OFFICE LEASE
by and between
CHOICE HOTELS HOLDINGS, INC.
a Delaware corporation (to be renamed Choice Hotels International, Inc.)
"Tenant"
and
Manor Care, Inc., a Delaware corporation
"Landlord"
at
11555 Darnestown Road
Gaithersburg, Maryland 20878-3200
INDEX
Title Page #
Article I. Definitions and Certain Basic Provisions 1
Article II. Granting Clause 2
Article III. Rental 2
Article IV. Cafeteria and Fitness Center 5
Article V. Acceptance of theDemised Premises 5
Article VI. Uses and Care of Premises 5
Article VII. Landlord's Services 7
Article VIII. Alterations 8
Article IX. Landlord's Right of Access and Use 8
Article X. Signs 9
Article XI. Utilities 9
Article XII. Indemnity, Public Liability Insurance and
Fire and Extended Coverage Insurance 10
Article XIII. Tenant's Insurance 10
Article XIV. Non-Liability for Certain Damages 10
Article XV. Damage by Casualty 11
Article XVI. Eminent Domain 11
Article XVII. Assignment and Subletting 12
Article XVIII. Default by Tenant and Remedies 12
Article XIX. Holding Over 14
Article XX. Subordination and Attornment 15
Article XXI Estoppel Certificates 15
Article XXII. Notices 15
Article XXIII. Brokers 15
Article XXIV. Approval and Changes Required by Lender 16
Article XXV. Parking 16
Article XXVI. Waiver of Trial by Jury 16
Article XXVII. Furnishing of Financial Statements 16
Article XXVIII. Occupational and Environmental Compliance 16
Article XXIX. Miscellaneous 17
Article XXX. Attachments 19
Article XXXI. Status as Sublease 19
Article XXXII. Commercially Reasonable Terms and Conditions 19
OFFICE LEASE
This Lease is entered into this ____ day of ______________ 1996, by and between
Manor Care, Inc., a Delaware corporation ("Landlord") and Choice Hotels
Holdings, Inc., a Delaware corporation (to be renamed Choice Hotels
International, Inc.) ("Tenant").
RECITALS:
A. Landlord is implementing a restructuring of itself in which,
among other things, it will distribute to its shareholders all
of the common stock of Tenant, pursuant to a Distribution
Agreement dated as of __________________, 1996, between
Landlord and Tenant (the "Distribution Agreement") as a result
of which Landlord and Tenant will become separate publicly
traded corporations.
B. Landlord has acquired an office building in Gaithersburg,
Maryland, as its new corporate headquarters. Landlord and
Tenant desire to provide in this Lease for the occupancy by
Tenant, after said stock distribution, of premises in said
office building.
C. Landlord and Tenant each have determined that the rental and
other terms and conditions of this Lease are commercially
reasonable, based upon market conditions in the Gaithersburg,
Maryland area.
Article I. Definitions and Certain Basic Provisions.
1.1
(a) "Landlord": Manor Care, Inc,
a Delaware corporation
(b) "Landlord's Address": 11555 Darnestown Road
Gaithersburg, Maryland 20878-3200
Attn.: General Counsel
(Re: Real Estate)
(c) "Tenant": Choice Hotels Holdings, Inc., a
Delaware corporation (to be renamed Choice
Hotels International, Inc.)
(d) "Tenant's Address": 10750 Columbia Pike
Silver Spring, Maryland 20910
Attn.: General Counsel
(Re: Real Estate)
(e) "Complex" shall refer to the complex of two buildings having an
address of 11555 Darnestown Road, Gaithersburg, Montgomery County, Maryland,
consisting of: (i) an office building with approximately 377,126 gross square
feet of space (hereinafter the "Office Building"); and (ii) a warehouse and
distribution building with approximately 200,000 gross square feet of space
(hereinafter the "Warehouse Building"). A plan of the Complex is attached hereto
as Exhibit A.
(f) "Demised Premises": approximately 100,000 gross square feet of
office space in the Office Building, more particularly shown in the plan
attached hereto as Exhibit B. Landlord and Tenant acknowledge that portions of
the Demised Premises are currently leased by Landlord to National Geographic
Society, a District of Columbia non-profit corporation ("National Geographic")
under an Office Lease Agreement dated August 30, 1995 (the "National Geographic
Lease"). The term of the National Geographic Lease expires on August 31, 1997
(the "National Geographic Termination Date," as it may be changed by mutual
agreement of Landlord and National Geographic). However, pursuant to Article 41
of the National Geographic Lease, National Geographic has the right to terminate
the National Geographic Lease as to the entire premises leased therein or
portions thereof and surrender such space to Landlord. Accordingly, Landlord and
Tenant hereby agree that
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(i) prior to the National Geographic Termination Date, the Demised Premises
shall consist of the 100,000 gross square feet of space shown on Exhibit B
hereto, less those portions of such space leased to and not surrendered by
National Geographic under the National Geographic Lease; and (ii) from and after
the National Geographic Termination Date, the Demised Premises shall consist of
the entire 100,000 gross square feet of space leased hereunder. Either party may
elect at its expense to have the rentable area of the Demised Premises measured
by Landlord's architect in accordance with the Washington Board of Realtors
Standard Floor Area Measure, and to have this Lease amended to state the
rentable area of the Demised Premises as so measured. Landlord further reserves
the right in its sole and unreviewable discretion to relocate Tenant to
comparable premises in the Office Building, upon sixty (60) days prior written
notice to Tenant.
(g) "Lease Term": The period of time commencing from the
Commencement Date, as defined below, and terminating thirty (30) months after
such Commencement Date, unless such termination date is other than the last day
of a calendar month, in which event this Lease shall terminate on the last day
of the calendar month in which such date falls. Landlord shall give Tenant prior
written notice of the proposed sale of the Complex or any building therein.
Either party may elect to terminate this Lease effective as of the date of such
sale by written notice given to the other party within thirty (30) days after
Tenant's receipt of such notice of sale.
[GRAPHIC OMITTED]
(h) "Lease Year": In the case of the first Lease Year, that period
from the Commencement Date to May 31, 1997. Thereafter, "Lease Year" shall mean
each successive twelve (12) month period from June 1 to May 31 following the
expiration of the first Lease Year, except that the last Lease Year shall be the
period from June 1 to the termination date of this Lease.
(i) "Commencement Date": the Distribution Date under the Distribution
Agreement. If the Commencement Date does not occur prior to May 31, 1997, either
Landlord or Tenant may terminate this Lease by written notice to the other
party.
(j) "Annual Base Rent": See Section 3.1
(k) "Permitted Use": General Office Use.
Article II. Granting Clause.
2.1. In consideration of the obligation of Tenant to pay rent and other
charges as provided in this Lease and in consideration of the other included
terms, covenants and conditions, Landlord Demises and Leases to Tenant, and
Tenant Leases from Landlord, the Demised Premises as described in Article I,
Section 1.1(f) TO HAVE AND TO HOLD said premises for the Lease Term specified in
Article I, Section 1.1(g), all upon the terms and conditions set forth in this
Lease. Landlord expressly reserves the right to name or change the name of the
Complex or any building therein without notice to the Tenant.
Article III. Rental
3.1 Base Rent. Tenant shall pay to Landlord monthly rental installments
in an amount equal to 1/12th of the Annual Base Rent (as hereinafter defined) in
advance, without demand, deduction, counterclaim or offset, and without relief
from valuation and appraisement laws or any other deduction for any reason
whatsoever, on or before the first day of each and every calendar month during
the term of this Lease; provided, however, that if the Commencement Date shall
be on a day other than the first day of the calendar month or the expiration
date shall be a day other than the last day of the calendar month, the monthly
rental installment for such first or last fractional month shall be prorated on
the basis of the number of days during the month this Lease was in effect in
relation to the total number of days in such month.
Annual Base Rent for each Lease Year shall be calculated in accordance
with the following formula:
Annual Base Rent =
(1- Manor Care Occupancy
Percentage) x (Operating Expenses - Third Party Rental Income)
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Capitalized terms used in said formula shall have the meanings given to them in
Section 3.2 below.
At Landlord's sole discretion, at any time and from time to time during
the term of this Lease upon written notice to Tenant, Landlord may elect that
instead of using the aforesaid formula to calculate Annual Base Rent, Annual
Base Rent shall be the number of square feet of space in the Demised Premises
times the "Alternate Rent" as hereinafter defined. The Alternate Rent shall be
the annual fair market rental value per square foot for the Demised Premises in
their "as is" condition for the remaining Lease Term as reasonably determined by
Landlord based on quoted rental rates at comparable office buildings in the
Gaithersburg, Maryland area. Should Landlord so elect, the parties will enter
into an amendment to this Lease establishing the new Annual Base Rent and
providing that Tenant shall pay its pro rata share (based on the ratio of the
number of square feet in the Demised Premises to the number of square feet of
office space in the Complex) of increases in real estate taxes and operating
expenses over a base year, with the terms "real estate taxes", "operating
expenses" and "base year" being defined consistent with the definitions of such
terms in leases of space in the Complex to tenants unrelated to Landlord.
3.2 Definitions. For the purpose of this Lease, the following
definitions shall apply:
(a) "Manor Care Occupancy Percentage" shall mean the ratio of
(i) the number of gross square feet in the Complex occupied by Manor Care, Inc.,
a Delaware corporation, or any person or entity which directly or indirectly
controls, is controlled by, or is under common control with, Manor Care, Inc.,
as of the commencement of the Lease Year in question; to (ii) the total number
of gross square feet in the Complex, as the Complex may be altered or enlarged
in Landlord's discretion from time to time. The parties agree that as of the
Commencement Date the total number of gross square feet in the Complex is
577,126, consisting of 377,126 square feet in the Office Building, and 180,000
square feet of storage space plus an additional 20,000 square feet of office
space in the Warehouse Building. For purposes of the preceding sentence, (and
also for purposes of Sections 3.2(c) and 17.1 of this Lease) in order for an
entity to control another, it must have voting control of and own greater than
fifty percent (50%) of every class of stock entitled to vote and/or other voting
equity interest of the other entity, in the case that the other entity is a
corporation; it must own greater than fifty percent (50%) of the partnership
interests in the assets, liabilities, income, loss and distributions of the
other entity, in the case that the other entity is a partnership; it must be the
sole beneficiary of the other entity, in the case that the other entity is a
trust. The parties further agree that as of the Commencement Date, Manor Care,
Inc. occupies 162,111 gross square feet in the Complex.
(b) "Operating Expenses" shall mean any and all expenses
incurred by Landlord in connection with the servicing, operation, maintenance
and repair of the Complex and related appurtenances, including, but not limited
to: (1) wages and salaries of all employees engaged in operation, maintenance,
or security of the Complex including taxes, insurance and benefits relating
thereto; (2) all supplies and materials used in operation, maintenance or
security of the Complex; (3) cost of all maintenance and service agreements for
the Complex and the equipment therein, including but not limited to security and
energy management services, window cleaning and elevator maintenance; (4) cost
of all insurance relating to the Complex including the cost of casualty and
liability insurance applicable to the Complex and Landlord's personal property
used in connection therewith; (5) cost of repairs and general maintenance,
whether structural or non-structural, but excluding repairs and general
maintenance paid with proceeds of insurance or by Tenant or third parties; (6) a
management fee for the manager of the Complex, who may be Landlord or an
affiliate of Landlord; (7) the cost of any additional services provided to the
Complex by or on behalf of the Landlord in the prudent management of the
Complex; (8) the cost of any capital improvements or alterations made to the
Complex after the Commencement Date (and the entire cost of such capital
improvements shall be included in Operating Expenses in the Lease Year in which
such cost was paid or incurred), but excluding all costs of Landlord's initial
"build-out" to prepare portions of the Office Building for Landlord's occupancy
(except for the costs of installing building security equipment and a traffic
signal on Darnestown Road, which shall be included in Operating Expenses); (9)
leasing commissions, free rent, lease takeover obligations and other
inducements, costs, disbursements and expenses incurred in connection with
leasing space at the Complex; (10) costs incurred in constructing, improving,
renovating or decorating rented space or space for tenants; (11) costs of
environmental inspection, testing or cleanup; (12) payments of principal,
interest, and other costs relating to indebtedness secured by mortgages or deeds
of trust against the Complex or any portion
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thereof; (13) costs incurred in leasing equipment, including air conditioning
systems, elevators, or other equipment ordinarily considered to be of a capital
nature; (14) depreciation and amortization of the buildings and improvements in
the Complex, in accordance with generally accepted accounting principles ;(15)
security services; (16) trash collection; (17) janitorial and cleaning services;
(18) all charges of utility companies or governmental entities for electricity,
water, sewer, gas or other utilities (excluding telephone) supplied to the
Complex; (19) taxes, assessments and governmental charges of any kind and nature
whatsoever (hereinafter collectively referred to as "Taxes") levied or assigned
against the Complex or any part thereof, and all expenses incurred by Landlord
in attempting to protest, reduce or minimize Taxes; (20) ground rents, and
payments under any financing leases of the Complex or any portion thereof
(including Landlord's existing lease agreement with the Gaithersburg Realty
Trust); (21) any operating loss resulting from Landlord's operation of a
cafeteria or fitness center in the Complex; (22)costs of the "employee store"
and other services provided by the "Employee Service Center" at the Complex; and
(23) costs of mailroom/shipping and receiving services provided by Landlord.
(c) "Third Party Rental Income" shall mean all rental income actually
received by Landlord from tenants or occupants (excluding Tenant) of space in
the Complex during the Lease Year in question (including National Geographic),
other than any person or entity which controls, is controlled by, or is under
common control with, Manor Care, Inc.
3.3 As part of the rental arrangements between Landlord and Tenant,
Tenant has specifically reviewed, approved, and agreed to pay as herein
provided, each and every item in the foregoing definition of Operating Expenses.
3.4 PAYMENT OBLIGATION:
(a) Annual Base Rent shall be paid by Tenant to Landlord in
advance, in equal monthly installments, in an estimated amount reasonably
determined by Landlord prior to the commencement of the first Lease Year and
each subsequent Lease Year . (Landlord may revise its estimate at any time
during a Lease Year). Within a reasonable time following the end of each Lease
Year, Landlord shall submit to Tenant a statement which shall include a
comparison of (i) the Annual Base Rent therefore paid by Tenant for the Lease
Year in question on the basis of Landlord's estimate, and (ii) Tenant's actual
obligation for Annual Base Rent for the Lease Year in question as determined by
Landlord. Any excess paid by Tenant, as disclosed by such comparison, shall be
credited against Tenant's next due installment(s) of Annual Base Rent, and any
additional sums disclosed by such comparison as being due to Landlord by Tenant
shall be paid to Landlord within thirty (30) days following delivery to Tenant
of such statement (including any statement delivered after the expiration or
termination of the Term). However, for the Lease Year during which the term of
this Lease ends, any excess paid by Tenant to Landlord and due to Tenant shall
be promptly refunded to Tenant.
(b) Tenant or its accountants shall have the right to inspect,
at reasonable times and in a reasonable manner and at the Landlord's offices or
such other place designated by Landlord, during the thirty (30) day period
following the delivery of Landlord's statement of the actual amount of Tenant's
Annual Base Rent for a particular Lease Year, such of Landlord's books of
account and records as pertain to and contain information concerning the
Operating Expenses, the Manor Care Occupancy Percentage and Third Party Rental
Income in order to verify the amounts thereof. In the event Tenant elects not to
inspect Landlord's books of account and records during said thirty (30) day
period, such election or failure to inspect shall constitute Tenant's
unconditional waiver of any and all rights to inspect Landlord's books of
account and records for the subject period and Tenant shall be forever [GRAPHIC
OMITTED]estopped from challenging or questioning the amount of its Annual Base
Rent for said period. In the event of any disagreement or dispute between Tenant
and Landlord concerning Landlord's statement, the decision of Landlord's Chief
Financial Officer shall be final and unreviewable.
3.5 Tenant shall be liable for all taxes levied against personal
property and trade fixtures placed by Tenant on the Complex. If any such taxes
are levied against Landlord or Landlord's property, and if Landlord elects to
pay the same or if the assessed value of Landlord's property is increased by
inclusion of personal property and trade fixtures placed by Tenant on the
property and Landlord elects to pay the taxes based on such increase, Tenant
shall pay to Landlord as additional rent hereunder, upon demand, the amount of
such taxes paid by Landlord.
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3.6 If at any time during the term of this Lease, the present method of
taxation shall be changed so that in lieu of the whole or any part of any taxes,
assessments, levies, or charges levied, assessed or imposed on the Complex there
shall be levied, assessed or imposed on Landlord a capital levy or other tax
directly on the rents received therefrom and/or a franchise tax assessment, levy
or charge measured by or based, in whole or in part, upon such rents on the
present or any future building or buildings in the Complex, then all such taxes,
assessments, levies or charges, or the part thereof so measured or based, shall
be deemed to be included within the term "Taxes" for the purposes hereof.
3.7 Late Charge. In the event Tenant fails to pay to Landlord, when
due, any installment of rental or other sum to be paid to Landlord which may
become due in this Lease, Landlord will [GRAPHIC OMITTED]incur additional
expenses in an amount not readily ascertainable and which has not been elsewhere
provided for between Landlord and Tenant. If Tenant should fail to pay to
Landlord, when due, any installment of rental or other sum to be paid hereunder,
such unpaid amount shall bear interest from the due date thereof to the date of
payment at an annual rate equal to the lesser of twelve percent (12%) or the
highest rate permitted by law. Provision for such late charge shall be in
addition to all other rights and remedies available to Landlord within this
Lease or at law or in equity and shall not be construed as liquidated damages or
limiting Landlord's remedies in any manner.
3.8 All payments to be made by Tenant to Landlord pursuant to this
Lease shall be made by check payable to Landlord, and delivered to Landlord at
Landlord's Address or to such other person and place as may be designated by
notice in writing from Landlord to Tenant from time to time.
3.9 Unless otherwise agreed in writing between Landlord and Tenant, no
payment by Tenant or receipt by Landlord of a lesser amount than the monthly
installments of rent stipulated shall be deemed to be other than on account of
the above-stipulated rent, nor shall any endorsement or statement on any check
or any letter accompanying any check or payments as rent be deemed an accord
with satisfaction, and Landlord may accept such check for payment without
prejudice to Landlord's right to recover the balance of such rent or pursue any
other remedy in this Lease provided.
Article IV. Cafeteria and Fitness Center
4.1 For as long as Landlord chooses to operate a cafeteria and/or
fitness center at the Complex, Tenant's officers and employees shall have the
right to use such facilities on a non-exclusive basis in common with Landlord's
officers and employees and others entitled thereto, upon payment of the current
fees and charges for such use. In Landlord's sole and unreviewable discretion
and without notice to Tenant, Landlord may discontinue operation of the
cafeteria and/or fitness center at any time.
Article V. Acceptance of the Demised Premises.
5.1 The Demised Premises are leased to Tenant in "AS IS" condition.
Landlord shall have no obligation to make any improvements or alterations to
prepare the Demised Premises for Tenant's use. By taking possession of the
Demised Premises, Tenant shall be deemed to have accepted the same and to have
acknowledged that the same fully comply with Landlord's covenants and
obligations under this Lease. Tenant further agrees that, if requested by
Landlord, Tenant will furnish Landlord with a written statement that Tenant has
accepted the Demised Premises and that Landlord has fully complied with
Landlord's covenants and obligations.
Article VI. Uses and Care of Premises.
6.1 The Demised Premises may be used only for the purpose or purposes
specified in Article I, Section 1.1(k) above, and for no other purpose or
purposes without the prior written consent of Landlord.
6.2 Tenant shall not use the Demised Premises for any unlawful purposes
or acts; shall not commit or permit any waste or damage to the Demised Premises;
shall use and maintain the Demised Premises in compliance with (i) all laws,
codes, ordinances, rules, regulations and orders (collectively
5
"Laws") of any governmental authority or agency, including, without limitation,
those governing zoning, health, safety (including fire safety), and the
occupational hazards, pollution and environmental control, and handicapped
accessibility (including but not limited to any such laws imposing upon Landlord
or Tenant any duty respecting or triggered by any change in use or occupancy or
any alteration or improvement of, in or to the Demised Premises, and (ii) all
reasonable directions of the Landlord, including the building rules and
regulations, attached hereto as Exhibit "C", as may be modified from time to
time by Landlord on reasonable notice to Tenant. Tenant shall use his best
efforts to cause its agents, employees, customers, invitees, licensees, and
concessionaires to comply with the building rules and regulations and with the
covenants and agreements of this Section. [GRAPHIC OMITTED]
6.3 Tenant shall not, without Landlord's prior written consent, keep
anything within the Demised Premises for any purpose which increases the
insurance premium costs or invalidates any insurance policy carried on the
Demised Premises or other part of the property. Tenant shall pay as additional
rent, upon demand of Landlord, any such increased premium cost due to Tenant's
use or occupation of the property. All property kept, stored or maintained
within the property by Tenant shall be at Tenant's sole risk.
6.4 Tenant shall not conduct within the Demised Premises any fire,
auction, going out of business, liquidation or bankruptcy sales or operate
within Demised Premises a "Wholesale" or "Factory Outlet" store, a cooperative
store, a "Second Hand" store, a "Surplus" store or a store commonly refereed to
as a "Discount House." Tenant shall not advertise that it sells products or
services at "discount," "cut-price" or "cut-rate" prices. Tenant shall not
permit any objectionable or unpleasant odors to emanate from the Demised
Premises, nor place or permit any radio, television, loud-speaker, or amplifier
on the roof or outside of the Demised Premises, or where the same can be seen or
heard from outside the Demised Premises, nor place an antenna, awning, or other
projection on the exterior of the Demised Premises; nor solicit business or
distribute leaflets or other advertising material on the property outside the
Demised Premises; nor take any other action which, in the exclusive judgment of
Landlord, would constitute a nuisance or would disturb or endanger other tenants
of the Building or unreasonably interfere with their use of their respective
premises, nor do anything which would tend to injure the reputation of the
Building.
6.5 Tenant shall take good care of the Demised Premises and keep the
same free from waste at all times. Tenant shall keep the Demised Premises and
sidewalks, service-ways, and loading areas adjacent to the Demised Premises
neat, clean and free from dirt, rubbish, insects and pests at all times, and
shall store all trash and garbage within the Demised Premises, arranging for the
regular pickup of such trash and garbage at Tenant's expense. Tenant will store
all trash and garbage within the area designated by Landlord for such trash
pickup and removal and only in receptacles of the size, design and color from
time to time prescribed by Landlord. Receiving and delivery of goods and
merchandise and removal of garbage and trash shall be made only in the manner
and areas from time to time prescribed by Landlord. Landlord may, at its sole
option, arrange for collection of all trash and garbage and, should Landlord
exercise such election, the costs thereof will be part of Operating Expenses.
Tenant shall not operate an incinerator or burn trash or garbage within the
property.
6.6 Tenant shall not move any furniture or equipment into or out of the
Demised Premises except at such times as Landlord may from time to time
designate in writing to all tenants.
[GRAPHIC OMITTED] 6.7 Tenant shall include the address and identity of its
business activities in the Demised Premises in all advertisements made by Tenant
in which the address and identity of any similar local business activity of
Tenant is mentioned.
6.8 Tenant shall not allow any animals other than seeing eye dogs onto
the property whatsoever.
6.9 Tenant shall procure, at its sole expense, any permits and
licenses required for the transaction of business in the Demised Premises and
otherwise comply with all applicable laws, ordinances and governmental
regulations. Landlord makes no representation or warranty, expressed or implied,
with regard to the fitness of the Demised Premises or the property for the
Tenant's intended use or for any particular purpose. Tenant shall bear the cost
of all alterations or improvements to the property required by any applicable
laws, ordinances or governmental regulation based upon Tenant's use of the
property.
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6.10 Tenant shall not use the public address system in the Office
Building.
Article VII. Landlord's Services.
7.1 Landlord covenants and agrees that it will provide the following
services, the cost of which shall be included in Operating Expenses:
(a) keep the foundation, the exterior walls and roof of the Demised
Premises in good repair;
(b) provide heat and air conditioning to maintain the Demised Premises
at a reasonably comfortable temperature between the hours of 8:00 a.m. and 6:00
p.m., Monday through Friday of each week, and 8:00 a.m. and 1:00 p.m. on
Saturday of each week, except holidays recognized by the United States
Government. Landlord shall endeavor to provide HVAC during hours other than the
hours of full operation of the Building, upon request by Tenant at least
twenty-four (24) hours prior to the time Tenant desires such service. Tenant
agrees to cooperate fully with Landlord and to abide by all the regulations and
requirements which Landlord may reasonably prescribe for the proper functioning
and protection of the HVAC equipment and to pay the cost of any damage resulting
from Tenant's failure to comply with the foregoing provisions;
(c) provide electricity for lighting purposes and operation of ordinary
office equipment, excluding, however, computers other than personal computers,
and other equipment requiring heavier than normal office use of electricity.
Within fifteen (15) days from the date of this Lease, Tenant shall submit to
Landlord its list of office equipment. Within fifteen (15) days from receipt of
such list, Landlord shall inform Tenant whether Landlord, in its reasonable
discretion, has determined that such equipment satisfies the requirements of
this Section 7.1(c).
[GRAPHIC OMITTED] (d) provide janitor services Monday through Friday of each
week, except holidays recognized by the United States Government, it being
understood and agreed, however, that Landlord shall not be liable in any way for
any damage or inconvenience caused by the cessation or interruption of such
heating, air conditioning, electricity, elevator, janitor services occasioned by
fire, accident, strikes, necessary maintenance, alterations, or repairs, or
other causes beyond Landlord's control. It is understood that employees of
Landlord are prohibited as such from receiving any packages or other articles
delivered to the Building for Tenant and that, should any such employee receive
any such packages or articles, he or she in so doing shall be the agent of
Tenant and not of Landlord.
(e) provide hot and cold water and lavatory supplies, it being
understood and agreed that hot and cold water shall be furnished by Landlord
only at those points of supply provided for general use of other tenants in the
Building as well as to Tenant's kitchen;
(f) provide automatically operated elevator service at all times;
(g) list the Tenant's trade name on the Building directory located in
the entrance lobby.
7.2 In the event any public utility company supplying energy, water,
sewer or other utility, or governmental law, regulation, executive or
administrative order requires that Landlord or Tenant reduce or maintain at a
certain level the consumption of a utility and such requirement affects the
HVAC, light, use of or hours of operation of the premises or Building, Landlord
and Tenant shall each adhere to and abide by said laws, regulations or executive
orders without any reduction in Rent.
7.3 Failure by Landlord to any extent to furnish the above described
services, or any cessation thereof, shall not render Landlord liable for damages
to either person or property, nor be construed as an eviction of Tenant, nor
give Tenant the right to an abatement of Rent, nor relieve Tenant from the
obligation to fulfill any covenant or agreement hereof, unless such failure to
provide services is a result of the gross negligence of Landlord or Landlord's
agents. Should any of the Building equipment or machinery break down, or for any
cause cease to function properly, Landlord shall use reasonable diligence to
repair the same promptly, and Tenant shall have no claim for an abatement of
rent or damages on account of any interruptions in service occasioned thereby or
resulting therefrom.
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7.4 Landlord shall not be required to make any repairs occasioned by
the act or negligence of Tenant, its agents, employees, subtenants, licensees
and concessionaires, which repairs shall be made by Tenant. In the event that
the Demised Premises should become in need of repairs required to be made by
Landlord hereunder, Tenant shall give immediate written notice thereof to
Landlord and Landlord shall not be responsible in any way for failure to make
such repairs until a reasonable time shall [GRAPHIC OMITTED]have elapsed after
delivery of such written notice. Landlord's obligation hereunder is limited to
repairs specified in this article only, and Landlord shall have no liability for
any damages or injury arising out of any condition or occurrence causing a need
for such repairs.
The cost of such repairs and maintenance shall be included in the
Operating Expenses. There shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant's business
arising from the making of any repairs, alterations or improvements in or to any
portion of the property or in or to any fixtures, appurtenances and equipment
therein or thereon.
7.5 Tenant shall furnish, maintain and replace all Building
Non-Standard electric light bulbs, tubes and tube casings.
7.6 Tenant shall keep the Demised Premises in good clean condition and
shall, at its sole cost and expense, make all needed repairs and replacements
including replacement of cracked or broken glass, except for repairs and
replacements expressly required to be made by Landlord under the provisions of
Article VII, Section 7.1, Article XI, Section 11.1 and Article XV, Section 15.3.
If any repairs required to be made by Tenant hereunder are not made within three
(3) days after written notice delivered to Tenant by Landlord, Landlord may, at
its discretion, make such repairs without liability to Tenant for any loss or
damage which may result to its stock or business by reason of such repairs, and
Tenant shall pay to Landlord immediately upon demand as additional rental
hereunder the cost of such repairs plus ten percent (10%) of the amount thereof
and failure to do so shall constitute an event of default hereunder. At the
expiration of this Lease, Tenant shall surrender the Demised Premises in good
condition, reasonable wear and tear excepted, and shall surrender all keys for
the Demised Premises to Landlord and shall inform Landlord of all combinations
on locks, safes and vaults, if any, in the Demised Premises.
Article VIII. Alterations.
8.1 Tenant shall not make any alterations, additions, or improvements
to the Demised Premises without the prior written consent of Landlord, which
Landlord may grant or deny in its sole discretion with respect to structural
alterations, except for the installation of unattached, movable trade fixtures
which may be installed without drilling, cutting or otherwise defacing the
Demised Premises. Landlord shall not unreasonably withhold or delay its consent
with respect to non-structural alterations. All alterations, additions,
improvements and fixtures, except that any Alterations, fixtures or any other
property installed in the Demised Premises at the sole expense of Tenant and
which can be removed without causing material damage to the Building, shall
remain upon and be surrendered with the Demised Premises and become the property
of Landlord at the termination of this Lease, unless Landlord requests their
removal in which event Tenant shall remove the same and restore the Demised
Premises to their original condition at Tenant's expense. Any linoleum,
carpeting or other floor covering which may be cemented or otherwise affixed to
the floor of the [GRAPHIC OMITTED]Demised Premises is a permanent fixture and
shall become the property of the Landlord without credit or compensation to
Tenant.
8.2 All construction work done by Tenant within the Demised Premises
shall be performed in a good and workmanlike manner, in compliance with all
governmental requirements, and the requirements of any contract or deed or trust
to which the Landlord may be a party and in such manner as to cause a minimum of
interference with other construction in progress and with the transaction of
business in the Building. Tenant agrees to indemnify Landlord and hold it
harmless against any loss, liability or damage resulting from such work, and
Tenant shall, if requested by Landlord, furnish bond or other security
satisfactory to Landlord against any loss, liability or damage.
Article IX. Landlord's Right of Access and Use.
9.1 Landlord shall have the right to enter upon the Demised Premises at
any reasonable time for the purpose of inspecting the same, or of making repairs
to the Demised Premises, or of
8
making repairs, alterations or additions to adjacent premises, or of showing the
Demised Premises to prospective purchasers, Tenants or lenders.
9.2 Landlord may, within one hundred twenty (120) days prior to the
expiration of the term, post and maintain notices, free from hindrance or
control of Tenant.
9.3 Use of the roof above the Demised Premises is reserved to
Landlord.
9.4 In addition to the rights specified elsewhere in this Lease,
Landlord shall have the following rights regarding the use of the Demised
Premises or the property by Tenant, its employees, agents, customers and
invitees, each of which may be exercised without notice or liability to Tenant:
(a) Landlord may install such signs, advertisements or notices or
Tenant identification information on or in the Building, on the property or on
the directory board or Tenant access doors as it shall deem necessary or proper.
(b) Landlord shall approve or disapprove, prior to installation, all
types of drapes, shades and other window coverings used in the Demised Premises,
and may control all internal lighting and signage that may be visible from
outside the Demised Premises.
(c) Landlord may grant to any person the exclusive right to conduct
business or render any service in the Building, provided that such exclusive
right shall not operate to limit Tenant from using the Demised Premises for the
use permitted in Article I, Section 1.1(k).
(d) Landlord may control the use of the property in such manner as it
deems necessary or proper, including by way of illustration and not limitation:
requiring all persons entering [GRAPHIC OMITTED]or leaving any Building in the
Complex to identify themselves and their business in the Building to a security
guard; excluding or expelling any peddler, solicitor or loud or unruly person
from the Building; closing or limiting access to the Building or any part
thereof, including entrances, corridors, doors and elevators, during times of
emergency, repairs or after regular business hours.
Article X. Signs.
10.1 All signs, decorations and advertising media shall conform in all
respects to the sign criteria established by Landlord for the Complex from time
to time in the exercise of its sole discretion, and shall be subject to the
prior written approval of Landlord as to construction, method of attachment,
size, shape, height, lighting, color, location and general appearance. All signs
shall be kept in good condition and in proper operating order at all times.
Other than Building directory signage and front entrance signage to the Demised
Premises, and Tenant's signage at the Complex existing as of the Commencement
Date, no other signs, advertisements or notices shall be painted, affixed or
displayed: (I) within the Demised Premises which are visible from outside of the
Demised Premises, (ii) outside of the Demised Premises, (iii) in, about or
outside of the Building, or (iv) on the land associated with Building.
Article XI. Utilities.
11.1 Landlord agrees to cause to be provided and maintained the
necessary mains, conduits and other facilities necessary to supply water,
electricity, gas (if available), telephone service and sewerage service to the
Demised Premises, and the charges therefor shall be included in Operating
Expenses (except telephone service, which shall be paid directly by Tenant).
11.2 Landlord shall not be liable for any interruption or failure
whatsoever in utility services. Landlord does not represent or warrant the
uninterrupted availability of such utilities or building services, and any such
interruption shall not be deemed an eviction or disturbance of Tenant's right to
possession, or render Landlord liable to Tenant for damages by abatement of rent
or otherwise, or relieve Tenant from the obligation to fully and timely perform
its obligations and covenants under this Lease.
9
Article X Indemnity, Public Liability Insurance and Fire and Extended Coverage
Insurance.
12.1 Landlord shall not be liable to Tenant or to Tenant's employees,
agents or visitors, or to any other person or entity, whatsoever, for any injury
to person or damage to or loss of property on or about the Demised Premises or
the property caused by the negligence or misconduct of Tenant, its employees,
subtenants, licensees or concessionaires, or of any other person entering the
Building under the express or implied invitation of Tenant or arising out of the
use of the Demised Premises by Tenant and the conduct of its business therein,
or arising out of any breach or default by Tenant in the performance of its
obligations hereunder or resulting from any other cause except Landlord's gross
negligence, and Tenant agrees to indemnify Landlord and hold Landlord harmless
from any loss, expense or claims arising out of such damage or injury.
12.2 Landlord and Tenant agree and covenant that neither shall be
liable to the other for loss arising out of damage to or destruction of the
Demised Premises or contents thereof when such loss is caused by any perils
included within standard All Risk property insurance, including flood and
earthquake insurance policies, for buildings similar to the buildings in the
Complex, in Montgomery County, Maryland. This agreement shall be binding whether
or not such damage or destruction be caused by negligence of either party or
their agents, licensees, employees or visitors.
Article XIII. Tenant's Insurance.
13.1 Tenant agrees, at its sole cost, to carry and keep in full force
and effect at all times during the term of this Lease, a comprehensive general
liability policy with a single limit of at least Ten Million Dollars
($10,000,000.00), including coverage for bodily injury, property damage,
contractual liability for this Lease and personal injury liability. Tenant's
comprehensive general liability insurance policy and certificates evidencing
such insurance shall name Landlord and its property manager of the Complex as
additional insureds and shall also contain a provision by which the insurer
agrees that such policy shall not be canceled except after sixty (60) days
written notice to Landlord. Any liability insurance carried or to be carried by
Tenant hereunder shall be primary over any policy that might be carried by
Landlord. If Tenant shall fail to obtain or maintain such insurance, Landlord
may obtain, after providing written notice to Tenant with a thirty (30) day
opportunity to cure, such insurance on Tenant's behalf and the cost shall be
deemed additional rent and shall be payable upon Landlord's demand.
13.2 Tenant shall obtain All Risk property insurance, including flood
and earthquake insurance, insuring against loss to the Demised Premises
(including any improvements thereon). Such insurance shall be in the form and
amount reasonably satisfactory to Landlord, and Tenant shall, when requested
from time to time by Landlord, provide Landlord with evidence of such insurance.
Such insurance shall contain waiver of subrogation provisions in favor of
Landlord and its agents.
[GRAPHIC OMITTED] 13.3 Tenant agrees to carry and keep in full force and effect
at all times during the term of this Lease, at its sole cost, Worker's
Compensation and Employer's Liability insurance, with a minimum Employer's
Liability limit of $1,000,000 each occurrence.
13.4 At the request of Landlord, Tenant shall obtain business
interruption insurance naming Landlord as loss payee, which insurance shall be
in an amount sufficient to pay all rent due hereunder.
Article XIV. Non-Liability for Certain Damages.
14.1 Landlord and Landlord's agents and employees shall not be liable
to Tenant or any other person or entity whomsoever for any injury to person or
damage to property caused by the Demised Premises or other portions of the
property becoming out of repair or by defect (including latent defects) in or
failure of any building equipment, pipes or wiring, or broken glass, or by the
backing up of drains, or by gas, water, steam, electricity or oil leaking,
escaping or flowing into the Demised Premises, nor shall Landlord be liable to
Tenant or any other person or entity whomsoever from any loss or damage that may
be occasioned by or through the acts or omissions of other tenants of the
Building or of any other persons or entity whomsoever. Tenant shall indemnify
and hold harmless Landlord from any loss, cost, expense or claims arising out of
such injury or damage referred to in this Article XIV, Section 14.1.
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14.2 In the event of any violation of this Lease by Landlord, Tenant's
exclusive remedy shall be an action for damages (Tenant waiving the benefit of
any laws granting it a lien upon the property of Landlord and/or upon rent due
the Landlord), but prior to any such action Tenant will give Landlord written
notice specifying such violation with particularity, and Landlord shall
thereupon have thirty (30) days in which to cure any such violation. Unless and
until Landlord fails to so cure any violation after such notice, Tenant shall
not have any remedy or cause of action by reason thereof. All obligations of
Landlord hereunder will be construed as covenants, not conditions; and all such
obligations will be binding upon Landlord only during the period of its
ownership of the property and not thereafter.
The term "Landlord" shall mean only the owner, for the time being, of
the property and in the event of the transfer by such owner of its
interest in the property such owner shall thereupon be released and
discharged from all covenants and obligations of the Landlord
thereafter accruing, but such covenants and obligations shall be
binding during the Lease term upon each new owner for the duration of
such owner's ownership.
Notwithstanding any other provision hereof, Landlord shall not have
any personal liability hereunder. In the [GRAPHIC OMITTED]event of any
breach or default by Landlord in any term or provision of this Lease,
Tenant agrees to look solely to the equity or interest then owned by
Landlord in the land and improvements which constitute the property;
however, in no event shall any deficiency judgment or any money
judgment of any kind be sought or obtained against Landlord or
affiliated companies.
Article XV. Damage by Casualty.
15.1 Tenant shall give immediate written notice to Landlord of any
damage caused to the Demised Premises by fire or other casualty.
15.2 If the Office Building shall be destroyed or damaged in excess of
$100,000 by a casualty, then Landlord may elect either to terminate this Lease
as hereinafter provided, or to proceed to rebuild and repair the Demised
Premises. Should Landlord elect to terminate this Lease, it shall give written
notice of such election to Tenant within ninety (90) days after the occurrence
of such casualty. If Landlord should not elect to terminate this Lease, Landlord
shall proceed with reasonable diligence to rebuild and repair the Demised
Premises (and the cost of such repairs in excess of insurance proceeds shall be
included in Operating Expenses).
15.3 Landlord's obligation to rebuild and repair under this Article XV
shall in any event be limited to restoration to substantially the condition in
which the Demised Premises existed prior to the casualty, and shall be further
limited to the extent of the insurance proceeds available to Landlord for such
restoration, and Tenant agrees that promptly after the completion of such work
by Landlord, it will proceed with reasonable diligence and at its sole cost and
expense to rebuild, repair and restore its signs, fixtures, equipment and
furnishings.
15.4 During the period from the occurrence of the casualty until
Landlord's repairs are substantially completed, there shall be no reduction in
the Annual Base Rent.
15.5 All damage or injury to the Demised Premises or the Building
caused by the act or omission of Tenant, its employees, agents, invitees,
licensees or contractors, shall be promptly repaired by Tenant at Tenant's sole
cost and expense, to the satisfaction of Landlord except to the extent covered
by insurance [GRAPHIC OMITTED]carried by Landlord; provided, however, Tenant
shall pay any deductible under Landlord's policy required to be paid thereunder.
Article XVI. Eminent Domain.
16.1 If the entire Demised Premises or the Complex should be taken for
any public or quasi-public use under governmental law, ordinance or regulation,
or by right of eminent domain or by private purchase in lieu thereof, this Lease
shall terminate and the rent shall be abated during the unexpired portion of
this Lease, effective on the date physical possession is taken by the condemning
authority. If less than the entire Demised Premises or Complex should be taken
as aforesaid, this Lease shall continue in full force and effect and there shall
be no abatement in Annual Base Rent.
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16.2 All compensation awarded for any taking (or the proceeds of
private sales in lieu thereof) of the Demised Premises or the property shall be
the property of Landlord, and Tenant assigns its interest in any such award to
Landlord; provided, however, Landlord shall have no interest in any award made
to Tenant for loss of business or the taking of Tenant's fixtures and other
property if a separate award for such items is made to Tenant.
Article XVII. Assignment and Subletting.
17.1 Tenant shall not assign or transfer all or any portion of its
interest in this Lease or in the Demised Premises, or sublet all or any portion
of the Demised Premises, without the prior written consent of Landlord, which
consent may be withheld at the sole and absolute discretion of the Landlord. Any
assignment or sublease without the Landlord's prior written consent shall be
voidable and, at Landlord's election, shall constitute a default of Tenant
hereunder. Consent by Landlord to one or more assignments or sublettings shall
not operate as a waiver of Landlord's rights with respect to any subsequent
assignment or subletting. The term "sublet" shall be deemed to include the
granting of licenses, concession, and any other rights of occupancy of any
portion of the Demised Premises. Notwithstanding the foregoing, Landlord's
consent shall not be required in the case of an assignment to a person or entity
which controls, is controlled by, or is under common control with, Tenant,
provided that Tenant remains primarily liable under this Lease.
17.2 In the event of the transfer and assignment by Landlord of its
interest in this Lease or in the property to a person expressly assuming
Landlord's obligations under this Lease, [GRAPHIC OMITTED]Landlord shall thereby
be released from any further obligations hereunder, and Tenant agrees to look
solely to such successor in interest of the Landlord for performance of such
obligations. Any such security given by Tenant to secure performance of Tenant's
obligations hereunder may be assigned and transferred to such successor in
interest, and Landlord shall thereby be discharged of any further obligations
relating thereto.
17.3 Tenant shall not mortgage, pledge or otherwise encumber its
interest in this Lease or in the Demised Premises.
17.4 In no case may Tenant assign any options granted to Tenant
hereunder, all such options being deemed personal to Tenant and exercisable by
Tenant only.
17.5 Any request by Tenant for approval to sell or sublet the Demised
Premises or to transfer or assign Tenant's interest in this Lease, shall be
accompanied by a processing charge in the amount of Five Hundred Dollars
($500.00) payable to Landlord.
17.6 In the event Landlord approves Tenant subletting this Lease and
the subtenant or assignee is paying to Tenant an amount in excess of that paid
by Tenant to Landlord under this Lease (which such amount shall be deemed the
aggregate sum of all payments by subtenants to Tenant), then fifty percent (50%)
of any such excess amounts shall be deemed rent under this Agreement and shall
be immediately paid by Tenant to Landlord. If any court of law should find this
provision invalid, then, in such event, Tenant shall be prohibited from
subletting or assigning this Lease for an amount in excess of the amounts paid
by Tenant to Landlord pursuant to the terms of this Lease.
Article XVIII. Default by Tenant and Remedies.
18.1 The following events shall be deemed to be events of default by
Tenant under this Lease:
(a) Tenant shall fail to pay any installment of rental or any other
expense required to be paid by Tenant hereunder when due, and such failure
continues for ten (10) days after Tenant receives written notice thereof from
Landlord.
(b) Tenant shall fail to comply with any term, provision or covenant
in this Lease, other than the payment of rental or expenses demanded by Landlord
and shall not cure such failure within thirty (30) days after receiving written
notice thereof from Landlord; provided, however, that if such failure cannot
reasonably be cured within the thirty (30) day period, Tenant shall not be
deemed to be in default if Tenant shall commence such cure within the thirty
(30) day period and thereafter diligently prosecute the same to completion.
12
(c) Tenant or any guarantor of Tenant's obligations under this Lease
shall become insolvent, or shall make a transfer in fraud of creditors, or shall
make an assignment for the benefit of creditors.
(d) Tenant or any guarantor of Tenant's obligation under this Lease
shall file a petition under any section or chapter of the U.S. Bankruptcy Code,
as amended, or under any similar law or statute of the United States or any
State thereof; or Tenant or any guarantor of Tenant's obligations [GRAPHIC
OMITTED]under this Lease shall be adjudged bankrupt or insolvent in proceedings
filed against Tenant or any guarantor of Tenant's obligations under this Lease.
(e) A receiver or Trustee shall be appointed for all or substantially
all of the assets of the Tenant or any guarantor of Tenant's obligations under
this Lease.
(f) Tenant shall do or permit to be done anything which creates a lien
upon the Demised Premises.
18.2 Upon the occurrence of any such events of default, Landlord shall
have the option to pursue any one or more of the following remedies without any
notice or demand whatsoever:
(a) Terminate this Lease in which event Tenant shall immediately
surrender the Demised Premises to Landlord, and if Tenant fails to do so,
Landlord may, without prejudice to any other remedy which he may have for
possession or arrearages in rental, enter upon and take possession of the
Demised Premises and expel or remove Tenant and any other person who may be
occupying said premises or any part thereof, by force if necessary, without
being liable for prosecution or any other claim of damages.
(b) Enter upon and take possession of the Demised Premises and expel
or remove Tenant and any other person who may be occupying said premises or any
part, by force if necessary, without being liable for prosecution or any claim
for damages with or without having terminated the Lease.
(c) Enter upon the Demised Premises by force, if necessary, without
being liable for prosecution or any claim for damages, and do whatever Tenant is
obligated to do under the terms of this Lease, and Tenant agrees to reimburse
Landlord on demand for any expenses which Landlord may incur in effecting
compliance with Tenant's obligations under this Lease, and Tenant further agrees
that Landlord shall not be liable for any damages resulting to the Tenant from
such action.
(d) Alter all locks and other security devices at the Demised Premises
without terminating this Lease and without notice to Tenant.
18.3 In the event Landlord elects to terminate the Lease by reason of
an event of default, then notwithstanding such [GRAPHIC OMITTED]termination,
Tenant shall be liable for, and shall pay to Landlord, at the address specified
for notice to Landlord, the sum of all rental and other indebtedness accrued to
date of such termination plus, as damage, an amount equal to the present value
(using a discount rate of five percent (5%)) of the difference between (i) the
total Annual Base Rent, as reasonably estimated by Landlord, for the remaining
portion of the Lease term (had such term not been terminated by Landlord prior
to the date of expiration stated in Article I); and (ii) the fair rental value
of the Demised Premises for such period.
18.4 In the event that Landlord elects to repossess the Demised
Premises without terminating the Lease, then Tenant shall be liable for and
shall pay to Landlord, at the address specified for notice to Landlord, all
rental and other indebtedness accrued to the date of such repossession, plus, as
damage, an amount equal to the total Annual Base Rent, as reasonably estimated
by Landlord, for the remainder of the Lease term until the date of expiration of
the term as stated in Article I diminished by any net sums thereafter received
by Landlord through reletting the Demised Premises during said period (after
deducting expenses incurred by Landlord as provided in Article XVIII, Section
18.5 hereof). In no event shall Tenant be entitled to any excess of any rental
obtained by reletting over and above the rental herein reserved. Actions to
collect amounts due from Tenant to Landlord may be brought from time to time on
one or more occasions, without the necessity of Landlord's waiting until
expiration of the Lease term.
13
18.5 In case of any event of default or breach by Tenant, Tenant shall
also be liable for and shall pay to Landlord, at the address specified for
notice herein, in addition to any sum provided to be paid above, brokers fees
incurred by Landlord in connection with reletting the whole or part of the
Demised Premises; the costs of removing and storing Tenant's or other occupant's
property; the cost of repairing, altering, remodeling or otherwise putting the
Demised Premises into condition acceptable to a new Tenant or Tenants, and all
reasonable expenses incurred by Landlord in enforcing or defending Landlord's
rights and/or remedies, including reasonable attorneys' fees.
18.6 In the event of termination or repossession of the Demised
Premises for an event of default, Landlord shall not have any obligation to
relet or attempt to relet the Demised Premises, or any portion thereof, or to
collect rental after reletting; Landlord may relet the whole or any portion of
the Demised Premises for any period, to any tenant, and for any use and purpose.
18.7 If Tenant should fail to make any payment or cure any default
hereunder within the time herein permitted, Landlord, without being under any
obligations to do so and without waiving such default, may make such payment
and/or remedy such other default for the account of Tenant (and enter the
Demised Premises [GRAPHIC OMITTED]for such purpose), and thereupon Tenant shall
be obligated to, and agrees to, pay Landlord, as additional rent, upon demand,
all costs, expenses and disbursements (including reasonable attorneys' fees)
incurred by the Landlord in taking such remedial action.
18.8 In the event that Landlord shall have taken possession of the
Demised Premises pursuant to the authority herein granted, then Landlord shall
have the right to keep in place and use all of the furniture, fixtures, and
equipment at the Demised Premises, including that which is owned by or Leased to
Tenant, at all times prior to any foreclosure thereon by Landlord or
repossession thereof by any Landlord thereof or third party having a lien
thereon. Landlord shall also have the right to remove from the Demised Premises
(without the necessity of obtaining a distress warrant, writ of sequestration or
other legal process) all or any portion of such furniture, fixtures, equipment
and other property located thereon and place same in storage at any premises
within the County in which the Demised Premises is located; and in such event,
Tenant shall be liable to Landlord for costs incurred by Landlord in connection
with such removal and storage and shall indemnify and hold harmless Landlord
from all loss, damage, cost, expense and liability in connection with such
removal and storage. Landlord shall also have the right to relinquish possession
of all or any portion of such furniture, fixtures, equipment and other property
to any person ("Claimant") claiming to be entitled to possession thereof who
presents to Landlord a copy of any instrument represented to Landlord by
Claimant to have been executed by Tenant (or any predecessor of Tenant) granting
Claimant the right under various circumstances to take possession of such
furniture, fixtures, equipment or other property, without the necessity on the
part of Landlord to inquire into the authenticity of said instrument's copy of
Tenant's or Tenant's predecessor's signature thereon and without the necessity
of Landlord's making any nature of investigation or inquiry as to the validity
of the factual or legal basis upon which Claimant purports to act; and Tenant
agrees to indemnify and hold Landlord harmless from all costs, expense, loss,
damage, and liability incident to Landlord's relinquishment of possession of all
or any portion of such furniture, fixtures, equipment or other property by
Claimant. The rights of Landlord herein stated shall be in addition to any and
all other rights which Landlord has or may hereafter have at law or in equity;
and Tenant stipulates and agrees that the rights herein granted Landlord are
commercially reasonable.
Article XIX. Holding Over.
19.1 In the event Tenant remains in possession of the Demised Premises
after the expiration of this Lease and without the execution of a new Lease, it
shall be deemed to be occupying said Demised Premises as a Tenant from month to
month at a rental equal to the rental herein provided, plus fifty percent (50%)
of such amount and otherwise subject to all the conditions, provisions and
obligations of this Lease insofar as the same are applicable to a month to month
tenancy.
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Article XX. Subordination and Attornment
20.1 Tenant accepts this Lease subject and subordinate to any mortgage,
deed of trust or other lien presently existing or hereafter created upon the
property and to any renewals and extensions thereof. Landlord is irrevocably
vested with full power and authority to subordinate this Lease to any mortgage,
deed of trust or other lien hereafter placed upon the property and Tenant agrees
upon demand to execute such further instrument subordinating this Lease as
Landlord may request, and if Tenant shall fail at any time to execute, seal and
deliver any such instrument to Landlord, in addition to any other remedies
available to it in consequence thereof, Landlord may execute, seal and deliver
the same as the attorney in fact of Tenant in Tenant's name, place and stead,
and Tenant irrevocably makes, constitutes and appoints Landlord, its successors
and assigns, as such attorney in fact for that purpose.
20.2 At the option of any transferee of the Landlord's interest in the
property pursuant to a foreclosure or similar proceeding under any mortgage,
deed of trust or other lien upon the property, whether now existing or hereafter
created, Tenant shall attorn to and be bound to any such transferee under the
[GRAPHIC OMITTED]terms, covenants and conditions of this Lease for the balance
of the term hereof remaining and any extensions or renewals hereof which may be
affected in accordance with any option therefore in this Lease, with the same
force and effect as if the transferee was the Landlord, and Tenant does hereby
agree to attorn to such transferee, at the transferee's option, the attornment
to be effective and self operative without the execution of any further
instruments on the part of Tenant, immediately upon the transferee succeeding to
the interest of the Landlord, provided said transferee provides written notice
to the Tenant of its election to accept such attornment within sixty (60) days
of the subject transfer.
In the event any such transferee does elect to accept such attornment,
the Tenant hereby agrees that said transferee shall not be (a) liable for any
act or admission of Landlord under the Lease prior to the subject transfer or
(b) subject to any offsets or defenses which Tenant might have against Landlord
arising from events or circumstances existing prior to the subject transfer, or
(c) bound by any rent or additional rent which Tenant might have paid in advance
for more than the month of the subject transfer, or (d) bound by any amendment
or modification of this Lease made without the foreclosing party's prior written
consent.
Article XXI. Estoppel Certificates.
21.1 Tenant agrees to furnish from time to time, when requested by
Landlord, the holder of any deed of trust or mortgage or the Landlord under any
ground Lease covering all or any part of the property or any interest of
Landlord therein, an estoppel certificate signed by Tenant confirming and
containing such factual certifications and representations deemed appropriate by
Landlord. The holder of any such deed of trust or mortgage or the Landlord under
any such ground Lease and Tenant shall, within ten (10) days following receipt
of said proposed estoppel certificate from Landlord, return a fully-executed
copy of said certificate to Landlord. In the event Tenant fails to return a
fully-executed copy of such certificate to Landlord within the foregoing ten-day
period, then Tenant shall be deemed to have approved and confirmed all of the
terms, certifications and representations contained in such certificate.
Article XXII. Notices.
22.1 Wherever any notice is required or permitted hereunder, such
notice shall be in writing. Any notice or document required or permitted to be
delivered hereunder shall be deemed to be delivered, whether actually received
or not when deposited in the United States mail, postage prepaid, certified or
registered mail, return receipt requested, addressed to the parties hereto at
the respective addresses set out in Article I, Section 1.1b & 1.1d above or such
other address as they may have hereafter specified by written notice.
Article XXIII. Brokers.
[GRAPHIC OMITTED] 23.1 Landlord and Tenant represent and warrant to each other
that it has not employed a broker in carrying on the negotiations relating to
this Lease. Tenant further warrants and covenants that is has not relied and
will not rely upon any oral representation about the property, other tenants'
15
occupancy, uses or related matters made by any real estate agent, real estate
broker, agent or employee of Landlord, or any other party. Tenant shall
indemnify and hold Landlord harmless, from and against any cost, liability or
expense (including attorney's fees and disbursements) incurred as a result of
the assertion(s) or claim(s) by any person, firm or entity for brokerage or
other commissions or finder's fees based upon the claiming person's alleged
dealings with Tenant or any of its employees, agents or representatives.
Article XXIV. Approval and Changes Required by Lender.
24.1 Any mortgagee of the property, or of Landlord's interest therein,
may have the right to approve this Lease, and in the event such approval is not
granted, Landlord shall have the right to terminate this Lease as hereinafter
set forth. In the event that any mortgagee of the property, or of Landlord's
interest therein, requires, as a condition of such financing, modifications to
this Lease which (i) do not materially and adversely affect Tenant's use of the
Demised Premises as herein permitted; and (ii) do not increase the rent or other
sums required to be paid by Tenant hereunder; then Landlord may submit to Tenant
a written amendment of this Lease incorporating such required changes. Tenant
shall execute such amendment within ten (10) days after the same has been
submitted to Tenant. If Tenant fails to so execute and deliver such amendment,
then Landlord shall thereafter have the right, at its sole option, to (a)
execute such amendment on Tenant's behalf, Tenant appointing Landlord its
irrevocable attorney-in-fact, said power being coupled with an interest to
execute such amendment; or (b) to cancel this Lease. Such cancellation option
shall be exercisable by Landlord's giving Tenant written notice of such
termination; immediately whereupon this Lease shall be canceled and terminated
and, upon relinquishment of possession of the Demised Premises by Tenant in the
condition required pursuant to the terms hereof, both Landlord and Tenant shall
thereupon be relieved from any and all further liability or obligation
hereunder.
Article XXV. Parking.
25.1 During the Term of this Lease, Tenant and its employees and guests
shall have use of all parking areas in the Complex, without charge, for parking
purposes only, on an unreserved, non-exclusive basis in common with others
entitled to use of said parking areas. Landlord shall have general possession,
management and control of the parking areas, and may from time to time adopt
reasonable rules and regulations pertaining to the use thereof. Landlord
reserves the right to designate reserved parking in the parking areas. [GRAPHIC
OMITTED] Article XXVI. Waiver of Trial by Jury and Right to Redeem.
26.1 Landlord and Tenant each agree to and they waive trial by jury in
any action, proceeding or counterclaim brought by either of the parties hereto
against the other on any matters whatsoever arising out of or in any way
connected with this Lease, the relationship of Landlord and Tenant, Tenant's use
or occupancy of said premises and/or any claim of injury or damage, and
statutory remedy. Tenant also hereby agrees that the provisions of Section
8-401(e) of the Maryland Real Property Code shall not apply to this Lease and
Tenant hereby waives its rights thereunder.
Article XXVII. Furnishing of Financial Statements.
27.1 Within ten (10) days of the execution of this Lease, Tenant shall
furnish Landlord financial statements outlining Tenant's current financial
condition if applicable, as of the last annual audit or the last regularly
prepared report including tax returns. Over the term of this Lease and any
extensions, within ten (10) days of Landlord's written request, Tenant shall
furnish financial statements outlining Tenant's current financial condition. The
foregoing requirements shall not apply during any period of time in which
Tenant's stock is listed on a national stock exchange.
Article XXVIII. Occupational and Environmental Compliance.
28.1 Tenant shall not in any manner use, maintain or allow the use or
maintenance of the property in violation of any law, ordinance, statute,
regulation, rule or order (collectively "Laws") of any governmental authority,
including but not limited to Laws governing zoning, health, safety (including
fire safety), occupational hazards, and pollution and environmental control.
Tenant shall not use, maintain or allow the use or maintenance of the property
or any part thereof to treat, store, dispose of, transfer, release, convey or
recover hazardous materials nor shall Tenant otherwise, in any
16
manner, possess or allow the possession of any hazardous, materials on or about
the property; provided, however, any hazardous material lawfully permitted and
generally recognized as necessary and appropriate for general office use may be
stored and used in the Demised Premises, so long as (i) such storage and use is
in the ordinary course of Tenant's business permitted under this Lease; (ii)
such storage and use is performed in compliance with all applicable laws and
regulations and in compliance with the highest standards prevailing in the
industry for the storage and use of such materials; and (iii) Tenant delivers
prior written notice to Landlord of the identity of and information regarding
such materials as Landlord may require. Tenant shall immediately notify Landlord
of the presence or suspected presence of any hazardous material on or about the
property and shall deliver to Landlord any notice received by Tenant relating
thereto.
Landlord and its agents shall have the right, but not the duty, to
inspect the Demised Premises and conduct tests thereon at any time to determine
whether or the extent to which there is hazardous materials on the Demised
Premises. Landlord shall have [GRAPHIC OMITTED]the right to immediately enter
upon the Demised Premises to remedy any contamination found thereon. In
exercising its rights herein, Landlord shall use reasonable efforts to minimize
interference with Tenant's business but such entry shall not constitute an
eviction of Tenant, in whole or in part, and Landlord shall not be liable for
any interference, loss, or damage to Tenant's property or business caused
thereby. If any lender or governmental agency shall ever require testing to
ascertain whether there has been a release of hazardous materials, then the
reasonable costs thereof shall be reimbursed by Tenant to Landlord upon demand
as additional rent if such requirement arose in whole or in part because of
Tenant's use of the Demised Premises. Tenant shall execute affidavits,
representations and the like from time to time, at Landlord's request,
concerning Tenant's best knowledge and belief regarding the presence of any
hazardous materials on the property or Tenant's intent to store or use hazardous
materials on the property. Tenant shall indemnify and hold harmless Landlord
from any and all claims, loss, liability, costs, expenses or damage, including
attorneys' fees and costs of remediation and compliance, incurred by Landlord in
connection with any breach by Tenant of its obligations under this section. The
covenants and obligations of Tenant hereunder shall survive the expiration or
earlier termination of this Lease.
28.2 For the purposes of this Article XXVIII, the term "hazardous
materials" shall mean (i) any and all hazardous waste, toxic chemicals,
materials or substances occurring in the air, water, soil or ground water at the
property by reason of which the Tenant or Landlord would be subject to an
injunction action and/or any damages, penalties, clean up costs or other
liability under the provisions of the Comprehensive Environmental Response,
Compensation and Liability Act 42 U.S.C. ss. 9601 et seq., the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. ss. 9601 (20D), the
Resource Conservation and Recovery Act (the Solid Waste Disposal Act), 42 U.S.C.
ss. 9601 et seq., the Federal Water Pollution Control Act, as amended by the
Clean Water Act of 1977, 33 U.S.C. ss. 1251 et seq., the Clean Air Act of 1966,
42 U.S.C. ss. 7401 et seq., and the Toxic Substances Control Act, 15 U.S.C. ss.
2601, et seq.; (ii) any "oil, petroleum products and their by-products" as
defined by the Maryland Environmental Code Annotated ss. 4-411(a)(3); as amended
from time to time and regulations promulgated thereunder; (iii) any "hazardous
substance" as defined by the Maryland Environmental Code Annotated, Title 7,
Subtitle 2, as amended from time to time and regulations promulgated thereunder;
and (iv) any substance the presence of which is prohibited or controlled by any
other federal, state or local laws, regulations, statutes, or ordinances now in
a force or hereafter enacted relating to waste disposal or environmental
protection with respect to hazardous, toxic or other substances generated,
produced, leaked, released, spilled, stored or disposed of at or from the
property. Hazardous material shall also include any other substance which by law
requires special handling in its collection, storage, treatment or disposal, but
not including small quantities of materials present on the property in retail
containers, which [GRAPHIC OMITTED]would not be prohibited, regulated or
controlled under applicable environmental laws.
Article XXIX Miscellaneous.
29.1 Nothing herein contained shall be deemed or construed by the
parties hereto, nor by any third party, as creating the relationship of
principal and agent or of partnership or a joint venture between parties hereof,
it being understood and agreed that neither the method of computation of rental,
nor any other provisions contained herein, nor the acts of the parties hereto,
shall be deemed to create any relationship between the parties hereto other than
the relationship of Landlord and Tenant. Whenever herein the singular number is
used, the same shall include the plural, and words of gender shall include each
other gender.
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29.2 The captions used herein are for convenience only and do not
limit or amplify the provisions hereof.
29.3 One or more waivers of any covenant, term or condition of this
Lease by Landlord shall not be construed as a waiver of a subsequent breach of
the same covenant, term or condition. The consent or approval by Landlord shall
not be construed as a waiver of a subsequent breach of the same covenant, term
or condition. The consent or approval by Landlord to or of any act by the Tenant
shall not be deemed to waive or render unnecessary consent to or approval of any
subsequent similar act.
29.4 Whenever a period of time is herein prescribed for action to be
taken by the Landlord, Landlord shall not be liable or responsible for, and
there shall be excluded from the computation of any such period of time, any
delays due to strikes, riots, acts of God, shortages of labor or materials, war,
government laws, regulations or restrictions or any other cause of any kind
whatsoever which is beyond the reasonable control of Landlord. At any time when
there is outstanding a mortgage, deed of trust or similar security instrument
covering Landlord's interest in the Demised Premises, Tenant may not exercise
any remedies for default by Landlord hereunder unless and until the holder of
the indebtedness secured by such mortgage, deed of trust or similar instrument
shall have received written notice of such default and a reasonable time for
such default shall thereafter have elapsed.
29.5 This Lease contains the entire agreement between the parties, and
no agreement shall be effective to change, modify or terminate this Lease in
whole or in part unless such agreement is in writing and duly signed by the
party against whom enforcement of such change, modification or termination is
sought.
29.6 The laws of the State of Maryland, without reference to its
conflicts of laws principles, shall govern the interpretation, validity,
performance and enforcement of this Lease. 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. [GRAPHIC
OMITTED
29.7 The terms, provisions and covenants contained in this Lease shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, successors in interest and legal representatives except as
otherwise herein expressly provided.
29.8 Tenant shall not record this Lease or any memorandum or other
document referring to this Lease without the express written permission of
Landlord. Landlord, however, may record this Lease or any related document
without the consent or jointer of Tenant.
29.9 Tenant shall pay before delinquency all costs for work done or
caused to be done by Tenant in the Demised Premises which could result in any
lien or encumbrance in respect of such work and shall indemnify, defend and hold
harmless Landlord against any claim, loss, cost, demand and legal or other
expenses, whether in respect of any lien or otherwise, arising out of the supply
of material, services or labor for such work. Tenant shall immediately notify
Landlord of any such lien, claim of lien or other action of which it has or
reasonably should have knowledge and which affect the title to the Complex or
any part thereof, and shall cause the same to be removed within fifteen (15)
days (or such additional time as Landlord may consent to in writing) after its
filing, creation or assertion, whichever shall first occur, failing which
Landlord may declare Tenant in default hereunder and take such action as
Landlord deems necessary to remove the same and the entire cost thereof shall be
immediately due and payable by Tenant to Landlord as additional rent hereunder.
29.10 The submission of this Lease for examination does not constitute
a reservation of or an option for the Demised Premises nor does it constitute an
offer to lease the Demised Premises until signed by Landlord and this Lease
becomes effective as a Lease only upon execution and delivery thereof by both
Landlord and Tenant.
29.11 Time shall be of the essence for this Lease.
29.12 If any term, covenant or condition of this Lease or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Lease, or the application of
such term, covenant or condition to persons or circumstances other than those
18
as to which it is held invalid or unenforceable, shall not be affected thereby
and each term, covenant or condition of this Lease shall be valid and be
enforced to the fullest extent permitted by law.
[GRAPHIC OMITTED] 29.13 It is agreed that, for the purpose of any suit brought
or based on this Lease, this Lease shall be construed to be a divisible
contract, to the end that successive actions may be maintained thereon as
successive periodic sums shall mature or be due hereunder, and it is further
agreed that failure to include in any suit or action any sum or sums then
matured or due shall not be a bar to the maintenance of any suit or action for
the recovery of said sum or sums so omitted; and Tenant agrees that it will not,
in any suit or suits brought or arising under this Lease for a matured sum for
which judgment has not previously been obtained or entered, plead, rely on or
interpose the defenses of res judicata, former recovery, extinguishment, merger,
election or remedies or other similar defense as a defense to said suit or
suits.
Article XXX. Attachments.
The Following Attachments are attached hereto and made a part hereof:
Exhibit A - Plan of the Complex
Exhibit B - Demising Plan
Exhibit C - Rules and Regulations
Article XXXI. Status as Sublease.
31.1 It is understood that this Lease is a sublease of a portion of the
Project leased to Landlord pursuant to a Lease dated August 30, 1995, between
the Gaithersburg Realty Trust, as Landlord, and Landlord, as Tenant (the "Master
Lease"). This Lease is fully subject and subordinate to all terms and conditions
of the Master Lease, and to the rights of the Gaithersburg Realty Trust
thereunder. In no event shall the Lease Term hereunder extend beyond the
Expiration Date or earlier termination of the Master Lease (unless the Property
is conveyed to Landlord). After termination or expiration of the Master Lease
(unless the Property is conveyed to Landlord), Tenant shall promptly surrender
all its interest in the Property. (The terms "Expiration Date" and "Property"
shall have the respective meanings given to them in the Master Lease).
Article XXXII. Commercially Reasonable Terms and Conditions.
32.1 The terms and provisions of this Agreement are intended to reflect
commercially reasonable terms and conditions (including, but not limited to,
pricing) that are at least as favorable and as competitive to Tenant as the
terms and conditions Landlord would grant or require of third parties for
substantially similar goods and services.
IN WITNESS HEREOF, the parties hereunto signed their names, as their
free act and deed on the day and year first above written, and do hereby
acknowledge and accept this Lease agreement.
ATTEST: Landlord: MANOR CARE, INC.
_____________________ By: /s/ James H. Rempe
James H. Rempe
Title: Senior Vice President and Secretary
ATTEST: Tenant: CHOICE HOTELS HOLDINGS, INC.
(to be renamed Choice Hotels
International, Inc.)
_____________________ By: /s/ James A. MacCutcheon
James A. MacCutcheon
Title: Executive Vice President, Chief
Financial Officer and Treasurer
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EXHIBIT C
RULES AND REGULATIONS
1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls or other parts of the Building not occupied by any
Tenant shall not be obstructed or encumbered by any Tenant or used for any
purpose other than ingress and egress to and from the Demised Premises. Landlord
shall have the right to control and operate the public portions of the Building,
and the facilities furnished for the common use of the Tenants, in such manner
as Landlord deems best for the benefit of the Tenants generally. No Tenant shall
permit the visit to the Demised Premises of persons in such numbers or under
such conditions as to interfere with the use and enjoyment by other Tenants of
the entrances, corridors, elevators and other public portions or facilities of
the Building.
2. No awnings or other projections shall be attached to the outside
walls of the Building without the prior written consent of the Landlord. No
drapes, blinds, shades, or screens shall be attached to or hung in, or used in
connection with any window or door of the Demised Premises, without the prior
written consent of the Landlord. Such awnings, projections, curtains, blinds,
shades, screens, or other fixtures must be of a quality, type, design, and
color, and attached in the manner approved by Landlord. Landlord agrees that it
will not unreasonably withhold its consent to any such request by Tenant.
3. No sign, advertisement, notice or other lettering shall be
exhibited, inscribed, painted, or affixed by any Tenant on any part of the
outside or inside of the Demised Premises or building without the prior written
consent of the Landlord. In the event of the violation of the foregoing by any
Tenant, Landlord may remove same without any liability, and may charge expense
incurred by such removal to the Tenant or Tenants violating this rule. Interior
signs on doors and directory tablet shall be inscribed, painted or affixed for
each Tenant by the Landlord at the expense of such Tenant, and shall be of a
size, color and style acceptable to the Landlord.
4. No show cases or other articles shall be put in front of or affixed
to any part of the exterior of the Building, nor placed in the halls, corridors
or vestibules, without the prior written consent of the Landlord.
5. The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags, or other substances shall be thrown therein. All
damages resulting from any misuse of the fixtures shall be borne by the Tenant
who, or whose servants, employees, agents, visitors or licensees, shall have
caused the same.
6. There shall be no unnecessary marking, painting, drilling into or in
any way defacing any part of the Demised Premises or the Building. No boring,
cutting or stringing of [GRAPHIC OMITTED]wires shall be permitted. Tenant shall
not construct, maintain, use or operate within the Demised Premises or elsewhere
within or on the outside of the Building, any electric device, wiring or
apparatus in connection with a loud speaker system or other sound system.
7. No bicycles, vehicles or animals, birds or pets of any kind shall be
brought into or kept in or about the Demised Premises except seeing eye dogs. No
Tenant shall cause or permit any unusual or objectionable odors to be produced
upon or permeate from the Demised Premises, except as may be permitted in
accordance with the Use and Occupancy permit.
8. No space in the Building shall be used for manufacturing, for the
storage of merchandise, or for the sale of merchandise, goods or property of any
kind at auction.
9. No Tenant shall make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of this or neighboring
buildings or premises or those having business with them, whether by the use of
any musical instrument, radio, talking machine, unmusical noise, whistling,
singing, or in any other way. No Tenant shall throw anything out of the doors or
windows or down the corridors or stairs.
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10. No inflammable, combustible or explosive fluid, chemical or
substance as defined by the Environmental Protection Agency shall be brought or
kept upon the Demised Premises.
11. No additional locks or bolts of any kind shall be placed upon any
of the doors, or windows by any Tenant, nor shall any changes be made in
existing locks or the mechanism thereof, except as may be required by Tenant as
a financial institution. The doors leading to the corridors or main halls shall
be kept closed during business hours except as they may be used for ingress or
egress. Each Tenant shall, upon the termination of his tenancy, restore to
Landlord all keys of stores, offices, storage, and toilet rooms either furnished
to, or otherwise procured by, such Tenant, and in the event of the loss of any
keys, so furnished, such Tenant shall pay to the Landlord the cost thereof.
12. All removals, or the carrying in or out of any safes, freight,
furniture or bulky matter of any description must take place during the hours
which the Landlord or its Agent may determine from time-to-time. The Landlord
reserves the right to inspect all freight to be brought into the Building and to
exclude from the Building all freight which violates any of these Rules and
Regulations or the Lease of which these Rules and Regulations are a part.
13. Any person employed by any Tenant to do janitor work within the
Demised Premises must obtain Landlord's consent and such person shall, while in
the Building and outside of said Demised Premises, comply with all instructions
issued by the Superintendent of the Building. No Tenant shall engage or pay any
employees on the Demised Premises, except those actually working for such Tenant
on said premises. [GRAPHIC OMITTED] 14. Landlord shall have the right to
prohibit any advertising by any Tenant which, in Landlord's reasonable opinion,
tends to impair the reputation of the Building or its desirability as a building
for offices, and upon written notice from Landlord, Tenant shall refrain from or
discontinue such advertising.
15. The premises shall not be used for lodging or sleeping or for any
immoral or illegal purpose.
16. Each Tenant, before closing and leaving the Demised Premises at
any time, shall see that all windows are closed.
17. The requirements of Tenants will be attended to only upon
application of the office of the Building. Employees shall not perform any work
or do anything outside of the regular duties, unless under special instruction
from the management of the Building.
18. Access plates to under floor conduits shall be left exposed. Where
carpet is installed, carpet shall be cut around access plates.
19. Mats, trash and other objects shall not be placed in the public
corridors.
20. The Landlord does not maintain suite finishes which are
non-standard, such as kitchens, bathrooms, wallpaper, special lights, etc.
However, should the need for repairs arise, the Landlord will arrange for the
work to be done at the Tenant's expense.
21. Violation of these rules and regulations, or any amendments
thereto, shall be sufficient cause for termination of this Lease at the option
of the Landlord.
22. Smoking in the Demised Premises or anywhere else in the Building
is prohibited.
21