LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into on this 20th day of
January, 1995, by and between PDL-RTKL ASSOCIATES, a Maryland General
Partnership having an office at 32 Lafayette Place, Greenwich, Connecticut
06830, hereinafter called "Landlord", and Scios Nova, Inc., hereinafter called
"Tenant".
W I T N E S S E T H :
1.1 For purposes of this Lease and all agreements supplemental to
this Lease, the following terms shall have the respective meanings set forth in
this Section:
ADDITIONAL RENT: As defined in Section 5.1.
BASE OPERATING FACTOR: As defined in Section 7.1.
BASE TAX FACTOR: As defined in Section 6.1.
BASIC RENT: As defined in Section 5.1.
BUILDING: As defined in Section 2.1.
BUILDING EQUIPMENT: All machinery, equipment, personal property,
fixtures and systems of every kind and nature whatsoever now or hereafter
attached to or used in connection with the operation or maintenance of the
Building, including, without limitation, all electrical, heating, mechanical,
sanitary, sprinkler, utility, power, plumbing, cleaning, fire prevention,
refrigeration, ventilating, air cooling, air-conditioning and elevator systems
and equipment and any and all renewals and replacements of any thereof; but
excluding (i) Tenant's Property, (ii) property of any other tenant, (iii)
property of contractors servicing the Building and (iv) improvements for water,
gas, steam and electricity and other similar equipment owned by any public
utility company or any governmental agency or body.
BUSINESS DAYS: As defined in Section 14.1.
BUSINESS HOURS: As defined in Section 14.1.
BUILDING SERVICES: As set forth in Article XIV.
COMMON AREA: The areas of the Building intended for the general
common use and benefit of all tenants of the Building, including, without
limitation, all stairs, landings, roofs, utility and mechanical rooms and
equipment, service closets, corridors, elevators, lobbies, lavatories and other
public parts of the Building.
COMMON FACILITIES: The Common Area and the Building Equipment.
COMMENCEMENT DATE: As defined in Section 3.1.
ESCALATION YEAR: Each 12-month period commencing on March 1 which
shall include any part of the Term.
EVENT OF DEFAULT: As defined in Section 20.1.
EXPIRATION DATE: As defined in Section 3.1.
FIXTURES: All fixtures, equipment, improvements and appurtenances
attached to or built into the Premises at the commencement of or during the
Term, whether or not at the expense of Tenant, including, without limitation,
all electrical, plumbing, heating and sprinkling equipment and fixtures,
outlets, venetian blinds, partitions, railways, gates, doors, vaults, paneling,
molding, shelving, radiator enclosures, cork, rubber, linoleum and composition
floors, ventilating, silencing, air-conditioning and cooling equipment, and all
fixtures, equipment, improvements and appurtenances of a similar nature or
purpose (specifically excluding moveable partitions) whether or not attached to
or built into the Premises.
IMPROVEMENTS: All improvements, alterations, additions,
installations, substitutions, betterments and decorations, made by or on behalf
of Tenant, including, without limitation Tenant's Work.
HEREIN, HEREOF, HEREBY, HEREUNDER AND WORDS OF SIMILAR IMPORT:
Refer to this Lease as a whole and not to any particular Article or Section
unless expressly so stated.
INSURANCE REQUIREMENTS: All requirements of any insurance policy
covering or applicable to all or any part of the Project or the Premises or the
use thereof, all requirements of the issuer of any such policy and all orders,
rules, regulations, recommendations and other requirements of the local board of
fire underwriters or any other body exercising the same or similar functions and
having jurisdiction or cognizance of all or any part of the Project or the
Premises.
LAND: As defined in Section 2.1.
LANDLORD'S STATEMENT: An instrument containing a computation of
any additional Rent due pursuant to the provisions of Article VI or Article VII.
LANDLORD'S WORK: As defined in the Work Letter.
LEGAL REQUIREMENTS: Laws, statutes and ordinances
(including building codes and zoning regulations and ordinances) and the orders,
rules, regulations, directives and requirements of all federal, state, county
and city departments, bureaus, boards, agencies, offices, commissions and other
subdivisions thereof, or of any official thereof, or of any other governmental,
public or quasi-public authority, whether now or hereafter in force, which may
be applicable to the Project or the Premises or any part thereof and all
requirements, obligations and conditions of all instruments of record affecting
the Project, including without limitation (i) the Disposition Agreement, dated
June 19, 1974, between Area 9A Associates and the Mayor and City Council of
Baltimore recorded among the Land Records of Baltimore City, Maryland, in Liber
3141, Folio 347, as amended by agreement dated June 19, 1974, recorded among
said Land Records in Liber 3141, Folio 387, (ii) the Disposition Agreement dated
as of March 4, 1981, among Landlord, The Mayor and City Council of Baltimore and
Charles Center - Inner Harbor Management, Inc., recorded among said Land Records
in Liber 4026, Folio 129, and (iii) the Inner Harbor Project I Renewal Plan,
approved June 16, 1967, as amended. The use restrictions applicable to the
Premises contained in said Disposition Agreements and Renewal Plan are set forth
on Exhibit D hereto.
NET RENT: As defined in Paragraph (c) of Section 21.3.
OPERATING EXPENSES: As defined in Section 7.1.
PARKING GARAGE: The multi-level parking garage on the parcels of
land adjacent to the Land to the north.
PROJECT: The Land, the Building, the Parking Garage and all
easements, rights, privileges and appurtenances thereto, including without
limitation, all rights and easements granted by the City of Baltimore in and to
the public park area adjacent to the Land on the south and west and in and to
the pedestrian overpass over Pratt Street from the Project.
PREMISES: As defined in Section 2.1.
PREMISES AREA: Shall be deemed to be 7,070 sq. feet
PUBLIC AREAS: As defined in Exhibit E.
REAL PROPERTY: The Land and the Building.
RENT: As defined in Section 5.1.
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RULES AND REGULATIONS: As defined in Section 28.1
SUCCESSOR LANDLORD: As defined in Section 24.4.
SUPERIOR LEASE: Any present or future ground lease, operating
lease, superior lease, overriding lease or underlying lease or grant of term of
the Real Property, or any part thereof, and any renewals, modifications,
replacements, substitutions and extensions thereof.
SUPERIOR LESSOR: The landlord under a Superior Lease.
SUPERIOR MORTGAGE: Any mortgage or building loan agreement,
including leasehold mortgages and spreader and consolidation agreements, which
may now or hereafter affect the Real Property, or any part thereof, or a
Superior Lease, and any renewals, modifications, replacements, substitutions and
extensions thereof.
SUPERIOR MORTGAGEE: The holder of a Superior Mortgage.
TAXES: As defined in Section 6.1.
TENANT'S OPERATING PAYMENT: As defined in Section 7.2:
TENANT'S PROPERTY: All Fixtures, Improvements, trade fixtures,
furniture, furnishings and other personal property (i) installed at the sole
expense of Tenant, or anyone claiming through or under Tenant, (ii) with respect
to which Tenant, or anyone claiming through or under Tenant, has not been
granted any credit or allowance by Landlord, (iii) which are removable without
material damage to the Premises and (iv) which are not replacements of any
property of Land-lord, whether any such replacement is made at Tenant's expense
or otherwise.
TENANT'S PROPORTIONATE SHARE: 5.25%
TENANT'S TAX PAYMENT: As defined in Section 6.2.
TENANT'S WORK: As defined in the Work Letter.
TERM: As defined in Section 3.1.
TRANSFEREE: As defined in Section 31.9.
UNAVOIDABLE DELAYS: Any delays caused by Tenant, war, civil
commotion, riot, acts of God, strikes or other
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labor disputes, governmental restrictions, regulations or actions, fire or other
casualty, shortage or unavailability of labor or materials obtainable on
reasonable terms or any other factors beyond the control of Landlord, whether
similar or not to any of those listed above.
WORK LETTER: As defined in Section 4.1 and set forth on Exhibit C.
ARTICLE II
PREMISES
2.1 Landlord hereby leases to Tenant and Tenant hereby hires from
Landlord certain premises consisting of a portion of the third (3rd) floor, as
substantially set forth on Exhibit A hereto ("Premises"), of the building
("Building") constructed on the parcel of land and the air rights parcel
described on Exhibit B hereto (collectively, "Land") being a portion of the
block bounded by Pratt, Commerce, Lombard and Gay Streets, in the City of
Baltimore, State of Maryland, together with the right to the use of and benefit
from, in common with others, the Common Facilities.
ARTICLE III
LEASE TERM
3.1 The term of this Lease ("Term") shall commence on the earlier
of sixty (60) days after delivery of possession of the Premises to Tenant for
performance of Tenant's work, as herein defined, or the date Tenant commences
occupancy for the business of Tenant ("Commencement Date") or if said date be a
Saturday, Sunday or holiday, the first business day thereafter, and shall end at
midnight on the date which is sixty (60) months after the Commencement Date
("Expiration Date"), unless the Term shall be extended pursuant to Section 31.17
or shall sooner terminate pursuant to any of the terms of this Lease or pursuant
to law.
ARTICLE IV
CONSTRUCTION AND ACCEPTANCE
OF THE PREMISES
4.1 Landlord agrees to perform work and make installations in the
Premises, if any, to the extent set forth on Exhibit C hereto ("Work Letter").
Landlord warrants that all portions of the Building's mechanical systems serving
the
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Premises shall be in working order as of the Commencement Date.
4.2 By occupying the Premises or any portion thereof for
performance of Tenant's Work as set forth on Exhibit C, Tenant shall be deemed
to have accepted the Premises, or such portion, and to have acknowledged that
the same and the Building fully comply with Landlord's obligations hereunder to
construct and deliver the Premises, or such portion. Landlord shall have the
right to enter the Premises to complete or repair any unfinished items or
defects and entry by Landlord, its agents, servants, employees or contractors
for such purpose shall not constitute an actual or constructive eviction in
whole or in part, or entitle Tenant to any abatement or diminution of rent or
relieve Tenant of any of its obligations under this Lease, or impose any
liability upon Landlord or its agents, servants, employees or contractors.
4.3 Landlord and Tenant each agree that at the request of either,
they will execute and deliver a confirmatory agreement acknowledging that Tenant
has accepted possession of the Premises and that this Lease is operative.
ARTICLE V
RENT
5.1 Commencing on March 1, 1995, Tenant shall pay to Landlord
without notice or demand or set-off, in lawful money of the United States of
America, by check drawn on a bank or trust company having an office in either
the State of Maryland, the State of Connecticut or the State of New York, at the
office of Landlord or at such other place as Landlord may designate, the
following sums (collectively, "Rent"):
(a) Fixed Rent ("Basic Rent") at the following rates:
(b) additional rent ("Additional Rent") consisting of all other
sums of money as shall become due from and be payable by Tenant hereunder (for
default in the payment of which Landlord shall have the same remedies as for a
default in the payment of Basic Rent).
5.2 Basic Rent shall be payable in advance in equal monthly
installments beginning on the Commencement Date and continuing on the first day
of each calendar month thereafter during the Term. If any installment of Basic
Rent remains
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unpaid for a period of 10 days after notice of such default or any payment of
Additional Rent remains unpaid for a period of 15 days after notice of such
default, Tenant shall pay (i) a late charge equal to 2% of said installment
[except that such late charge will not be imposed on the first two such late
installments] and (ii) interest thereon at a rate equal to the lesser of 2% per
annum above the rate from time to time announced by Nations Bank or any
successor thereto in Baltimore as its "prime rate" or the maximum legal rate
then prevailing, from the date on which such installment or payment is due to
the date of payment thereof, and such interest shall be deemed to be Additional
Rent.
ARTICLE VI
TAX PAYMENTS
6.1 For purposes of this Lease:
A. The term "Base Tax Factor" shall mean Taxes, as hereafter
defined, for the Tax Year July 1, 1994 through June 30, 1995.
B. The term "Taxes" shall mean all real estate taxes, improvement
district taxes, assessments (special or otherwise), ad valorem charges, front
foot benefit charges, water and sewer rents, rates and charges (other than
charges which are based on consumption and included in Operating Expenses), city
and county taxes, minor privilege permits and any other governmental liens,
impositions or charges of a similar or dissimilar nature, whether general,
special, ordinary, foreseen or unforeseen, and any payments in lieu of such
charges, which may be levied, assessed or imposed on or with respect to all or
any part of the Real Property by the City of Baltimore, State of Maryland, or
any other taxing authority, whether or not the same constitute on or more tax
lots. If, however, by law, any assessment may be divided and paid in
installments, then, for the purposes of this Article, (i) such assessment shall
be deemed to have been so divided, (ii) such assessment shall be deemed payable
in the maximum number of installments permitted by each Escalation Year the
installment(s) of such assessment becoming payable during such Escalation Year,
together with interest payable during such
Escalation Year on such installment(s) and on all installments thereafter
becoming due as provided by law, all as if such assessment had been so divided.
If at any time during the Term the methods of taxation prevailing at the date
hereof shall be altered so that in lieu of or as an addition to or as a
substitute for the whole or any part of the Taxes now levied, assessed or
imposed on all or any part of the Real
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Property, there shall be levied, assessed or imposed (i) a tax, assessment,
levy, imposition or charge based on the rents received therefrom whether or not
wholly or partially as a capital levy or otherwise, or (ii) a tax, assessment,
levy, imposition or charge measured or based in whole or in part upon all or any
part of the Real Property and imposed on Landlord, or (iii) a license fee
measured by the rent payable by Tenant or Landlord, or (iv) any other tax, levy,
imposition, charge or license fee however described or imposed, then all such
taxes, assessments, levies, impositions, charges or license fees or the part
thereof so measured or based, shall be deemed to be Taxes. In no event,
however, shall Tenant be required to pay Landlord's income taxes unless such
income tax is in lieu of or partial substitution for Taxes, nor shall Taxes
include franchise, gift, transfer, stock transfer, excise, estate, succession or
inheritance taxes, Federal, State or local income taxes, or penalties or
interest for late payment of Taxes.
6.2 A. If Taxes payable in any Escalation Year falling wholly or
partially within the Term shall be in such amount as shall constitute an
increase above the Base Tax Factor, Tenant shall pay as Additional Rent for such
Escalation Year a sum ("Tenant's Tax Payment") equal to Tenant's Proportionate
Share of the amount by which Taxes for such Escalation Year exceed the Base Tax
Factor. For purposes of calculating the taxes payable in the First Escalation
Year only, any increase in taxes taking place during such Escalation Year shall
be deemed to have occurred on December 1.
B. Landlord shall furnish to Tenant prior to the commencement
of each Escalation Year, or partial Escalation Year, a Landlord's Statement
setting forth Tenant's Tax Payment for such Escalation Year. Tenant's Tax
Payment shall commence as of the first day of the relevant Escalation Year and
shall be payable in 12 equal monthly installments, in advance, on the first day
of each month during such Escalation Year based on Landlord's Statement. If
Landlord's Statement for any Escalation Year is furnished to Tenant after
commencement of such Escalation Year, then (i) until the first day of the month
following the month in which Landlord's Statement is furnished to Tenant, Tenant
shall pay to Landlord on the first day of each month an amount equal to 1/12th
of Tenant's Tax Payment for the preceding Escalation Year; (ii) promptly after
the Landlord's Statement for such Escalation Year is furnished to Tenant or
together therewith, Landlord shall give notice to Tenant stating whether the
installments of Tenant's Tax Payment previously made for such Escalation Year
were greater or less than the installments of Tenant's Tax Payment to be made
for such Escalation Year in accordance with Landlord's Statement, and if there
shall be a deficiency,
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Tenant shall pay the amount together with the next installment of Basic Rent
becoming due hereunder, or if there shall have been an overpayment, Landlord
shall credit the amount thereof against subsequent payments under this Section
6.2, (or, if the Term has expired, and Tenant has no further obligation to
Landlord under this Lease, pay the same in cash to Tenant within thirty (30)
business days); and (iii) on the first day of the month following the month in
which Landlord's Statement is furnished to Tenant, and monthly thereafter
throughout the remainder of such Escalation Year, Tenant shall pay to Landlord
an amount equal to 1/12th of Tenant's Tax Payment for such Escalation Year shown
on Landlord's Statement. If there shall be any increase in Taxes for any fiscal
tax year falling wholly or partially within an Escalation Year, whether during
or after such Escalation Year, of if there shall be any decrease during any
Escalation Year in the taxes for any fiscal tax year falling wholly or partially
within such Escalation Year, Landlord shall furnish to Tenant a revised
Landlord's Statement for such Escalation Year, and Tenant's Tax Payment for such
Escalation Year shall be adjusted and paid or refunded, as the case may be,
substantially in the same manner as provided in the preceding sentence. Any
Additional Rent payable by Tenant pursuant to this Section 6.2 shall be
collectible by Landlord in the same manner as Basic Rent. Notwithstanding
anything to the contrary contained in this Subsection 6.2B., Tenant shall be
permitted at Tenant's option to make Tenant's Tax Payment in a lump sum rather
than monthly, if, and so long as, (i) such is permitted by the Superior
Mortgagee (as hereinafter defined) and (ii) Tenant shall have made each and
every payment within fifteen (15) days after request by Landlord therefor, and
provided that such lump sum payment shall be made prior to the date on which the
taxes for such Escalation Year would be payable to the taxing authority without
penalty, assuming payment thereof were made in full and not in installments.
C. If, as a result of any application or proceeding brought by or
on behalf of Landlord for reduction in the assessed valuation of the Real
Property affecting any Escalation Year, there shall be a decrease in Taxes for
any Escalation Year with respect to which Landlord shall have previously
rendered a Landlord's Statement, Landlord's Statement next following such
decrease shall include an adjustment for such Escalation Year reflecting such
decrease in Taxes (less all costs and expenses, including counsel fees, incurred
by Landlord in connection with such application or proceeding) but in no event
shall such adjustment result in a credit to Tenant in excess of Tenants's Tax
Payment for such Escalation Year. Nothing herein shall obligate Landlord to
file any application or institute any proceeding seeking a reduction in assessed
valuation.
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6.3 If the Rent Commencement Date or Expiration Date shall occur on
a date other than March 1 or the last day of February, respectively, any
Additional Rent under Section 6.2 for the Escalation Year in which the Rent
Commencement Date of Expiration Date shall occur, as the case may be, shall be
appropriately prorated. In the event of a termination of the Lease, any
Additional Rent under this Article VI shall be paid or adjusted within 30 days
after submission of a Landlord's Statement. In no event shall Basic Rent ever
be reduced by operation of this Article VI. The rights and obligations of
Landlord and Tenant under the provisions of this Article VI with respect to any
Additional Rent shall survive the Expiration Date or any sooner termination of
the Term.
6.4 A. Landlord's Statements with respect to Tenant's Tax Payment
shall be rendered to Tenant annually in accordance with the provisions of
Section 31.12. Landlord's failure to render Landlord's Statements with respect
to increases in Taxes for any Escalation Year shall not prejudice Landlord's
right to thereafter render a Landlord's Statement with respect thereto or with
respect to any subsequent Escalation Year. Nothing herein contained shall
restrict Landlord from issuing Landlord's Statements at any time during any
Escalation Year that there is an increase in Taxes or at any time thereafter.
B. Each Landlord's Statement rendered pursuant to this
Article VI shall be conclusive and binding upon Tenant unless, within 30 days
after receipt of such Landlord's Statement, Tenant shall notify Landlord that it
disputes the correctness of Landlord's Statement, specifying the respects in
which Landlord's Statement is claimed to be incorrect. In the event that
Landlord and Tenant are unable to resolve such dispute, the same shall be
submitted to arbitration in accordance with the provisions of Article XXII
hereof. Pending the determination of such dispute by agreement or arbitration,
Tenant shall pay Additional Rent under this Article VI in accordance with the
applicable Landlord's Statement, and such payment shall be without prejudice to
Tenant's position. If the disputes shall be determined in Tenant's favor,
Landlord shall forthwith pay to Tenant the amount of Tenant's overpayment of
Additional Rent resulting from compliance with Landlord's Statement.
6.5 Tenant shall be liable for all taxes levied against Tenant's
Property and for all sales, use or excise taxes levied against Tenant or
Tenant's Property. If any such taxes for which Tenant is liable are levied
against Landlord, the Real Property, the Project or any of Landlord's other
property and if Landlord elects to pay the same, or if the assessed value of the
Real Property, the Project or Landlord's
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other property is increased by inclusion of Tenant's Property and Landlord
elects to pay the taxes based on such increase, Tenant shall pay to Landlord,
upon demand, as Additional Rent, that part of the aforesaid taxes attributable
to Tenant's Property. Landlord shall give Tenant notice of the inclusion of
Tenant's Property in any assessment of Real Property, the Project, or Landlord's
other property, sufficient to enable Tenant to protest the amount thereof, in
Landlord's name if necessary, but at Tenant's expense.
ARTICLE VII
OPERATING EXPENSE ESCALATION
7.1 For purposes of this Lease:
A. The term "Base Operating Factor" shall mean Operating Expenses,
as hereinafter defined, for the calendar year 1995.
B. The term "Operating Expenses" shall mean all operating expenses
of the Building and such additional facilities in subsequent years as may be
determined by Landlord to be reasonably necessary or desirable for the
management, maintenance or operation of the Real Property and all expenses and
costs (but not specific costs which are allocated or separately billed to and
paid by specific tenants) of every kind and nature which Landlord shall pay or
become obligated to pay because of or in connection with owning, operating,
managing, painting, repairing, insuring and cleaning the Building. Operating
Expenses shall be reasonably consistent with like expenses of other Class A
buildings in Downtown Baltimore, but with variations resulting from building
size, age of building, services provided and security needs based upon tenant
mix. Operating Expenses shall include, but not be limited to, the following:
(i) all supplies and material used, and labor charges incurred, in
the operation, maintenance, decoration, repairing and cleaning of the Building,
including janitorial service for all floor areas;
(ii) cost of all equipment purchased or rented which is utilized in
the performance of Landlord's obligations hereunder, and the cost of maintenance
and operation of any such equipment;
(iii) cost of all management, maintenance and service agreements
for the Building and the equipment therein, including, without limitation, alarm
service, security service, window cleaning, and elevator maintenance;
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(iv) accounting costs, including the cost of audits by certified
public accountants, and legal and engineering fees and expenses incurred in
connection with the operation and management of the Real Property;
(v) wages, salaries, commissions (exclusive of leasing
commissions), and related expenses of all on-site and off-site agents or
employees engaged in the operation, maintenance, security and the costs of
management in the Building;
(vi) cost of all insurance coverage for the Building;
(vii) cost of repairs, replacements and general maintenance to the
Building, structural or non-structural, including without limitation the
mechanical, electrical and heating, ventilating and air-conditioning equipment
and/or systems (excluding repairs and general maintenance paid by proceeds of
insurance or by tenants or other third parties, and alterations attributable
solely to tenants);
(viii) any and all Common Area maintenance or redecoration
(including repainting) and exterior and interior landscaping;
(ix) cost of removal of trash, rubbish, garbage and other refuse
from the Building as well as removal of ice and snow from the sidewalks on or
adjacent to the Land;
(x) amortization of the cost of capital improvements made to the
Building subsequent to the Commencement Date which will improve operating
efficiencies (including legal, architectural and engineering fees incurred in
connection therewith) as determined under generally acceptable management
practices in the Metropolitan Baltimore area, or which may be required by any
Legal Requirement or Insurance Requirement;
(xi) all charges for electricity (except as otherwise specifically
paid for by individual tenants) and gas, water, sewerage service, heating,
ventilation and air-conditioning and other utilities furnished to the Building;
(xii) every other expense which would be considered as an expense
of maintaining, operating, leasing, insuring, managing or repairing the
Building, and
(xiii) 15% percent of items (i) through (xii) above for overhead
and administration.
Provided, however, that the foregoing costs and expenses shall
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exclude or have deducted therefrom, as the case may be,
(a) advertising and promotional expenditures;
(b) refinancing costs and mortgage interest and amortization
payments;
(c) attorneys' fees and disbursements and court costs in connection
with enforcing leases;
(d) depreciation, except as provided above;
(e) leasing commissions;
(f) costs incurred in performing work or furnishing services for
any tenant (including Tenant), whether at such tenant's or at
Landlord's expense, to the extent that such work or service
is in excess of any work or service that Landlord is obligated
to furnish Tenant at Landlord's expense;
(g) costs incurred pursuant to Paragraph E
of the Rider;
(h) capital improvements, other than as provided above in
subsection 7.1 B(x);
(i) expenditures for correcting construction defects in the
Building or the Building Equipment, the need for which is
discovered within 12 months after the Commencement Date.
(j) expenditures for any alteration, renovation, redecoration,
subdivision, layout and finish of any tenant's space in the
Building performed in connection with initial occupancy of such
space by a new tenant or in connection with a renewal of a
lease for such space with the existing tenant thereof;
(k) costs of any curative action required, or repair, replacement
or alteration made, by Landlord to remedy damage caused by or
resulting from the negligence of Landlord, its agents, servants
or employees;
(l) Taxes; and
(m) fines and penalties imposed for non-payment or
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delay in payment of Taxes, failure or delay in complying with
Legal Requirements or Insurance Requirements or any
requirements of any Superior Lease or Superior Mortgage.
7.2 A. For each Escalation Year or any part thereof during the
Term, Tenant shall pay as Additional Rent a sum ("Tenant's Operating Payment")
equal to Tenant's Proportionate Share of the amount by which Operating Expenses
for such Escalation Year exceed the Base Operating Factor.
B. Landlord shall furnish to Tenant, prior to the
commencement of each Escalation Year or partial Escalation Year a written
statement setting forth Landlord's estimate of Tenant's Operating Payment for
such Escalation Year. Tenant shall pay to Landlord on the first day of each
month during such Escalation Year an amount equal to 1/12th of Landlord's
estimate of Tenant's Operating Payment for such Escalation Year. If, however,
Landlord shall furnish any such estimate for an Escalation Year subsequent to
the commencement thereof, then (i) until the first day of the month following
the month in which such estimate is furnished to Tenant, Tenant shall pay to
Landlord on the first day of each month an amount equal to the monthly sum
payable by Tenant to Landlord under this Section 7.2 in respect of the last
month of the preceding Escalation Year; (ii) promptly after such estimate is
furnished to Tenant or together therewith, Landlord shall give notice to Tenant
stating whether the installments of Tenant's operating Payment previously made
for such Escalation Year were greater or less than the installments of Tenant's
Operating Payment to be made for such Escalation Year in accordance with such
estimate, and if there shall be a deficiency, Tenant shall pay the amount
thereof together with the next installment of Basic Rent becoming due hereunder,
or if there shall have been an overpayment, Landlord shall credit the amount
thereof against subsequent payments under this Section 7.2 (or if the Term has
expired and Tenant has no further obligation to Landlord under the Lease, pay
the same in cash to Tenant within thirty (30) business days); and (iii) on the
first day of the month following the month in which such estimate is furnished
to Tenant and monthly thereafter throughout the remainder of such Escalation
Year, Tenant shall pay to Landlord an amount equal to 1/12th of Tenant's
Operating Payment shown on such estimate. Landlord may at any time or from time
to time furnish to Tenant a revised statement of Landlord's estimate of Tenant's
Operating Payment for such Escalation Year, and in such case, Tenant's Operating
Payment for such Escalation Year shall be adjusted and paid or refunded, as the
case may be, substantially in the same manner as provided in the preceding
sentence. Any Additional Rent payable to Tenant pursuant to this Section 7.2
shall be collectible by Landlord in the same manner as Basic Rent.
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C. After the end of each Escalation Year Landlord shall furnish to
Tenant a Landlord's Statement for such Escalation Year for computing Tenant's
Operating Payment. Each such year-end Landlord's Statement shall be accompanied
by a computation of operating expenses for the Building prepared by Landlord's
managing agent, showing various categories of operating expenses in reasonable
detail, from which Landlord shall make the computation of Operating Expenses
hereunder. If such Landlord's Statement shall show that the sums paid by Tenant
under Subsection 7.2(b) exceed the payments by Tenant of Tenant's Operating
Payment for such Escalation Year, Landlord shall promptly either refund to
Tenant the amount of such excess or permit Tenant to credit the amount of such
excess against subsequent payments under this Section 7.2, and if the Landlord's
Statement for such Escalation Year shall show that the sums so paid by Tenant
were less than Tenant's Operating Payment for such Escalation Year, Tenant shall
pay the amount of such deficiency together with the next installment of Basic
Rent becoming due hereunder.
7.3 If the Rent Commencement Date or the Expiration Date shall
occur on a date other than March 1 or the last day of February, respectively,
any Additional Rent under Section 7.2 for the Escalation Year in which such Rent
Commencement Date or Expiration Date shall occur, as the case may be, shall be
appropriately prorated. In the event of a termination of this Lease, any
Additional Rent under this Article VII shall be paid or adjusted within 30 days
after submission of a Landlord's Statement. In no event shall Basic Rent ever
be reduced by operation of this Article VII. The rights and obligations of
Landlord and Tenant under the provision of this Article VII with respect to any
Additional Rent shall survive the Expiration Date or any sooner termination of
the Term.
7.4 A. Landlord's Statements with respect to Tenant's Operating
Payment shall be rendered in accordance with the provisions of Section 31.12.
Landlord's failure to render Landlord's Statements with respect to increases in
Operating Expenses for any Escalation Year shall not prejudice Landlord's right
to thereafter render a Landlord's Statement with respect thereto or with respect
to any subsequent Escalation Year. Nothing herein contained shall restrict
Landlord from issuing Landlord's Statements at any time there is an increase in
Operating Expenses during any Escalation Year or any time thereafter.
B. Each Landlord's Statement rendered pursuant to this
Article VII shall be conclusive and binding upon Tenant unless within 60 days
after receipt of such Landlord's Statement Tenant shall notify Landlord that it
disputes the correctness of Landlord's Statement, specifying the particular
15
respects in which Landlord's Statement is claimed to be incorrect. In the event
that Landlord and Tenant are unable to resolve such dispute, the same shall be
submitted to arbitration in accordance with the provisions of Article XXII
hereof. Pending the determination of such dispute by agreement or arbitration,
Tenant shall pay Additional Rent under this Article VII in accordance with the
applicable Landlord's Statement and such payment shall be without prejudice to
Tenant's position. If the dispute shall be determined in Tenant's favor,
Landlord shall forthwith pay to Tenant the amount of Tenant's overpayment of
Additional rent resulting from compliance with Landlord's Statement.
ARTICLE VIII
USE OF THE PREMISES
8.1 Tenant covenants that throughout the Term it will use the
Premises for general, clerical, administrative, and executive offices consistent
with a first class office building in the Baltimore area and for no other
purpose.
8.2 Tenant, at its sole cost and expense, shall comply with all
Legal Requirements and all Insurance Requirements relating to or affecting the
Premises and shall give Landlord prompt notice of any lack of compliance with
any of the foregoing, except that Tenant shall not be under any obligation to
comply with any Legal Requirements or Insurance Requirements requiring any
structural alteration of the Premises solely by reason of the use thereof for
any of the permitted purposes specified in Section 8.1 unless said alteration
(i) is necessitated by a condition which has been otherwise created by, or at
the instance of, Tenant, (ii) is attributable to the use or manner of use to
which Tenant puts the Premises, other than as permitted by Section 8.1, (iii)
is required by reason of a breach of Tenant's obligations hereunder, or (iv)
is occasioned, in whole or in part by any act, omission or negligence of Tenant
or any person claiming through or under Tenant, or any of their employees,
agents, contractors, invitees or licensees. Tenant shall pay all costs,
expenses, fines, penalties and damages which may be imposed upon Landlord or a
Superior Lessor or a Superior Mortgagee by reason of or arising out of Tenant's
failure fully and promptly to comply with the provisions of this Section 8.2.
Subject to the provision of this Article, Landlord, at its expense, shall
comply with all other Legal Requirements and Insurance Requirements, but may
defer compliance as long as Landlord shall be contesting the validity or
applicability thereof.
8.3 Tenant shall be solely responsible for
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obtaining any permits and/or licenses necessary for the conduct of its business
in the Premises or any part thereof (including, without limitation, a
certificate of occupancy or equivalent thereof necessary in connection with the
making of Improvements to the Premises other than Improvements to be performed
by Landlord pursuant to the Work Letter) and Tenant shall at all times comply
with the terms and conditions of all such permits and licenses, but in no event
shall failure by Tenant to procure and maintain such licenses or permits affect
Tenant's obligations hereunder. Landlord agrees to cooperate with Tenant in
Tenant's endeavor to procure such permits and licenses.
8.4 Tenant shall not abandon the Premises and shall not vacate the
Premises without giving Landlord reasonable advance notice. Tenant shall
operate and conduct its business at the Premises in an efficient, dignified,
tasteful and reputable manner and in accordance with high standards of
operation. All property kept, stored or maintained within the Premises by
Tenant or anyone claiming through or under Tenant or any of their respective
agents, employees or contractors shall be at Tenant's sole risk.
8.5 Tenant shall not use, occupy, suffer or permit the Premises, or
any part thereof to be used in any manner, or suffer or permit anything to be
brought into or kept therein, which would, in Landlord's reasonable judgment,
(i) violate any of the provisions of any Superior Lease or Superior Mortgage,
(ii) violate any Legal Requirement or Insurance Requirement, (provided, however,
that with respect to the foregoing clauses (i) and (ii) Tenant would have
knowledge of any such violation), (iii) make void or voidable any insurance
policy then in force with respect to the Real Property, the Premises or the
Project, (iv) make unobtainable from reputable insurance companies authorized to
do business in the State of Maryland at standard rates any fire insurance with
extended coverage or liability, elevator, boiler or other insurance, (v) cause
or be likely to cause, injury or damage to the Project or any part thereof, (vi)
constitute a public or private nuisance, (vii) violate any certificate of
occupancy for the Premises, the Building or the Project, (viii) emit or
discharge objectionable noise, vibrations, fumes, vapors or odors into the
Building or the Project, (ix) impair or interfere with any of the Building
services, including the furnishing of electrical energy, or the proper and
economical cleaning, heating, ventilating, air-conditioning or other servicing
of the Building, the Premises or the Project (x) impair or interfere with the
use of any other areas of the Building or the Project by, or occasion
discomfort, annoyance or inconvenience to, Landlord or any other tenant, (xi)
cause Tenant to default in any of its other obligations under this Lease or
(xii) adversely affect the appearance, character or
17
reputation of the Project as a first class office building retail-garage
complex. If anything is done, omitted to be done, or suffered to be done by
Tenant, or kept or suffered by Tenant to be kept in, upon or about the Premises
that shall cause the rate of fire or other insurance on the Premises, the
Building or the Project in companies acceptable to Landlord to be increased,
Tenant shall pay the entire amount of such increase promptly upon Landlord's
demand therefor as Additional Rent. Notwithstanding the foregoing, Tenant's
prudent use of the Premises in the usual and regular course of Tenant's business
for the purposes set forth in Section 8.1 shall not be deemed a basis for
imposing any obligation or charge upon Tenant for any increase in the rate of
fire or other insurance. In determining whether increased premiums are a result
of something done, omitted or suffered to be done or kept or suffered to be kept
in, upon or about the Premises by Tenant, a schedule issued by the organization
computing the insurance rate of the Building or the Project, as the case may be,
showing the various components of such rate, shall be conclusive evidence of the
several items and charges which make up such rate.
8.6 Tenant shall not place a load upon any floor that exceeds
either the floor load per square foot that such floor was designed to carry or
which is allowed by any Legal Requirement. Business machines and mechanical
equipment in the Premises shall be placed and maintained by Tenant at the
Tenant's sole expense, in such manner as shall be sufficient, in Landlord's
reasonable judgment, to prevent vibration, noise, annoyance or inconvenience to
Landlord and the other tenants.
ARTICLE IX
BUILDING NAME
9.1 The Building is presently designated and known as "Inner Harbor
Center". Such name and the address of the building may be changed from time to
time in Landlord's sole discretion.
ARTICLE X
ASSIGNMENT AND SUBLETTING
10.1 Neither this Lease nor any part hereof, nor the interest of
Tenant in any sublease or the rentals thereunder shall, by operation of law or
otherwise, be assigned, mortgaged, pledged, encumbered or otherwise transferred
by Tenant, Tenant's legal representatives or
18
successors in interest, and neither the Premises, nor any part thereof, nor any
of Tenant's Property shall be encumbered in any manner by reason of any act or
omission on the part of Tenant or anyone claiming under or through Tenant, or
shall be sublet or be used, occupied or utilized by anyone other than Tenant,
without the prior consent of Landlord. A transfer of more than 50% in interest
of Tenant (whether stock, partnership interest or otherwise), whether in a
single transaction or a series of related or unrelated transactions, shall be
deemed an assignment of this Lease. Any assignment, sublease, mortgage, pledge,
encumbrance or transfer by Tenant in contravention of this Article X shall be
void. If this Lease be assigned, or if the Premises or any part thereof be
sublet or occupied by anybody other than Tenant, Landlord may, after the
occurrence of an Event of Default, collect rent from the assignee, subtenant or
occupant, and apply the net amount collected to the Rent, but no such
assignment, subletting, occupancy or collection shall be deemed a waiver of this
covenant, or an acceptance of the assignee, subtenant or occupant as tenant
under this Lease, or a release of Tenant from the further performance by Tenant
of covenants on the part of Tenant herein contained. The consent by Landlord to
an assignment or subletting shall not in any way be construed to relieve Tenant
from obtaining the express consent of Landlord to any further assignment or
subletting.
10.2 No assignment or subletting consented to by Landlord shall be
valid unless within 10 days after the execution thereof, Tenant shall deliver to
Landlord (a) a duplicate original sublease, duly executed by Tenant and the
subtenant, or instrument of assignment duly executed by Tenant, as the case may
be, in form and substance satisfactory to Landlord and (b) in the case of an
assignment, an instrument in form and substance satisfactory to Landlord, duly
executed by the assignee, in which such assignee shall assume observance and
performance of, and agree to be personally bound by, all of the terms, covenants
and conditions of this Lease on Tenant's part to be observed and performed.
10.3 Notwithstanding anything contained in Section 10.1, in the
event that, at any time or from time to time prior to or during the Term, Tenant
desires to sublet all or any part of the Premises or assign its interest in this
Lease, Tenant shall submit to Landlord:
(a) in writing, the name and address of the proposed subtenant
or assignee, a reasonably detailed statement of the proposed subtenant's or
assignee's business, reasonably detailed character references for the proposed
subtenant or assignee, reasonably detailed financial references for the proposed
subtenant or assignee (including
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certified balance sheet and income statements for the proposed subtenant or
assignee; in the case of the balance sheet, dated not more than 60 days prior to
the date of its submission), and such other information with respect to the
character, business and financial condition of the proposed subtenant or
assignee as Landlord or any Superior Lessor or Superior Mortgagee, whose consent
to such subletting or assignment is required, may request; and
(b) (i) a fully executed copy of the proposed sublease or
assignment, the effective date of which shall be at least 30 days after the date
on which Tenant shall have furnished Landlord with all of the information
required pursuant to Subdivision (a) above and which shall be conditioned on
Landlord's consent thereto and (ii) an agreement by Tenant to indemnify Landlord
against liability resulting from any claims that may be made against Landlord by
the proposed assignee or subtenant or by any brokers or other persons claiming a
commission or similar compensation in connection with the proposed assignment or
sublease.
10.4 Tenant agrees to pay Landlord all reasonable costs incurred by
Landlord in connection with any subletting or assignment, including, without
limitation, the costs of making investigations as to the acceptability of a
proposed subtenant or assignee, and legal costs incurred in connection with any
requested consent.
ARTICLE XI
REPAIRS
11.1 Tenant, at its sole cost and expense, shall take good care of
the Premises and the Fixtures and Building Equipment therein and Tenant's
Property consistent with the operation of a first-class office building. Tenant
shall pay to Landlord, promptly upon demand, all costs and expenses incurred by
Landlord in connection with all repairs, replacements and alterations to the
Premises and the Fixtures or the Building Equipment therein, whether such
repairs, replacements and alterations are interior or exterior, structural or
otherwise, ordinary or extraordinary, the need for which arises out of (i) the
installation, use, operation or existence of Improvements or Tenant's Property,
(ii) the moving of Tenant's Property or Improvements in or out of the Building
or the Premises, (iii) the acts, omissions, negligence or misuse of Tenant or
any of its subtenants or any of its or their employees, agents, contractors,
licensees or invitees or their use or occupancy or manner of use or occupancy of
the Premises (except fire or other casualty caused by Tenant's negligence, if
the fire or other casualty
20
insurance policies insuring Landlord are not invalidated and the rights of
Landlord are not adversely affected by this provision) or (iv) the performance
by Tenant of its obligations pursuant to the provisions of Section 8.2. Tenant,
at its sole cost and expense, except where the necessity therefor has been
occasioned by the gross negligence or willful acts of Landlord, it agents,
employees or contractors, shall promptly replace scratched, damaged or broken
doors and glass in and about the Premises and shall be responsible for all
repairs and maintenance of wall and floor coverings in the Premises. Tenant
shall promptly and diligently make all repairs in or to the Premises for which
it is responsible and in any event within 30 days of receipt of written notice
of the necessity therefor from Landlord, except that if any such repair cannot
be completed within 30 days, Tenant shall commence such repair within said
period and thereafter diligently proceed with such repair to completion. All
repairs made by or on behalf of Tenant or any person claiming through or under
Tenant shall be made and performed in conformity with the provisions of Article
XV.
11.2 Landlord shall keep the Building and Building Equipment in
good order and repair and shall operate the Building as a first-class office
building. Landlord, at its sole cost and expense, shall make all repairs and
replacements, structural or non-structural, exterior or interior, ordinary or
extraordinary, necessary to comply with the covenant contained in this Section
11.2, including, but not limited to, repairs to all utility. sprinkler,
electrical and plumbing lines and HVAC systems outside the Premises which serve
the Premises, and all such lines and systems within the Premises but serving
other occupants of the Building, except for (a) repairs required to be made by
Tenant pursuant to Section 11.1 and any other terms of this Lease, and (b)
repairs of Tenant's Property or Improvements not occasioned by Landlord's
negligence. Notwithstanding anything contained herein to the contrary, Landlord
shall have no liability to Tenant under this Section unless and until 30 days
after receipt of written notice from Tenant of the specific repair required to
be made (which, in the case of an emergency, may be telephone notice confirmed
in writing) or, in the event such repair cannot be effected within such 30 days
period, within a reasonable time, under the circumstances, thereafter.
11.3 All repairs and replacements made by either party shall be at
least equal in quality of workmanship and material to the quality of workmanship
and material found in the original construction of the Building or the Premises,
as the case may be, and shall be consistent with the operation of a first-class
office building.
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ARTICLE XII
ACCESS
12.1 Landlord or its representative, or designees, may enter the
Premises at reasonable times under the circumstances, whether or not during
business hours, to inspect the Premises, to enforce any provisions of this
Lease, to make or cause to be made such repairs and Improvements, or to perform
such maintenance, including the maintenance of the Building Equipment, as may be
required of Landlord hereunder or as Landlord may deem necessary or desirable,
to cure defaults of Tenant pursuant to the rights granted Landlord under Article
XXIII hereof, to repair any utility lines or system or systems servicing other
parts of the Building or the Project, to rectify any condition in the Premises
adversely affecting other occupants of the Building or the Project, to alter,
renovate and decorate the Premises at any time during the Term if Tenant shall
have removed all or substantially all of Tenant's Property from the Premises,
or, upon prior reasonable notice to Tenant, to exhibit the Premises to others.
Landlord or its representative may bring upon the Premises all things
necessary to perform any work any work to be done in the Premises pursuant to
this Section 12.1. Landlord agrees, however, that all such repairs,
Improvements and maintenance shall be made with a minimum of inconvenience to
Tenant and that Landlord will diligently proceed therewith to completion but
without obligation to employ overtime labor and subject to Unavoidable Delays.
If Tenant, its agents or employees shall not be present or shall not permit an
entry into the Premises at any time when such entry shall be permissible,
Landlord may use a master key (or master code, card or switch if Tenant's
security system is other than conventional locks and keys), or, in the case of
an emergency, forcibly enter the Premises. The Superior Lessor and the Superior
Mortgagee shall have the right to enter the Premises at any time to examine the
Premises or for the purpose of exercising any right reserved to Landlord under
this Section.
ARTICLE XIII
COMMON FACILITIES
13.1 Tenant, and its permitted subtenants and its and their
employees, invitees and licensees shall have the non-exclusive right to make use
of the Common Area, such use to be in common with Landlord and other tenants and
persons entitled to use the same, subject to such reasonable rules and
regulations governing use as Landlord may from time to time prescribe and
subject to such easements therein as Landlord may from time to time grant to
others. Tenant shall not
22
obstruct in any way any portion of the Common Area or in any way interfere with
the rights of other person entitled thereto to use or enjoy the benefit of the
Common Facilities and, shall not, without the prior written consent of Landlord,
use the Common Area in any manner, directly or indirectly, for the location or
display of any merchandise or for the location or display of any property
belonging to Tenant or appertaining, directly or indirectly, to Tenant's
operations in the Premises.
13.2 Subject to the provisions of Sections 13.3 and 13.4, the
Common Facilities shall at all times be subject to the exclusive control and
management of Landlord.
13.3 Landlord shall not, without Tenant's prior consent, which
shall not be unreasonably withheld or delayed, make any change to the location,
layout, nature or arrangement of the Common Facilities or any alteration to any
portion of the Common Area, which would (a) unreasonably deprive Tenant of
access to the Premises, (b) interfere with the use of the Premises or the
services furnished to the Premises for an unreasonable length of time, or (c)
reduce the Premises Area in excess of 2% (without any reduction in Rent), except
if such reduction results from compliance with Legal Requirements or Insurance
Requirements and in such event only if there is an appropriate reduction in
Rent. Landlord shall redecorate and repaint the Common Area, from time to time,
as Landlord may deem necessary or desirable to maintain the Common Area in an
attractive manner consistent with a first-class office building. Landlord shall
have the right to close temporarily all or any portion of the Common Area to
such extent as may in the reasonable opinion of Landlord be necessary to prevent
a dedication thereof to public use or the accrual of any rights to the public
therein and/or for repairs, replacements or maintenance, provided said repairs,
replacements or maintenance are performed expeditiously and provided (both as to
closing and repairs) that Tenant and its invitees shall not be denied access to
the Premises.
13.4 Landlord covenants to keep, maintain, manage and operate the
Common Facilities in good order, condition and repair consistent with the
operation of a first class office building-retail-parking complex and to keep
the sidewalks and driveways, if any, constituting a portion of the Common Area
clean and reasonably clear of snow and ice. Landlord reserves the right of
access to the Common Facilities through the Premises for the purposes of
operation, decoration, cleaning, maintenance, safety, security, alteration and
repair.
ARTICLE XIV
UTILITIES AND SERVICES
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14.1 HEATING, VENTILATING AND AIR-CONDITIONING.
A. Except as otherwise provided in Section 14.7, Landlord shall
maintain and operate the heating, ventilating and air-conditioning systems and
shall furnish heat, outside air and air-conditioning to the Premises through the
Building Equipment from 8:00 a.m. to 6:00 p.m. on business days and from 8:00 am
to 1:00 p.m. on Saturdays (such hours being herein referred to as "business
hours"). "Business days" shall mean all days except Saturdays, Sundays and days
observed by the federal or the Maryland State or Baltimore City governments as
legal holidays and such other days as shall be designated as holidays by the
applicable operating engineers union or building service employees union
contract. Landlord and Tenant agree to operate the heating, ventilating and
air-conditioning equipment in accordance with their design criteria unless a
recognized energy conversation law, program, guideline, regulation or
recommendation (which, with respect to any recommendation, is being observed by
other owners or landlords of first class office building in Baltimore)
promulgated by any federal, state, city or other governmental or
quasi-governmental bureau, board, department, agency, office, commission or
other subdivision thereof shall provide for any reduction in operations below
said design criteria in which case such equipment shall be operated so as to
provide reduced service in accordance with such law, program, guideline,
regulation or recommendation.
B. If Tenant requests heating, ventilating or air-conditioning
services during other than business hours, which request shall be made between
the hours of 9:00 a.m. and 1:00 p.m. on any business day, Landlord shall make
the same available to Tenant in accordance with such request, provided that,
Tenant shall pay to Landlord, as Additional Rent, Landlord's then established
charges therefor. As of the date of this Lease, such established charge is
$75.00 per hour, and no increase in such charge shall average more than 3% per
year calculated from the last such established charge.
C. Notwithstanding the foregoing provisions of this Section 14.1,
Landlord shall not be responsible if the normal operation of the Building
heating, ventilating and air-conditioning system shall fail to provide
conditioned air at reasonable temperatures, pressures or degrees of humidity or
in reasonable volumes or velocities in any portion of the Premises (i) which
shall have an electrical load in excess of 3 watts per square foot of usable
area of the Premises for all purposes (including lighting and power), or which
shall have a human occupancy factor in excess of one person per 100 square feet
of usable area of the Premises (the average electrical load and human occupancy
factors for which such system is designed), or (ii) because of any rearrangement
of
24
partitioning or other Improvements. Tenant shall cooperate fully with Landlord
at all times and abide by all regulations and requirements which Landlord may
reasonably prescribe for the proper functioning and protection of the heating,
ventilating and air-conditioning system.
14.2 ELEVATORS. Landlord shall provide elevator service by
elevators servicing the floors on which the Premises are situated during
business hours on business days and shall have at least one passenger elevator
subject to call at all other times. In the event that Tenant shall require the
use of a service elevator or of the Building's passenger elevators for purposes
not otherwise supplied by Landlord or other than during business hours on
business days, Landlord shall provide a service elevator or passenger elevators,
as the case may be, for the use of Tenant, provided Tenant gives Landlord
reasonable advance notice of the time and use of such elevators to be made by
Tenant and Tenant pays to Landlord, as Additional Rent, Landlord's then
established charges therefor.
14.3 CLEANING. A. Provided Tenant shall keep the Premises in
good order, Landlord, at Landlord's expense, shall cause the Premises, including
the exterior and the interior of the windows thereof (subject to Tenant
maintaining unrestricted access to such windows), but excluding any portions of
the Premises used for the storage, preparation, service or consumption of food
or beverages, to be cleaned. Notwithstanding the preceding sentence, Tenant
shall pay to Landlord on demand Landlord's charges for (a) cleaning work in the
Premises or the Building or other portions of the Project required because of
(i) misuse or neglect on the part of Tenant or its agents, employees,
contractors subtenants or visitors, (ii) use of portions of the Premises for
preparation, storage, service, or consumption of food or beverages,
reproduction, data processing or computer operations, private lavatories or
toilets, or other special purposes requiring greater or more difficult cleaning
work than typical office areas, (iii) interior glass surfaces in the Premises,
(iv) non-building standard materials or finishes installed by Tenant or at its
request, (v) increases in frequency or scope of cleaning beyond the
specifications contained in any contract, the cost of which is included in
Operating Expenses, and (b) removal from the Premises and the Building of (i) so
much of any refuse and rubbish of Tenant as shall exceed that normally
accumulated daily in the routine of ordinary business office occupancy and (ii)
all of the refuse and rubbish of Tenant's machines and of any eating facilities
requiring special handling. Landlord and its cleaning contractor and their
employees shall have access to the Premises after 6 P.M. and before 9 P.M. on
each business day and at all times of any other day and, in the case of an
emergency, at any time on any day. Landlord and its cleaning
25
contractor and their employees shall also have the right to use Tenant's light,
power and water in the Premises, without charge therefor, as may be reasonably
required for the purpose of cleaning the Premises. If Tenant is permitted
hereunder to, and does, have a separate area for the storage, preparation,
service or consumption of food or beverages in the Premises, Tenant, at Tenant's
expense, shall cause all portions of the Premises so used to be cleaned daily in
a manner satisfactory to Landlord, and to be exterminated against infestation by
vermin, roaches or rodents regularly and, in addition, whenever there shall be
evidence of any infestation.
B. The cleaning services required to be furnished by Landlord
pursuant to this Section 14.3 may be furnished by a contractor or contractors
employed by Landlord and Tenant agrees that Landlord shall not be deemed in
default of any of its obligations under this Section 14.3 unless such default
shall continue for an unreasonable period of time after notice from Tenant to
Landlord setting forth the specific nature of such default.
14.4 WATER. Landlord shall cause to be furnished adequate
tempered water to each floor on which the Premises are located for normal
drinking, lavatory and cleaning purposes. If Tenant uses water for any purpose
other than as aforesaid, or in extraordinary quantities, Landlord, at Tenant's
expense, may install a meter or meters to measure Tenant's consumption of water.
Tenant shall pay to Landlord the cost of any such meter and its installation and
Tenant, at its sole cost and expense, shall keep any such meter(s) in good
working order and repair. Tenant shall reimburse Landlord on demand for the
cost of the quantities of water shown on such meter(s), or in an amount which
may otherwise be agreed upon by the parties, and for any related sewer charges.
14.5 DIRECTORY LISTINGS. Landlord, on Tenant's request, shall
maintain listings on the Building directory of the names of Tenant and permitted
subtenants, and the names of partners, officers and key employees of Tenant and
permitted subtenants, provided that the spaces so allocated to Tenant shall not
exceed Tenant's Proportionate Share of the total listing space on the Building
directory.
14.6 ELECTRICITY. A. Landlord, at Landlord's expense, subject
to the provisions of this Section and Article VII, shall furnish through the
Building Equipment electrical energy reasonably required (but subject to the
provisions of Subsections 14.6B and C) in connection with the use and occupancy
of the Premises for the operation of such lighting, electrical appliances and
equipment as Landlord may permit to
26
be installed in the Premises. Except as otherwise specifically set forth in
this Article, there shall be no specific charge by way of measuring such
electrical energy on any meter or otherwise, as the furnishing of such
electrical energy will be included in Operating Expenses. If either the
quantity or character of electrical service is changed by the public utility
corporation supplying electrical service to the Building or is no longer
available or suitable for Tenant's requirements, no such change, unavailability
or unsuitability shall constitute an actual or constructive eviction, in whole
or in part, or entitle Tenant to any abatement or diminution of rent, or relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Landlord or Landlord's agents.
B. Tenant covenants that at no time shall the use of
electrical energy in the Premises exceed 3 watts per square foot of usable area
consisting of 2.5 watts per square foot for lighting and 0.5 watts per square
foot for power (electric outlets). In order to insure that such capacity
is not exceeded and to avert any possible adverse effect upon the Building
electrical system or the Building heating, ventilating or air-conditioning
systems, Tenant shall not, without the prior consent of Landlord in each
instance (which consent, subject to all of the other provisions of this section,
shall not be unreasonably withheld or delayed), make or perform, or permit the
making or performing of, any alteration to wiring installations or other
electrical facilities in or serving the Premises or any additions to the
electrical fixtures, business machines, office equipment, or other appliances in
the Premises which utilize electrical energy, other than small business
machines, including personal desktop computers, normally used in executive and
administrative offices. Should Landlord grant such consent, all additional
risers or other equipment required therefor, including, without limitation,
air-conditioning equipment, shall be provided by Landlord and the cost thereof
shall be paid by Tenant with 10 days after being billed therefor. As a
condition to granting such consent, Tenant shall be required to pay an amount
for each calendar month commencing with the month in which installation of such
alterations, wiring, other facilities or such fixtures, appliances or equipment
occurs (prorated for the month in which such installation occurs, if necessary)
which will reflect the value of the additional electrical service to be
furnished by Landlord--that is, the potential additional electrical energy to be
made available to Tenant based upon the estimated additional capacity of such
additional risers or other equipment or the connected load of such fixtures,
equipment or appliances as determined by an electrical consultant selected by
Landlord. Such determination shall be binding upon the parties. Each such
determination shall be made at the sole cost and expense of
27
Tenant.
C. From time to time during the Term, Landlord may, at its option,
cause an electrical engineer or utility consultant selected by Landlord to make
a survey of the electrical lighting and power load to determine the average
monthly electrical energy consumption in the Premises. Such determinations
shall take into account, among other things, any special electrical requirements
of Tenant and use by Tenant of electrical energy at times other than business
hours on business days. If, based on the findings of such engineer or
consultant, Landlord reasonably determines that Tenant is consuming electricity
in the Premises in excess of that reasonably required for the operation of
normal office lighting fixtures, appliances and equipment, during business hours
on business days, Tenant shall pay to Landlord an amount for each month from and
after the date of such determination by the engineer or consultant (prorated for
the month during which such determination is made, if necessary) which will
reflect the value of the electrical energy being consumed by Tenant in excess of
that reasonably required for the operation of normal office lighting fixtures,
appliances and equipment during business hours on business days. Alternatively,
Landlord may cause to be installed a submeter to measure the electric
consumption of any special equipment operated by Tenant, and Tenant agrees to
pay the charges shown thereon.
D. Notwithstanding anything to the contrary contained herein,
Landlord reserves the right to discontinue, at any time, the furnishing of
electrical energy. In the event of any such discontinuance, (i) Landlord agrees
to give not less than 60 days advance notice of any such discontinuance to
Tenant unless such notice is not feasible under the circumstances in which event
Landlord will give Tenant such reasonable advance notice as is possible, (ii)
Landlord agrees to permit Tenant to receive electrical service directly from the
public utility corporation supplying electrical service to the Building and to
permit the existing feeders, risers, wiring and other electrical facilities
serving the Premises to be used by Tenant for such purpose to the extent they
are available, suitable and safely capable, (iii) Tenant agrees, at its sole
cost and expense, to install and maintain any necessary electrical meter
equipment, panel boards, feeders, risers, wiring and other equipment and to pay
for any necessary rewiring, (iv) any amounts payable to Tenant pursuant to
Subsections 14.6B and C shall be eliminated from and after the date of such
discontinuance and (v) this Lease shall remain in full force and effect and such
discontinuance shall not constitute an actual or constructive eviction, in whole
or in part, or entitle Tenant to any abatement or diminution of Rent except as
expressly provided in this Subsection D, or relieve Tenant from any of its other
28
obligations under this Lease, or impose any liability upon Landlord or
Landlord's agents.
14.7 REDUCTION IN SERVICES. Landlord reserves the right, without
any liability to Tenant and without affecting Tenant's covenants and obligations
hereunder, to stop or reduce the level of service of any of the heating,
ventilation, air-conditioning, electric, sanitary, elevator or other Building
systems serving the Premises, or to stop or reduce the level of any other
services required of Landlord under this Lease, whenever and for so long as may
be necessary, by reason of accidents, emergencies, governmental or
quasi-governmental laws, regulations, controls or guidelines, strikes or the
making of repairs or changes which Landlord is required by this Lease or by law
to make or in good faith deems necessary, or by reason of inability to secure
proper supplies of fuel, steam, water, electricity, labor or supplies, or by
reason of any other cause beyond Landlord's reasonable control. In each
instance, Landlord shall exercise reasonable diligence to eliminate the cause of
stoppage and to effect restoration of service and shall give Tenant reasonable
notice, when practicable, of the commencement and anticipated duration of such
stoppage or reduction in service. Tenant shall not be entitled to any
diminution or abatement of Rent or other compensation by reason of any such
stoppage or reduction, unless such stoppage or reduction prevents all use of the
Premises for three (3) consecutive business days, in which event Basic Rent and
Additional Rent shall abate until Tenant is able to resume use of all or any
part of the Premises.
14.8 NO FURTHER SERVICE. Landlord shall have no obligation to
provide any services to Tenant beyond those specifically set forth in this
Article XIV.
14.9 UTILITY FACILITIES. Landlord agrees to cause to be provided
and maintained the necessary mains, conduits and other facilities necessary to
supply, if applicable, water, electricity, heating, ventilation and
air-conditioning, telephone service and sewerage service to the Premises, in
accordance with and subject to the provisions of this Article XIV.
14.10 TELEPHONE SERVICE. Telephone service within the Premises
shall not be deemed an Operating Expense and Tenant shall pay for the entire
cost of such service directly to the utility company providing the same.
14.11 REQUESTS FOR SERVICE. Any requests made by Tenant for
after hours or additional services may be made by telephone to the building
superintendent or such other person
29
as may be designated by Landlord by written notice to Tenant.
14.12 ACCESS TO BUILDING. Anything herein to the contrary
notwithstanding, it is agreed that Tenant will have access to the Building 24
hours per day, 7 days per week.
ARTICLE XV
ALTERATIONS AND FIXTURES
15.1A. Any Improvements in or to the Premises shall be made only with
the prior consent of Landlord which shall not be unreasonably withheld provided
such Improvements are limited to the interior of the Premises, do not affect the
Building's structure or systems, and are in compliance with all Legal
Requirements and Insurance Requirements. Before proceeding with any such
Improvements, Tenant shall submit to Landlord detailed plans and specifications
therefor, for Landlord's consent. Tenant shall, commencing with the third such
request, reimburse Landlord for all reasonable expenses incurred by Landlord in
connection with (i) its decision and the decision of the Superior Lessor and the
Superior Mortgagee (if such consents are required) as to whether to approve the
proposed alterations, and (ii) inspecting the Improvements to determine whether
the same are being or have been performed in accordance with the approved plans
and specifications therefor and with all Legal Requirements and Insurance
Requirements, including, without limitation, the fees and expenses of any
architect or engineer employed for such purpose. If such Improvements require
consent by or notice to the Superior Lessor or the Superior Mortgagee, Tenant,
notwithstanding anything to the contrary contained in this Article, shall not
proceed with the Improvements until such consent has been received, or such
notice has been given, as the case may be, and all applicable conditions and
provisions of the Superior Lease and the Superior Mortgage with respect to the
proposed Improvements have been met or complied with at Tenant's expense; and
Landlord, if it consents to the Improvements, will request such consent or give
such notice, as the case may be.
B. With respect to all Improvements made in or to the Premises:
(i) all work in connection with such Improvements shall be
performed in such a way so as not to damage the Premises or any other portion of
the Building or the Project, or interfere with any Building services provided to
any other tenant of the Building or the Parking Garage, but if any damage is
caused by such work, such damage shall be
30
promptly repaired by Tenant at its sole cost and expense;
(ii) Tenant shall obtain all necessary permits and licenses and
Landlord shall cooperate with Tenant to that end;
(iii) any such work shall be done in a good, and workmanlike
manner and in conformity with all applicable Legal Requirements and Insurance
Requirements, and shall be consistent with a first-class office
building-retail-parking complex;
(iv) except in connection with the initial installation by
performance of Tenant's work, no such work shall be commenced or performed by
any contractor, until Tenant shall have delivered to Landlord a waiver of right
to file a mechanic's lien signed by such contractor;
(v) all costs and expenses of such work shall be paid by
Tenant and shall be paid promptly so as to prevent the assertion of any liens or
encumbrances on Landlord's estate in the Project on account of labor and/or
materials used in or contributing to the work;
(vi) Tenant shall indemnify Landlord and hold it harmless
against any and all loss, claim, expense, liability or damage resulting from
such work, including any mechanic's or others liens or claims asserted against
Landlord's estate in the Premises, the Building or the Project, as a result of
said work, and Tenant shall, within 10 days of receipt of notice of the
occurrence of any such loss, claim, expense, liability or damage, or the filing
of such lien or claim, defend, pay off or satisfy the same or, if applicable,
cause same to be removed of record by furnishing a bond or other security
reasonably satisfactory to Landlord;
(vii) no such work shall weaken or impair the structural
integrity of any part of the Project or result in a concentration of structural
loads beyond the design capacity or overloading of any of the Building Equipment
beyond the design criteria and standards therefor;
(viii) the construction process shall not unreasonably interfere
with or cause annoyance to any other tenants of the Building or disrupt any
access to or use of the Common Facilities, or unreasonably delay or impose any
additional expense upon Landlord in the construction, maintenance, cleaning,
repair, safety, management, security or operation of the Building or the
Project, and if any such additional expense shall be incurred by Landlord as a
result of Tenant's construction work, Tenant shall pay such additional expense
as Additional Rent upon demand;
31
(ix) Improvements will not result in violation of or require a
change in any certificate of occupancy applicable to the Premises, the Building
or the Project;
(x) the proper functioning of the Building Equipment shall
not, in the sole opinion of Landlord, be adversely affected;
(xi) Tenant shall not use the elevators during business hours
on business days for haulage or removal of materials or debris;
(xii) Tenant shall not be permitted to install and make part of
the Premises-any materials, fixtures or articles which are subject to liens,
conditional sales contracts, chattel mortgages or security interests (as such
term is defined in the Uniform Commercial Code as in effect in Maryland);
(xiii) no Improvements estimated to cost more than $10,000 (as
estimated by Landlord's contractor or engineer), shall be undertaken (a) except
under the supervision of a licensed architect or licensed professional engineer
satisfactory to Landlord, and (b) prior to Tenant delivering to Landlord either
(y) a performance bond and a labor and materials payment bond (issued by a
surety satisfactory to Landlord and licensed to do business in Maryland) each in
an amount equal to 150% of such estimated cost and otherwise in form
satisfactory to Landlord or (z) such other security as shall be satisfactory to
Landlord;
(xiv) throughout the making of such Improvements, Tenant at its
sole cost and expense, shall carry, or cause to be carried, worker's
compensation insurance covering all persons employed in connection with such
Improvements in statutory limits and general liability insurance for any
occurrence in or about the Building in which Landlord, Landlord's agents, the
Superior Lessor and the Superior Mortgagee shall be named as parties assured, in
limits which shall be subject to Landlord's approval, which approval Landlord
agrees shall not be unreasonably withheld, and with insurers reasonably
satisfactory to Landlord. Tenant shall furnish Landlord with satisfactory
evidence that such insurance is in effect at or before the commencement of any
work in connection with such Improvements and, on request, at reasonable
intervals thereafter;
(xv) no Improvements shall involve the removal of any Fixtures,
equipment or other property in the Premises which are not Tenant's Property
without Landlord's prior consent and unless they are promptly replaced, at
Tenant's expense and free of superior title, liens, security interest
32
and claims, with fixtures, equipment or other property, as the case may be, of
like utility and at least equal value (which shall thereupon become the property
of Landlord), unless Landlord shall otherwise consent; and
(xvi) upon the termination of this Lease, Tenant shall, on
Landlord's request, restore the Premises to their condition prior to the making
of any Improvements by Tenant (except for Improvements made with Landlord's
consent and which consent did not require removal thereof, shall not be required
to be removed), reasonable wear and tear and damage by insured casualty
excepted.
15.2 Notwithstanding the provisions of Articles VIII and XI and
this Article XV, only Landlord or any one or more persons, firms or
corporations, authorized by Landlord shall be permitted to act as a construction
contractor or subcontractor for any work to be performed by Tenant pursuant to
such Articles. Landlord shall not unreasonably withhold its authorization for
any firm or corporation proposed by Tenant. Landlord expressly reserves the
right to act as or to designate, at any time and from time to time, an exclusive
construction contractor, and Landlord expressly reserves the right to exclude
from the Building any person, firm or corporation attempting to act as
construction contractor in violation hereof. In the event Tenant shall employ
any contractor permitted by this Section, such contractor and any subcontractor
shall agree to employ only such materials and such labor as will not result in
any difficulty, strike or jurisdictional dispute with other contractors,
mechanics or laborers engaged by Tenant, Landlord or others. Tenant, upon
demand of Landlord, shall cause all materials, contractors, mechanics or
laborers causing such difficulty, strike or dispute to leave or be removed from
the Building immediately. Tenant shall inform Landlord in writing of the names
of any permitted contractor or subcontractor Tenant proposes to use in the
Premises at least 10 days prior to the beginning of work by such contractor or
subcontractor.
15.3 All Improvements made in connection with Tenant's initial
occupancy of the Premises shall be subject to the provisions of Sections 15.lB,
15.2 and the provisions of the Work Letter.
15.4 All Improvements shall be and remain the property of Tenant
until the Expiration Date or date of earlier termination of this Lease at which
time all Improvements shall become the property of Landlord and shall be
surrendered with the Premises. All other Fixtures installed in Premises at the
commencement of or during the Term shall be and remain a part of the Premises
and shall be deemed the property of Landlord as of the date such Fixtures
33
are completed, or as of the date such Fixtures are attached to or built into the
Premises, and shall not be removed by Tenant, except as otherwise expressly
provided in this Lease.
15.5 Notwithstanding the provisions of Section 15.4, provided no
Event of Default has occurred and is continuing, and provided that any such
removal is not incident to Tenant's abandoning the Premises or terminating the
operation of its business at the Premises in violation of any provision of this
Lease, Tenant shall have the right during the Term hereof to remove, at its sole
cost and expense, any and all of Tenant's Property. All Tenant's Property shall
remain the property of Tenant; provided, however, that any Tenant's Property not
removed by Tenant upon the expiration or sooner termination of this Lease,
shall, at Landlord's option, either become the property of the Landlord or shall
be disposed of or stored by Landlord, at Tenant's risk and expense, at such
place as Landlord selects within the metropolitan Baltimore area. Any removal
of Tenant's Property by Tenant in accordance with the foregoing provisions shall
be accomplished in a manner which will minimize any damage or injury to the
Premises, the Building or the Project, and any such damage or injury shall be
promptly repaired by Tenant at its sole cost and expense; and any damage to the
Premises caused by the installation of Tenant's Property in the Premises by
nailing, bolting or otherwise attaching the same to a floor, ceiling or wall,
shall be repaired at Tenant's sole cost and expense.
15.6 No approval of plans or specifications by Landlord or consent
by Landlord allowing Tenant to make Improvements in the Premises shall in any
way be deemed to be an agreement by Landlord that the contemplated Improvements
comply with any Legal Requirements or Insurance Requirements or the certificate
of occupancy for the Building. Nor shall it be deemed to be a waiver by
Landlord of the compliance by Tenant of any of the terms of this Lease.
Notice is hereby given that neither Landlord, Landlord's agent, the Superior
Lessor nor the Superior Mortgagee shall be liable for any labor or materials
furnished or to be furnished to Tenant upon credit, and that no mechanic's or
other liens for such labor or materials shall attach to or affect any estate
or interest of Landlord, the Superior Lessor or the Superior Mortgagee in and
to the Premises or the Real Property.
15.7 Tenant shall keep records of Improvements costing in excess
of $10,000 and the cost thereof. Tenant shall, within 45 days after demand by
Landlord, furnish to Landlord copies of such records.
ARTICLE XVI
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INSURANCE
16.1 A. Tenant shall during the entire Term and any extensions and
renewals thereof and during any period of Rent abatement or period of occupancy
prior to the Commencement Date, at its sole cost and expense, obtain, maintain
and keep in full force and effect, with Tenant, Landlord and all Superior
Lessors and Superior Mortgagees named as insureds therein as their respective
interests may appear, the following insurance:
(1) Fire insurance, including extended coverage, vandalism and
malicious mischief, upon property of every description and kind owned by
Tenant or anyone claiming through or under Tenant and located in the
Building or for which Tenant is legally liable or which was installed by
or on behalf of Tenant or anyone claiming through or under Tenant,
including, without limitation, Tenant's Property and all other
Improvements (other than Landlord's Work), in an amount not less than 90%
of the full replacement cost thereof. In the event that there shall be a
dispute as to the amount which comprises full replacement cost, the
decision of Landlord or any Superior Mortgagee shall be conclusive.
(2) Comprehensive General Liability Insurance, coverage to include
personal injury, bodily injury, broad form property damage, operations
hazard, owner's protective coverage, contractual liability and products
and completed operations liability in limits not less than $5,000,000
inclusive.
(3) Worker's Compensation and Employer's Liability insurance in
form and amount satisfactory to Landlord.
(4) Any other form or forms of insurance as Tenant or Landlord or
any Superior Lessor or Superior Mortgagee may reasonably require from time
to time in form, in amounts and for insurance risks against which a
prudent tenant in a building in Baltimore similar to the Building would
protect itself.
B. All policies shall be taken out with insurers acceptable to
Landlord and in form reasonably satisfactory from time to time to Landlord and
all Superior Lessors and Superior Mortgagees. Such policies may be blanket
policies provided that the coverage afforded Landlord and any Superior Lessor or
Mortgagee shall not be reduced or diminished by reason of the use thereof.
Tenant agrees that certificates of insurance on the Landlord's standard form,
or, if required by Landlord or any Superior Lessor or Superior Mortgagee,
certified copies of each such insurance policy will be
35
delivered to Landlord as soon as practicable after the placing of the required
insurance, but in no event later than 10 days after Tenant takes possession of
all or any part of the Premises, including any possession taken prior to the
Commencement Date. All policies shall contain an undertaking by the insurers to
notify Landlord and all Superior Lessors and Superior Mortgagees in writing, by
registered mail, not less than 30 days prior to any material change, reduction
in coverage, cancellation, or other termination thereof.
C. In the event of damage to or destruction of the Premises and
the termination of this Lease by Landlord pursuant to Section 18.2 hereof,
Tenant pay to Landlord all of its insurance proceeds relating to the
Improvements in the Premises.
16.2 Landlord will not carry insurance of any kind on any
Improvements other than Landlord's Work or on any other of Tenant's Property,
and Landlord shall not be obligated to repair any damage thereto or replace the
same, except as otherwise set forth in Section 18.3 hereof.
16.3 If any insurance policy carried by Landlord on the Premises,
the Building, the Building Equipment or the Project shall be canceled or
cancellation shall be threatened or the coverage thereunder reduced or
threatened to be reduced, in any way by reason of the use or occupation of the
Premises to any part thereof by Tenant or by any one claiming through or under
Tenant or by anyone permitted by Tenant to be upon the Premises and, if Tenant
fails to remedy the condition giving rise to cancellation, threatened
cancellation or reduction of coverage within 48 hours after notice thereof,
then, in addition to any remedies Landlord may have pursuant to Articles XXI and
XXIII hereof, Landlord may, at its option, terminate this Lease.
16.4 Any policy or policies of fire, extended coverage or similar
casualty insurance, which either party obtains in connection with the Premises
shall include a clause or endorsement denying the insurer any rights of
subrogation against the other party to the extent rights have been waived by the
insured prior to the occurrence of injury or loss. Landlord and Tenant waive
any rights of recovery against the other for injury or loss due to hazards
covered by insurance containing such a waiver of subrogation clause or
endorsement to the extent of the injury or loss covered thereby.
ARTICLE XVII
NON-LIABILITY AND INDEMNIFICATION
17.1 Neither Landlord nor Landlord's agents,
36
officers, directors, shareholders, partners or principals (disclosed or
undisclosed) shall be liable to Tenant or Tenant's agents, employees,
contractors, invitees or licensees or any other occupant of the Premises, and
Tenant shall save Landlord, Landlord's agents, the Superior Lessor and the
Superior Mortgagee and their respective agents, employees, contractors,
officers, directors, shareholders, partners and principals (disclosed or
undisclosed) harmless from any loss, cost, liability, claim, damage, expense
(including reasonable attorneys' fees and disbursements), penalty or fine
incurred in connection with or arising from any injury to Tenant or to any other
person or for any damage to, or loss (by theft or otherwise) of, any of Tenant's
Property or of the property of any other person, irrespective of the cause of
such injury, damage or loss (including the acts or negligence of any tenant or
of any owners or occupants of adjacent or neighboring property or caused by
operations in construction of any private, public or quasi-public work) unless
due to the negligence or wilful misconduct of Landlord or Landlord's employees
or agents without contributory negligence on the part of Tenant, its employees,
agents, contractors, invitees such as might normally be brought upon or kept in
the Premises as incidental to the reasonable use of the Premises for the
purposes herein permitted will be brought upon or kept in the Premises;
provided, however, that even if due to any such negligence of Landlord or
Landlord's agents, Tenant waives, to the full extent permitted by law, any claim
for consequential damages in connection therewith. Landlord and Landlord's
agents shall not be liable, to the extent of Tenant's insurance coverage, for
any loss or damage to any person or property even if due to the negligence of
Landlord or Landlord's agents. Any Building employee to whom any property shall
be entrusted by or on behalf of Tenant shall be deemed to be acting as Tenant's
agent with respect to such property and neither Landlord nor Landlord's agents
shall be liable for any loss of or damage to any such property by theft or
otherwise.
17.2 No representation, guaranty or warranty is made or assurance
given that the communications or security systems, devices or procedures of the
Building, if any, will be effective to prevent injury to Tenant or any other
person or damage to, or loss (by theft or otherwise) of, any of Tenant's
Property or of the property of any other person, and Landlord reserves the right
to discontinue or modify at any time such communications or security systems or
procedures without liability to Tenant.
17.3 Tenant hereby indemnifies Landlord, Landlord's agents, each
Superior Lessor and each Superior Mortgagee against liability in connection with
or arising from (a) any default by Tenant in the performance of any of the terms
of
37
this Lease on Tenant's part to be performed, or (b) the use or occupancy or
manner of use or occupancy of the Premises by Tenant or any person claiming
through or under Tenant, or (c) any acts, omissions or negligence of Tenant or
any such person, or the contractors, agents, employees, invitees or licensees of
Tenant or any such person, in or about the Premises, the Real Property or the
Project either prior to, during or after the expiration of, the Term. If any
action or proceeding shall be brought against Landlord or Landlord's agents, or
the Superior Lessor or the Superior Mortgagee, based upon any such claim and if
Tenant, upon notice from Landlord, shall cause such action or proceeding to be
defended at Tenant's expense by counsel reasonably satisfactory to Landlord,
without any disclaimer of liability by Tenant in connection with such claim,
Tenant shall not be required to indemnify Landlord, Landlord's agents, the
Superior Lessor or the Superior Mortgagee for attorneys' fees and disbursements
in connection with such action or proceeding.
17.4 Tenant shall pay to Landlord as Additional Rent, within 15
days following rendition by Landlord to Tenant of bills or statements therefor,
sums equal to all losses, costs, liabilities, claims, damages, fines, penalties
and expenses referred to in Section 17.3.
ARTICLE XVIII
CASUALTY DAMAGE
18.1 Tenant shall give immediate notice (by telephone, confirmed in
writing) to Landlord of any damage caused to the Premises by fire or other
casualty, and if Landlord does not elect to terminate this Lease as provided in
Section 18.2, Landlord shall proceed with reasonable diligence and at its sole
cost and expense to rebuild and repair the Building and/or the Premises, as the
case may be, but Landlord shall not be obligated to expend for such rebuilding
and repair any amount in excess of the amount of the insurance proceeds actually
recovered by Landlord and made available by any Superior Lessor or Superior
Mortgagee as a result of such loss.
18.2 If the Building or the Premises shall be destroyed or
substantially damaged by a casualty not covered by Landlord's insurance, or if
25% or more of the Premises is damaged or rendered untenantable by a casualty
covered by Landlord's insurance, or if the Premises are not affected but 25% of
the Building or such portion of the Common Facilities as shall render the
Premises or the Building untenantable is damaged or rendered untenantable, then
in any such event Landlord may elect either to terminate this Lease or to
38
proceed to rebuild and repair the Premises or that portion of the Building so
damaged. Landlord shall give written notice to Tenant of such election within
90 days after the occurrence of such casualty, or within 30 days after the
adjustment of the insurance settlement, whichever is later. In the event that
such notice of termination shall be given, this Lease shall terminate as of the
date provided in such notice of termination (whether or not the Term shall have
commenced) with the same effect as if that date were the Expiration Date,
without prejudice, however, to Landlord's rights and remedies against Tenant
under the terms of this Lease. If at any time prior to Landlord giving the
aforesaid notice of termination or commencing the repair pursuant to Section
18.1, there shall be a Successor Landlord, such Successor Landlord shall have a
further period of 60 days from the date of so taking possession to terminate
this Lease by notice to Tenant and in the event that such a notice of
termination shall be given, this Lease shall terminate as of the date provided
in such notice of termination (whether or not the Term shall have been
commenced) if Tenant is not occupying any portion of the Premises or otherwise
as of the date provided in such notice, with the same effect as if that date
were the Expiration Date, without prejudice, however, to Landlord's rights
against Tenant under the terms of this Lease.
18.3 Subject to the provisions of Section 18.1, Landlord's
obligation to rebuild and repair under this Article XVIII shall in any event be
limited to restoring Landlord's work, as described in the Work Letter, to
substantially the condition in which the same existed prior to the casualty, and
to proceed, at the sole cost and expense of Tenant, to rebuild, repair and
restore Tenant's Work and any additional Improvements made by Tenant during the
Term, all to substantially the condition existing prior to such casualty.
18.4 During the period from the occurrence of the casualty until
Landlord's repairs are completed, the Basic Rent and Additional Rent payable
pursuant to Articles VI and VII shall be abated in that Proportion which the
Premises Area rendered untenantable bears to the entire Premises Area; provided,
however, there shall be no abatement of any other charges or items of Additional
Rent provided for herein to be paid by Tenant; and further provided, however,
that should Tenant or anyone claiming through or under Tenant occupy a portion
of the Premises during the period the repair work is taking place and prior to
the date the Premises are no longer untenantable, the Rent allocable to such
reoccupied portion, based upon the proportion which the reoccupied portion of
the Premises bears to the total area of the Premises, shall be payable by Tenant
from the date of such occupancy.
18.5 Landlord shall not be liable for any
39
inconvenience or annoyance to Tenant or injury to the business of Tenant
resulting in any way from any such damage by fire or other casualty or the
repair thereof.
18.6 Notwithstanding any of the foregoing provisions of this
Article, if, by reason of some action or inaction on the part of Tenant or any
of its employees, agents, licensees, invitees or contractors, either (a)
Landlord or the Superior Lessor or the Superior Mortgagee shall be unable to
collect all of the insurance proceeds (including rent insurance proceeds)
applicable to damage or destruction of the Premises or the Building or the
Project by fire or other casualty or (b) the Premises or the Building or the
Project shall be damaged or destroyed or rendered completely or partially
untenantable on account of fire or other casualty then, without prejudice to any
other remedy which may be available against Tenant, the abatement of rent
provided for in Section 18.4 shall not be effective to the extent of the
uncollected insurance proceeds.
ARTICLE XIX
EMINENT DOMAIN
19.1 If the whole of the Real Property or the Building or the
Premises shall be acquired or condemned by eminent domain for any public or
quasi-public use or purpose, this Lease shall terminate as of the date of the
vesting or acquisition of title in the condemning authority with the same effect
as if said date were the Expiration Date.
19.2 If less than the whole but more than 50% of the premises or
more than 25% of the Building (even if the Premises are unaffected) or such
portion of the Common Facilities as shall render the Premises or the Building
untenantable should be so acquired or condemned, Landlord shall have the option
to terminate this Lease by notice to Tenant given within 90 days of such taking.
If more than 25% of the Premises is taken or if more than 50% of the Building
(even if the Premises are unaffected) or such portion of the Common Facilities
as shall render the Premises or the Building untenantable should be so acquired
or condemned, Tenant shall have the option to terminate this Lease by notice to
Landlord given within 90 days of such taking. In the event that a notice of
termination is given as hereinabove set forth, this Lease shall terminate as of
the date of vesting or acquisition of title in the condemning authority with the
same effect as if said date were the Expiration Date. If (i) neither Landlord
nor Tenant shall exercise their respective options to terminate this Lease as
hereinabove set forth, or (ii) some
40
lesser portion of the Premises or the Building, which does not give rise to a
right to terminate pursuant to Section 19.2, should be so acquired or condemned,
this Lease shall continue in force and effect but, from and after the date of
the vesting of title, the Basic Rent payable hereunder during the unexpired
portion of this Lease shall be reduced in proportion to the reduction of the
Premises Area so taken and any Additional Rent payable pursuant to Article VI
and Article VII shall be adjusted to reflect the diminution of the Premises
and/or the Building, as the case may be.
19.3 Following a partial condemnation, and provided this Lease is not
terminated as provided in Section 19.2, Landlord shall make all necessary
repairs and alterations within the scope of Landlord's Work necessary to make
the Premises an architectural whole, but Landlord shall not be obligated to
expend for such repairs any amount in excess of the condemnation proceeds
received by Landlord and made available by any Superior Lessor or Superior
Mortgagee as a result of such taking or condemnation. Further, Landlord will
proceed at the sole cost and expense of Tenant (except to the extent Landlord
receives any portion of an award for the taking of Tenant's Improvements) to
make all necessary repairs and alterations to Tenant's Work, and any additional
Improvements made by Tenant during the Term necessary to restore the Premises
to its condition immediately prior to such taking, to the extent practicable.
19.4 The proceeds of any condemnation award whether for the whole
or a part of the Premises, shall be the property of Landlord, whether such award
is compensation for damages to Landlord's or Tenant's interest in the Premises,
and Tenant hereby assigns all of its interest in any such award to Landlord;
provided, however, that Landlord shall have no interest in any award made to
Tenant for loss of business, relocation expenses, or for the taking of Tenant's
Property if a separate award for such items is made to Tenant.
19.5 If the temporary use or occupancy of all or part of the Premises
shall be condemned or taken for any public or quasi-public use or purpose during
the Term, this Lease and the Term shall be and remain unaffected by such
condemnation or taking and Tenant shall continue responsible for all of its
obligations hereunder (except to the extent prevented from so doing by reason of
such condemnation or taking) and it shall continue to pay the Rent in full. In
the event of any temporary condemnation or taking, Tenant shall be entitled to
appear, claim, prove and receive the entire award unless the period of temporary
use or occupancy extends beyond the Expiration Date or date of earlier
termination of this Lease, in which event Landlord shall be entitled to appear,
claim, prove and receive the entire award as represents the
41
cost of restoration of the Premises and the balance of any such award shall be
apportioned between Landlord and Tenant as of the Expiration Date or date of
earlier termination. At the termination of such occupancy prior to the
Expiration Date, Tenant, at its own expense, will restore the Premises as nearly
as possible to their condition prior to the condemnation or taking.
Notwithstanding the foregoing, any lump sum award received by Tenant as
compensation for temporary use and occupancy of the Premises shall be delivered
to and held by Landlord in trust for the making of rent payments. The rights
and interest of Landlord and Tenant to any award received or receivable with
respect to a condemnation or taking for temporary use or occupancy shall be in
all other respects governed by the applicable provisions of the Superior Lease
and the Superior Mortgage and in the event of any conflict between the terms of
this Section and of the Superior Lease and the Superior Mortgage, those of the
Superior Lease and the Superior Mortgage shall govern.
ARTICLE XX
EVENTS OF DEFAULT
20.1 The occurrence of any one or more of the following events and
the continuation thereof beyond the applicable grace period herein provided, if
any, shall constitute an "Event of Default":
(a) if Tenant shall default in the payment of (i) Basic Rent and
such default shall continue for a period of 5 days after notice thereof, or (ii)
any item of Additional Rent and such default shall continue for a period of 15
days after notice thereof; or
(b) if Tenant shall default in the performance of any of its covenants
or obligations under this Lease (other than the payment of Basic Rent and
Additional Rent), and shall not have cured such default within 30 days after
written notice from Landlord of such default, or, if such default is of such a
nature that it cannot be completely remedied within said 30 days, Tenant shall
not have (i) promptly upon the giving by Landlord of such notice, advised
Landlord of Tenant's intention to institute all steps necessary to remedy such
situation, (ii) promptly instituted and thereafter diligently prosecute to
completion all steps necessary to remedy the same, and (iii) completed such
remedy within a reasonable time after the date of the giving of said notice by
Landlord and in any event prior to such time as would either subject Landlord,
Landlord's agents, any Superior Lessor or Superior Mortgagee to prosecution for
a crime or cause a
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default under any Superior Lease or any Superior Mortgage; or
(c) if any event shall occur or any contingency shall arise
whereby this Lease or the estate hereby granted or the unexpired balance of the
Term would, by operation of law or otherwise, devolve upon or pass to any person
other than Tenant except as is expressly permitted under Article X; or
(d) if Tenant shall fail to take occupancy of the Premises within 30
days after the Commencement Date; or
(e) if Tenant shall file a voluntary petition in bankruptcy or
insolvency, or commence a case under the Federal Bankruptcy Code, or shall be
adjudicated a bankrupt or insolvent, or shall file any petition or answer
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or any future federal bankruptcy
act or any other present or future applicable federal, state or other statute or
law (foreign or domestic), or shall make an assignment for the benefit of
creditors or shall seek or consent or acquiesce in the appointment of any
trustee, receiver or liquidator of Tenant or of all or any part of Tenant's
Property; or
(f) if, within 60 days after the commencement of any proceeding
against Tenant, whether by the filing of a petition or otherwise, seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future federal bankruptcy act or any
other present or future applicable federal, state or other statute or law
(foreign or domestic), such proceeding shall not have been dismissed, or if,
within 60 days after the appointment of any trustee, receiver or liquidator of
Tenant or of all or any part of Tenant's Property, without the consent or
acquiescence of Tenant, such appointment shall not have been vacated or
otherwise discharged, or if any execution or attachment shall be issued against
Tenant or any of Tenant's Property pursuant to which the Premises, or any part
thereof, shall be taken or occupied or attempted to be taken or occupied.
20.2 If Tenant shall default (i) in the timely payment of Basic
Rent or Additional Rent, and any such default shall continue or be repeated for
2 consecutive months or for a total of 4 months in any period of 12 months or
(ii) more than 3 times in any period of 6 months, in the performance of any
other term of this Lease to be performed by Tenant, then, notwithstanding that
such defaults shall have each been cured within the applicable period, if any,
as above provided, any further similar default shall be deemed to be deliberate
and Landlord thereafter may pursue any one or more of the remedies provided to
Landlord in Article XXI or otherwise available to
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Landlord at law or in equity.
20.3 If, at any time, (a) Tenant shall be comprised of two or more
persons, or (b) Tenant's obligations under this Lease shall have been guaranteed
by any person, or (c) Tenant's interest in this Lease shall have been assigned,
"Tenant", as used in subdivisions (b) and (c) of Section 20.1, shall mean any
one or more of the persons primarily or secondarily liable for Tenant's
obligations under this Lease. Any monies received by Landlord from or on behalf
of Tenant during the pendency of any proceeding of the types referred to in
subdivisions (b) and (c) of Section 20.1 shall be deemed
paid as compensation for the use and occupation of the Premises and the
acceptance of any such compensation by Landlord shall not be deemed an
acceptance of Rent or a waiver on the part of Landlord of any rights under this
Lease.
ARTICLE XXI
LANDLORD'S REMEDIES
21.1 Upon the occurrence of any of the Events of Default, Landlord
shall have the option to pursue any one or more of the following remedies, in
addition to any and all other rights and remedies Landlord may have under this
Lease or by law, without any notice or demand whatsoever:
(a) Landlord and Landlord's agents may at any time, re-enter the
Premises, or any part thereof, without notice, either by summary proceedings,
distress proceedings, or by any other applicable action or proceeding, or by
force or otherwise (without being liable to indictment, prosecution or damages
therefor), and may repossess the Premises and dispossess Tenant and any other
persons from the Premises and remove any and all of its or their property and
effects from the Premises, without liability or damage thereto to the end that
Landlord may have, hold and enjoy the Premises and in no event shall re-entry be
deemed an acceptance and surrender of this Lease;
(b) Landlord, at its option, may relet the whole or any part or
parts of the Premises from time to time, either in the name of Landlord or
otherwise, to such tenant or tenants, for such term or terms ending before, on
or after the Expiration Date, at such rental or rentals and upon such other
conditions, which may include concessions and free rent periods, as Landlord in
its sole discretion may determine. Landlord shall have no obligation, other
than as prescribed by the laws of the State of Maryland, to relet the Premises
or any part thereof and shall in no event be liable, other than
44
as prescribed by the laws of the State of Maryland, for refusal to relet the
Premises or any part thereof, or, in the event of any such reletting, for
refusal or failure to collect any rent upon any such reletting, and no such
refusal or failure shall operate to relieve Tenant of any liability under this
Lease or otherwise to affect any such liability. Landlord, at Landlord's
option, may make such repairs, improvements, alterations, additions, decorations
and other physical changes in and to the Premises as Landlord, in its sole
discretion, considers advisable or necessary in connection with any such
reletting or proposed reletting, without relieving Tenant of any liability under
this Lease or otherwise affecting any such liability;
(c) Either before or after any re-entry or reletting under this
Article XXI, Landlord may, by notice to Tenant, declare the Term hereof ended
and this Lease terminated and, in the event such notice is given, this Lease and
the Term and estate hereby granted (whether or not the Term shall have
commenced) shall terminate on the date set forth in such notice with the same
effect as if that day were the Expiration Date, but Tenant shall remain liable
for damages as provided in Section 21.3; and
(d) Distrain for rent and other charges due as rent and/or
additional rent and be entitled to the benefit of all laws now or hereafter made
applicable to distrain or any action in the nature of distraint.
21.2 In the event of any breach or threatened breach by Tenant or
any person claiming through or under Tenant of any of the terms of this Lease,
Landlord shall be entitled to enjoin such breach or threatened breach and shall
have the right to invoke any right allowed at law or in equity, by statute or
otherwise, as if re-entry, summary proceedings or other specific remedies were
not provided for in this Lease.
21.3 If this Lease shall terminate as provided in Subdivision (c) of
Section 21.1, or by or under any summary proceeding or any other action or
proceeding, or if Landlord shall re-enter the Premises as provided in
Subdivision (a) of Section 21.1, or by or under any summary proceeding or any
other action or proceeding, then, in any of said events:
(a) Tenant shall pay to Landlord all Rent to the date upon which
this Lease shall have been terminated or to the date of re-entry upon the
Premises by Landlord, as the case may be;
(b) Landlord shall be entitled to retain all monies, if any, paid
by Tenant to Landlord, whether as advance
45
rent, security or otherwise, but such monies shall be credited
by Landlord against any Rent due at the time of such termination or re-entry or,
at Landlord's option, against any damages payable by Tenant;
(c) Tenant shall be liable for and shall pay to Landlord, as
damages, any deficiency between the Rent payable hereunder for the period which
otherwise would have constituted the unexpired portion of the Term (conclusively
presuming the Additional Rent to be the same as was payable for the year
immediately preceding such termination or reentry) and the net amount, if any,
of rents ("Net Rent") collected under any reletting effected pursuant to the
provisions of Subdivision (b) of Section 21.1 for any part of such period (first
deducting from the rents collected under any such reletting all of Landlord's
expenses in connection with the termination of this Lease or Landlord's re-entry
upon the Premises and in connection with such reletting including all
repossession costs, brokerage commissions, legal expenses, alteration costs and
other expenses of preparing the Premises for such reletting);
(d) Any deficiency in accordance with Subdivision
(c) above shall be paid in monthly installments by Tenant on the days specified
in this Lease for the payment of installments of Basic Rent. Landlord shall be
entitled to recover from Tenant each monthly deficiency as the same shall arise
and no suit to collect the amount of the deficiency for any month shall
prejudice Landlord's right to collect the deficiency for any prior or subsequent
month by a similar proceeding. Alternatively, suit or suits for the recovery of
such deficiencies may be brought by Landlord from time to time at its election;
(e) Whether or not Landlord shall have collected any monthly
deficiencies as aforesaid, Landlord shall be entitled, to recover from Tenant,
and Tenant shall pay Landlord, on demand, as and for liquidated and agreed final
damages and not as a penalty, a sum equal to the amount by which the Basic Rent
and Additional Rent payable hereunder for the period to the Expiration Date from
the latest of the date of termination of this Lease, the date of re-entry or the
date through which monthly deficiencies shall have been paid in full
(conclusively presuming the Additional Rent to be the same as payable for the
year immediately preceding such termination or re-entry) exceeds the then fair
and reasonable rental value of the Premises for the same period, both discounted
at the rate of 8% per annum to present worth. If, before presentation of proof
of such liquidated damages to any court, commission or tribunal, the Premises,
or any part thereof, shall have been relet by Landlord for the period which
otherwise would have constituted the unexpired portion
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of the Term, or any part thereof, the amount of rent upon such reletting shall
be deemed, prima facie, to be the fair and reasonable rental value for the part
or the whole of the Premises (as the case may be) so relet during the term of
the reletting; and
(f) In no event shall Tenant be entitled (i) to receive any excess
of any Net Rent under subdivision (c) over the sums payable by Tenant to
Landlord hereunder or (ii) in any suit for the collection of damages pursuant to
this Section, to a credit in respect of any Net Rent from a reletting except to
the extent that such Net Rent is actually received by Landlord prior to the
commencement of such suit. If the Premises or any part thereof should be relet
in combination with other space, then proper apportionment on a square foot area
basis shall be made of the rent received from such reletting and the expenses of
reletting.
21.4 If, on account of any breach or default by Tenant in Tenant's
obligations hereunder, it shall become necessary for Landlord to employ an
attorney to enforce or defend any of Landlord's rights or remedies hereunder,
Tenant agrees to pay any reasonable attorney's fees incurred by Landlord in such
connection.
21.5 All of the foregoing remedies are cumulative and the decision by
Landlord to exercise one of the remedies shall not preclude Landlord from
exercising any other of the remedies at such time as Landlord deems fit, and
pursuit by Landlord of any remedy herein provided or any other remedies provided
by law shall not constitute a forfeiture or waiver of any Rent due to Landlord
hereunder or of any damages to which Landlord may lawfully be entitled by reason
of any default by Tenant.
21.6 Any re-entry or re-letting under this Article XXI shall not
be deemed to constitute a surrender or termination of this Lease or of any
rights reserved by Landlord hereunder, nor a release of Tenant from the
performance of any of its obligations hereunder, unless Landlord shall
specifically notify Tenant in writing to that effect. Any such re-entry or
re-letting shall not preclude Landlord from thereafter at any time terminating
this Lease as herein provided.
ARTICLE XXII
ARBITRATION
22.1 The parties hereto shall not be deemed to have agreed to
determination of any dispute arising out of the
47
Lease by arbitration unless determination in such manner shall have been
specifically provided for in this Lease.
22.2 The party desiring arbitration shall give notice to that
effect to the other party and shall in such notice appoint a person as
arbitrator on its behalf. Within 10 days, the other party by notice to the
original party shall appoint a second person as arbitrator on its behalf. The
arbitrators thus appointed shall appoint a third person, and such three
arbitrators shall as promptly as possible determine such matter, provided,
however, that
(a) if the second arbitrator shall not have been appointed as
aforesaid, the first arbitrator shall proceed to determine such matter; and
(b) if the two arbitrators appointed by the parties shall be
unable to agree, within 10 days after the appointment of the second arbitrator,
upon the appointment of a third arbitrator, they shall give written notice to
the parties of such failure to agree, and, if the parties fail to agree upon the
selection of such third arbitrator within 10 days after the arbitrators
appointed by the parties give notice as aforesaid, then within 5 days thereafter
either of the parties upon notice to the other party may request such
appointment by the American Arbitration Association (or any organization
successor thereto), or in its absence, refusal, failure or inability to act, may
apply for a court appointment of such arbitrator.
22.3 Each arbitrator shall be a fit and impartial person who shall
have had at least 10 years' experience in the City of Baltimore in a calling
connected with the matter of the dispute.
22.4 The arbitration shall be conducted, to the extent consistent
with this Article, in accordance with the then prevailing rules of the American
Arbitration Association (or any organization successor thereto). The
arbitrators shall render their decision and award, upon the concurrence of at
least two of their number, within 30 days after the appointment of the third
arbitrator. Such decision and award shall be in writing and shall be final and
conclusive on the parties, and counterpart copies thereof shall be delivered to
each of the parties. In rendering such decision and award, the arbitrators
shall not add to, subtract from or otherwise modify the provisions of this
Lease. Judgment may be had on the decision and award of the arbitrator(s) so
rendered in any court of competent jurisdiction. Any monetary award made by the
arbitrators shall bear interest at the then prevailing rate for three month
Treasury Bills.
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22.5 Each party shall pay the fees and expenses of the one of the
two original arbitrators appointed by or for such party and the fees and
expenses of the third arbitrator and all other expenses of the arbitration
(other than the fees and disbursements of attorneys or witnesses for each party)
shall be borne by the parties equally.
22.6 Notwithstanding the provisions of this Article, if any delay
in complying with any requirement of this Lease by Tenant might subject Landlord
to any fine or penalty, or to prosecution for a crime, or if it would constitute
a default by Landlord under a Superior Mortgage or a Superior Lease, Landlord
may exercise its right under Article XXIII to remedy such default and in such
event the sole question to be determined by the arbitrators under this Article
shall be whether Tenant is liable under Article XXIII for Landlord's costs and
expenses of curing such default.
22.7 Notwithstanding anything to the contrary elsewhere provided
in this Lease, if (a) the subject matter of a dispute which is provided in this
Lease to be determined by arbitration is (i) one which would directly affect the
liability of an insurer under any of the policies of insurance covering the
Project or the Premises and the party which is the insured under such policy so
notifies the other party, or (ii) one which cannot be the subject of arbitration
under the Superior Lease or the Superior Mortgage, then unless such insurer or
the Superior Lessor or the Superior Mortgagee gives its written consent to the
determination of such matter by arbitration, or (b) a Superior Mortgagee shall
be a Successor Landlord, then, in any such event, the dispute shall not be
determined by arbitration and the parties shall be left to such other remedies
as they may have.
ARTICLE XXIII
CURING TENANT'S DEFAULTS; FEES AND EXPENSES
23.1 If Tenant shall default in the performance of any term of
this Lease on Tenant's part to be performed, Landlord, without thereby waiving
such default, may, but shall not be obligated to, perform the same for the
account and at the expense of Tenant, without notice in case of emergency and
upon 10 days' prior notice in all other cases. Landlord may enter the Premises
at any time to cure any default without thereby incurring any liability to
Tenant or anyone claiming through or under Tenant. Bills for any expenses
incurred by Landlord in connection with any such performance or involved in
collecting or endeavoring to collect rent or enforcing or endeavoring to enforce
any rights against Tenant under or in connection with this Lease or pursuant to
law, including any
49
cost, expense and disbursement involved in instituting and
prosecuting summary proceedings, as well as bills for any property, material,
labor or services provided, furnished or rendered, including reasonable
attorney's fees and disbursements, shall be paid by Tenant as Additional Rent on
demand. In the event that Tenant is in arrears in payment of Rent, Tenant
waives Tenant's right, if any, to designate the items against which any payments
made by Tenant are to be credited and Landlord may apply any payments made by
Tenant to any items Landlord sees fit, irrespective of and notwithstanding any
designation or requests by Tenant as to the items against which any such
payments shall be credited. Landlord reserves the right, without liability to
Tenant, to suspend furnishing to Tenant electrical energy and all or any other
services (including heat, ventilating and air conditioning), whenever Landlord
is obligated to furnish the same, in the event that (but only for so long as)
Tenant is in arrears in paying Landlord therefor.
ARTICLE XXIV
SUBORDINATION AND ATTORNMENT
24.1 A. This Lease shall be subordinate to each Superior Lease and
each Superior Mortgage. The provisions of this Subsection 24.lA shall be
self-operative and no further instruments of subordination shall be required.
However, if Landlord requests confirmation of the subordination provided for in
this Subsection 24.lA, Tenant shall, without charge therefor, promptly execute
and deliver to Landlord any certificate or instrument which Landlord may at any
time request in connection therewith. Upon request and without charge therefor,
Tenant shall promptly execute and deliver to each Superior Mortgagee an
instrument acknowledging notice of any assignment by Landlord of Landlord's
rights under this Lease to such Superior Mortgagee. If Tenant fails to execute,
acknowledge or deliver any such instrument provided for herein within 10 days
after request therefor, Tenant hereby irrevocably constitutes and appoints
Landlord as Tenant's attorney-in-fact, coupled with an interest, to execute,
acknowledge and deliver any such instruments for and on behalf of Tenant.
B. If, in connection with obtaining financing for the Premises, a
Superior Mortgagee shall request reasonable modifications in this Lease as a
condition to such financing, Tenant will not unreasonably withhold, delay or
defer its consent thereto, provided that such modifications do not materially
adversely increase the obligations of Tenant hereunder nor materially adversely
affect the leasehold interest hereby created or Tenant's use and enjoyment of
the
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Premises.
C. Any Superior Mortgagee may elect that this Lease shall have
priority over such Superior Mortgage and upon notification by such Superior
Mortgagee to Tenant, this Lease shall be deemed to have priority over such
Superior Mortgage whether this Lease is dated prior to or subsequent to the date
of such Superior Mortgage.
24.2 Tenant shall not do or suffer or permit anything to be done
which would constitute a default under any Superior Mortgage or any Superior
Lease or cause any Superior Lease to be terminated or forfeited by virtue of any
rights of termination or forfeiture reserved or vested in any Superior Lessor.
24.3 Tenant agrees to give each Superior Mortgagee, by registered
mail, a copy of any notice of default served upon Landlord, provided that prior
to such notice Tenant has been notified in writing (by way of Notice of
Assignment of Rents and Leases, or otherwise) of the address of such Superior
Mortgagee. Tenant further agrees that if Landlord shall have failed to cure
such default within the time provided for in this Lease, then, each Superior
Mortgagee shall have an additional 30 days within which to cure such default or,
if such default cannot be cured within that time, then such additional time as
may be necessary if within such 30 days any Superior Mortgagee has commenced and
is diligently pursuing the remedies necessary to cure such default (including
but not limited to commencement of foreclosure proceedings if necessary to
effect such cure), in which event this Lease shall not be terminated while such
remedies are being so diligently pursued.
24.4 If, at any time prior to the termination of this Lease, a
Superior Lessor or Superior Mortgagee (or any person or such person's successors
or assigns, who acquires the interest of Landlord under this Lease through
foreclosure action or an assignment or deed in lieu of foreclosure) shall
succeed to the rights of Landlord under this Lease through possession or
foreclosure or delivery of a new lease or deed or otherwise, Tenant agrees at
the election and upon request of any such person (collectively, "Successor
Landlord"), to fully and completely attorn, from time to time, to and recognize
any such Successor Landlord, as Tenant's landlord under this Lease upon the then
executory terms of this Lease. Upon such attornment this Lease shall continue
in full force and effect as a direct lease between Tenant and such Successor
Landlord, except that such Successor Landlord shall not be:
(i) liable for any previous act or omission of any prior
landlord (including Landlord);
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(ii) subject to any offsets or defenses which may have
theretofore accrued to Tenant against any prior landlord (including
Landlord);
(iii) bound by any previous amendment or modification of this
Lease not expressly provided for herein unless such modification
shall have been expressly approved in writing by such Successor
Landlord prior to attornment;
(iv) bound by any previous prepayment of Basic Rent or
Additional Rent for a period greater than one month in advance;
(v) bound to or liable for any refund of all or any part of
any security deposited by Tenant;
(vi) obligated to repair the Premises or the Building or any
part thereof, in the event of total or substantial damage beyond
such repair as can reasonably be accomplished from the net proceeds
of insurance actually made available to Landlord; or
(vii) obligated to repair the Premises or the Building or any
part thereof, in the event of partial condemnation beyond such
repair as can reasonably be accomplished from the net proceeds of
any award actually made available to Landlord as consequential
damages allocable to the part of the Premises or the Building not
taken.
ARTICLE XXV
SURRENDER AND HOLDOVER
25.1 On the Expiration Date or upon the sooner termination of this
Lease or upon re-entry by Landlord upon the Premises, Tenant shall surrender,
vacate and deliver to Landlord the Premises, including all improvements,
additions, alterations and replacements thereon, trade fixtures, furnishings,
furniture, equipment, merchandise and other personal property installed or
placed in or on the Premises by Tenant unless removed by Tenant pursuant to
Section 15.3 hereof, "broom clean" and in good order, condition and repair
except for ordinary wear, tear and damage by fire or other insured casualty.
25.2 If the Premises are not surrendered upon the termination of
this Lease, Tenant hereby indemnifies Landlord against liability resulting from
delay by Tenant in so surrendering the Premises, including any claims made by
any succeeding Tenant or prospective Tenant founded upon such
52
delay. In addition, in the event Tenant remains in possession of the Premises
after the termination of this Lease without the execution of a new lease,
Tenant, at the option of Landlord, shall be deemed to be occupying the Premises
as a tenant from month to month, at 2 times the Basic Rent and Additional Rent
payable during the last month of the Term, subject to all of the other terms of
this Lease insofar as the same are applicable to a month-to-month tenancy.
Notwithstanding the foregoing, if, at the termination of this Lease, the parties
are negotiating in good faith for a new lease, the Basic Rent and Additional
Rent payable during the last month of the Term shall remain in effect until the
earlier of 90 days or the execution of such new lease.
25.3 Tenant's obligations under this Article shall survive the
termination of this Lease.
ARTICLE XXVI
NONDISCRIMINATION
26.1 NONDISCRIMINATION.
Throughout the Term of this Lease, Tenant agrees, for itself, its
successors and assigns, that it will comply with all laws, statutes and
ordinances and all rules, orders, regulations, directives and requirements of
all federal, state, county and city departments, bureaus, boards, agencies,
offices, commissions and other subdivisions thereof, or of any official thereof,
or of any other governmental, public or quasi-public authority, whether now or
hereafter in force, applicable to it which prohibit it from discriminating
against any person on the grounds of race, color or national origin in providing
housing, accommodations, facilities, services, financial aid, employment, or any
other benefits. This covenant shall run with the Land and shall bind Tenant's
assigns and successors in interest as to any such laws applicable to such assign
or successor, to the same force and effect as if any said successor in interest
had executed this Lease. In the event Tenant defaults hereunder it shall be
subject to all remedies or enforcement procedures contained in any such Laws at
the insistence of such agencies or persons entitled to enforcement thereof, but
such default shall not be deemed an Event of Default hereunder.
ARTICLE XXVII
PEACEABLE AND QUIET POSSESSION
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27.1 Tenant, if and so long as it pays the Rent and performs and
observes the other terms and covenants to be performed and kept by it as
provided in this Lease, shall have the peaceable and quiet possession of the
Premises during the Term free of the claims of Landlord or anyone claiming by,
through or under Landlord, subject to the terms of this Lease and any Superior
Lease and any Superior Mortgage. This covenant shall be construed as a covenant
running with the Land and shall not be construed as a personal covenant or
obligation of Landlord, except to the extent of Landlord's interest in this
Lease and then subject to the terms of Section 31.9.
ARTICLE XXVIII
RULES AND REGULATIONS
28.1 Tenant and its employees, agents, invitees and licensees
shall faithfully observe and strictly comply with, and shall not permit
violation of, the Rules and Regulations annexed hereto as Exhibit E, and such
reasonable changes therein as Landlord hereafter may make and communicate to
Tenant ("Rules and Regulations"). In case of any conflict or inconsistency
between the provisions of this Lease and any Rules and Regulations, the
provisions of this Lease shall control. Landlord shall have no duty or
obligation to enforce any Rule or Regulation, or any term, covenant or condition
of any other lease, against any other tenant, and Landlord's failure or refusal
to enforce any Rule or Regulation or any term, covenant or condition of any
other lease against any other tenant shall be without liability of Landlord to
Tenant.
28.2 Notwithstanding anything to the contrary in any of the Rules
and Regulations, whenever Landlord shall claim by notice to Tenant that Tenant
is violating any of the provisions of the Rules and Regulations and Tenant shall
in good faith dispute such claim to Landlord within 10 days after service of
Landlord's notice of the violation, the dispute shall be determined by
arbitration pursuant to Article XXII.
ARTICLE XXIX
SECURITY DEPOSIT
29.1 Tenant has deposited with Landlord the sum of as security
for the full and punctual performance by Tenant of all of the terms of this
Lease. In the event
54
Tenant defaults in the performance of any of the terms of this Lease, including
the payment of Rent, Landlord may use, apply or retain the whole or any part of
the security so deposited to the extent required for the payment of any Rent or
for any sum which Landlord may expend or may be required to expend by reason of
Tenant's default in respect of any of the terms of this Lease, including any
damages or deficiency in the reletting of the Premises, whether accruing before
or after summary proceedings or other re-entry by Landlord. In the case of
every such use, application or retention, Tenant shall, on demand, pay to
Landlord the sum so used, applied or retained which shall be added to the
security deposit so that the same shall be replenished to its former amount. If
Tenant shall fully and punctually comply with all of the terms of this Lease,
the security, without interest, shall be returned to Tenant after the
termination of this Lease and delivery of exclusive possession of the Premises
to Landlord. In the event of a sale or lease of the Building Landlord shall
have the right to transfer the security to the vendee or lessee and Landlord
shall IPSO FACTO be released by Tenant from all liability for the return of
such security; and Tenant agrees to look solely to the new landlord for the
return of said security; and it is agreed that the provisions hereof shall apply
to every transfer or assignment made of the security to
a new landlord. Tenant shall not assign or encumber or attempt to assign or
encumber the monies deposited herein as security and neither Landlord nor its
successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment or encumbrance.
ARTICLE XXX
Article XXX intentionally omitted.
ARTICLE XXXI
MISCELLANEOUS
31.1 NO WAIVER.
(a) No agreement to accept a surrender of this Lease shall be
valid unless in writing signed by Landlord and agreed to by the Superior Lessor
and Superior Mortgagee. No agent or employee of Landlord or of Landlord's agent
shall have any power to accept the keys to or possession of all or any part of
the Premises prior to the Expiration Date. The delivery of keys or possession
to any such agent or employee shall not operate as a termination of this Lease
or a surrender of the Premises.
55
(b) No provision of this Lease shall be deemed to have been waived
by Landlord or Tenant unless such waiver be in writing signed by the party
making such waiver. The failure of Landlord or Tenant to seek redress for
violation of, or to insist upon the strict performance of, any covenant or
condition of this Lease, shall not be deemed a waiver thereof or prevent a
subsequent act, which would have originally constituted a violation, from having
all the force and effect of an original violation.
(c) The receipt by Landlord of Basic Rent, and/or any items of
Additional Rent with knowledge of the breach of any covenant of this Lease shall
not be deemed a waiver of such breach. No payment by Tenant or receipt by
Landlord of a lesser amount than the Basic Rent herein stipulated shall be
deemed to be other than on account of the earliest Basic Rent reserved hereby
which is due and owing at the time such payment is received by Landlord. No
payment by Tenant or receipt by Landlord of a lesser amount than the Additional
Rent herein stipulated shall be deemed to be other than on account of the
earliest Additional Rent reserved hereby which is due and owing at the time
such payment is received by Landlord. No endorsement or statement on any check
or any letter accompanying any check or payment of any such Rent shall be
deemed an accord and satisfaction, and Landlord may accept such check or payment
without prejudice to Landlord's right to remedy provided in this Lease.
31.2 CAPTIONS; GENDER. The captions used in this Lease are for
convenience only and do not in any way limit or amplify the terms and provisions
hereof. Whenever herein the singular number is used, the same shall include the
plural, and words of any gender shall include each other gender.
31.3 EXHIBITS. The Exhibits hereto and the Rider are hereby
incorporated into this Lease.
31.4 FINAL AGREEMENT. This Lease and all other agreements and
instruments signed contemporaneously herewith contain the entire agreement
between the parties, and no agreement, representation or inducement shall be
effective to change, modify or terminate this Lease in whole or in part unless
such agreement, representation or inducement is in writing and signed by both
parties hereto.
31.5 BROKERS. Tenant warrants that it has not employed nor had
any dealings or discussions with any broker or agent in connection with the
negotiation or execution of this Lease other than Colliers Pinkard & Co., Inc.,
Peter D. Leibowits Co., Inc. and Manekin Corporation. Landlord agrees to pay
the agreed brokerage commission to Colliers Pinkard &
56
Co., which shall be responsible for distribution of same in accordance with
separate agreements. Tenant agrees to indemnify Landlord and hold it harmless
from and against any and all liability for commissions or other compensation or
charges and all costs and expenses incurred in defense of the claim if this
warranty is breached. In the event of a suit on any such claim, Landlord shall
notify and implead Tenant, or Tenant may intervene. Landlord shall have no
liability for brokerage commissions arising out of a sublease by Tenant and
Tenant shall and does hereby indemnify Landlord and hold it harmless from any
and all liability for brokerage commissions arising out of any such sublease.
31.6 ESTOPPEL CERTIFICATES. Tenant at any time or from time to
time at the request of Landlord or at the request of any Superior Lessor or any
Superior Mortgagee will execute, acknowledge and deliver to the party so
requesting, a certificate by Tenant, in the form annexed hereto as Exhibit F,
certifying:
(a) that this Lease has not been modified, changed, altered or
amended in any respect and is in full force and effect (or, if there have been
modifications, stating the modifications and that the Lease is in full force and
effect as modified);
(b) that this Lease is the only lease between Landlord and Tenant
affecting the Premises;
(c) that Tenant has accepted the Premises (or a part thereof), is
in occupancy of the Premises, or a part thereof, and is paying all Rent
hereunder, for which it is then liable on a current basis;
(d) that there are then existing no credits, offsets or defenses
against the enforcement of any provisions of-this Lease (and, if so, specifying
the same);
(e) the dates, if any, to which the Rent or other charges due
hereunder have been paid in advance and that there has been no prepayment of
Rent other than as provided for in this Lease;
(f) that there are no existing defaults by Landlord or Tenant
under this Lease (or, if so, specifying such default);
(g) whether or not Tenant has exercised any renewal options or
other options which may be provided in this Lease;
(h) that there are no actions, whether voluntary
57
or otherwise, pending against Tenant under the bankruptcy laws of the United
States or any state thereof; and
(i) such further information with respect to the Lease or the
Premises as Landlord, any Superior Lessor or any Superior Mortgagee may request.
Any such certificate may be relied upon by any prospective purchaser of the Real
Property or the Project or of the interest of Landlord in any part thereof, by
any mortgagee or prospective mortgagee thereof, by any lessor or prospective
lessor thereof, by any lessee or prospective lessee thereof, or by any
prospective assignee of any mortgage thereof. The failure of Tenant to execute,
acknowledge and deliver to Landlord a statement in accordance with the
provisions of this Section 31.6 within 10 days after request therefor shall
constitute an acknowledgement by Tenant, which may be relied on by any person
who would be entitled to rely upon any such statement, that such statement as
submitted by Landlord is true and correct.
31.7 SEVERABILITY. If any provision of this Lease should be
held to be invalid or unenforceable, the validity and enforceability of the
remaining provisions of this Lease shall not be affected thereby.
31.8 BINDING EFFECT. The terms, provisions and covenants
contained in this Lease shall apply to, inure to the benefit of, and be binding
upon the parties hereto and their respective heirs, personal representatives,
successors and permitted assigns and shall be covenants running with the Land.
31.9 EXCULPATION.
A. In the event of any default or breach by Landlord with respect to
any of the terms, covenants and conditions of this Lease to be observed and
performed by Landlord, Tenant shall look solely to the estate and property of
Landlord in the Real Property (provided that any right of Tenant thereto shall
always be subject and subordinate to the right of any Superior Lessor or
Superior Mortgagee) for the collection of any sum of money on a judgment, or for
the payment or expenditure of any money under any decree of specific
performance, injunctive relief or other equitable relief (or other judicial
process) requiring performance by Landlord of any obligation under this Lease.
No other property or assets of the Landlord, Landlord's agents, incorporators,
shareholders, officers, directors, partners, principals (disclosed or
undisclosed) or affiliates shall be subject to levy, execution or other
enforcement procedure for the satisfaction of Tenant's remedies.
58
B. The term "Landlord" shall mean only the owner at the time in
question of the present Landlord's interest in the Building and in the event of
a sale or transfer of the Building (by operation of law or otherwise), or in the
event of the making of a lease of all or substantially all of the Building, or
in the event of a sale or transfer (by operation of law or otherwise) of the
leasehold estate under any such lease, the grantor, transferor or lessor, as the
case may be, shall be and hereby is (to the extent of the interest or portion of
the Building or leasehold estate sold, transferred or leased) automatically and
entirely released and discharged, from and after the date of such sale, transfer
or leasing, of all liability in respect of the performance of any of the terms
of this Lease on the part of Landlord thereafter to be performed; provided that
the purchaser, transferee or lessee (collectively, "Transferee") shall be deemed
to have assumed and agreed to perform, subject to the limitations of this
Section (and without further agreement between the then parties hereto, or among
such parties and the Transferee) and only during and in respect of the
Transferee's period of ownership of the Landlord's interest under this Lease,
all of the terms of this Lease on the part of Landlord to be performed during
such period of ownership, which terms shall be deemed to run with the Land it
being intended that Landlord's obligations hereunder shall, as limited by this
Article, be binding on Landlord, its successors and assigns, only during and in
respect of their respective successive periods of ownership.
C. In the event of any default or breach by Tenant with respect to
any of the term, covenants and conditions of this Lease to be observed and
performed by Tenant, Landlord shall look solely to the assets of the Tenant
corporation for the collection of any sum of money on a judgment, or for the
payment or expenditure of any money under any decree of specific performance,
injunctive relief or other equitable relief (or other judicial process)
requiring performance by Tenant of any obligation under this Lease. No other
property or assets of the corporation's agents, incorporators, shareholders,
officers, directors, partners, principals (disclosed or undisclosed) or
affiliates shall be subject to levy, execution or other enforcement procedure
for the satisfaction of Landlord's remedies.
31.10 WAIVER OF CERTAIN RIGHTS. Tenant hereby expressly waives any
and all rights granted by or under any present or future laws to redeem
Landlord's reversionary interest in the Real Property. To the extent permitted
by applicable law, Landlord and Tenant waive trial by jury in any proceeding or
any matter in any way connected with this Lease and agree that they will not
interpose any counterclaim of whatsoever nature or description in any manner
whatsoever
59
arising out of or in any way connected with this Lease, the relationship of
Landlord and Tenant, or Tenant's use or occupancy of the Premises, any claim of
injury or damage, or any emergency or other statutory remedy with respect
thereto. The preceding sentence notwithstanding, Tenant may assert a
counterclaim arising out of and related to the particular matter asserted by
Landlord. In addition, in the event of any lawful termination of the Term or
any repossession of the premises by reason of Tenant's default hereunder, Tenant
waives (a) any notice of re-entry or of the institution of legal proceedings to
that end, (b) any right of redemption, re-entry or repossession, and (c) the
benefit of any laws now or hereafter in force exempting property from liability
for rent or otherwise. The provisions of this Article shall survive the
termination of this Lease.
31.11 NO RECORDATION. Neither Landlord nor Tenant shall record
this Lease, any amendment to this Lease, the confirmatory agreement referred to
in Section 4.3 or any other memorandum of this Lease without the prior written
consent of the other party and in the event such consent is given the party
requesting such consent shall pay all transfer taxes, recording fees and other
charges in connection with such recording notwithstanding any provision of law
imposing liability therefor upon the other party.
31.12 NOTICES. Except as otherwise expressly set forth herein all
notices, requests, demands, approvals or consents required hereunder or by law
(collectively, "Notices") shall be in writing and shall be given by personal
delivery, delivery by overnight courier providing proof of such delivery,
telefax transmission with confirmation or by mailing the same, certified or
registered mail, return receipt requested, postage prepaid, addressed to
Landlord at c/o PDL Baltimore Associates, 32 Lafayette Place, Greenwich,
Connecticut 06830, Attention: Mr. Peter D. Leibowits, if to Tenant, at the
Premises with a copy to General Counsel, Scios Nova, Inc., 2450 Bayshore
Parkway, Mountain View, California 94043. Notices shall be deemed given upon
such personal delivery or upon receipt if by overnight courier or telefax, or,
if mailed, 2 business days after mailing. The persons designated for the
receipt of Notices, and the addresses to which Notices may be given or made by
either party, may be changed or supplemented by Notice given by such party to
the other and notwithstanding the preceding sentence such Notice shall be
effective 10 days after mailing or delivery.
31.13 GOVERNING LAW. This Lease shall be deemed to be made under
and shall be construed in accordance with and governed by the internal laws of
the State of Maryland, without regard to principles of conflicts of laws.
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31.14 NO REPRESENTATIONS. Tenant expressly acknowledges that
neither Landlord nor Landlord's agents has made or is making and Tenant, in
executing and delivering this Lease, is not relying upon, any warranties,
representations, promises, or statements, except to the extent that the same are
expressly set forth in this Lease and no rights, easements or licenses are or
shall be acquired by Tenant by implication or otherwise unless expressly set
forth in this Lease.
31.15 CONSENTS.
A. Wherever it is specifically provided in this Lease that a party's
consent is not to be unreasonably withheld, a response to a request for such
consent shall also not be unreasonably delayed. If either Landlord or Tenant
considers that the other has unreasonably withheld or delayed a consent, it
shall so notify the other party within 10 days after receipt of notice of denial
of the requested consent or, in case notice of denial is not received, within 20
days after making its request for the consent.
B. Tenant hereby waives any claim against Landlord which it may have
based upon any assertion that Landlord has unreasonably withheld or unreasonably
delayed any such consent, and Tenant agrees that its sole remedy shall be an
action or proceeding to enforce any such provision or for specific performance,
injunction or declaratory judgment. In the event of such a determination, the
requested consent shall be deemed to have been granted; however, Landlord shall
have no liability to Tenant for its refusal or failure to give such consent.
C. Notwithstanding anything to the contrary provided in this Lease,
in any instance where the consent of the Superior Lessor and/or the Superior
Mortgagee is required Landlord shall not be required to give its consent until
and unless such Superior Lessor and/or such Superior Mortgagee has given its
consent. Landlord agrees to seek such consent if Landlord would otherwise
consent in such instance.
31.16 PARTIES BOUND. The terms of this Lease shall bind and
benefit the successors and assigns of the parties with the same effect as if
mentioned in such instance where a party is named or referred to, except that no
violation of the provisions of Article X shall operate to vest any right in any
successors or assignee of Tenant and that the provisions of this Article shall
not be construed as modifying the conditions of limitation contained in Article
X. This Lease is submitted to Tenant for signature with the understanding that
it shall not bind Landlord or Tenant unless and until it is duly executed by
both Landlord and Tenant and an executed copy
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delivered to Tenant.
IN WITNESS WHEREOF, the parties hereto have executed this Lease on
the day and year first above written.
PDL-RTKL ASSOCIATES
By: PDL Baltimore Associates,
Partner
By: /S/PETER D. LEIBOWITS
-------------------------------------
Peter D. Leibowits,Partner
Attest: SCIOS NOVA, INC.
/S/JOHN H. NEWMAN By: /S/W. VIRIGINA WALKER
- --------------------------- ----------------------------
1
RIDER TO LEASE BETWEEN PDL-RTKL ASSOCIATES AS "LANDLORD" AND SCIOS NOVA, INC.,
AS "TENANT" COVERING A PORTION OF THE THIRD (3RD) FLOOR OF THE BUILDING LOCATED
AT THE NORTHWEST CORNER OF PRATT AND GAY STREETS, BALTIMORE, MARYLAND
In case of any conflict or inconsistency between this Rider and the Lease, the
provisions of this Rider shall control.
A. Section 31.17 RENEWAL OPTION:
Provided that Tenant is not in default under any of the terms of
this Lease at the time of the exercise of this option and at the time of the
commencement of the Renewal Term (as hereinafter defined), Tenant shall have the
right, at its option, to extend the original Lease Term ("Original Term"), for a
renewal term ("Renewal Term") of five (5) years to commence immediately
following the expiration of the Original Term, by giving notice ("Tenant's
Notice") to Landlord not less than six (6) nor more than nine (9) months prior
to the stated Expiration Date of this Lease and, upon the giving of such notice,
this Lease, subject to the provisions hereof, shall be automatically extended
for the Renewal Term with the same force and effect as if the Renewal Term had
been originally included in the Lease Term. Time shall be of the essence with
respect to the exercise by Tenant of this option. All of the terms, covenants
and conditions of this Lease shall continue in full force and effect during the
Renewal Term except that (a) the Basic Rent shall be as hereinafter set forth,
(b) the terms of this Lease relating to the performance of Landlord's Work and
Tenant's Work shall not be applicable to the Renewal Term, and (c) any further
privilege of extension of this Lease shall be limited to the Second Renewal Term
(as hereinafter defined). The basic rent payable to Tenant during the Renewal
Term shall be the fair market basic rent then prevailing for rental of space in
privately owned Class A buildings opened for initial occupancy subsequent to
1982 in the City of Baltimore as determined by Landlord, based upon then current
leases for such space.
B. Section 31.18 TENANT'S TERMINATION RIGHTS:
Tenant shall have the right to terminate this Lease on each of the
first, second and third anniversaries of the Commencement Date upon no less than
three (3) months' prior written notice to Landlord of Tenant's intention to
cancel this Lease ("Tenant's Termination Notice"); provided that Tenant pays to
Landlord on the applicable termination date the unamortized cost of the
following leasing expenses: construction allowance; RENT CREDIT, IF ANY, TAKEN
FOR BALANCE OF CONSTRUCTION ALLOWANCE; moving allowance; design allowance;
space planning allowance and brokerage commissions. For purposes of calculation
of the payment, amortization shall be over the Original Term of the lease.
Upon Tenant's compliance with the terms of this Section of the Lease and
Tenant's payment of all amounts owed to Landlord under the Lease, the Lease will
terminate as of the date set forth in Tenant's Notice and neither Landlord nor
Tenant shall have any further rights or obligations under the Lease except with
respect to those matters in the Lease which expressly survive the termination of
the Lease.
C. SUPPLEMENTING SECTION 1.1 PREMISES AREA
Landlord and Tenant acknowledge that the amount of square footage
set out on Page 3 of this Lease is an estimate. Within twenty (20) days of the
date of this Lease, Landlord's architect shall measure the Premises and Landlord
shall give Tenant notice of the Premises Area. If Tenant disagrees with the
Premises Area, it shall so notify Landlord within 10 days after the date of
Landlord's notice, failing which the Premises Area in Landlord's notice shall be
deemed conclusive. If Tenant does so disagree, it shall specify the square
footage it claims for the Premises Area. If the parties are unable to agree
within 10 days thereafter, they shall jointly designate a qualified third party
whose determination of the square footage of the Premises Area shall be final.
That square footage shall apply for all purposes under the Lease as though it
were the original Premises Area set out on Page 3. The cost of the qualified
third party shall be borne by Tenant.
D. SUPPLEMENTING ARTICLE III
Within thirty (30) days after the Commencement Date, the parties
shall confirm in writing the Commencement Date and Expiration Date of the Lease.
Such writing shall also confirm the Premises Area, determined in accordance with
Paragraph C of this Rider, and the amount of the leasing expenses subject to
amortization, as referred to in Paragraph B of this Rider.
E. SUPPLEMENTING SECTION 4.1
Landlord further warrants that as of the date of this Lease (i) the
Building has a valid Certificate of Occupancy; (ii) Landlord is aware of no
outstanding violations against the Building issued by any governmental authority
having jurisdiction; and (iii) Landlord has not been notified by any
governmental authority having jurisdiction, that there is any condition in the
Building or the Premises which is in violation of the Americans with
Disabilities Act, or that asbestos or any other hazardous material is present in
the Building or the Premises. In the event that any such violation has been
issued as of the date of this Lease, then, provided same affects the Premises,
Landlord will cause same to be corrected and removed of record at Landlord's
sole cost
and expense.
F. SUPPLEMENTING SECTIONS 6.4
In the event that, pursuant to Section 7.4B, Tenant disputes the
correctness of Landlord's Statement of Tenant's Operating Payment, Tenant shall
have the right to audit the books and records of Landlord with respect to the
Statement so disputed, provided that there shall be no more than one audit with
respect to such Statement and such audit shall be conducted within six (6)
months of the rendering of such Statement. Any such audit shall be conducted at
the place where such books and records are regularly maintained and shall be at
Tenant's sole cost and expense. Landlord shall use reasonable efforts to make
the books and records available to Tenant in Baltimore, Maryland but shall not
be required to remove the books and records from the place where they are
regularly maintained or to make a copy thereof. If such audit reveals an
overpayment by Tenant, and Landlord accepts the results of such audit, or if the
dispute with respect to such Statement is determined in Tenant's favor, Landlord
shall credit the amount of such overpayment to Tenant pursuant to Section 7.2.
G. SUPPLEMENTING ARTICLE X
Subject to and conditioned upon compliance with all the terms and
conditions of this Article X, and provided Tenant shall not be in default of any
of its obligations under this Lease:
a. Tenant shall have the right, without Landlord's consent to
assign this Lease or sublet all but not less than all of the Premises to any
wholly-owned subsidiary corporation of Tenant, to any corporation succeeding to
substantially all of the assets of Tenant as a result of a consolidation or
merger or to a corporation to which all or substantially all of the assets of
Tenant have been sold, or to any Affiliate to Tenant (as defined below);
provided, that in each of the foregoing instances, such other corporation shall
assume in writing all of Tenant's obligations hereunder. The term "Affiliate"
as used herein, shall mean any corporation, directly or indirectly, through one
or more intermediaries, controlling, controlled by, or under common control with
Tenant; the term "control" as used in the immediately preceding sentence, shall
mean the right to the exercise, directly or indirectly, of more than fifty
percent (50%) of the voting rights attributable to the shares of the controlled
corporation. Notwithstanding any such Assignment or Sublease, Tenant shall not
be released from liability and shall perform all obligations imposed upon it
hereunder.
b. Landlord shall not unreasonably withhold its consent to an
assignment of this Lease, or a subletting of all, but not less than all, of the
Premises, to an assignee or sublessee other than set forth in Subparagraph (a)
above, provided that: (i) the assignee or sublessee, as the case may be, shall
have assets, capitalization and net worth certified to Landlord by an
independent certified public account to be at least equal to the greater of the
assets, capitalization and net worth of Tenant, determined as of the date of
Lease or as of the time of such assignment or subletting; (ii) the assignee or
sublessee, as the case may be, shall be a private business (which term shall
include a company whose shares are publicly traded) engaged in a use consistent
with uses of businesses then located in the Building; (iii) if rents or other
charges required to be paid to Tenant by the assignee or sublessee exceed the
rents and other charges reserved hereunder, Tenant shall pay the entire amount
of such excess (after deducting reasonable architects' fees, reasonable
attorneys' fees and any reasonable construction costs in adapting the Premises
for use by the assignee or sublessee) to Landlord monthly, as Additional Rent;
and (iv) no such assignment or subletting shall relieve Tenant of any of its
obligations under this Lease.
Landlord shall, within thirty (30) days after receiving the
information required in Subsection 10.3 of the Lease, give notice to Tenant to
permit or deny the proposed sublease or assignment. If Landlord does not
respond within the thirty (30) day period, then Tenant shall be deemed to have
received Landlord's consent and may assign or sublease all of the Premises upon
the terms given by Tenant in the information under Subsection 10.3.
H. SUPPLEMENTING ARTICLE XII
Except for performance of its cleaning obligation or regularly
scheduled maintenance, and except in cases of an emergency, wherever in this
Article or elsewhere in this Lease it is provided that Landlord may have access
to the Premises, Landlord shall give reasonable notice to Tenant (not less than
48 hours if possible) of its requirement of such access. If the required access
prevents all use of the Premises for three (3) consecutive business days, Basic
Rent and Additional Rent shall abate proportionately thereafter until the use of
all, or any portion thereof, may be resumed.
I. SUPPLEMENTING ARTICLE XVII
Landlord hereby indemnifies Tenant against liability in connection
with or arising from any acts, omissions or negligence of Landlord, its
contractors, agents or employees in or about the common areas of the Building
during the term of the Lease, provided in each case Landlord is insured for such
peril and such insurance is in force and collectible and
Landlord shall not be liable to the extent of any negligence on the part of
Tenant, or Tenant's agent's, employees, and contractors.
J. SUPPLEMENTING ARTICLE XVIII
Tenant shall have the right to terminate this Lease if the
rebuilding, repair and restoration required to be performed by Landlord under
this Article is not completed within eighteen (18) months after receipt by
Landlord of the insurance proceeds.
K. SUPPLEMENTING SECTION 24.1
The subordination herein provided shall be conditioned upon a written
agreement from any present Superior Lessor and any present Superior Mortgagee to
the effect that, in the event of the foreclosure of the Superior Mortgage or
exercise of rights under the Superior Lease, said Superior Mortgagee or Superior
Lessor shall not join Tenant as a party defendant nor extinguish nor interfere
with Tenant's rights under this Lease or Tenant's possession, provided that
Tenant shall not have defaulted in its obligations under this Lease. Landlord
agrees to use reasonable efforts to obtain a similar written agreement from any
future Superior Lessor and Superior Mortgagee.
EXHIBIT C
WORK LETTER
LANDLORD'S WORK - Landlord will provide at its sole expense, corridor
partitioning where necessary for access to Tenant's Premises, a single door for
ingress and egress from the Premises, and demising walls for the Premises.
Landlord shall have no other construction obligation with respect to the
Premises. Within a reasonable time after Tenant has occupied the Premises for
the conduct of its business, taking into consideration the status of existing or
future occupants of the floor on which the Premises is located, Landlord shall
provide carpeting and wall covering or paint in the common areas of said floor.
Tenant acknowledges that neither Landlord nor Landlord's agent has made any
representations or promises in regard to the Premises for the term herein
demised. The taking possession of the Premises by Tenant for the term herein
demised shall be conclusive evidence as against Tenant that Tenant accepts the
same 'as is' and that said Premises were in good and satisfactory condition at
the time such possession was taken.
TENANT'S WORK - All other work required to prepare the premises for Tenant's
occupancy shall be performed by Tenant at its sole cost and expense pursuant to
plans and specifications to be submitted for Landlord's approval prior to
commencement of such work. Tenant shall renovate and modernize all bathrooms on
the Premises, other than those the use of which it shares with other tenants,
pursuant to plans and specifications approved in advance by Landlord.
TENANT'S ALLOWANCES
A. Landlord shall pay to Tenant, as Landlord's Contribution for Tenant's
Work, an amount which shall not exceed the PRODUCT of THE rentable square
feet in the Premises MULTIPLIED BY $20.00. Payment shall be made in
installments no more frequently than monthly, upon receipt of an application for
payment from Tenant. Each application for payment shall be accompanied by a
certification from Tenant's architect or construction manager that the portion
of Tenant's Work for which payment is being requested has been completed and by
a waiver of liens from each contractor and subcontractor performing such portion
of Tenant's Work.
Landlord shall withhold payment of the final ten (10%) percent of
the allowance, notwithstanding the submission by Tenant of any further
applications for payment. Upon
completion of Tenant's Work Tenant shall furnish to Landlord all invoices
rendered in connection therewith sufficient in form and content to permit
Landlord to determine the cost thereof. Landlord shall pay to Tenant the amount
withheld, or if said cost is less than $20.00 per square foot, so much of the
amount withheld as will complete payment for Tenant's Work, when Tenant shall
have (i) completed Tenant's Work in all respects in accordance with the
provisions of this Lease, (ii) furnished evidence satisfactory to Landlord that
all of Tenant's Work has been completed and paid for in full (and such work has
been accepted by Landlord), that any and all liens therefor that have been filed
have been discharged of record (by payment, bond, order of a court of competent
jurisdiction or otherwise) or waived and that no security interests relating
thereto are outstanding, (iii) furnished to Landlord all certifications and
approvals with respect to Tenant's Work that may be required from any
governmental authority and any board of fire underwriters or similar body for
the use and occupancy of the Premises, (iv) furnished Landlord with one set of
sepia mylar transparent reproducible 'as built' drawings of the Premises, (v)
occupied the Premises for the conduct of its business, and (vi) caused all
'punch list' items to be completed.
THE AMOUNT, IF ANY, BY WHICH LANDLORD'S CONTRIBUTION FOR TENANT'S
WORK IS LESS THAN THE PRODUCT OF THE NUMBER OF RENTABLE SQUARE FEET IN THE
PREMISES MULTIPLIED BY $20.00 MAY, AT TENANT'S OPTION AND UPON WRITTEN NOTICE TO
LANDLORD GIVEN PRIOR TO MARCH 1, 1995, BE TAKEN AS A CREDIT AGAINST THE MONTHLY
INSTALLMENTS OF BASIC RENT FIRST BECOMING DUE UNDER THIS LEASE.
B. Tenant shall also receive:
(i) an allowance in the amount of $.10 per rentable square foot for
space planning services;
(ii) an allowance in the amount of $1.00 per rentable square foot
for space programming, design and construction documents; and
(iii) a moving allowance in the amount of $1.00 per rentable square
foot.
Payment shall in each case be made within five (5) business days after
Tenant has completed moving its offices into the Premises and has commenced full
occupancy.
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