as though this Lease had
originally provided for the rental of the Leased Premises and the Expansion
Space;
(iii) The Expansion Space shall be delivered to Tenant in the condition set
forth in the Offer;
(iv) The Lease shall be amended, as may be appropriate, to reflect the
leasing of the Expansion Space.
(v) This First Offer right is subordinate to any previously granted rights
of any tenant of the Building and/or any tenant of 65 West Watkins Mill Road,
including, without limitation, renewal rights, expansion rights, rights of
refusal and rights of offer including, specifically, the rights granted to HT
Medical Systems, Inc. and Genvec, Inc., or Landlord's agreement to allow any
existing tenant of the Expansion Space to extend its Lease thereof, whether or
not such right exists currently.
Time is of the essence with respect to Tenant's exercise of its rights
under this Rider and Tenant acknowledges that Landlord requires strict adherence
to the requirement that the Notice be timely made and in writing.
<PAGE>
RIDER NO. 2
RENEWAL OPTION
Provided that (a) this Lease is then in full force and effect, (b) Tenant
is not in monetary default beyond any applicable grace period on the date Tenant
elects to renew and on the date the Renewal Term commences, and (c) Tenant is in
occupancy of at least fifty percent (50%) of the Leased Premises on the date
Tenant elects to renew and on the date the Renewal Term commences, Tenant shall
have the right to renew this Lease for one (1) renewal term (the "Renewal Term")
of five (5) years immediately following the expiration of the initial Lease
Term, on the same terms, conditions, and provisions as are set forth in this
Lease, with the same force and effect as though this Lease had originally
provided for a an approximately twelve (12) year term, save that:
(i) There shall be no further right of renewal, after the Renewal Term.
(ii) Tenant's renewal may be of all or any portion of the Leased Premises
(but in no event less than fifty percent (50%) of the original Leased Premises);
provided, however, that if Tenant elects to exercise its renewal option with
respect to less than the entire Leased Premises, then in Tenant's renewal notice
to Landlord, Tenant shall notify Landlord of the square footage of the Leased
Premises with respect to which the renewal option is being exercised (which area
is referred to herein as the "Decreased Leased Premises"), and prior to the date
the Renewal Term commences, Landlord will determine the precise location within
the original Lease Premises that the Decreased Leased Premises will be located.
Landlord, at Tenant's sole cost and expense, on or about the date the Renewal
Term commences, will construct a demising wall or walls for purposes of
separating the Decreased Leased Premises from the balance of the original Leased
Premises.
(iii) Beginning with and as of the first day of the Renewal Term, the Basic
Annual rent and each monthly installment thereof payable during such Renewal
Term shall be increased such that it equals ninety-five percent (95%) of the
then-current market rent (as determined below); provided, however, that in no
event shall the Basic Annual Rent for the Renewal Term be less than ninety
percent (90%) of the Basic Annual Rent in effect during the immediately
preceding Lease Year; and provided further, that the Basic Annual Rent will
increase by three percent (3%) per annum compounded annually, for each year of
the Renewal Term.
(iv) Market rent for the Leased Premises shall be determined by mutual
agreement of Landlord and Tenant. If Landlord and Tenant are unable to agree
within thirty (30) days after Tenant's exercise of its renewal option, then it
shall be determined as follows:
(1) Within fifteen (15) days after the expiration of said thirty (30) day
period, Landlord and Tenant shall give written notice to the other that each, at
its own expense, has hired and appointed as a broker a disinterested person of
recognized competence and professional experience as a commercial real estate
broker of comparable commercial and industrial real estate in the
Baltimore-Washington Metropolitan Area. The two (2) brokers thus appointed shall
appoint a third broker who shall also be a disinterested person of recognized
competence and professional experience as a commercial real estate broker of
comparable commercial and industrial real estate in the Baltimore-Washington
Metropolitan Area (the "Broker"), the cost of which shall be split equally
between Landlord and Tenant. In the event that the two (2) brokers appointed as
aforesaid shall be unable to agree, within fifteen (15) days after their own
appointment, on the appointment of the Broker, then Tenant shall choose three
brokers from whom Landlord shall choose one who shall serve as the third broker.
Landlord shall notify Tenant of the selection of the third broker within ten
(10) days of Tenant's notice to Landlord of the three brokers from which
Landlord is to choose. The Broker shall as promptly as possible, but in no event
more than thirty (30) days after the date of his selection, determine the market
rent for the Leased Premises. Landlord and Tenant shall each be entitled to
present evidence and argument to the Broker. A decision by the Broker shall be
conclusive and binding on the parties hereto as to the market rent to be
utilized in the exercise of this purchase option.
(2) After the market rent has been determined, the Broker shall immediately
give written notice to the parties hereto stating his determination, and shall
furnish to each party hereto a copy of such determination signed by him.
(3) The market rent shall be based upon the rental rates charged at
buildings comparable to the Building which are located within five (5) miles of
the Building, and shall further take into account the size of the Leased
Premises (or Decreased Leased Premises, as the case may be), the length of the
Renewal Term, the creditworthiness of Tenant, whether or not any tenant
improvements are included, and other similar relevant factors.
Tenant shall be deemed to have waived the right to exercise this renewal
option unless, at least nine (9) months prior to the date on which the initial
Lease Term expires, Tenant shall have notified Landlord in writing of Tenant's
election to renew (the "Renewal Notice"). Time is of the essence with respect to
Tenant's exercise of its rights under this Rider No. 2, and Tenant acknowledges
that Landlord requires strict adherence to the requirement that the Renewal
Notice be timely made and in writing.
<PAGE>
RIDER NO. 3
ROOF RIGHTS
So long as this Lease is in full force and effect and Tenant is not in
default, beyond any applicable cure periods, of any obligation on its part to be
performed hereunder, Tenant shall have the non-exclusive right, with Landlord's
consent, not to be unreasonably withheld, conditioned or delayed, from time to
time, at its expense, to erect mechanical equipment on the roof of and adjacent
to the Building (the "Equipment") so long as the same do not negatively impact
the aesthetics or functional integrity of the Building in Landlord's reasonable
opinion, and subject to the terms and conditions set forth below:
(i) The location of the Equipment shall be subject to Landlord's prior
written approval, which approval shall not be unreasonably withheld. Tenant
shall make every effort to place the Equipment on the roof within the boundaries
of the existing roof screen and shall screen any ground equipment with
landscaping acceptable to Landlord.
(ii) The installation of the Equipment on the roof shall not in any way
void the roof warranty, and Tenant shall indemnify Landlord from same. Any
penetration of the roof surface in connection with the installation of the Roof
Equipment shall be performed by a reputable certified roofer acceptable to
Landlord.
(iii) Tenant, for itself, its employees, and approved contractors, shall
have access to the roof to install, service, operate, and maintain the
Equipment, subject to the reasonable rules and regulations of Landlord
promulgated from time to time.
(iv) Upon the expiration or termination of the Lease, Tenant shall remove
the Equipment and repair any damage caused by said removal and leave the subject
areas in the same order and repair as when received by Tenant, reasonable wear
and tear excepted. Tenant covenants to pay to Landlord within ten (10) days of
written notice, the cost of repairing any damage to the Building resulting from
the operation or maintenance of the Equipment.
(v) Tenant shall maintain the Equipment in accordance with customary
engineering standards and in conformity with any requirements of the Federal
Communications Commission and with the requirements of all other public
authorities having jurisdiction over Tenant or the Leased Premises.
(vi) Tenant, at its expense, must obtain all necessary zoning and
government approvals, as well as approvals required by any business park
covenants. The Equipment must be limited to Tenant's business and Tenant shall
not license the subject area to others.
(vii) Tenant's use and installation of the Equipment shall not interfere
with the rights of any other tenant of the Building or business park in which
the Building is located.
(viii) The rights granted to Tenant pursuant to this Rider No. 3 are
personal to Tenant and may not be assigned.
<PAGE>
-ii-
MOR BENNINGTON LLLP
LEASE AGREEMENT FOR MEDIMMUNE, INC.
55 West Watkins Mill Road
TABLE OF CONTENTS
<TABLE>
<S> <C>
Paragraph Page No.
I. LEASED PREMISES............................................................1
A. Location of Leased Premises.......................................1
B. Construction of the Leased Premises...............................1
C. Performance.......................................................2
D. Landlord's Warranty...............................................2
II. LEASE TERM.................................................................3
A. Lease Term........................................................3
B. Possession........................................................3
C. Lease Year........................................................4
D. Acceptance of Leased Premises.....................................4
III. RENT AND FINANCIAL MATTERS.................................................4
A. First Month's Rent................................................4
B. Rental Payments...................................................4
C. Rent Adjustments..................................................5
1. Definitions..............................................5
2. Rent Adjustment--Common Area Expenses and Taxes..........8
3. Summary of Payments......................................9
4. Utilities...............................................10
IV. CONDITIONS OF TENANT'S OCCUPANCY AND POSSESSION...........................10
A. Use Restrictions and Rules.......................................10
B. Improvements by Tenant...........................................11
C. Maintenance......................................................11
D. Conduct on Leased Premises.......................................12
E. Insurance........................................................12
F. Liens............................................................13
G. Environmental Assurances.........................................13
1. Representations.........................................13
2. Covenants...............................................14
3. Tenant's Indemnification................................14
4. Landlord's Indemnification..............................14
5. Definitions.............................................15
V. LANDLORD'S RIGHTS AND RESPONSIBILITIES....................................15
A. Access...........................................................15
B. Building Repairs.................................................15
C. Performance of Tenant's Responsibilities by Landlord.............15
D. Loss, Damage, Injury.............................................16
E. Mutual Indemnity.................................................16
VI. DAMAGE AND DESTRUCTION....................................................16
VII. CONDEMNATION..............................................................17
VIII. HOLDING OVER..............................................................17
IX. DEFAULT...................................................................17
A. Events of Default................................................17
B. Effect of Default................................................18
C. Termination of Lease and Possession of Leased Premises...........18
D. Damages..........................................................18
E. Landlord's Default...............................................19
X. LEGAL AND GENERAL PROVISIONS..............................................19
A. Assignment/Subletting............................................19
B. Estoppel Certificates............................................21
C. Subordination....................................................21
D. Attornment.......................................................21
E. Landlord's Liability.............................................21
F. Authority........................................................22
G. Notices..........................................................22
H. Severability, Enforceability.....................................22
I. Captions.........................................................22
J. Recordation......................................................22
K. Successors and Assigns...........................................22
L. Commissions......................................................23
M. Quiet Enjoyment..................................................23
N. Force Majeure....................................................23
O. Limited Waiver of Jury Trial.....................................23
P. Parking..........................................................23
Q. Signage..........................................................24
R. Miscellaneous....................................................24
RIDER NO. 1 - RIGHT OF FIRST OFFER.................................................27
RIDER NO. 2 - RENEWAL OPTION.......................................................29
RIDER NO. 3 - ROOF RIGHTS..........................................................31
</TABLE>