LEASE AGREEMENT
BETWEEN
MARYLAND ECONOMIC DEVELOPMENT CORPORATION
AND
HUMAN GENOME SCIENCES, INC.
DATED DECEMBER 1, 1997
TABLE OF CONTENTS
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Page
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1. Demise of Leased Premises.................................................... 1
2. Certain Definitions.......................................................... 2
3. Title........................................................................ 10
4. Plans and Specifications; Construction....................................... 11
5. Use of Leased Premises....................................................... 11
6. Term; Purchase Option........................................................ 12
7. Rent......................................................................... 17
8. Net Lease; Non-Terminability................................................. 20
9. Payment of Impositions; Compliance with Law and Restrictive Covenants........ 21
10. Liens; Recording and Title; Easements........................................ 22
11. Indemnification.............................................................. 22
12. Tenant's Equipment; Building Equipment; Maintenance and Repair............... 23
13. Alterations.................................................................. 25
14. Condemnation................................................................. 27
15. Insurance.................................................................... 28
16. Casualty and Restoration..................................................... 31
17. Assignment and Subletting.................................................... 33
18. Permitted Contests........................................................... 35
19. Default Provisions........................................................... 36
20. Additional Rights of Landlord................................................ 40
21. Inspection................................................................... 41
22. Notices, Demands and Other Instruments....................................... 42
23. Estoppel Certificates........................................................ 42
24. No Merger.................................................................... 43
25. Representations and Warranties of Tenant..................................... 43
26. Affirmative Covenants of Tenant.............................................. 45
27. Negative Covenants of Tenant................................................. 51
28. Non-Recourse................................................................. 52
29. Separability................................................................. 52
30. Subordination................................................................ 53
31. Binding Effect............................................................... 54
32. Heading...................................................................... 54
33. Environmental Matters........................................................ 54
34. Quiet Enjoyment.............................................................. 59
35. Miscellaneous................................................................ 59
LIST OF EXHIBITS
EXHIBIT A Description of Land
EXHIBIT B List of Construction Contracts
EXHIBIT C List of Tenant's Equipment
EXHIBIT D Schedule of Option Purchase Prices
EXHIBIT E Notice and Payment Addresses
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LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") is made as of December 1, 1997, by
and between MARYLAND ECONOMIC DEVELOPMENT CORPORATION, a body politic and
corporate and an instrumentality of the State of Maryland ("Landlord") and HUMAN
GENOME SCIENCES, INC., a Delaware corporation ("Tenant").
RECITALS
A. Landlord, at the request of Tenant, has acquired from Montgomery
County, Maryland a certain parcel of land located at the Johns Hopkins Belward
Research Campus in Montgomery County, Maryland, more particularly described on
Exhibit A attached hereto and made a part hereof (the "Land") as further defined
in Paragraph 1 below). ---------
B. Landlord is acquiring the Land at the request of Tenant for the sole
purposes of (a) constructing on the Land, a process development and
manufacturing plant consisting of approximately 80,000 square feet in accordance
with plans and specifications to be approved by Landlord and Tenant, and (b)
leasing the Leased Premises (hereinafter defined) to Tenant.
C. The parties desire to enter into this Lease defining their
respective rights, duties, obligations and liabilities relating to the Leased
Premises.
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby
covenant and agree as follows:
A. Demise of Leased Premises. In consideration of the rents and
covenants herein stipulated to be paid and performed, Landlord hereby demises
and lets to Tenant, and Tenant hereby demises and lets from Landlord, the
premises (collectively, the "Leased Premises") consisting of (i) the parcel of
land described in Exhibit A hereto, together with the easements, rights and
appurtenances thereunto belonging or appertaining (collectively, the "Land"),
(ii) the buildings, structures and other improvements to be constructed on the
Land pursuant to Paragraph 4 hereof (the "Improvements"), and (iii) the
equipment and fixtures to be installed in the Improvements which are integral to
the occupancy of the Leased Premises as a "tenantable shell" (e.g., all
elevators, escalators, shades, awnings, floor coverings, screens, landscaping
and security systems and building code required
plumbing, heating, electrical, ventilation and fire-extinguishing equipment) and
financed with proceeds of the Bonds (hereinafter defined) or the State Loans
(hereinafter defined) as evidenced through the requisitions from the Facility
Fund (hereinafter defined) and the requisitions for the State Loans (the
"Building Equipment"), but excluding therefrom the Tenant's Equipment
(hereinafter defined).
2. Certain Definitions. The following terms shall have the definitions
provided below. Unless specifically provided otherwise, all accounting terms
have the definitions given them in accordance with GAAP (hereinafter defined) as
applied to the applicable Person on a consistent basis by its accountants in the
preparation of its previous annual financial statements.
Act of Bankruptcy means with respect to any Person, the filing of a
petition in bankruptcy under the Bankruptcy Code, or the commencement of a
proceeding under any other applicable law concerning insolvency, reorganization
or bankruptcy, by or against such Person as debtor.
Accumulated Funding Deficiency means an "accumulated funding
deficiency" as defined in Section 302 of ERISA or Section 412(a) of the Code.
Additional Rent means Additional Rent as defined in Paragraph 7.
Affiliate means: (a) any Person in which Tenant legally or beneficially
owns or holds, directly or indirectly, any capital stock or other equity
interest; (b) any Person that is a partnership in which Tenant is a partner, or
a joint venturer in which Tenant is a joint venturer or a limited liability
company of which Tenant is a managing member; (c) any Person that is a director,
officer, employee, stockholder (legally or beneficially) or other affiliate of
any of the foregoing or of Tenant; and (d) any Person that directly or
indirectly controls, is under the control of, or is under common control with,
Tenant, including, without limitation, any Person that directly or indirectly
has the right or power to direct the management or policies of Tenant and any
Person whose management or policies Tenant directly or indirectly has the right
or power to direct.
Alterations means all changes, additions (including additional
Improvements on the Land), improvements or repairs to, all alterations,
reconstructions, renewals or removals of and all substitutions or replacements
for any of the Improvements, both interior and exterior, structural and
non-structural, and ordinary and extraordinary.
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Assignments means, collectively, the Bond Assignment and the State Loan
Assignment.
Bank means The First National Bank of Maryland, a national banking
association, its successors and assigns.
Bankruptcy Code means Title 11 of the United States Code, as amended,
and all rules and regulations promulgated pursuant thereto.
Basic Rent means Basic Rent as defined in Paragraph 7.
Basic Rent Payment Date means any date on which an installment of Basic
Rent is due pursuant to Paragraph 7 hereof.
Beneficiaries mean, collectively, the Bond Beneficiary and the State
Loan Beneficiary.
Bond Assignment means the Assignment, Subordination and Non-Disturbance
Agreement by and among Landlord, the Tenant and the Bank, dated as of December
1, 1997, together with all amendments thereto and modifications thereof.
Bond Beneficiary means, collectively, MIDFA, the Bank and any other
Credit Facility Provider, as Beneficiary under the Bond Deed of Trust.
Bond Deed of Trust means the Deed of Trust dated as of December 1,
1997, encumbering the Leased Premises, from Landlord to certain individual
trustees for the benefit of the Bond Beneficiary, together with all amendments
thereto and modifications thereof.
Bond Documents has the meaning given to such term in the Indenture.
Bond Purchase Drawing has the meaning given to such term in the
Indenture.
Bonds means the $23,000,000 Taxable Variable Rate Demand/Fixed Rate
Revenue Bonds (Human Genome Sciences, Inc. Facility), 1997 Issue, being issued
by the Landlord to finance a portion of the costs of the acquisition and
construction of the Leased Premises.
Building Equipment means the Building Equipment as defined in the
Recitals to this Lease.
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Closing Date means the date on which fully executed and authenticated
Bonds are issued and initially delivered.
Code means the Internal Revenue Code of 1986, or any applicable
predecessor statutory provision. Each reference to a section of the Code herein
shall be deemed to include the United States Treasury Regulations in effect or
proposed from time to time with respect thereto.
Collateral Pledge Agreement means the Collateral Pledge Agreement dated
as of December 1, 1997 from Tenant to Landlord, together with all amendments
thereto and modifications thereof.
Commonly Controlled Entity means any trade or business (whether or not
incorporated) which is a member of a "controlled group of corporations" (as such
phrase is used and defined in Section 414(b) of the Code) or which is under
"common control" (as such phrase is used and defined in Section 414(c) of the
Code), and of which Tenant or any Subsidiary of Tenant is a part.
Construction Contracts means those certain Construction Contracts
between Contractors and Landlord listed on Exhibit B hereto (which Exhibit B
shall be updated from time to time if and when new construction contracts are
entered into with Tenant's written consent).
Contractors means the contractors named in the Construction Contracts.
Credit Facility Agreement has the meaning given to such term in the
Indenture. The initial Credit Facility Agreement is the Letter of Credit
Agreement.
Credit Facility Documents has the meaning given to such term in the
Indenture. The initial Credit Facility Documents are the Letter of Credit
Documents.
Credit Facility Provider has the meaning given to such term in the
Indenture. The initial Credit Facility Provider is the Bank.
Deeds of Trust means, collectively, the Bond Deed of Trust and the
State Loan Deed of Trust.
Default Rate means the Default Rate as defined in Paragraph 7(e).
Encumbrances means Encumbrances as defined in Paragraph 30.
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ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and all Laws promulgated pursuant thereto or in connection therewith.
Event of Default means an Event of Default as defined in Paragraph 19.
Facility Fund means the "Facility Fund", as such term is defined in the
Indenture.
GAAP means generally accepted accounting principles in the United
States of America in effect from time to time, consistently applied. In the
event of a change in GAAP affecting the covenants contained in Paragraphs 26 or
27 of this Lease or definitions contained in Paragraph 2 of this Lease relating
to such covenants, such covenants and definitions shall continue to be applied
as though such change in GAAP had not occurred unless and until Landlord, the
Credit Facility Provider, MIDFA, the State and Tenant shall agree in writing to
amend or adjust such covenants or definitions as deemed necessary as a result of
such change in GAAP.
Hedge means any interest rate swap or similar hedge arrangement in
existence at any time or from time to time between Landlord and the Hedge
Counterparty.
Hedge Agreement means any agreement between Landlord and the Hedge
Counterparty in existence at any time or from time to time, executed in
connection with the Hedge, including (without limitation) the Swap Agreement (as
defined in the Letter of Credit Agreement), together with all amendments thereto
and modifications thereof.
Hedge Counterparty means any Person, in its capacity as counterparty to
the Hedge Agreement, with which Landlord has entered the Hedge or may hereafter
at any time or from time to time enter into the Hedge, including (without
limitation) the Bank and any other Credit Facility Provider.
Hedge Documents means, collectively, the Hedge Agreement and all other
documents in existence at any time or from time to time, executed and delivered
to evidence, secure, or in connection with, the Hedge.
Impositions means all taxes, including, without limitation, sales and
use taxes (but excluding, except as hereinafter provided, income, franchise,
profits and gross receipt taxes), assessments (including, without limitation,
all assessments for public improvements or benefits), water and sewer rents,
rates and
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charges, excises, levies, license fees, permit fees, inspection fees and other
authorization fees and other charges or costs of any nature whatsoever, in each
case whether general or special, ordinary or extraordinary, foreseen or
unforeseen, of every character (including all interest and penalties thereon),
which at any time during or in respect of the term hereof may be assessed
against, levied upon, confirmed or imposed on, or in respect of, or be a lien
upon (a) the Leased Premises or any part thereof or any estate, right or
interest therein, (b) any occupancy, use or possession of, or activity conducted
on, the Leased Premises or any part thereof, (c) any Basic Rent or Additional
Rent or other sum reserved or payable by Tenant hereunder, or (d) this Lease or
Landlord. Notwithstanding the foregoing provisions, the term "Impositions" shall
exclude (i) franchise, capital stock or similar taxes, if any, of Landlord and
assessments, levies and liens arising therefrom; (ii) transfer, income, profits
or other taxes, if any, of Landlord, determined on the basis of its net income
or net revenues, and assessments, levies and liens arising therefrom; (iii)
excise, gross receipts or gross income taxes imposed upon or measured by Basic
Rent, Additional Rent or other sums payable by Tenant pursuant to this Lease,
unless the taxes referred to in clauses (i) and (ii) above are in lieu of or a
substitute for any other tax or assessment upon or with respect to the Leased
Premises or any increases therein which, if such other tax or assessment were in
effect, would be payable by Tenant.
Improvements means Improvements as defined in Paragraph 1.
Indenture means the Trust Indenture dated as of December 1, 1997
between Landlord and the Trustee, together with all amendments thereto and
modifications thereof.
Insurance and Award Trustee has the meaning given to that term in
Paragraph 15.
Land means that parcel of land described in Exhibit A attached hereto,
together with the easements, rights and appurtenances thereunto belonging or
appertaining.
Landlord means Maryland Economic Development Corporation, a body
politic and corporate and a public instrumentality of the State of Maryland.
Landlord's Bond Obligations means the "Issuer's Bond Obligations," as
such term is defined in the Indenture.
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Landlord's Credit Facility Obligations means the "Issuer's Credit
Facility Obligations", as such term is defined in the Indenture.
Landlord's State Loan Obligations means all of Landlord's limited
obligations to the State pursuant to the terms and conditions of the State Loan
Documents.
Law means the Constitution of the United States and of the State of
Maryland and any statute or rule of law of the United States and of the State of
Maryland.
Lease Documents has the meaning given to such term in Paragraph 25.
Leased Premises means the Land, the Improvements and the Building
Equipment.
Legal Requirements means all laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations, directions, requirements and agreements with all governments,
departments, commissions, boards, courts, authorities, agencies, officials and
officers, foreseen or unforeseen, ordinary or extraordinary, which now or at any
time hereafter may be applicable to the use, occupancy, possession, maintenance,
alteration, repair or reconstruction of any of the Leased Premises.
Letter of Credit means that certain Letter of Credit to be issued by
the Bank in the original stated amount of $23,378,083 for the account of
Landlord as security for the Bonds, as the same may from time to time be
modified, amended, supplemented, renewed or replaced.
Letter of Credit Agreement means that certain Letter of Credit
Agreement between the Bank and Landlord dated as of December 1, 1997, as the
same may from time to time be modified, amended, supplemented, renewed or
replaced.
Letter of Credit Documents has the meaning given to such term in the
Letter of Credit Agreement.
LIBOR Rate means the fluctuating annual rate of interest which shall at
all times equal the interest rate which the Credit Facility Provider announces
and declares from time to time to be its one month London Interbank Offered
Rate, adjusted for any Federal Reserve Board requirements imposed on the Credit
Facility Provider from time to time. All interest at the LIBOR Rate or computed
thereon shall be calculated on the basis of a 360-day year factor applied to
actual days elapsed and shall be adjusted on any date on which a change occurs
in the LIBOR Rate.
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MIDFA means the Maryland Industrial Development Financing Authority.
MIDFA Insurance Agreement means the Insurance Agreement of even date
herewith by and among MIDFA, the Bank and Landlord, together with all amendments
thereto and modifications thereof.
Multiemployer Plan means a multiemployer plan (as defined in ERISA) to
which Tenant, or any Commonly Controlled Entity, as appropriate, has or had an
obligation to contribute.
Net Award has the meaning given to such term in Paragraph 14.
Net Proceeds has the meaning given to such term in Paragraph 15.
Paying Agent has the meaning given to such term in the Indenture.
Permitted Equipment Lien means any encumbrance or other lien upon, or
security interest in, or any equipment lease of, any Tenant's Equipment, or
interest therein, provided that the acquisition to which any such encumbrance,
lien, security interest or lease relates shall not result in a default under any
other provisions of this Lease.
Permitted Use means the Permitted Use as defined in Paragraph 5.
Person means any natural person, firm, association, corporation,
company, trust, partnership, public body or other entity.
Plan means any pension, profit sharing, savings, stock bonus or other
deferred compensation plan which is intended to qualify under Code '401 and is
subject to the requirements of ERISA, together with any related trusts.
Plans means the Plans and Specifications for the Improvements which
have been approved, and which will be approved from time to time, in writing by
Landlord and Tenant, as the same may be modified or amended in accordance with
Paragraph 4.
Prohibited Transaction means a "prohibited transaction" as defined in
Section 406 of ERISA or Section 4975 of the Code.
Rating Agency means any rating agency which at any time or from time to
times provides or furnishes a rating with respect to the Bonds.
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Registrar has the meaning given to such term in the Indenture.
Remarketing Agent has the meaning given to such term in the Indenture.
Remarketing Agreement means the "Placement and Remarketing Agreement"
as such term is defined in the Indenture.
Rent Commencement Date means the Rent Commencement Date as defined in
Paragraph 7(a).
Reportable Event means a "reportable event" as defined by Title IV of
ERISA.
Restrictive Covenants means the covenants and restrictions set forth in
(a) the Declaration of Covenants, Easements and Restrictions (Protective
Covenants) made the 24th day of September, 1997, by The Johns Hopkins
University, and recorded among the Land Records of Montgomery County, Maryland,
in Liber 15181 at folio 074, and (b) The Johns Hopkins University Belward
Research Campus Declaration of Covenants, Conditions, Easements and Restrictions
made the 24th day of September, 1997, by The Johns Hopkins University, and
recorded among the Land Records of Montgomery County, Maryland, in Liber 15181
at folio 084.
Scheduled Completion Date means December 30, 1999, regardless of the
actual date the Improvements are completed.
State means the State of Maryland, acting through the Maryland
Department of Business and Economic Development and any other department or
agency of the State of Maryland which makes any of the State Loans to Landlord.
State Loans means, collectively, the following loans to be made by the
State to Landlord for the purpose of financing a portion of the costs of the
acquisition and construction of the Leased Premises:
(a) Loan in the principal amount of $2,000,000, from the
Maryland Department of Business and Economic Development
under the Maryland Industrial Land Act;
(b) Loan in the principal amount of $3,000,000, made by the
Maryland Department of Business and Economic Development
from the Maryland Industrial and Commercial Redevelopment
Fund; and
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(c) Loan in the principal amount of $2,000,000, made by the
Maryland Department of Business and Economic Development
from the Maryland Economic Development Opportunities Program
Fund.
State Loan Assignment means the Assignment, Subordination and
Non-Disturbance Agreement by and among Landlord, the Tenant and the State, dated
December 31, 1997, together with all amendments thereto and modifications
thereof.
State Loan Beneficiary means the Beneficiary as such term in defined in
the State Loan Deed of Trust.
State Loan Deed of Trust means the Second Deed of Trust dated December
31, 1997, encumbering the Leased Premises, from Landlord to certain individual
trustees for the benefit of the State Loan Beneficiary, together with all
amendments thereto and modifications thereof.
State Loan Documents means, collectively, any and all documents
executed and delivered by Landlord as evidence of, as security for, or in
connection with, the State Loans, including (without limitation) the State Loan
Deed of Trust and the State Loan Assignment.
Subsidiary means, with respect to any Person, any present or future
corporation at least a majority of whose outstanding Voting Stock shall at the
time be owned by such Person or by one or more Subsidiaries of such Person, or
by such Person and one or more Subsidiaries of such Person.
Substantial Completion means the date on which the Improvements are in
such condition that Tenant may commence its final fit out of the Improvements
and move in and a Certificate of Occupancy of a tenantable shell either has been
issued or would be issued except for work to be performed by Tenant.
Tenant's Equipment means that certain equipment described on Exhibit C
attached hereto (as such Exhibit C may from time to time be updated by the
Tenant to include equipment to be used for the Permitted Use), together with all
replacements thereof. It is anticipated that some or all of Tenant's Equipment
will be leased by Tenant.
Term means the Term as defined in Paragraph 6.
Trustee means FMB Trust Company, National Association, its successors
and assigns.
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Voting Stock means the shares of any class of capital stock of a
corporation having ordinary voting power to elect the directors, managers or
trustees thereof (irrespective of whether or not at the time stock of any class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingencies).
3. Title.
(a) The Leased Premises are demised and let subject to (i) the
Deeds of Trust and any Encumbrances executed in connection therewith and all of
the terms and provisions thereof, including but not limited to the provisions
governing disbursement of insurance proceeds and condemnation awards, (ii) the
existing state of the title of the Land as of the date hereof and any other
exceptions or encumbrances of record as of the date hereof and any other
restrictions, exceptions and Encumbrances entered into subsequent to the date
hereof with Tenant's knowledge and written consent, which consent shall not be
unreasonably withheld or delayed provided Tenant's rights hereunder are not
adversely affected in a material manner (including Tenant's option to purchase
the Leased Premises as hereinafter provided), (iii) any state of facts which an
accurate survey or physical inspection of the Leased Premises might show, and
(iv) the condition of the Leased Premises, as of the Rent Commencement Date,
without representation or warranty by Landlord, and without liability or
obligation of Landlord for patent or latent defects (except that Landlord shall
assign the benefit of all warranties written and implied to Tenant and Tenant
shall be a third party beneficiary of such warranties under the Construction
Contracts).
(b) Tenant has made its own investigation as to the existing state of
the title of the Land and has made arrangements for its own
survey.
4. Plans and Specifications; Construction.
(a) Landlord will cause the Improvements to be constructed on the
Land in accordance with the Plans by the execution and delivery
of the Construction Contracts. Landlord has entered into, or will
enter into, the Construction Contracts listed on Exhibit B
attached hereto.
(b) Landlord will not agree to any modifications of the Plans without
Tenant's consent thereto, and any modifications to the Plans will
be made and approved in accordance with the requirements of
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the Bond Documents, the Credit Facility Documents and the State
Loan Documents.
(c) Any change orders with respect to the Construction Contracts will
be entered into and approved in accordance with the requirements
of the Bond Documents, the Credit Facility Documents and the
State Loan Documents.
(d) Landlord may enter into additional Construction Contracts. All
such Construction Contracts are subject to Tenant's approval,
which approval will not be unreasonably withheld or delayed, and
must be approved by the Credit Facility Provider and the State.
5. Use of Leased Premises.
Tenant shall occupy and use the Leased Premises only as a
biological research, product development and manufacturing and related
administrative use facility (the "Permitted Use"), or for such other lawful
purpose as may be approved by Landlord, the Credit Facility Provider, MIDFA and
the State in their sole discretion (except that Landlord, the Credit Facility
Provider, MIDFA and the State will not unreasonably withhold consent to
additional uses which are related to the Permitted Use), subject, in addition,
to the terms and provisions of any covenants, easements, conditions or
restrictions of record now or hereafter recorded with the written consent of
Tenant, including but not limited to the Deeds of Trust and the Restrictive
Covenants, and for no other purpose. Tenant shall not abandon the Leased
Premises. Tenant shall not permit any unlawful occupation, business or trade to
be conducted on any of the Leased Premises or any use to be made thereof
contrary to applicable Legal Requirements. Tenant shall not use or occupy or
permit any of the Leased Premises to be used or occupied, nor do or permit
anything to be done in or on any of the Leased Premises, in a manner which would
or might (i) make void or voidable any insurance then in force with respect to
any of the Leased Premises, (ii) make it difficult or impossible to obtain fire
or other insurance which Tenant is required to furnish hereunder, (iii) cause
structural injury to any of the Improvements, or (iv) constitute a public or
private nuisance or waste.
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6. Term; Purchase Option.
(a) This Lease shall be effective from and after the date of
its execution and delivery by Landlord and Tenant, December 31, 1997. Subject to
the terms, covenants, agreements and conditions contained herein, Tenant shall
have and hold the Leased Premises for a term (the "Term") commencing on the Rent
Commencement Date and ending at midnight on January 1, 2019. From the effective
date of this Lease, as set forth above, to and including the Rent Commencement
Date, Tenant shall have the right to enter the Leased Premises for the purpose
of performing, or causing to be performed, "tenant improvement work" for the
purpose of installing, or causing to be installed, Tenant's Equipment and for
the purpose of monitoring the construction of the Improvements.
Landlord shall have the right during the last twelve months of
the Term of this Lease to (i) advertise the availability of the Leased Premises
for sale or for reletting and to erect upon the Leased Premises signs indicating
such availability (provided that such signs do not unreasonably interfere with
the use of the Leased Premises by Tenant), and (ii) show the Leased Premises to
prospective purchasers or tenants at such reasonable times and on reasonable
prior notice during normal business hours as Landlord may select, subject to
Tenant's customary access restrictions.
(b) Provided that, at the time of exercise of the following
purchase option and at the time of closing of the purchase of the Leased
Premises pursuant to such option, (i) no Event of Default or event which, with
the giving of notice or the lapse of time, or both, would constitute an Event of
Default which would entitle Landlord to terminate this Lease or evict Tenant
from possession of the Leased Premises, shall exist, (ii) all payments of Basic
Rent and Additional Rent shall have been paid through the date of the exercise
of such purchase option, and (iii) this Lease shall be in full force and effect
(unless this Lease in not in full force and effect due to Landlord's default),
then Tenant shall have the right and option, by giving notice as set forth
below, to acquire the Leased Premises from Landlord as provided below. Tenant
may not exercise such purchase option during any period in which the Bonds are
not subject to redemption pursuant to Section 3.1(c) or Section 3.1(e) of the
Indenture, unless the Bonds are to remain outstanding after the closing of such
purchase option.
From and after the date which is five years after the Rent
Commencement Date, Tenant may exercise such purchase option by written notice to
Landlord, with a copy of such written notice
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to MIDFA, the State and the Credit Facility Provider; provided that, in the
event that Landlord is in default under the provisions of the Bond Documents,
the Credit Facility Documents or the State Loan Documents and such default is
not the result of an Event of Default under this Lease, Tenant may also exercise
such purchase option during such five year period by written notice to Landlord,
with a copy of such written notice to MIDFA, the State and the Credit Facility
Provider. If Tenant exercises such purchase option by giving such written
notice, and (i) the Bonds have been previously redeemed, the closing of such
purchase option shall occur no later than the 90th day following such notice (or
the next business day if such 90th day is not a business day), or (ii) the Bonds
then bear interest at a variable rate, the closing of such purchase option shall
occur no later than the 180th day following such notice (or the next business
day if the 180th day is not a business day), or (iii) the Bonds then bear
interest at a fixed rate, the closing of such purchase option shall occur no
later than the later of (A) the first day on which the Bonds may be redeemed
pursuant to Section 3.1(e) of the Indenture, and (B) the 180th day following
such notice (or the next business day if the 180th day is not a business day),
PROVIDED THAT, in the case of (ii) or (iii) above, unless the Bonds are to
remain outstanding after the closing of such purchase option, the closing of
such purchase option shall not take place unless all Bonds shall have been
redeemed on or before the date of the closing of such purchase option.
Not later than 50 days prior to the date of the closing of
such purchase option, Tenant shall pay to Landlord, in immediately available
funds, the sum of the following (the "Basic Purchase Price"), which sum shall be
held, in trust, by Landlord and used by Landlord solely for the purposes
hereinafter set forth:
(A) the applicable option purchase price set forth on
the Schedule of Option Purchase Prices attached hereto as Exhibit D and
made a part hereof, plus
(B) if Tenant exercises such purchase option during a
period in which the Bonds bear interest at a fixed rate, an amount of
money equal to any redemption premium payable upon redemption of the
Bonds on the next optional redemption date as set forth in Section
3.1(e) of the Indenture, unless the Bonds are to remain outstanding
after the closing of such purchase option.
Any portion of the Basic Purchase Price which is not paid to the Trustee, as
provided below, will be held by Landlord, in trust, upon terms and conditions
mutually acceptable to Landlord and
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Tenant, in an interest bearing account at a commercial bank mutually acceptable
to Landlord and Tenant, pending the closing of such purchase option.
Upon receipt by Landlord of the Basic Purchase Price, Landlord
shall pay to the Trustee from the Basic Purchase Price, to be held in an
irrevocable escrow for the redemption of the Bonds, in immediately available
funds, an amount sufficient, when added to moneys then held by the Trustee and
available for the redemption of Bonds, to redeem all of the Bonds in full on the
next date on which the Bonds may be redeemed pursuant to Section 3.1(c) or
3.1(e) of the Indenture, unless the Bonds are to remain outstanding after the
closing of such purchase option.
In addition, at the closing of such purchase option, Tenant
shall pay to Landlord, in immediately available funds, the sum of the following:
(A) all Basic Rent and Additional Rent through the
date of the closing of such purchase option, plus
(B) all actual third party costs and expenses
(including reasonable attorneys fees and expenses) of the Credit
Facility Provider, Landlord, MIDFA and the State (excluding Landlord's
internal overhead) incurred in connection with such purchase, including
(without limitation) any costs incurred by Landlord in connection with
"unwinding" the Hedge, but deducting any benefits accruing to Landlord
in connection with "unwinding" the Hedge, plus
(C) all transfer and recordation taxes, brokerage
fees, if any, and other costs and expenses required or necessary to be
paid in connection with the transfer of the Leased Premises from
Landlord to Tenant.
At the closing of such purchase option, Landlord will use a
portion of the Basic Purchase Price received by Landlord to pay the outstanding
principal balance and all accrued and unpaid interest on the State Loans;
provided, however, that in the event that, in connection with the purchase of
the Leased Premises by Tenant pursuant to such purchase option, Tenant assumes
all of the obligations of Landlord under the State Loan Documents with respect
to the State Loans, the Basic Purchase Price will be reduced by the total amount
of the State Loans then outstanding which are so assumed by Tenant as of the
date of the closing of such purchase option.
If, at the time Tenant exercises such purchase option, any of
the Bonds shall have been redeemed or paid prior to
15
maturity or any portion of the principal of the State Loans shall have been
prepaid prior to maturity, the Basic Purchase Price shall be reduced by an
amount equal to the total amount of Bonds so redeemed or paid and the portion of
the principal of the State Loans so prepaid.
If, at the time Tenant exercises such purchase option, there
shall be on deposit with the Trustee any moneys which are available for the
redemption of the Bonds upon the closing of such purchase option, and the
outstanding Bonds are to be redeemed upon the closing of such purchase option,
the Basic Purchase Price shall be reduced by an amount equal to the amount of
moneys so on deposit with the Trustee.
Upon Tenant's exercise of such purchase option, Tenant may
advise Landlord that Tenant will purchase the Leased Premises pursuant to such
purchase option, subject to the Bond Documents and the Credit Facility
Documents, and that Tenant either will assume all of the obligations of Landlord
under the Bond Documents and the Credit Facility Documents or, in the
alternative, pay the portion of the Basic Purchase Price attributable to the
outstanding Bonds by the delivery of a loan agreement, or similar document,
evidencing Tenant's agreement to pay Landlord amounts which are sufficient to
enable Landlord to pay its monetary obligations under the Bond Documents and the
Credit Facility Documents, in which event (i) the Basic Purchase Price will be
reduced by the principal amount of the Bonds which would have been redeemed upon
the closing of such purchase option, (ii) at or prior to the closing of such
purchase option, Tenant and Landlord will execute and deliver such documents,
and take such actions, as Landlord, the Credit Facility Provider and MIDFA may
require, in their sole discretion, to provide for the assumption by Tenant of
Landlord's obligations under the Bond Documents and the Credit Facility
Documents, and (iii) the Bonds will not be redeemed but will remain outstanding
after the closing of such purchase option.
At the closing of such purchase option, Landlord shall pay,
from the moneys paid to Landlord by Tenant as set forth above, (1) to the State,
in immediately available funds, an amount sufficient to pay the outstanding
principal of and accrued and unpaid interest on the State Loans, unless, and to
the extent that, Tenant shall have assumed all of the obligations of Landlord
under the State Loan Documents as set forth above, (2) to the Trustee, the
Paying Agent, the Registrar, the Remarketing Agent, the Rating Agency, the
Credit Facility Provider, MIDFA, the State and the Hedge Counterparty, all
accrued fees, costs and expenses then payable to the Trustee, the Paying Agent,
the Registrar, the Remarketing Agent, the Rating Agency, the Credit Facility
Provider, MIDFA, the State and the Hedge Counterparty, (3) to the
16
Credit Facility Provider, MIDFA and the State, all actual third party costs and
expenses (including reasonable attorneys fees and expenses) incurred by them in
connection with such purchase of the Leased Premises by Tenant and, if
applicable, in connection with the assumption by Tenant of the obligations of
Landlord under the State Loan Documents, the Bond Documents and the Credit
Facility Documents.
In consideration of the payment by Tenant to Landlord of the
Basic Purchase Price and the other amounts of money set forth above, Landlord,
by special warranty deed, will transfer its interest in the Leased Premises, as
well as incidental personal property relating to the Leased Premises, to Tenant
as of the date of the closing of such purchase option, free of all Encumbrances,
other than (1) Encumbrances in existence on the date of this Lease, (2)
Encumbrances assumed by Tenant, (3) Encumbrances approved by Tenant, (4) the
State Loan Documents in the event that in connection with the purchase of the
Leased Premises by Tenant pursuant to such Purchase Option Tenant assumes all of
Landlord's obligations under the State Loan Documents, and (5) the Bond
Documents and the Credit Facility Documents in the event that in connection with
the purchase of the Leased Premises by Tenant pursuant to such purchase option
Tenant assumes all of Landlord's obligations under the Bond Documents and the
Credit Facility Documents; and Landlord will assign to Tenant all contracts and
warranties (to the extent assignable) relating to the Leased Premises and/or
incidental to any and all personal property relating to the Leased Premises.
Notwithstanding any other provision of this Lease, Landlord
will not accept the Basic Purchase Price and the other amounts of money set
forth above, and will not close such purchase option, unless the amount of the
Basic Purchase Price is sufficient to enable Landlord to (1) redeem all of the
Bonds at the then applicable redemption price, and to pay all of Landlord's Bond
Obligations and Landlord's Credit Facility Obligations in connection therewith,
unless, in connection with the purchase of the Leased Premises by Tenant
pursuant to such purchase option, Tenant assumes all of the obligations of
Landlord under the Bond Documents and the Credit Facility Documents, or, in the
alternative, delivers a loan agreement, or similar document, in payment of a
portion of the Basic Purchase Price as set forth above, and (2) to prepay all of
the State Loans in full, including all accrued and unpaid interest thereon, and
to pay all of the Landlord's State Loan Obligations in connection therewith,
unless, and to the extent that, in connection with the purchase of the Leased
Premises by Tenant pursuant to such purchase option, Tenant assumes all of the
obligations of Landlord under the State Loan Documents.
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Concurrently with the closing of such purchase option,
Landlord shall cause the Bond Deed of Trust (if not previously satisfied) to be
released upon the payment by Landlord to the Trustee of the amounts set forth
above, unless Tenant shall have assumed all of the obligations of Landlord under
the Bond Documents and the Credit Facility Documents as set forth above, in
which event the Bond Deed of Trust will not be so released; and Landlord shall
cause the State Loan Deed of Trust (if not previously satisfied) to be released
upon the payment by Landlord to the State of the amounts set forth above, unless
Tenant shall have assumed all of the obligations of Landlord under the State
Loan Documents as set forth above, or, in the alternative, shall have delivered
a loan agreement, or similar document, in payment of a portion of the Basic
Purchase Price, as set forth above, in which event the State Loan Deed of Trust
will not be so released.
Upon the closing of such purchase option and the payment of
all amounts set forth above, Tenant shall be released of all of its obligations
under this Lease; provided, however that any and all obligations and liabilities
of Tenant under this Lease that survive the Term of this Lease (such as
indemnification obligations) shall survive the closing of such purchase option.
(c) In the event Tenant exercises its option to purchase the
Leased Premises from Landlord as set forth above, but fails to close as and when
required as set forth above, such failure shall constitute an Event of Default
under this Lease.
7. Rent.
(a) As used herein, the term "Rent Commencement Date" means
the earlier to occur of (i) the first day of the first month following the date
on which Tenant gives written notice to Landlord, with a copy of such written
notice to the Credit Facility Provider, the State and MIDFA, that Tenant's
beneficial use of the Leased Premises has begun, and (ii) January 1, 1999.
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(b) Tenant covenants to pay to Landlord, on the first day of
each and every calendar month, beginning on the Rent Commencement Date, basic
rent in the amount of $186,376.00 per month, subject to adjustment as set forth
in subparagraph (c) below (such basic rent, as so adjusted from time to time, is
hereinafter referred to as "Basic Rent"). Basic Rent shall be payable to
Landlord by separate check or wire transfer at Landlord's payment addresses set
forth in Exhibit E attached hereto and made a part hereof or at such other place
or bank account within the continental United States or to such other Person as
Landlord from time to time may designate to Tenant in writing, in lawful money
of the United States of America.
(c) Landlord and Tenant acknowledge and agree that the Basic
Rent has been determined based upon a number of factors, which include the
amount of debt service payable by Landlord with respect to the Bonds and the
State Loans and other costs which may fluctuate from time to time. Accordingly,
the Basic Rent shall be adjusted from time to time by Landlord and Tenant to
reflect (i) any redemption of the Bonds prior to maturity and any prepayment of
any of the State Loans prior to maturity, and (ii) the expiration of the Hedge
or any default by the Hedge Counterparty in the performance of its obligations
under the Hedge Documents.
(d) Tenant covenants to pay and discharge, as additional rent,
the following (collectively, the "Additional Rent"):
(i) the amount of any cost or expense required to be
paid by Landlord with respect to or in connection with the acquisition,
construction and financing of the Improvements and the ownership of the
Leased Premises and the leasing of the Leased Premises to Tenant,
including (without limitation), consultants' fees, accounting fees,
legal fees and other expenses relating to any litigation involving the
Leased Premises (except to the extent that Landlord is otherwise
indemnified therefor pursuant to another provision of this Lease),
costs of maintenance, upkeep and repair of the Leased Premises paid for
by Landlord, costs of permits, charges by governmental authorities, and
amounts paid pursuant to any declaration or covenants including the
Restrictive Covenants, and all indemnification obligations of Landlord
to any Person or Persons resulting from or growing out of such
acquisition, construction, financing, ownership and leasing, and any
sales taxes, plus
(ii) all fees and amounts payable by Landlord to any
Person or Persons in connection with the acquisition, construction and
financing of the Improvements, including (without limitation) all
credit facility fees, remarketing
19
fees, insurance premiums payable to MIDFA, common area maintenance fees
or rents or other similar charges relating to the maintenance of the
Leased Premises or any roads or otherimprovements related thereto,
monthly deposits on account of Impositions and insurance premiums, in
the event that Landlord is required to make such monthly deposits on
account of Impositions and insurance premiums, and amounts representing
increases in fees payable to the Rating Agency or to the Trustee or the
Registrar or the Paying Agent pursuant to the Indenture or increases in
the negotiation fee payable to the Credit Facility Provider, and
amounts representing changes in costs resulting from any conversion of
the interest rate payable on the Bonds from a variable rate to one or
more fixed rates or from one or more fixed rates to one or more other
fixed rates or to a variable rate, plus
(iii) to the extent not paid on the Closing Date from
the proceeds of the Bonds, the amounts determined by Landlord to be
sufficient to enable Landlord to make payments of all other monetary
obligations of Landlord under the Bond Documents, the Credit Facility
Documents, the State Loan Documents and the Hedge Documents.
Landlord, as promptly as practicable after obtaining knowledge that any
Additional Rent will be payable under this Lease, will advise Tenant, by written
notice, of the amount of any Additional Rent payable hereunder and the date on
which any Additional Rent is due and payable by Tenant in order for Landlord to
meet its obligations with respect to payments by Landlord to other Persons.
Additional Rent shall be paid to Landlord's payment addresses set forth in
Exhibit E attached hereto. In the event of any failure by Tenant to pay or
discharge any Additional Rent, Landlord shall have all rights, powers and
remedies provided herein or by Law in the case of non-payment of Basic Rent.
Unless otherwise provided herein, all payments of Additional Rent shall be due
on the date specified by Landlord in such written notice as the date on which
such Additional Rent is due and payable.
(e) In the event that any payment of Basic Rent or Additional Rent is
not made within 15 days after the date on which the same is due and payable, any
such payment in default and the entire unpaid balance of all amounts owing to
Landlord shall bear interest, from the date on which the payment was due until
such payment in default is paid in full, at the fluctuating rate which is at all
times equal to the LIBOR Rate plus 3% per annum (the ADefault Rate@). In
addition, Tenant shall pay (i) a late charge equal to 2% of the payment in
default as set forth above (except for any payment with respect to a Bond
Purchase Principal Drawing,
20
as defined in the Indenture) which is made more than 15 days after the date on
which the same is due and payable, and (ii) all costs of collection, including
attorneys= fees, if collection of amounts due to Landlord is referred to an
attorney after default by Tenant.
8. Net Lease; Non-Terminability.
(a) This is a net lease, and Basic Rent, Additional Rent and
all other sums payable by Tenant shall be paid without notice (except as
specifically provided herein) or demand.
(b) Except as expressly provided in this Lease, Tenant shall
not be entitled to any set-off, counterclaim, recoupment, abatement, suspension,
deferment, diminution, deduction, reduction or defense of or to Basic Rent or
Additional Rent or any other sums payable hereunder and the obligations of
Tenant under this Lease shall not be affected, for any reason, including the
following: (i) any damage to or the destruction of all or any part of the Leased
Premises from whatever cause, (ii) the taking of the Leased Premises or any
portion thereof or interest therein by condemnation, requisition or otherwise
for any reason, (iii) the prohibition, limitation or restriction of Tenant's use
of all or any part of the Leased Premises, or any interference with such use,
(iv) any title defect or encumbrance, or any eviction from the Leased Premises
by paramount title or otherwise, (v) Tenant's acquisition or ownership of any
interest in all or any part of the Leased Premises otherwise than pursuant to an
express provision of this Lease, (vi) any failure on the part of Landlord to
observe any provision of this Lease, or any default by Landlord under any other
agreement to which Landlord and Tenant may be parties, (vii) any claim which
Tenant has or might have against Landlord, or (viii) any other cause whether
similar or dissimilar to the foregoing, any present or future Law to the
contrary notwithstanding except by agreement by and among Landlord, Tenant, the
State and the Bank. It is the intention of the parties hereto that the
obligations of Tenant hereunder shall be separate and independent covenants and
agreements, that Basic Rent, Additional Rent and all other sums payable by
Tenant hereunder shall continue to and be payable in all events, and that the
obligations of Tenant hereunder shall continue unaffected, unless the
requirement to pay or perform the same shall have been terminated pursuant to an
express provision of this Lease.
(c) Tenant agrees that it will remain obligated under this Lease
in accordance with its terms, and that it will not take any action to terminate,
rescind or avoid this Lease or abate the rent required hereby, notwithstanding
(i) the bankruptcy, insolvency, reorganization, composition, readjustment,
liquidation, dissolution, winding-up or other proceeding affecting
21
Landlord or any assignee of Landlord in any such proceeding or/and (ii) any
other action (including rejection) with respect to this Lease which may be taken
by any trustee or receiver of Landlord or of any assignee of Landlord in any
such proceeding or by any court in any such proceeding; and, in any such event,
so long as Tenant pays and performs its obligations under this Lease and does
not take any action to terminate, rescind or avoid this Lease or abate the rent
required hereby, Tenant shall be entitled to the benefits of Tenant set forth in
this Lease.
(d) Except as otherwise provided in this Lease, Tenant waives
all rights which may now or hereafter be conferred by law (i) to quit, terminate
or surrender this Lease or (ii) to any abatement, suspension, deferment or
reduction of Basic Rent, Additional Rent or any other sums payable under this
Lease, except as expressly approved by the State and the Credit Facility
Provider or as otherwise expressly provided herein.
(e) Subject to Paragraph 35(f), Tenant and Landlord agree that
the State and the Credit Facility Provider are and shall be third-party
beneficiaries of this Lease and that, as such, the State and the Credit Facility
Provider shall have the right to pursue any right, remedy or performance to
which Landlord shall be entitled pursuant hereto notwithstanding that but for
the provisions of this subparagraph (e), the State and the Credit Facility
Provider may not have had the right to pursue any such right, remedy or
performance.
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9. Payment of Impositions; Compliance with Law and Restrictive
Covenants.
(a) Subject to the provisions of Paragraph 18 relating to
contests, Tenant shall pay all Impositions before any fine, penalty, interest or
cost may be added for non-payment. Tenant agrees to furnish to Landlord, within
30 days after written demand therefor, proof of the payment of all Impositions
payable by Tenant as provided in this Paragraph 9. In the event that any
Imposition becomes due and payable during the Term and may be legally paid in
installments, Tenant shall have the option to pay such Imposition in
installments; and in such event, Tenant shall be liable only for those
installments which become due and payable during the Term, with appropriate
proration in the case of fractional years. Any Impositions which are
attributable in part to the Term and in part to a period preceding or following
the Term, as the case may be, shall be equitably apportioned between Landlord
and Tenant. If Landlord is required pursuant to the Bond Documents or the Credit
Facility Documents or the State Loan Documents to make monthly deposits on
account of Impositions and insurance premiums, and Landlord informs Tenant in
writing thereof specifying the amount of such deposits, Tenant shall pay such
monthly deposits to Landlord, as Additional Rent hereunder as provided in
Paragraph 7 (d).
(b) Tenant shall promptly comply with and conform to all Legal
Requirements concerning the use, occupancy and conditions of the Leased Premises
and all machinery, equipment, furnishings, fixtures and improvements therein. If
any such Legal Requirement requires an occupancy or use permit, license, special
exception, or other local, state or federal agency certification, then Tenant
shall promptly obtain and keep current the same.
(c) Tenant shall comply with all of the Restrictive Covenants.
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10. Liens; Recording and Title; Easements.
(a) Tenant will not, directly or indirectly, create or permit
to remain, and will promptly discharge, at its expense, any mortgage, lien,
encumbrance or charge on, pledge of, or conditional sale or other title
retention agreement with respect to, the Leased Premises or any part thereof or
Tenant's interest therein or Basic Rent, Additional Rent or other sums payable
by Tenant under this Lease, other than Permitted Equipment Liens. The existence
of any mechanic's, laborer's, materialman's, supplier's or vendor's lien, or any
right in respect thereof, shall not constitute a violation of this Paragraph 10
if payment is not yet due upon the contract or for the goods or services in
respect of which any such lien has arisen so long as such payment is made or
bonded off within 30 days after the later to occur of the completion of the work
which gave rise to the imposition of said liens or the rendering of the invoice,
statement or demand for such payment. Nothing contained in this Lease shall be
construed as constituting the consent or request of Landlord, expressed or
implied, of any contractor, subcontractor, laborer, materialman or vendor to or
for the performance of any labor or services or other furnishing of any
materials for any construction, alteration, addition, repair or demolition of or
to the Leased Premises or any part thereof.
(b) At Tenant's request and at Tenant's sole cost and expense,
Landlord and Tenant will execute and deliver a memorandum evidencing Tenant's
option to purchase set forth in Paragraph 6, and shall cause such memorandum to
be recorded, filed or registered in such manner and in such places as may be
required by any present or future Law in order to publish notices and protect
the validity of such option to purchase.
(c) Subject to the terms and conditions of Paragraph 30,
Landlord shall have the right to encumber the Leased Premises, provided that any
such encumbrance (except for the Deeds of Trust and other Credit Facility
Documents and State Loan Documents) shall be made expressly subject to Tenant's
rights under this Lease including the purchase option.
11. Indemnification. Tenant shall pay, protect, indemnify and save
harmless Landlord from and against any and all liabilities, losses, damages,
costs, expenses (including all reasonable attorneys' fees and expenses),
penalties, causes of action, suits, claims, demands or judgments of any nature
whatsoever arising from (i) any injury to, or the death of, any person or any
damage to property on the Leased Premises or upon adjoining sidewalks, streets
or ways, if caused by the negligence of Tenant or its agents or employees, or in
any manner growing out of or connected with the use, failure of use, condition
or
24
occupancy of the Leased Premises or any part thereof or resulting from the
condition thereof, (ii) any violation by Tenant of any covenant, agreement or
condition of this Lease, and (iii) any violation by Tenant of the terms of any
contract or agreement to which Tenant is a party and which affects the Leased
Premises; provided, however, that if any such liability, loss, damage, penalty,
cost or expense, cause of action, suit, claim, demand or judgment results from
the negligence of Landlord, its agents or employees, or if any such act or
omission is determined to be a failure by Landlord to observe any provision of
this Lease (if observance is required of Landlord), the foregoing indemnity by
Tenant shall apply with respect to Landlord only to the extent of the insurance
coverage maintained (or required to be maintained, if greater) by Tenant
pursuant to the provisions of Paragraph 15 of this Lease. In case any action or
proceeding is brought against Landlord by reason of any such claim, Tenant
covenants, upon notice from Landlord, to resist or defend such action or
proceeding by counsel reasonably satisfactory to Landlord, and, at the expense
of Tenant, Landlord will cooperate and assist in the defense of such action or
proceeding if reasonably requested so to do by Tenant.
Tenant also shall pay, protect, indemnify and save harmless Landlord
for all amounts, liabilities, indemnities and obligations which Tenant assumes
or agrees to pay or discharge pursuant to this Lease, as well as any payments or
indemnification made or required to be made by Landlord under the Credit
Facility Documents, the Bond Documents, the State Loan Documents or the Hedge
Documents as a result of Tenant's default hereunder, together with every fine,
penalty, interest and cost which may be added for nonpayment or late payment
thereof.
The obligation of Tenant under this Paragraph 11 shall survive any
termination of this Lease as to any right of indemnity which shall have accrued
prior to such termination.
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12. Tenant's Equipment; Building Equipment; Maintenance and Repair.
(a) Tenant, at its expense, shall install all specialized machinery,
apparatus and equipment which Tenant, in its sole and absolute discretion, deems
necessary to permit the Leased Premises to be used for the Permitted Use
including, without limitation, the Tenant's Equipment described on Exhibit C
attached hereto. All Tenant's Equipment shall remain the property of the lessor
thereof or the property of the Tenant, as applicable, notwithstanding its
attachment to the Leased Premises. At the expiration of the Term, all of
Tenant's Equipment shall remain the property of the lessor thereof or the
property of the Tenant (as applicable) and shall be removed by Tenant or lessor
in accordance with subparagraph (c) below.
(b) Tenant, at its sole cost and expense, will keep and maintain
the Leased Premises, including any altered, rebuilt, additional or substituted
buildings, structures and parts of the Improvements, in good repair and
appearance, except for ordinary wear and tear, and will with reasonable
promptness make all structural and nonstructural, foreseen and unforeseen, and
ordinary and extraordinary changes and repairs of every kind and nature which
may be required to be made upon or in connection with the Leased Premises, the
Building Equipment, or any part thereof; in order to keep and maintain the
Leased Premises and the Building Equipment in such good repair and appearance.
All repairs, replacements and renewals shall be at least equal in quality to the
original work and all replacements shall have a value and useful life at least
equal to the value and remaining estimated useful life of the item being
replaced, and be suitable for a use which is the same or similar to that of the
item being replaced. Landlord shall not be required to maintain, repair or
rebuild, or to make any Alteration to the Leased Premises, the Building
Equipment, or Tenant's Equipment, or any part thereof, whether ordinary or
extraordinary, structural or non-structural, foreseen or unforeseen, or to
maintain the Leased Premises, the Building Equipment, or Tenant's Equipment, or
any part thereof, in any way, and Tenant hereby expressly waives the right to
make repairs at the expense of Landlord, notwithstanding the fact that such
right may be provided for in any Law in effect at the time of the execution and
delivery of this Lease or which may thereafter be enacted.
Notwithstanding anything herein to the contrary, Tenant shall not
be required to replace any Building Equipment during the last 3 years of the
Term, but Tenant, at Tenant's expense, shall keep all Building Equipment in good
working condition throughout the Term.
26
(c) Upon the expiration or earlier termination of this Lease,
Tenant shall surrender the Leased Premises in good condition, reasonable wear
and tear and damage by casualty excepted, with all Building Equipment in good
working condition, and all Tenant's Equipment removed. Any Tenant's Equipment
required to be removed but not removed by Tenant within 30 days after the
expiration or earlier termination of this Lease shall be considered abandoned by
Tenant and may be appropriated, sold, destroyed or otherwise disposed of by
Landlord without first giving notice thereof and without obligation to account
therefor to either Tenant or any lessor of such Tenant's Equipment. Tenant
agrees to pay all costs and expenses incurred in removing, storing and disposing
of Tenant's Equipment required to be removed but not removed. Tenant shall
repair (i.e., replace, restore or repair to a sightly and usable condition), at
its expense, any damage to the Leased Premises caused by removal of Tenant's
Equipment, whether effected by Landlord, Tenant, or Tenant's lessor. Landlord
shall not be responsible for any loss or damage to Tenant's Equipment under any
circumstances. The provisions of this subparagraph (c) are not applicable in the
event that Tenant purchases the Leased Premises as provided in Paragraph 6.
Notwithstanding anything herein to the contrary, Tenant shall not
be required to replace any Building Equipment during the last 3 years of the
Term, but Tenant, at Tenant's expense, shall keep all Building Equipment in good
working condition throughout the Term.
(d) Landlord shall, from time to time upon Tenant's written
request, execute appropriate documents for the benefit of Tenant's lenders or
equipment lessors confirming the provisions of this Paragraph 12 and containing
such further undertakings of Landlord concerning the right of any such lender or
lessor to enter the Leased Premises following termination of this Lease for the
purpose of exercising its rights with respect to the collateral of such lender
or lessor, including removing the same, provided such further undertakings are
on commercially reasonable terms and conditions and require such lender or
lessor to repair any damage to the Leased Premises caused by the removal of
Tenant's Equipment.
27
13. Alterations.
(a) So long as no Event of Default or event which, with the
giving of notice, the lapse of time, or both, would constitute an Event of
Default shall have occurred and be continuing, Tenant may, at its expense, make
Alterations, subject to the advance written consent of Landlord and subject to
the Deeds of Trust provided that the consent of Landlord shall not be required
for non-structural Alterations which do not involve the exterior of the building
or changes in utilities, electrical, mechanical or other existing systems and
which as in each separate Alteration do not exceed $500,000 in cost. Landlord
agrees not to withhold, delay or condition its consent provided that (i) all
such Alterations, construction and installations shall be performed in a good
and workmanlike manner; (ii) all such Alterations, construction and
installations shall be expeditiously completed in compliance with all Legal
Requirements; (iii) all work done in connection with any such Alterations,
construction or installation shall comply with the requirements of any insurance
policy required to be maintained by Tenant hereunder; (iv) Tenant shall promptly
pay all costs and expenses of any such Alteration, construction or installation
and shall discharge all liens filed against any of the Leased Premises arising,
out of the same; (v) Tenant shall procure and pay for all permits and licenses
required in connection with any such Alteration, construction or installation;
(vi) all such Alterations, construction and installations (except as provided in
subparagraph 13(c) below) shall be the property of Landlord and shall be subject
to this Lease; (vii) the design of any Alterations visible from the exterior of
the Leased Premises shall comply with the terms of the Restrictive Covenants
(including obtaining any consents required thereunder); (viii) the contractor
performing such alterations shall be reputable, licensed and insured and shall,
if required by Landlord, be required to obtain performance and payment bonds;
and (ix) Landlord shall incur no expense or cost whatsoever in connection with
such Alterations, including without limitation, costs for reviewing and
approving plans, additional common area maintenance fees, tap fees or other
utility fees, and costs incurred by Landlord in obtaining the approval of the
Credit Facility Provider and the State. Landlord may require, as a condition to
its consent to any Alterations, reasonable appropriate payments, assurances and
undertakings from Tenant to ensure that all such conditions are satisfied.
Notwithstanding the foregoing, it shall not be unreasonable for Landlord to
withhold its consent, or to condition its consent, if either of the
Beneficiaries withholds its consent to any of the foregoing, or requires that
certain conditions or requirements be satisfied or observed.
(b) In the event that any Alterations shall encroach
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upon any property, street or right-of-way adjoining or adjacent to the Leased
Premises, or shall violate the agreements or conditions contained in any
restrictive covenant affecting the Leased Premises or any part thereof, or shall
hinder or obstruct any easement or right-of-way to which the Leased Premises are
subject or shall impair the rights of others under any such easement or
right-of-way, then promptly after written request of Landlord or of any Person
affected by any such encroachment, violation, hindrance, obstruction or
impairment, Tenant shall, at its expense, either (i) obtain valid and effective
waivers or settlements of all claims, liabilities and damages resulting from
each such encroachment, violation, hindrance, obstruction or impairment, whether
the same shall affect Landlord, Tenant or both, or (ii) take such other action
as shall be necessary to remove such encroachments, hindrances or obstructions
and to end such violations or impairments.
(c) All Tenant improvements that can be removed without damage to
the structural integrity of the Leased Premises or the normal functions of the
Leased Premises or that are not necessary for the normal use of a building as a
tenantable shell building, and which were not financed with the proceeds of the
Bonds or the State Loans, shall, on termination of this Lease, become the
property of the Tenant.
14. Condemnation.
(a) Tenant, immediately upon obtaining knowledge of the
institution of any proceeding for any condemnation of the Leased Premises, shall
notify Landlord thereof and Landlord shall be entitled to participate with
Tenant in any condemnation proceeding at Tenant's expense. Tenant hereby
irrevocably assigns to Landlord any condemnation award or condemnation payment
to which Tenant may be or become entitled (except as set forth in subparagraph
(b) below) by reason of any taking of the Leased Premises or any part thereof,
in or by condemnation or other eminent domain proceedings pursuant to any Law,
or by reason of the temporary requisition of the use or occupancy of the Leased
Premises or any part thereof, by any governmental authority, civil or military,
whether the same shall be paid or payable in respect of Tenant's leasehold
interest hereunder or otherwise. The proceeds of the condemnation award shall be
made available for restoration if permitted by the Deeds of Trust and if this
Lease is not terminated. As used herein, the term "Net Award" means any
condemnation award received by Landlord, less Landlord's expenses and Tenant's
expenses, if any, in collecting same.
(b) The foregoing notwithstanding, nothing in this Lease shall
impair Tenant's right to any award or payment on account of Tenant's trade
fixtures, Tenant's Equipment, and other
29
tangible property, moving expenses, loss of business and the like, if available,
to the extent Tenant shall have a right to make a separate claim therefor
against the appropriate governmental authority, but in no event shall any such
separate claim be based upon the value of Tenant's leasehold interest in the
Leased Premises or result in a reduction of the award or payment which would
have been payable to Landlord absent such separate claim by Tenant.
(c) If there shall be taken by condemnation or other eminent
domain proceedings pursuant to any Law, general or special, (i) the entire
Leased Premises or (ii) any substantial portion of the Leased Premises which is
sufficient to render the remaining portion thereof, in the reasonable judgment
of Landlord or Tenant, unsuitable for restoration for the continued use and
occupancy of Tenant's business, or (iii) if the Credit Facility Provider or the
State shall retain any Net Award pursuant to the Deeds of Trust (it being
recognized that as a result thereof, either of the Beneficiaries may refuse to
allow the award to be disbursed for restoration under certain circumstances, as
provided in the Deeds of Trust), then Landlord and Tenant may each, not later
than 90 days after any such taking, give notice to the other of its intention to
terminate this Lease on any Basic Rent Payment Date specified in such notice,
which date shall not be prior to the date of the vesting of title to the Leased
Premises or portion thereof in the condemning authority. In the event Landlord
elects to terminate this Lease in the case of (ii) or (iii) above, if Tenant
elects to provide funds which, together with the Net Award, are sufficient to
restore the Leased Premises and pay Basic Rent and Additional Rent during such
restoration and provides evidence satisfactory to Landlord, the State and the
Credit Facility Provider (in the Credit Facility Provider's and the State's sole
and absolute subjective judgment) of its ability to do so within 30 days of
Landlord's election, Landlord's election to terminate shall be rescinded, this
Lease shall continue in full force and effect pursuant to subsection (d) below,
and restoration of the Leased Premises shall proceed in accordance with
Paragraph 16(b). In the event either Landlord or Tenant elects to terminate this
Lease under the provisions of this Paragraph 14(c), Landlord shall be entitled
to recover from Tenant, and Tenant will pay to Landlord, on or prior to the
effective date of termination, an amount equal to the Basic Rent, Additional
Rent and other sums which are then due and payable to the effective date of
termination; provided that in the event of such termination, Tenant may exercise
its purchase option under Paragraph 6(b) within 20 days after notice of
termination.
(d) If a portion of the Leased Premises shall be taken in or by
condemnation or other eminent domain proceedings pursuant to any Law, general or
special, which does not result in a
30
termination of this Lease, then this Lease shall continue in full force and
effect, and there shall be no abatement or reduction of rent payable hereunder,
except to the extent that any portion of the Net Award is used to redeem Bonds
or to prepay the State Loans prior to maturity. Unless Tenant immediately elects
to exercise its purchase option under Paragraph 6 above, subject to the
provisions of the Deeds of Trust, the Net Award of such condemnation shall be
paid to Landlord and, promptly after such condemnation and payment to Landlord
of the Net Award, Landlord shall make the Net Award available to Tenant for
restoration, in accordance with Paragraph 16.
(e) For the purposes of this Lease, all amounts payable pursuant
to any agreement with any condemning authority which has been made in settlement
of or under threat of any condemnation or other eminent domain proceeding
affecting the Leased Premises shall be deemed to constitute an award made in
such proceeding.
15. Insurance.
(a) Tenant will maintain at its expense (i) such fire, casualty,
extended coverage and all risk insurance on the Improvements and Building
Equipment as is required to be maintained by Landlord, as Grantor under the
Deeds of Trust, provided that the amount of any casualty insurance shall be in
no event less than the actual replacement value of the Improvements and Building
Equipment, less footings, foundations and other non-insurable portions, (ii)
commercial general public liability insurance with a single limit of not less
than $10,000,000, including contractual liability coverage insuring the
obligations assumed by Tenant under this Lease, premises and operations
coverage, broad form property damage coverage and independent contractors
coverage, (iii) worker's compensation insurance as required by Law, (iv)
business interruption insurance in the amount of $4,500,000, and (v) employer's
liability insurance in an amount not less than $2,000,000 for each accident,
$2,000,000 disease- policy limit and $2,000,000 disease-each employee.
(b) The insurance referred to in Paragraph 15(a) shall be written
by companies of recognized financial standing which are authorized to conduct an
insurance business in the State of Maryland and which are reasonably acceptable
to Landlord, the Credit Facility Provider, MIDFA and the State. All commercial
public liability insurance shall name as the insured parties thereunder
Landlord, Tenant, MIDFA, the State and the Credit Facility Provider, as their
interests may appear. Landlord shall not be required to prosecute any claim
against, or to contest any settlement proposed by, any insurer, provided that
Tenant may, at its expense, prosecute any such claim or contest any such
31
settlement. In such event, Tenant may bring such prosecution or contest in the
name of Landlord, Tenant, or both, and Landlord will join therein at Tenant's
written request upon the receipt by Landlord of a satisfactory indemnity from
Tenant against all costs, liabilities and expenses in connection with such
prosecution or contest.
(c) So long as no Event of Default exists hereunder, insurance
claims by reason of damage to or destruction of any portion of the Leased
Premises shall be adjusted by Tenant, but Landlord, the State and the Credit
Facility Provider shall have the right to join with Tenant in adjusting any such
loss. In furtherance of Tenant's right to adjust, collect and compromise, in its
discretion, all claims under any of the insurance policies required by this
Paragraph 15, Tenant is authorized to execute and deliver all necessary proofs
of loss, receipts, vouchers and releases required by the insurers.
(d) Every fire, casualty, extended coverage or all risk
insurance policy required above (other than on Tenant's Equipment) shall contain
a non-contributory mortgagee endorsement in favor of Landlord, the Credit
Facility Provider, the State and MIDFA. Every policy which Tenant is obligated
to carry under the terms of Paragraph 15(a) shall contain an agreement by the
insurer that it will not cancel such policy except after 30 days' prior written
notice to Landlord, the Credit Facility Provider, the State and MIDFA, and that
any loss otherwise payable thereunder shall be payable notwithstanding any act
or negligence of Landlord or Tenant which might, absent such agreement, result
in a forfeiture of all or a part of such insurance payment and notwithstanding
any foreclosure or other action or proceeding taken by either of the
Beneficiaries pursuant to any provision of the Deeds of Trust upon the happening
of an Event of Default, as defined therein, or any change in title or ownership
of the Leased Premises.
(e) Any and all insurance which Tenant is obligated to carry
pursuant to Paragraph 15(a) may be carried under a "blanket" policy or policies
covering other properties or liabilities of Tenant and may be effected by a
combination of basic and excess or umbrella policies, provided, that such
"blanket" policy or policies otherwise comply with the provisions of this
Paragraph 15. The amount of total insurance allocated to the Leased Premises,
which amount shall not be less than the amounts required pursuant to this
Paragraph 15, shall be specified either (i) in each such "blanket" policy or
(ii) in a written statement, which Tenant shall deliver to landlord from the
insurer thereunder.
(f) Tenant shall promptly comply with and conform to (i) all
provisions of each insurance policy and (ii) all
32
requirements of the insurers thereunder, applicable to Landlord, MIDFA, the
Credit Facility Provider, the State, Tenant or the Leased Premises or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration or
repair of the Leased Premises, even if such compliance necessitates structural
changes or improvements or results in interference with the use or enjoyment of
any of the Leased Premises. Tenant shall not use the Leased Premises in any
manner which would permit the insurer to cancel any insurance policy unless
Tenant obtains, prior to such cancellation, substitute insurance in accordance
with the provisions of this Paragraph 15 which permits such use of the Leased
Premises.
(g) Any loss under any policy of casualty insurance required to
be carried by Landlord or Tenant hereunder (other than on Tenant's Equipment)
shall be made payable to the Credit Facility Provider or, if references to the
Credit Facility Provider shall be ineffective as provided in Paragraph 35(f), to
the State as long as the State Loans are outstanding, and then to such other
party as the Landlord may designate (in any such case, the "Insurance and Award
Trustee") and each casualty insurer shall be authorized and directed to make
payment under said policies directly to the Insurance and Award Trustee for
disbursement in accordance with the provisions of first, the Bond Deed of Trust
second, the State Loan Deed of Trust, and third, this Lease. As used herein, the
term "Net Proceeds" means any casualty insurance proceeds received by Landlord,
less Landlord's expenses and Tenant's expenses, if any, in collecting same. The
term "Net Proceeds" shall not include proceeds of insurance on Tenant's
Equipment, which proceeds shall be paid directly to Tenant or the lessor of such
Tenant's Equipment.
(h) Tenant shall not carry separate insurance concurrent in form
or continuing in the event of loss with that required in this Paragraph 15
unless (i) Landlord, MIDFA, the State and the Credit Facility Provider are
included therein as named insureds, with lender's loss payable endorsements as
provided herein, and (ii) such separate insurance complies with the other
provisions of this Paragraph 15. Tenant shall immediately notify Landlord,
MIDFA, the State and the Credit Facility Provider of such separate insurance and
shall deliver to Landlord, MIDFA, the State and the Credit Facility Provider
duplicate original policies therefor. Notwithstanding the foregoing, Tenant may
maintain insurance to compensate Tenant for loss of use of the Improvements.
33
16. Casualty and Restoration.
(a) In the event of any casualty resulting in damage to the
Leased Premises, including any casualty which renders the entire Leased Premises
or a substantial portion thereof unsuitable for continued use, this Lease shall
continue in full force and effect and there shall be no abatement or reduction
of rent payable hereunder.
(b) Until such time as the Deeds of Trust shall have been
released and discharged, any Net Proceeds and any Net Award shall be applied
either to the restoration or replacement of the property that was lost or to the
redemption of Bonds and payment of the State Loans, as provided in the Deeds of
Trust.
(c) Unless there shall have occurred and be continuing an Event
of Default hereunder pursuant to which Landlord is taking action to take
possession of the Leased Premises or to terminate this Lease, or the Net
Proceeds or the Net Award are to be used as directed by either of the
Beneficiaries as provided in the Deeds of Trust, Landlord shall cause the Net
Proceeds or Net Award to be held by the Insurance and Award Trustee in a
restoration fund which shall be disbursed as follows:
(i) If the estimated cost of restoration is less than
$100,000, and if prior to commencement of restoration, no Event of Default or
event which would constitute an Event of Default pursuant to which Landlord is
taking action to take possession of the Leased Premises or to terminate this
Lease shall exist and no mechanics' or materialmen's liens shall have been filed
and remain undischarged, and if the architects, contracts, contractors, plans
and specifications for the restoration shall have been approved by Landlord
(which approval shall not be unreasonably withheld or delayed), and Landlord
shall be provided with reasonable assurance against mechanics' liens, accrued or
incurred, as Landlord may reasonably require, and acceptable performance and
payment bonds reasonably acceptable to Landlord in an amount and form having a
surety reasonably acceptable to Landlord, and naming Landlord, the Credit
Facility Provider, MIDFA and the State each as additional obligees; then such
proceeds shall be payable to Landlord and made available to Tenant for
application to pay the costs of restoration incurred by Tenant and Tenant shall
promptly complete such restoration.
(ii) If the estimated cost of restoration is equal to or
exceeds $100,000, and if the conditions set forth in subparagraph (i) above
shall have been satisfied, and if Tenant provides evidence satisfactory to
Landlord, the Credit Facility Provider, MIDFA and the State that sufficient
funds are available to restore the Leased Premises, disbursements shall be made
from
34
time to time in an amount not exceeding the cost of the work completed since the
date covered by the last disbursement, upon receipt of (A) satisfactory
evidence, including architect's certificates, of the stage of completion, of the
estimated cost of completion and of performance of the work to date in a good
and workmanlike manner in accordance with the contracts, plans and
specifications, (B) waivers of liens, (C) contractors' and subcontractors' sworn
statements, (D) a satisfactory bring-to-date of title insurance, and (E) other
evidence of cost and payment so that Landlord can verify that the amounts
disbursed from time to time are represented by work that is completed, in place
and free and clear of mechanics' lien claims.
(iii) Each request for disbursement shall be accompanied by a
certificate of Tenant, signed by the President or any Vice President thereof,
describing the work for which payment is requested, stating the cost incurred in
connection therewith and stating that Tenant has not previously received payment
for such work; the certificate to be delivered by Tenant upon completion of the
work shall, in addition, state that the work has been completed and complies
with the applicable requirements of this Lease.
(iv) Landlord may retain 10% of each requisition against the
restoration fund until the restoration is fully completed subject to reduction
of the retained amount upon approval by the Credit Facility Provider in
accordance with local custom;
(v) The restoration fund shall be invested in an interest
bearing account of the Insurance and Award Trustee;
(vi) At all times the undisbursed balance of the restoration
fund shall be not less than the cost of completing the restoration work free and
clear of all liens; and
(vii) Landlord may impose other reasonable conditions provided
the same are consistent with those imposed upon such disbursements by either of
the Beneficiaries under the Deeds of Trust. In addition, prior to commencement
of restoration and at any time during restoration, if the estimated cost of
restoration, as determined by the evaluation of an independent engineer
acceptable to Landlord, exceeds the amount of the Net Proceeds or the Net Award
available for such restoration, Tenant will provide evidence satisfactory to
Landlord that the amount of such excess will be available to restore the Leased
Premises. Any sum which remains in the restoration fund upon completion of
restoration shall be refunded to Tenant up to the amount of Tenant's deposits
pursuant to the immediately preceding sentence. If no such refund is required or
any sum remains in the
35
restoration fund after such refund, such sum remaining in the restoration fund
(including the residue of any Net Award in a condemnation remaining after
restoration) upon completion of restoration shall be applied (x) during any
period in which the Credit Facility is in effect, to the Landlord's
reimbursement obligations to the Credit Facility Provider to the extent of any
drawings honored by the Bank to pay the redemption price of Bonds redeemed in
accordance with Section 3.1(b) of the Indenture or to pay the purchase price of
Bonds purchased pursuant to Section 4.4 of the Indenture or (y) during any
period in which any Bonds are outstanding, to the redemption of Bonds in
accordance with Section 3.1(b) of the Indenture or to the purchase of Bonds as
set forth in Section 4.4 of the Indenture. During any period in which any Bonds
are outstanding, any sums remaining in an amount less than the minimum
Authorized Denomination (as defined in the Indenture) shall be deposited in the
Principal Account (as defined in the Indenture). If no Bonds are outstanding,
and the Credit Facility Agreement is still in effect, such remaining sum shall
be applied to the Landlord's Credit Facility Obligations under the Credit
Facility Documents. If no Bonds are outstanding and the Credit Facility
Agreement is no longer in effect, such remaining sum shall be distributed to the
State for repayment of the State Loans and then to Landlord and Tenant in
proportion to the value of each party's interest in the Leased Premises as
determined by mutual agreement.
(d) Tenant shall be solely responsible for the replacement
and/or repair of any of Tenant's Equipment damaged by casualty.
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17. Assignment and Subletting.
(a) Provided no Event of Default or event which, with the
giving of notice or the lapse of time or both, would constitute an Event of
Default, shall have occurred and be continuing, with prior notice to Landlord,
Tenant may sublet all or any part of the Leased Premises to an Affiliate, or
assign this Lease to an Affiliate, which Affiliate will use the Leased Premises
for the Permitted Use. Provided no Event of Default or event which, with the
giving of notice or the lapse of time or both, would constitute an Event of
Default, shall have occurred and be continuing, with the consent of Landlord,
(which consent shall not be unreasonably withheld) Tenant may sublet all or any
part of the Leased Premises to a Person which is not an Affiliate, or assign
this Lease to a Person which is not a Affiliate, which Person will use the
Leased Premises for the Permitted Use. Notwithstanding the foregoing, in any
instance in which Landlord may not unreasonably withhold its consent, it shall
not be unreasonable for Landlord to withhold its consent, or to condition its
consent, if the Credit Facility Provider, MIDFA or the State withholds its
consent to any assignment or subletting, or requires that certain conditions or
requirements be satisfied or observed. Tenant shall give Landlord at least 30
days' advance written notice of its intention to enter into any transaction
governed by this Paragraph 17, together with such information as Landlord, the
Credit Facility Provider, MIDFA or the State may reasonably request concerning
the business and financial background of the proposed subtenant or assignee.
Within 10 days after the execution and delivery of any assignment or sublease
permitted pursuant to this Paragraph 17, Tenant shall deliver a conformed copy
thereof to Landlord, and within 10 days after the execution and delivery of any
permitted sublease, Tenant shall give notice to Landlord of the existence and
term thereof, and of the name and address of the sublessee thereunder.
(b) If Tenant assigns all its rights and interests under this
Lease, the assignee under such assignment shall expressly assume all the
obligations of Tenant hereunder in a written instrument delivered to Landlord at
the time of such assignment. No assignment or sublease shall affect or reduce
any of the obligations of Tenant hereunder, and all such obligations shall
continue in full effect as obligations of a principal and not as obligations of
a guarantor or surety, to the same extent as though no assignment or subletting
had been made. No assignment or sublease shall impose any obligations on
Landlord beyond those of Landlord under this Lease or otherwise affect any of
the rights of Landlord under this Lease. Any assignment or subletting,
Landlord's consent thereto, or Landlord's collection or acceptance of rent from
any assignee or subtenant shall not be construed either as waiving or releasing
Tenant from any of its liabilities
37
or obligations under this Lease, or as relieving Tenant or any assignee or
subtenant from the obligation of obtaining Landlord's prior written consent to
any subsequent assignment or subletting.
(c) Upon the occurrence of an Event of Default under this
Lease, Landlord shall have the right to collect and enjoy all rents and other
sums of money payable under any sublease of any of the Leased Premises, and
Tenant hereby irrevocably and unconditionally assigns such rents and money to
Landlord, which assignment may be exercised upon and after (but not before) the
occurrence of an Event of Default. From and after the date, if any, that such
Event of Default is cured, such rents shall again become payable to Tenant and
the excess, if any, of the sublease rents collected by Landlord over the amount
thereof applied toward Tenant's obligations under this Lease shall be paid to
Tenant.
(d) All restrictions and obligations imposed pursuant to this
Lease on Tenant shall be deemed to extend to any subtenant or assignee, and
Tenant shall cause such Person to comply with such restrictions and obligations.
Each sublease is subject to the condition that if the Term is terminated or
Landlord succeeds to Tenant's interest in the Leased Premises by voluntary
surrender or otherwise, at Landlord's option the subtenant shall be bound to
Landlord for the balance of the term of such sublease and shall attorn to and
recognize Landlord as its landlord under the then executory terms of such
sublease.
18. Permitted Contests. Notwithstanding any other provision of this
Lease to the contrary, Tenant shall not be required to (i) pay any Imposition,
or (ii) discharge or remove any lien, encumbrance or charge referred to in
Paragraph 10 or 12, so long as Tenant shall contest, in good faith and at its
expense, the existence, the amount or the validity thereof, the amount of the
damages caused thereby, or the extent of its liability therefor, by appropriate
proceedings, provided that such contest shall operate at all times during the
pendency thereof to prevent (i) the collection of, or other realization upon,
the sums payable to satisfy any Imposition or lien, encumbrance or other charge
so contested, (ii) the sale, forfeiture or loss of the Leased Premises, or any
part thereof, or any interest therein or Basic Rent or any Additional Rent, or
any portion thereof, (iii) any interference with the use or occupancy of the
Leased Premises or any part thereof, (iv) any interference with the payment of
Basic Rent or any Additional Rent, or any portion thereof, (v) the cancellation
of any fire or other insurance policy, unless such policy is replaced prior to
its cancellation by another policy complying with the provisions of this Lease,
and (vi) the imposition of any civil or criminal liability upon Landlord. While
any such proceedings are pending, Landlord shall not have the right to pay,
remove or cause to be discharged the tax,
38
assessment, levy, fee, rent or charge or lien, encumbrance or charge thereby
being contested, provided that Landlord shall have the right to require Tenant
to establish reasonable reserves for such liabilities being contested if the
Landlord reasonably determines such reserves to be necessary. Tenant further
agrees to give Landlord prompt notice of Tenant's intention to contest any
Imposition and that each such contest shall be promptly prosecuted to a final
conclusion. Tenant will pay, and save Landlord harmless against, any and all
losses, judgments, decrees and costs (including all reasonable attorneys' fees
and expenses) in connection with any such contest and will, promptly after the
final settlement, compromise or determination of such contest, fully pay and
discharge the amounts which shall be levied, assessed, charged or imposed or be
determined to be payable therein or in connection therewith, together with all
penalties, fines, interests, costs and expenses thereof or in connection
therewith, and perform all acts the performance of which shall be ordered or
decreed as a result thereof.
19. Default Provisions.
(a) Any of the following occurrences or acts shall constitute
an Event of Default under this Lease:
(i) Tenant fails to pay, within 5 days after notice
from Landlord to Tenant, any installment of Basic Rent.
(ii) Tenant fails to pay any payment of Additional
Rent, or any other payment required to be paid by Tenant hereunder, including,
without limitation, payment of Impositions and insurance premiums, and such
failure continues for 30 days after written notice thereof shall have been given
to Tenant by Landlord.
(iii) Tenant fails to observe or perform any other
provision hereof for 30 days (or such shorter period of time as Landlord may
reasonably determine if such default endangers life or property) after Landlord
shall have delivered to Tenant written notice (except in the case of an
emergency) of such failure (provided that, in the case of any default referred
to in this clause (iii) which does not endanger life or property and which
cannot with diligence be cured within such 30 day period, if Tenant shall
proceed promptly to cure the same and thereafter shall prosecute the curing of
such default with diligence, then upon receipt by Landlord of a certificate from
an authorized officer of Tenant stating the reason that such default cannot be
cured within 30 days and stating that Tenant is proceeding with diligence to
cure such default, the time within which such failure may be cured shall be
extended for such additional period as may be necessary to complete the curing
of the same with diligence.
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(iv) An Act of Bankruptcy occurs with respect to
Tenant, or Tenant becomes generally unable to pay its debts as they become due;
provided, however, if a proceeding with respect to an Act of Bankruptcy is filed
or commenced against Tenant, the same shall not constitute an Event of Default
if such proceeding is dismissed within 90 days from the date of such Act of
Bankruptcy.
(v) Default is made (A) with respect to any evidence
of indebtedness of liability for borrowed money of Tenant to the Credit Facility
Provider, or (B) with respect to any evidence of indebtedness or liability of
Tenant to any other Person for borrowed money or pursuant to a lease obligation,
if the effect of such default described in clause (A) or (B) above is to
accelerate the maturity of such evidence of indebtedness or liability prior to
its stated maturity (whether automatically, following an election by the holder
or obligee thereof to accelerate, or otherwise) or any such indebtedness is not
paid as and when due and payable; provided, however, that it shall not
constitute an Event of Default if the outstanding principal balance of such
indebtedness or liability of Tenant to any Person other than the Credit Facility
Provider or the State is not in excess of $1,000,000 or Tenant certifies to the
Credit Facility Provider, the State and MIDFA that it is contesting such default
in good faith and by appropriate and diligent proceedings.
(vi) Any amendment to this Lease shall have been made
without the prior written consent of the Credit Facility Provider, the State and
MIDFA, which consent shall not be unreasonably withheld, conditioned or delayed,
and, except for material changes which would require the consent or approval of
the State Board of Public Works or the State Legislative Policy Committee, which
consent shall be deemed given by the Credit Facility Provider, the State or
MIDFA if the Credit Facility Provider, the State or MIDFA does not object to any
proposed amendment within 15 business days after the receipt thereof by the
Credit Facility Provider, the State or MIDFA.
(vii) Tenant abandons the Leased Premises.
(viii) The interest of Tenant in the Leased Premises
or any part thereof shall be assigned or subleased in violation of Paragraph 17,
or shall be levied upon or attached in any proceeding involving a claim in
excess of $1,000,000 and such proceeding is not vacated, discharged or bonded
against to the reasonable satisfaction of Landlord, the Credit Facility
Provider, the State and MIDFA within 30 days thereafter.
(ix) Any representation or warranty made by Tenant
40
or its representatives in this Lease or any of the Lease Documents executed and
delivered by Tenant or any statement or representation made by Tenant or its
representatives in any certificate, report or opinion (including legal opinions)
financial statement or other instrument furnished in connection with this Lease
or any of the Lease Documents executed and delivered by Tenant proves to have
been incorrect, false or misleading in any material respect when made.
(x) Any judgment against Tenant or any attachment or
other levy against the property of Tenant with respect to a claim for an amount
in excess of $1,000,000 remains unpaid, unstayed on appeal, undischarged,
unbonded or undismissed for a period of 60 days.
(xi) Tenant fails to comply with any material
requirement of any governmental authority having jurisdiction over the Leased
Premises within the time required by such governmental authority; or any
proceeding is commenced or action taken to enforce any remedy for a violation of
any material requirement of a governmental authority or any restrictive covenant
affecting the Leased Premises or any part thereof; provided, however, it shall
not constitute an Event of Default if Tenant is contesting the validity or
applicability of any such requirement or covenant, at its sole cost and expense,
in good faith and by appropriate and diligent proceedings.
(xii) If any material provision of this Lease at any
time for any reason ceases to be valid and binding on Tenant, or is declared to
be null and void, or the validity or enforceability thereof is contested by
Tenant or any governmental agency or authority, or Tenant denies that it has any
further liability or obligation under this Lease or any of the Lease Documents
executed and delivered by Tenant.
(xiii) Landlord, the Credit Facility Provider, the
State or MIDFA, or any of their respective representatives are not permitted, at
all reasonable times (after at least 48 hours prior written notice to Tenant,
unless an Event of Default shall have occurred and be continuing in which event
notice will not be required), to enter upon the Leased Premises, to inspect the
Leased Premises and all materials, equipment, fixtures and other items used or
to be used in the construction thereof, and to examine all detailed plans, shop
drawings and specifications which relate to or the appurtenances thereto or to
be used in the operation thereof, provided, however, any person conducting such
inspection shall comply with Tenant's safety and operating policies and
procedures.
(b) If an Event of Default shall have happened and be
41
continuing, Landlord shall have the right at its election, then or at any time
thereafter while such Event of Default shall continue, to give Tenant written
notice of Landlord's intention to terminate this Lease on a date specified in
such notice (such termination being hereinafter referred to as a "Default
Termination" and such notice being hereinafter referred to as a "Default
Termination Notice"). Upon giving a Default Termination Notice, the Term and the
estate hereby granted shall terminate on the date specified in the Default
Termination Notice as fully and completely and with the same effect as if such
date were the date hereinbefore fixed for the expiration of the Term, and all
rights of Tenant hereunder shall terminate, but Tenant shall remain liable as
hereinafter provided. Notwithstanding the foregoing, no Default Termination
Notice shall be effective unless it is also executed by the Credit Facility
Provider and the State and MIDFA.
(c) If an Event of Default shall have happened and be
continuing, Landlord shall have the immediate right, whether or not the Term
shall have been terminated pursuant to Paragraph 19(b), to re-enter and
repossess the Leased Premises or any part thereof by force (if legally permitted
in the State of Maryland), summary proceedings, ejectment or otherwise and the
right (subject to the rights and interests of equipment lessors) to remove all
Persons and property therefrom. Landlord shall be under no liability for or by
reason of any such entry, repossession or removal. No such re-entry or taking of
possession of the Leased Premises by Landlord shall be construed as an election
on Landlord's part to terminate this Lease unless a Default Termination Notice
shall have been given to Tenant, or unless the termination of this Lease be
finally decreed by a court of competent jurisdiction.
(d) At any time or from time to time after the repossession of
the Leased Premises or any part thereof pursuant to Paragraph 19(c), whether or
not this Lease shall have been terminated pursuant to Paragraph 19(b), Landlord
shall use reasonable efforts to relet the Leased Premises or any part thereof
for the account of Tenant or Landlord or otherwise, without notice to Tenant,
for such term or terms and on such conditions (which may include concessions of
free rent) and for such uses as Landlord, in its absolute discretion, may
determine, and Landlord may collect and receive any rents payable by reason of
such reletting. Landlord shall not be responsible or liable for any failure to
relet the Leased Premises or any part thereof or for any failure to collect any
rent due upon any such reletting.
(e) In the event of the termination of this Lease upon an
Event of Default or repossession of the Leased Premises or any part thereof
pursuant to Paragraph 19(c) or otherwise, or the
42
reletting of the Leased Premises or any part thereof pursuant to Paragraph
19(d), Tenant shall remain liable as hereinafter provided.
(f) In the event of any Default Termination or repossession of
the Leased Premises or any part thereof by reason of the occurrence of an Event
of Default, Tenant will pay to Landlord Basic Rent, Additional Rent and other
sums required to be paid by Tenant to and including the date of such termination
or repossession (including, without limitation, the amount of all sums which
have become due and payable by Landlord under the Credit Facility Documents and
the Bond Documents and the State Loan Documents); and, thereafter, Tenant shall,
until the end of what would have been the Term in the absence of such
termination or repossession, and whether or not the Leased Premises or any part
thereof shall have been relet, be liable to Landlord for, and shall pay to
Landlord, as liquidated and agreed current damages on each Basic Rent Payment
Date and on any other date when due and payable: (i) Basic Rent, Additional Rent
and other sums which would be payable under this Lease by Tenant in the absence
of such termination or repossession, less (ii) the net proceeds, if any, of any
reletting effected for the account of Tenant pursuant to Paragraph 19(d), after
deducting from such proceeds all Landlord's expenses in connection with such
reletting (including, without limitation, all repossession costs, brokerage
commissions, legal expenses, attorneys' fees, employees' expenses, alteration
costs and expenses of preparation for such reletting). Tenant will pay such
current damages on the days on which Basic Rent would have been payable under
this Lease in the absence of such termination or repossession, and Landlord
shall be entitled to recover the same from Tenant on each such day.
(g) At any time after a Default Termination, Landlord shall be
entitled to recover from Tenant, and Tenant will pay to Landlord within 120 days
of demand therefor, an amount equal to Basic Rent, Additional Rent and other
sums which would be payable under this Lease, from the date to which Tenant
shall have satisfied in full its obligations under Paragraph 19(f) to pay
current damages, to the end of the remaining Term of this Lease in the absence
of such termination (assuming, in computing the amount of Basic Rent that would
have been due under Paragraph 7, an interest rate which is equal to the rate
applicable to such obligations on the date the Default Termination Notice is
issued "the "Assumed Rate"), discounted at the Assumed Rate, or such lower rate
as shall be necessary to provide that the sum payable by Tenant hereunder shall
satisfy in full the sum of (I) all Landlord's Credit Facility Obligations" and
"Landlord's Bond Obligations" and the Landlord's State Loan Obligations accrued
through the date of the payment due under this Paragraph 19(g), including
without limitation, all accrued fees, costs and expenses
43
payable to the Trustee, Remarketing Agent, Rating Agency, Credit Facility
Provider, plus (II) all costs and expenses (including reasonable attorneys fees
and expenses) of the Credit Facility Provider, Landlord, MIDFA and the State in
connection with such Default Termination.
(h) The words "enter", "re-enter" or "re-entry", as used in
this Paragraph 19, are not restricted to their technical meaning.
20. Additional Rights of Landlord.
(a) No right or remedy herein conferred upon or reserved to
Landlord is intended to be exclusive of any other right or remedy given
hereunder or now or hereafter existing at Law or in equity. The failure of
either party to insist at any time upon the strict performance of any covenant
or agreement or to exercise any option, right, power or remedy contained in this
Lease shall not be construed as a waiver or a relinquishment thereof for the
future. A receipt by Landlord of any Basic Rent, Additional Rent or any other
sum payable hereunder with knowledge of the breach of any covenant or agreement
contained in this Lease shall not be deemed a waiver of such breach, and no
waiver of any provision of this Lease shall be deemed to have been made unless
expressed in writing and signed by the waiving party. In addition to other
remedies provided in this Lease, Landlord shall be entitled, to the extent
permitted by applicable law, to injunctive relief in case of the violation, or
attempted or threatened violation, of any of the covenants, agreements,
conditions or provisions of this Lease, or to a decree compelling performance of
any of the covenants, agreements, conditions or provisions of this Lease, or to
any other remedy allowed to Landlord at Law or in equity.
(b) Tenant hereby waives and surrenders, to the extent not
prohibited by Law, for itself and all those claiming under it, including
creditors of all kinds, (i) any right and privilege which it or any of them may
have under any present or future Law to redeem the Leased Premises or to have a
continuance of this Lease for the Term after termination of Tenant's right of
occupancy by order or judgment of any court or by any legal process or writ, or
under the terms of this Lease, or after the termination of the Term as herein
provided, and (ii) the benefits of any present or future law which exempts
property from liability for debt or for distress for rent.
(c) In the event Tenant shall be in default in the performance
of any of its obligations under this Lease, and an action shall be brought for
the enforcement thereof in which it shall be determined that Tenant was in
default, Tenant shall pay
44
to Landlord all the expenses incurred in connection therewith including
reasonable attorney's fees. In the event Landlord shall, without fault on its
part, be made a party to any litigation commenced against Tenant, and if Tenant,
at its expense, shall fail to provide Landlord with counsel reasonably approved
by Landlord, Tenant shall pay all costs and reasonable attorney's fees incurred
or paid by Landlord in connection with such litigation.
(d) If an Event of Default has happened and is continuing,
Landlord may, but shall not be obligated to, make any payment or perform any act
required hereunder to be made or performed by Tenant which has not been
performed within the time period specified herein for such performance, with the
same effect as if made or performed by Tenant, provided that no entry by
Landlord upon the Leased Premises for such purpose shall create any liability to
Tenant on the part of Landlord or shall constitute or shall be deemed to be an
eviction of Tenant, and no such entry shall waive or release Tenant from any
obligation or default hereunder. All sums so paid by Landlord and all costs and
expenses (including reasonable attorney's fees and expenses) incurred by
Landlord in connection with the performance of any such act, together with
interest at the Default Rate, shall constitute Additional Rent payable by Tenant
hereunder.
21. Inspection. Tenant shall permit Landlord, the Credit Facility
Provider, the State, MIDFA, and the holder of any Encumbrance, and its and their
representatives and agents to enter the Leased Premises, with notice to Tenant
and with an escort provided by Tenant, unless (i) an Event of Default shall have
occurred and be continuing, or (ii) an emergency threatening life or property
exists, in either of which cases, no advance notice shall be required, without
charge therefor and without diminution of the rent payable by Tenant, in order
to examine, inspect and protect the Leased Premises, or, during the last year of
the Term, to exhibit the same to brokers, prospective tenants, lenders,
purchasers and others. In connection with any such entry, Landlord shall
endeavor to minimize the disruption to Tenant's normal business operations in
the Leased Premises.
22. Notices, Demands and Other Instruments. All notices, demands,
requests, consents, approvals, certificates or other communications required
under this Lease shall be in writing, and shall be sufficiently given and shall
be deemed to have been properly given (i) if delivered by hand, when written
confirmation of delivery is received by the sender, (ii) three days after the
same is mailed by certified mail, postage prepaid, return receipt requested, or
(iii) if sent by overnight courier, 24 hours (plus 24 hours for any intervening
day that is not a business day) after delivery to such overnight courier
addressed to the Person to whom
45
any such notice, demand, request, consent, approval, certificate or other
communication is to be given, at the appropriate address designated on Exhibit E
attached hereto. Any party listed on Exhibit E shall each have the right from
time to time to specify as its address for purposes of this Lease any other
address in the United States of America upon giving 15 days' written notice
hereunder.
23. Estoppel Certificates. Landlord or Tenant, as the case may be,
shall, at any time and from time to time, upon not less than 20 days' prior
written notice by the other (but neither shall be required to do so more than
twice in any calendar year), execute, acknowledge and deliver to the requesting
party a statement in writing, executed by an authorized representative of
Landlord or by the President or a Vice President of Tenant, as the case may be,
certifying (i) that this Lease is unmodified and in full effect (or, if there
have been modifications, that this Lease is in full effect as modified, and
setting forth such modifications), (ii) the dates to which Basic Rent,
Additional Rent and all other sums payable hereunder have been paid, (iii) that
to the knowledge of the signer of such certificate no default by either Landlord
or Tenant exists hereunder or specifying each such default of which the signer
may have knowledge; and (iv) that, in the case of any statement being given by
Tenant, to the knowledge of the signer of such certificate, there are no
proceedings pending or threatened against Tenant before or by any court or
administrative agency which, if adversely decided, would materially and
adversely affect the financial condition and operations of Tenant or Tenant's
ability to perform or fulfill its obligations under this Lease, or if any such
proceedings are pending or threatened to said signer's knowledge, specifying and
describing the same. It is intended that any such statements may be relied upon
by the Credit Facility Provider, the State, Landlord or their assignees or by
any prospective purchaser of the Leased Premises or by any transferee or
assignee of Tenant's interest in the Lease or a sublessee of Tenant or by any
party providing financing to Tenant. Any certificate required under this
Paragraph 23 shall (i) state briefly the nature and scope of the examination or
investigation upon which the statements contained in such certificate are based,
(ii) state that in the opinion of each Person signing such certificate he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to the subject matter of such certificate, and (iii)
certify to the correctness of the statements contained therein.
24. No Merger. There shall be no merger of this Lease or of the
leasehold estate hereby created with any other estate or interest in the Leased
Premises or any part thereof by reason of the fact that the same Person may
acquire or hold, directly or
46
indirectly, (a) any interest in this Lease or the leasehold estate hereby
created or (b) any such other estate or interest in the Leased Premises or any
part.
25. Representations and Warranties of Tenant. Tenant makes the
following representations and warranties to Landlord:
(a) Good Standing. Tenant (i) is a corporation duly organized
and existing, in good standing, under the laws of the State of Delaware, (ii)
has the corporate power and all material governmental licenses, authorizations,
consents and approvals required to own its property and to carry on its business
as now being conducted, and (iii) is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the properties
owned by it therein or in which the transaction of its business makes such
qualification necessary, including, but not limited to, the State of Maryland.
(b) Authority. Tenant has full corporate power and authority
to enter into and execute and deliver this Lease and each of the other documents
executed and delivered by Tenant in connection herewith (collectively, the
"Lease Documents"), and to incur and perform the obligations provided for
therein and herein, all of which have been duly authorized by all proper and
necessary corporate action by Tenant. No consent or approval of stockholders or
of any other Person or public authority or regulatory body is required as a
condition to the validity or enforceability of this Lease or any of the other
Lease Documents, or if required the same has been duly obtained.
(c) Binding Agreements. This Lease and each of the other Lease
Documents have been duly and properly executed by Tenant, constitute the valid
and legally binding obligations of the Tenant, and are fully enforceable against
Tenant in accordance with their respective terms; except to the extent that
enforceability may be affected by any bankruptcy or insolvency proceeding filed
by or against the Tenant and subject to the exercise of judicial discretion in
accordance with general principles of equity.
(d) Litigation. There is no litigation or proceeding pending
or, so far as Tenant knows, threatened, before any court or administrative
agency which, in the opinion of Tenant, will materially adversely affect the
financial condition or operations of Tenant, Tenant's ability to perform and
fulfill its obligations under this Lease, or the authority of Tenant to enter
into, or the validity or enforceability of, this Lease or any of the other Lease
Documents.
(e) No Conflicting Agreements, Laws, etc. There is
47
(i) no charter, by-law or preference stock provision of the Tenant and no
provision of any existing mortgage, indenture, contract or agreement binding on
the Tenant or affecting Tenant's property, and (ii) to the knowledge of Tenant,
no provision of Law or order of court binding on the Tenant or affecting any of
Tenant's property, which would conflict with or in any way prevent the
execution, delivery, or performance of the terms of this Lease or any of the
other Lease Documents, or which would be in default or violated as a result of
such execution, delivery or performance, or for which adequate consents or
waivers have not been obtained.
(f) Tax Returns. Tenant has filed all required federal, state
and local tax returns and has paid all taxes as shown on such returns as they
have become due. No claims have been assessed and are unpaid with respect to
such taxes, and Tenant has established reserves which it believes to be adequate
for the payment of additional taxes for years which have not been audited by the
respective tax authorities.
(g) Place of Business of Tenant. Tenant's principal place of
business is located at 9410 Key West Avenue, Rockville, Maryland 20850.
(h) Brokers. To the best of Tenant's knowledge (other than
Scheer Partners Inc. and Manekin Corporation, the payment of whose fees are the
responsibility of Montgomery County, Maryland), no Person has, or as a result of
any action of or by Tenant in connection with the transactions contemplated
hereby and by the Lease will have, any right, interest or valid claim against or
on the Landlord for any commission, fee or other compensation as a broker or
finder, or in any similar capacity . Tenant shall indemnify the Landlord against
any claimed fee, commission or other compensation arising from or in connection
with the transactions contemplated hereby or by the Lease Documents.
(i) ERISA. (i) Any Plan established and maintained by the
Tenant or any Commonly Controlled Entity is a qualifying plan under the
applicable requirements of Section 401 of the Code and there is no current
matter which would materially adversely affect the qualified tax-exempt status
of any Plan; (ii) neither the Tenant nor any Commonly Controlled Entity has
engaged in or is engaging in any Prohibited Transaction or has incurred any
Accumulated Funding Deficiency in connection with any such Plan, whether or not
waived, and no Reportable Event has occurred with respect to any Plan subject to
the minimum funding requirements of Section 412 of the Code; (iii) no
Multiemployer Plan has "terminated", as that term is defined in ERISA; (iv)
neither the Tenant nor any Commonly Controlled Entity has "withdrawn" or
"partially withdrawn" from any Multiemployer Plan; and (v) no Multiemployer Plan
is in "reorganization" nor has notice been
48
received from the administrator of any Multiemployer Plan that any such Plan
will be placed in "reorganization".
26. Affirmative Covenants of Tenant. Tenant shall:
(a) Financial Statements. Furnish or cause to be furnished to
Landlord:
(i) as soon as available but in no event more than 45
days after the close of each fiscal quarter of Tenant, a copy of the 10Q Report
of Tenant filed with the Securities and Exchange Commission (the "SEC")
accompanied by a certificate of the chief financial officer of Tenant stating
whether any event has occurred which constitutes an Event of Default, or which
would constitute such an Event of Default with the giving of notice or the lapse
of time or both, and, if so, stating the facts with respect thereto; and
(ii) as soon as available but in no event more than
90 days after the close of each fiscal year of Tenant, a copy of the 10K Report
of Tenant filed with the SEC and a copy of the annual audited financial
statements relating to Tenant prepared in accordance with GAAP, which financial
statements shall include a balance sheet of Tenant as at the end of such fiscal
year and a statement of earnings and changes in stockholder's equity of Tenant
for such fiscal year; and
(iii) as soon as available but in no event more than
90 days after the close of each fiscal year of Tenant, a certificate of the
chief financial officer of Tenant stating whether any event which constitutes an
Event of Default under this Lease has occurred, or any event which would
constitute such an Event of Default with the giving of notice or the lapse of
time or both has occurred, and, if so, stating the facts with respect thereto;
and
49
(iv) promptly upon transmission thereof, copies of
any financial statements, proxy statements, reports and the like which Tenant
sends to its shareholders and copies of all registration statements (with
exhibits); and
(v) promptly upon request, access to the registration
materials submitted to the Federal Drug Administration (the "FDA") to evidence
the internal validation and registration of the Leased Premises as a
pharmaceutical-manufacturing facility, any correspondence, notices and the like
received from the FDA relating to the initial and on-going validation and
registration of the Leased Premises as a pharmaceutical-manufacturing facility
with the FDA and, promptly upon receipt thereof, copies of any threatened or
actual revocation, restriction, suspension or expiration of any such validation
and/or registration; and
(vi) with reasonable promptness, such additional
information, reports or statements as the Landlord, the Credit Facility
Provider, MIDFA or the State may from time to time reasonably request.
(b) Taxes and Claims. Pay and discharge or cause to be paid
and discharged all taxes imposed upon it or its income or properties prior to
the date on which penalties attach thereto, and all lawful claims which, if
unpaid, might become a lien or charge upon any of its properties. Tenant shall
have the right to contest the validity of any such tax, assessment, charge, levy
or claim, by timely and appropriate proceedings, provided that Tenant shall (1)
give the Landlord written notice of its intention to contest, (2) diligently
prosecute such contest, (3) at all times effectively stay or prevent any
official or judicial sale of the Leased Premises or Building Equipment or any
part thereof by reason of nonpayment of any such taxes, and (4) establish
reasonable reserves for such liabilities being contested if the Landlord
reasonably determines such reserves to be necessary.
(c) Insurance. In addition to the insurance required by
Paragraph 15 of this Lease, maintain insurance with responsible insurance
companies on such of its properties, in such amounts and against such risks as
is customarily maintained by similar businesses operating in the same vicinity.
Tenant shall file with Landlord, upon its request, a detailed list of the
insurance then in effect covering Tenant and Tenant's properties, stating the
names of the insurance companies, the amounts and rates of the insurance, dates
of the expiration thereof and the properties and risks covered thereby; and,
within 30 days after notice in writing from the Landlord, obtain such additional
insurance as the Landlord may reasonably request.
50
(d) Corporate Existence. Maintain its existence in good
standing as a Delaware corporation, qualified to transact business in the State
of Maryland.
(e) Compliance with Laws. Comply with all Legal Requirements,
subject to Tenant's right to contest the validity or applicability of any of the
foregoing, at its sole cost and expense, in good faith and by appropriate and
diligent proceedings, in accordance with Paragraph 18 hereof.
(f) Books and Records. Maintain appropriate books and records
with respect to the Leased Premises and permit access by Landlord, the Credit
Facility Provider, the State and MIDFA and their respective authorized
representatives and employees to the books and records of Tenant at the offices
of Tenant during normal business hours.
(g) Employment Count. Within 30 days after the Closing Date
and on each anniversary date thereafter, and upon subsequent request of
Landlord, the State or MIDFA, the Tenant shall supply the Landlord, the State
and MIDFA with the employment count at the Leased Premises.
(h) Equal Employment. Tenant shall prohibit discrimination on
the basis of (i) political or religious opinion or affiliation, marital status,
race, color, creed, or national origin, or (ii) sex or age, except when sex or
age constitutes a bona fide occupational qualification, or (iii) the physical or
mental disability of a qualified individual with a disability; and shall, upon
the request of MIDFA or the State Department of Business and Economic
Development (the "Department"), submit information relating to its employment
practices and operations with regard to the above on a form to be prescribed by
the State.
(i) Drug and Alcohol Free Workplace. Tenant shall make a good
faith effort to eliminate illegal drug use and alcohol and drug abuse from its
workplace during the Term and specifically, shall:
(i) prohibit the unlawful manufacture,
distribution, dispensation, possession, or use
of drugs in its workplace;
(ii) prohibit its employees from working under the
influence of alcohol or drugs;
(iii) not hire or assign to work on an activity
funded in whole or part with State of Maryland
funds, anyone whom it knows, or in
51
the exercise of due diligence should know,
currently abuses alcohol or drugs and is not
actively engaged in a bona fide rehabilitation
program;
(iv) promptly inform the appropriate law
enforcement agency of every drug related crime
that occurs in its workplace if it or its
employee has observed the violation or
otherwise has reliable information that a
violation has occurred; and
52
(v) notify employees that drug and alcohol abuse
is banned in the workplace, impose sanctions
on employees who abuse drugs and alcohol in
the workplace, and institute steps to maintain
a drug and alcohol free workplace.
(j) Financial Covenants. Maintain the following:
53
(i) Unrestricted cash and securities (exclusive of
any unrestricted cash or securities maintained
by a consolidated subsidiary of Tenant) with a
market value of at least $50,000,000 at all
times, of which unrestricted cash and
securities at least $10,000,000 (in addition
to the pledge described in the Collateral
Pledge Agreement) shall be maintained in an
account with the Bank or an affiliate of the
Bank. The cash and/or marketable securities
pledged by Tenant pursuant to the Collateral
Pledge Agreement shall be credited against the
foregoing $50,000,000 requirement. In the
event that the market value of such
unrestricted cash and securities falls below
$50,000,000, Tenant shall pledge to Landlord,
as security for Tenant's obligations under
this Lease, in addition to the pledge
described in the Collateral Pledge Agreement,
cash and/or marketable securities acceptable
to the Bank, as the assignee of Landlord, in
its sole discretion and margined as required
by the Bank, as the assignee of Landlord, with
a market value at all times equal to at least
$5,000,000. In the event that the market value
of unrestricted cash and securities falls
below $25,000,000, Tenant shall pledge to
Landlord, as security for Tenant's obligations
under this Lease, in addition to any other
pledge theretofore made to Landlord, cash
and/or marketable securities acceptable to the
Bank, as the assignee of Landlord, in its sole
discretion and margined as required by the
Bank, as assignee of Landlord, with a market
value at all times equal to at least
$5,000,000. Any cash and/or marketable
securities pledged hereunder shall be held by
the Bank. Tenant shall deposit with the Bank,
as the assignee of Landlord, additional cash
and/or marketable securities acceptable to the
Bank, as the assignee of Landlord, in its sole
discretion and margined as required by the
Bank, as the assignee of Landlord, whenever
the market value of each additional pledge
hereunder falls below $5,000,000 to make up
the deficiency. Whenever the market value
54
of any cash and/or marketable securities
pledged to Landlord (margined as required by
the Bank, as the assignee of the Landlord)
exceeds the required amount, i.e., $5,000,000
or $10,000,000, as the case may be, the Bank,
as the assignee of Landlord, shall, in
accordance with the terms of the Collateral
Pledge Agreement, release from the pledge cash
and/or marketable securities equal to such
excess.
(ii) A "Tangible Net Worth" (as hereinafter
defined) with a market value of not less than
$50,000,000. Tangible Net Worth of Tenant
shall not include the tangible net worth of
any consolidated subsidiary of Tenant. In the
event that the market value of such Tangible
Net Worth falls below $50,000,000, Tenant
shall pledge to Landlord, as security for
Tenant's obligations under this Lease, in
addition to the pledge described in the
Collateral Pledge Agreement, cash and/or
marketable securities acceptable to the Bank,
as the assignee of Landlord, in its sole
discretion and margined as required by the
Bank, as the assignee of Landlord, with a
market value at all times equal to at least
$5,000,000. In the event that Tangible Net
Worth falls below $25,000,000, Tenant shall
pledge to Landlord, as security for Tenant's
obligations under this Lease, in addition to
any other pledge theretofore made to Landlord,
cash and/or marketable securities acceptable
to the Bank, as the assignee of Landlord, in
its sole discretion and margined as required
by the Bank, as the assignee of Landlord, with
a market value at all times equal to at least
$5,000,000. Any cash and/or marketable
securities pledged hereunder shall be held by
the Bank. Monthly, Tenant shall deposit with
the Bank, as the assignee of Landlord,
additional cash and/or marketable securities
acceptable to the Bank, as the assignee of
Landlord, in its sole discretion and margined
as required by the Bank, as the assignee of
Landlord, whenever the market value of each
additional pledge hereunder falls below
$5,000,000 to make up
55
the deficiency. Whenever the market value of
any cash and/or marketable securities pledged
to Landlord (margined as required by the Bank,
as assignee of Landlord), exceeds the required
amount, i.e., $5,000,000 or $10,000,000, as
the case may be, quarterly, the Bank, as
assignee of Landlord, shall release from the
pledge cash and/or marketable securities equal
to such excess. Tangible Net Worth shall mean
shareholder's equity less all intangible
assets such as, but not limited to, good will,
licenses, trademarks, patents, copyrights or
consulting agreements.
(iii) Any pledge of cash and/or marketable
securities made pursuant to either clause (i)
or (ii) above shall satisfy the requirements
of the other clause.
(iv) Any investment earnings on the cash and/or
marketable securities pledged by Tenant
pursuant to clause (i) or (ii) above shall be
distributed quarterly by the Bank, as the
assignee of Landlord, to Tenant.
(v) If Tenant pledges cash and/or marketable
securities to Landlord to satisfy the
requirements of either clause (i) or (ii)
above and thereafter for a period of two
consecutive fiscal quarters Tenant returns to
compliance with the requirements which
necessitated such pledge, the Bank, as the
assignee of Landlord, shall release such cash
and/or marketable securities from such pledge.
By way of illustration, if the market value of
Tenant's Tangible Net Worth (as calculated
pursuant to clause (ii) above) falls below
$25,000,000 and Tenant has pledged $10,000,000
of cash and/or marketable securities to
Landlord and thereafter the market value of
Tenant's Tangible Net Worth is greater than
$25,000,000 but less than $50,000,000 for two
consecutive fiscal quarters the Bank, as the
assignee of Landlord, shall release from such
pledge $5,000,000 of cash and/or marketable
securities.
(vi) Notwithstanding the foregoing provisions of
56
this subparagraph 26(j), the amount of cash
and/or marketable securities required to be
pledged to Landlord at any time shall not
exceed the Stated Amount of the Credit
Facility (as defined in the Credit Facility).
(k) Cooperate in connection with any appraisal of the Leased
Premises conducted by or at the request of Landlord, the Credit Facility
Provider, the State or MIDFA.
27. Negative Covenants of Tenant. Until all of Tenant's obligations
under this Lease have been paid and performed in full (other than any
indemnities which survive the termination of this Lease), without the prior
written consent of Landlord, Tenant shall not, directly or indirectly:
(a) Declare any dividends (other than dividends payable in
capital stock of Tenant) on any shares of any class of its capital stock (other
than preferred stock outstanding on the Closing Date) or apply any of its
property or assets to the purchase, redemption or other retirement of, or set
apart any sum for the payment of any dividends on, or for the purchase,
redemption or other retirement of, or make any other distribution by reduction
of capital or otherwise in respect of, any shares of any class of capital stock
of Tenant unless (i) there is no Event of Default which has occurred and is
continuing, and (ii) the amount of the dividend does not exceed Tenant's
accumulated earnings at that time.
(b) Fail to notify Landlord of any change in the officers
(within the meaning of Section 240.16a-1 of the Regulations under the Securities
Exchange Act of 1934, as amended) of Tenant.
(c) (i) Restate or amend any Plan established and maintained
by Tenant or any Commonly Controlled Entity and subject to the requirements of
ERISA, in a manner designed to disqualify such Plan and its related trusts under
the applicable requirements of the Code; (ii) permit any officers of Tenant or
any Commonly Controlled Entity to materially adversely affect the qualified
tax-exempt status of any Plan or related trusts of Tenant or any Commonly
Controlled Facility under the Code; (iii) engage in or permit any Commonly
Controlled Entity to engage in any Prohibited Transaction; (iv) incur or permit
any Commonly Controlled Entity to incur any Accumulated Funding Deficiency,
whether or not waived, in connection with any Plan; (v) take or permit any
Commonly Controlled Entity to take any
57
action or fail to take any action which causes a termination of any Plan in a
manner which could result in the imposition of a lien on the property of Tenant
or any Commonly Controlled Entity pursuant to Section 4068 of ERISA; (vi) fail
to notify the Credit Facility Provider that notice has been received of a
"termination" (as defined in ERISA) of any Multiemployer Plan to which Tenant or
any Commonly Controlled Entity has an obligation to contribute; (vii) incur or
permit any Commonly Controlled Entity to incur a "complete withdrawal" or
"partial withdrawal" (as defined in ERISA) from any Multiemployer Plan to which
Tenant or any Commonly Controlled Entity has an obligation to contribute; or
(viii) fail to notify the Credit Facility Provider that notice has been received
from the administrator of any Multiemployer Plan to which Tenant or any Commonly
Controlled Entity has an obligation to contribute that any such Plan will be
placed in "reorganization" (as defined in ERISA).
28. Non-Recourse. Anything contained herein to the contrary
notwithstanding, any claim based on or in respect of any liability of Landlord
under this Lease shall be enforced only against Landlord's interest in the
Leased Premises, subject to the lien of the Deeds of Trust, and the Collateral
Pledge Agreement, and not against any other assets, properties or funds of
Landlord or against any assets, properties or funds of (i) any general partner
or limited partner of Landlord, or any employee or agent of Landlord (or any
director, officer, legal representative, successor, or assign of any thereof),
or (ii) any other Person affiliated with any of the foregoing, including without
limitation, the State of Maryland or any department, agency or instrumentality
thereof.
29. Separability. Each and every covenant and agreement contained in
this Lease is, and shall be construed to be, a separate and independent covenant
and agreement, and the breach of any such covenant or agreement by Landlord
shall not discharge or relieve Tenant from any of its obligations under this
Lease. If any term or provision of this Lease or the application thereof to any
Person or circumstances shall to any extent be invalid and unenforceable, the
remainder of this Lease, or the ------------ application of such term or
provision to persons or circumstances other than those as to which it is invalid
or unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and shall be enforced to the extent permitted by Law.
58
30. Subordination.
(a) This Lease is subject and subordinate to the lien,
provisions, operation and effect of the Deeds of Trust or other security
instruments which may now or hereafter encumber the Improvements or the Land or
any interest therein (collectively, "Encumbrances"), to all funds and
indebtedness intended to be secured thereby, and to all renewals, extensions,
modifications, recastings or refinancings thereof. The holder of any Encumbrance
to which this Lease is subordinate shall have the right (subject to any required
approval of the holders of any superior Encumbrance) at any time to declare this
Lease to be superior to the lien, provisions, operation and effect of such
Encumbrance, and Tenant shall execute, acknowledge and deliver all documents
required by such holder in confirmation thereof. Simultaneous with the execution
hereof, Landlord, Tenant, the Credit Facility Provider and the State shall
execute the Assignments. In the event that the Improvements and/or the Land
become subject to an Encumbrance after the date hereof, Landlord agrees to
obtain a non-disturbance agreement from the holder of such Encumbrance, in such
holder's standard form, provided that Tenant shall pay or reimburse Landlord for
any costs associated with such efforts and agrees to execute such agreement in
order to confirm the subordination of this Lease to the Encumbrance, if
requested by the holder of such Encumbrance.
(b) Tenant shall at Landlord's request promptly execute any
requisite or appropriate document confirming such subordination. Tenant waives
the provisions of any Law now or hereinafter in effect which may give or purport
to give Tenant any right to terminate or otherwise adversely affect this Lease
and Tenant's obligations hereunder in the event any foreclosure proceeding is
prosecuted or completed or in the event the Improvements, the Land or Landlord's
interest therein is transferred by foreclosure, by deed in lieu of foreclosure
or otherwise. At the request of such transferee, Tenant shall attorn to such
transferee and shall recognize such transferee as the Landlord under this Lease.
Tenant agrees that upon any such attornment, such transferee shall not be (i)
bound by any payment of Basic Rent or Additional Rent more than one month in
advance, except prepayments in the nature of security for the performance by
Tenant of its obligations under this Lease, but only to the extent such
prepayments have been delivered to such transferee, (ii) bound by any amendment
of this Lease made without the consent of the holder of each Encumbrance
existing as of the date of such amendment, (iii) liable for damages for any
breach, act or omission of any prior landlord, or (iv) subject to any offsets or
defenses which Tenant might have against any prior landlord; provided, however,
that after succeeding to Landlord's interest under this Lease, such transferee
shall agree to perform in
59
accordance with the terms of this Lease all obligations of Landlord arising
after the date of transfer. Within five days after the request of such
transferee, Tenant shall execute, acknowledge and deliver any requisite or
appropriate document submitted to Tenant confirming such attornment.
(c) If any prospective or current holder of an Encumbrance
requires that modifications to this Lease be obtained, and provided that such
modifications (i) are reasonable, (ii) do not adversely affect in a material
manner Tenant's use of the Leased Premises for the Permitted Use, (iii) do not
increase the rent and other sums to be paid by Tenant, (iv) do not change
Tenant's affirmative or negative covenants set forth herein, or (v) affect
Tenant's option to purchase the Leased Premises as provided in Paragraph 6(b),
then Landlord may submit to Tenant an amendment to this Lease incorporating such
required modifications, and Tenant shall execute, acknowledge and deliver such
amendment to Landlord within five days after Tenant's receipt thereof.
31. Binding Effect. All of the covenants, conditions and obligations
contained in this Lease shall be binding upon and inure to the benefit of the
respective successors and assigns of Landlord and Tenant to the same extent as
if each successor and assign were in each case named as a party to this Lease.
This Lease may not be changed, modified or discharged except by a writing signed
by Landlord and Tenant and consented to by the Credit Facility Provider, the
State and MIDFA.
32. Heading. The headings to the various paragraphs of this Lease have
been inserted for convenient reference only and shall not to any extent have the
effect of modifying, amending or changing the expressed terms and provisions of
this Lease.
33. Environmental Matters.
(a) As used in this Paragraph 33, the following items shall
have meanings set forth below:
(i) "CAA" - shall mean the Clean Air Act, codified at
42 U.S.C. " 7401, et seq., as amended.
(ii) "CERCLA" - shall mean the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, codified at 42
U.S.C. " 9601, et seq., as amended.
(iii) "CWA" - shall mean the Clean Water Act,
codified at 33 U.S.C. 1251; et seq., as amended.
(iv) "Environmental Laws" - shall mean CERCLA, HMTA,
RCRA, CAA, CWA, TSCA, RHA and the Right-to-Know Act and all
60
other federal, local and municipal laws, statutes, ordinances and codes,
guidelines and standards relating to health, safety, sanitation, and the
protection of the environment or governing the use, storage, treatment,
generation, transportation, processing, handling, production or disposal of
Hazardous Materials, including, without limitation, laws and regulations
regarding the discharge of water or other materials or fluids into waterways,
and the rules, regulations, guidelines, decisions, orders and directives of
federal, local and municipal governmental agencies, authorities and courts with
respect thereto presently in effect or hereafter enacted, promulgated or
implemented.
(v) "Environmental Permits" - shall mean all permits,
licenses, approvals, authorizations, consents or registrations required by any
applicable Environmental Laws, on either an individual or group basis, in
connection with the construction, ownership, use or operation of the Land or the
Improvements, or the storage, treatment, generation, transportation, processing,
handling, production or disposal of Hazardous Materials related to the Land.
(vi) "Hazardous Materials" - shall mean, without
limitation, flammables, explosives, radioactive materials, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, petroleum or petroleum
based or related substances, hydrocarbons or like substances and their additives
or constituents, and any substances now or hereafter defined as "hazardous
substances," "extremely hazardous substances," "hazardous wastes" or "toxic
chemicals" in CERCLA, HMTA, RCRA, CAA, CWA, TSCA, RHA, the Right-To-Know Act, or
any so-called "superfund" or "superlien" law or the regulations promulgated
pursuant thereto, or any other applicable federal, state or local law, common
law, code, rule, regulation, order, or ordinance, presently in effect or
hereafter enacted, promulgated or implemented.
(vii) "HMTA" - shall mean the Hazardous Materials
Transportation Act, codified at 49 U.S.C. " 1801, et seq., as amended.
(viii) "RCRA" - shall mean the Resource Conservation
and Recovery Act of 1976, codified at 42 U.S.C. " 6901, et seq., as amended.
(ix) "Release" - shall have the same meaning as given
to that term in CERCLA, as amended, and the regulations promulgated thereunder.
(x) "RHA" shall mean the Rivers and Harbors
Appropriation Act, codified at 33 U.S.C. " 401, et seq., as amended.
61
(xi) "Right-To-Know Act" - shall mean the Emergency
Planning and Community Right-To-Know Act, codified at 42 U.S.C. " 11001, et
seq., as amended.
(xii) "TSCA" - shall mean the Toxic Substances
Control Act, codified at 15 U.S.C. " 2601, et seq., as amended.
(b) Tenant shall comply at all times and in all respects with
the provisions of all Environmental Laws and Environmental Permits, and shall
not commit any actions or omissions that result in the incurrence of any
liability under such Environmental Laws or Environmental Permits. Tenant will
not allow, cause or permit any Hazardous Materials to be deposited on or under
the Land, or otherwise Released or threatened to be Released from or on the
Land, or otherwise Released or threatened to be Released from or on the Land or
the Improvements, by any Person whatsoever except as normally and properly used
in the construction and operation of the Improvements and in compliance with all
Environmental Laws. Tenant shall conduct all of its activities on the Land and
Improvements, including, without limitation, the off-site disposal of any
Hazardous Materials originating on or from the Land or Improvements, in
compliance with all Environmental Laws. Tenant shall obtain, whenever necessary
and in its own name, appropriate Environmental Permits for its operations and
shall comply in all respects with the requirements of such Environmental
Permits.
(c) Tenant hereby agrees to indemnify, hold harmless and
defend Landlord, the Trustee, the Credit Facility Provider, the State and MIDFA,
and their partners, officers, directors, lenders, agents and employees from and
against any and all claims, losses, damages, liabilities, penalties, costs,
assessments, expenses, demands, fines or liabilities of whatever kind or nature,
including, without limitation, costs, expenses (including expense of posting a
bond) and liabilities imposed upon Landlord pursuant to any indenture or other
document, in any way relating to or arising out of:
(i) The Release or threat of Release of any Hazardous
Materials in, on, above, from or under the Land or Improvements during the Term
hereof;
(ii) Any activity by any party on, off or within the
Land or Improvements in connection with the use, handling, treatment,
monitoring, removal, storage, decontamination, clean up, testing, transportation
or disposal of any Hazardous Materials located at any time on, within or under
the Land or the Improvements and introduced onto the Land or the Improvements at
62
any time on or after the commencement of the Term and prior to the expiration or
other termination of this Lease
(iii) The use, handling, treatment, monitoring,
removal, storage, decontamination, clean-up, testing, transportation or disposal
of any Hazardous Materials on, under or within the Land or the Improvements
which were introduced onto the Land or into the Improvements at any time on or
after the commencement of the Term and prior to the expiration or other
termination of this Lease;
(iv) The performance by Tenant or any other Person
acting on behalf of Tenant during the Term of any inspection, investigation,
audit, study, sampling, testing, removal, containment or other remedial action
or other clean-up related to Hazardous Materials on, above, within, related to,
or affected by, the Land or the Improvements;
(v) The imposition, recording or filing of any lien
(including, without limitation, a so-called "superlien") against the Land or the
Improvements as a result of the incurrence by any party of any claims, expenses,
demands, losses, costs, fines or liabilities of whatever kind or nature with
respect to any actual, suspected or threatened Release of Hazardous Materials or
environmental condition, on, above, within, related to, or affected by, the Land
or the Improvements at any time after the Lease Commencement Date and prior to
the expiration or other termination of this Lease; or
(vi) The violation by Tenant of any applicable
Environmental Laws or Environmental Permits with respect to the Land or the
Improvements. The provisions of this subparagraph (c) shall survive the
expiration or any other termination of this Lease.
(d) Landlord has delivered to Tenant an undated "Phase I"
environmental report referred to as "Phase I Environmental Assessment Results
Belward Research Campus, Parcel A, Montgomery County, MD", prepared in June/July
1997 by ManTech Environmental Corporation, as supplemented by the reliance
letter from ManTech Environmental Corporation dated as of December 23, 1997 and
the letter from Apex Environmental, Inc. dated as of December 23, 1997,
indicating any presence of any Hazardous Materials on, above or below the Land,
or of the Release or threat of Release of any Hazardous Materials existing prior
to the commencement of the Term.
(e) Unless Tenant purchases the Leased Premises as provided in
Paragraph 6(b), no less than nine months prior to the expiration of the Term
hereof, Tenant shall cause to be prepared,
63
by an environmental consultant reasonably acceptable to Landlord, an
environmental assessment of the Land and the Improvements (the "Assessment"),
which shall identify the presence or probable presence of any Hazardous
Materials on, above or below the Land or the Improvements, or the Release or
threat of Release of any Hazardous Materials or any violation of any
Environmental Laws with respect to the Land and the Improvements or Tenant's
operations thereon or therein. To the extent that the Assessment identifies any
such Hazardous Materials, Releases or threatened Releases or violations, Tenant
shall take all such measures, including, without limitation, any and all such
measures as shall be recommended by such environmental consultant, to remove,
remedy and/or cure such condition, so that, by the end of the Term hereof, no
Hazardous Materials shall be present on, above, within or under the Land or the
Improvements, no Release or threat of Release of Hazardous Materials exists, and
no violation of Environmental Laws shall exist with respect to the Land or the
Improvements or Tenant's operations thereon or therein. Any such response
actions undertaken by Tenant shall comply fully with all applicable
Environmental Laws. If Tenant fails to provide the Assessment to Landlord by the
date that is nine months prior to the expiration of the Term, or fails to take
such recommended measures and to remove any Hazardous Materials and comply with
all Environmental Laws as aforesaid, Landlord may, but shall not be obligated
to, have such Assessment prepared and such removal and/or remedial measures
undertaken at the expense of Tenant, the costs of which shall be considered
Additional Rent hereunder. The foregoing provisions of this subparagraph (e)
shall survive the expiration or any other termination of this Lease and shall
not be construed to relieve Tenant in any way of its continuing obligations
throughout the Term to comply with the provisions of subparagraph (b) above.
(f) Unless Tenant purchases the Leased Premises as provided in
Paragraph 6(b), as a condition of any termination of this Lease, Tenant shall
cause to be prepared, by an environmental consultant reasonably acceptable to
Landlord, an Assessment which shall identify the presence or probable presence
of any Hazardous Materials on, above or below the Land or the Improvements, or
the Release or threat of Release of any Hazardous Materials or any violation of
any Environmental Laws with respect to the Land and the Improvements or Tenant's
operations thereon or therein. To the extent that the Assessment identifies any
such Hazardous Materials, Releases or threatened Releases or violations, Tenant
shall take all such measures, including, without limitation, any and all such
measures as shall be recommended by such environmental consultant, to remove,
remedy and/or cure such condition, so that, as soon as practicable after the
termination of this Lease, no Hazardous Materials shall be present on, above,
within or under the Land or the Improvements, no Release or threat
64
of Release of Hazardous Materials exists, and no violation of Environmental Laws
shall exist with respect to the Land or the Improvements or Tenant's operations
thereon or therein. Any such response actions undertaken by Tenant shall comply
fully with all applicable Environmental Laws. If Tenant fails to engage an
environmental consultant to provide the Assessment to Landlord within fifteen
(15) days of the event which causes or permits termination of this Lease, or
fails to take such recommended measures and to remove any Hazardous Materials
and comply with all Environmental Laws as aforesaid, Landlord may, but shall not
be obligated to, have such Assessment prepared and such removal and/or remedial
measures undertaken at the expense of Tenant, the costs of which shall be
considered Additional Rent hereunder. The foregoing provisions of this
subparagraph (f) shall survive the expiration or any other termination of this
Lease and shall not be construed to relieve Tenant in any way of its continuing
obligations throughout the Term to comply with the provisions of subparagraph
(b) above.
34. Quiet Enjoyment. So long as no Event of Default exists hereunder,
and subject to the terms of this Lease, the Deeds of Trust, any Encumbrance, and
any other matters of record, Landlord warrants peaceful and quiet occupation and
enjoyment of the Leased Premises by Tenant, free of hindrance by Landlord or
anyone claiming by or through Landlord.
35. Miscellaneous.
(a) This Lease may be executed in any number of counterparts,
each of which shall be an original, but all of which shall together constitute
one and the same instrument.
(b) References to the masculine shall include the feminine and
neuter and the plural shall include the singular, as the context may require.
(c) This Lease shall be construed and enforced in accordance
with the Law of the State of Maryland.
(d) Time is of the essence with respect to each and every
provision of this Lease.
(e) With respect to any provision of this Lease which requires
Landlord to not unreasonably withhold its consent or approval, if in connection
therewith Landlord is obligated under the Deeds of Trust, the Credit Facility
Documents, the Bond Documents, the State Loan Documents or applicable Law to
obtain the consent or approval of MIDFA, the Trustee, the Credit Facility
Provider, the State or any other third party, then Landlord's failure to provide
consent or failure to otherwise act in a
65
reasonable manner because of its inability to obtain the consent or approval of
Landlord, MIDFA, the Credit Facility Provider, the State or other third party
shall not be deemed unreasonable, so long as Landlord has made a good faith
effort to obtain such consent.
(f) Upon the satisfaction of the Deeds of Trust, references in
this Lease to the Credit Facility Provider, the Trustee, MIDFA, the State, the
Credit Facility, the Credit Facility Agreement, the Deeds of Trust and the
Credit Facility Documents shall be ineffective, and Tenant shall no longer be
obligated to comply with the covenants contained in Paragraphs 26(g), (h), (i)
or (j) and in Paragraph 27.
(g) The parties hereto acknowledge that the provisions of this
Lease have been tailored to specific financing accommodations provided by
Landlord, the Credit Facility Provider, MIDFA and the State, including the Bonds
and the Credit Facility pursuant to the terms of the Bond Documents and the
Credit Facility Documents. In the event it becomes necessary to replace all or
any portion of these accommodations, Landlord shall exert good faith efforts to
obtain financing on the best terms available. Landlord and Tenant agree to
negotiate in good faith to amend this Lease to re-tailor this Lease to suit such
replacement financing, upon terms mutually agreeable to Landlord, Tenant and the
financial institution providing or participating in such financing and it is
acknowledged and agreed that Tenant's rental obligations hereunder will be
restructured to provide for the payment of all interest and all related expenses
of such replacement financing in the event such interest and related expenses
under the replacement financing are not identical to those payable under the
Bonds and the Credit Facility Documents and the State Loan Documents. The
parties hereto also acknowledge that in the event it becomes necessary to obtain
replacement financing for any reason other than (i) Landlord's misappropriation
of funds or (ii) a default by Landlord hereunder or under the Bond Documents or
the Credit Facility Documents not caused directly or indirectly by the act or
omission of Tenant, all expenses incurred by Landlord in connection with such
replacement financing shall be paid by Tenant as Additional Rent.
(h) Landlord and Tenant hereby agree and consent that any
action or proceeding arising out of or brought to enforce the provisions of this
Lease may be brought in any appropriate court in Montgomery County, Maryland or
Baltimore City, Maryland, and by the execution of this Lease Landlord and Tenant
irrevocably consent to the jurisdiction of each such court.
(i) If for any reason Landlord or Tenant should become not
qualified to do business in the State, Landlord and Tenant
66
hereby agree to designate and appoint, without power of revocation, an agent for
service of process within the State, as the agent for Landlord or Tenant, as
applicable, upon whom may be served all process, pleadings, notice or other
papers which may be served upon Landlord or Tenant, as applicable, as a result
of any of Landlord's or Tenant's, as applicable, obligations under this Lease.
(j) Landlord and Tenant covenant that throughout the Term, if
a new agent for service of process within the State is designated pursuant to
the terms of subparagraph (i) above, Landlord or Tenant, as applicable, will
immediately file with the other party hereto the name and address of such new
agent and the date on which such appointment is to become effective.
(k) Landlord and Tenant hereby jointly waive trial by jury in
any action or proceeding to which Landlord and Tenant may be parties, arising
out of or in any way pertaining to this Lease. This waiver is knowingly,
willingly and voluntarily made by Landlord and Tenant, each of which hereby
represents that no representations of fact or opinion have been made by any
individual to induce this waiver of trial by jury or to in any way modify or
nullify its effect. Each of Landlord and Tenant further represents that it has
been represented in the signing of this Lease and in the making of this waiver
by independent legal counsel, selected of its own free will, and that it has had
the opportunity to discuss this waiver with counsel.
(l) Landlord has issued the Bonds to, inter alia, fund the
costs of construction of the Improvements, and has created with the Trustee the
Facility Fund to pay for construction and other construction and Bond related
expenses. The Facility Fund is to be invested per Landlord's instructions in
accordance with the Indenture. In addition, with respect to the Bonds, Landlord
agrees that Landlord, upon Tenant's request, shall agree to procure a substitute
Credit Facility upon terms and conditions mutually satisfactory to Landlord and
Tenant.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
signed on their behalf, under seal, by their respective signatories thereunto
duly organized as of the date first above written.
WITNESS/ATTEST: MARYLAND ECONOMIC DEVELOPMENT
CORPORATION, Landlord
By: (SEAL)
- ----------------------------------------- -----------------------------
Hans F. Mayer
Executive Director
67
HUMAN GENOME SCIENCES, INC.,
Tenant
By: (SEAL)
- ----------------------------------------- -----------------------------
Steven C. Mayer
Senior Vice President
and Chief Financial Officer
68
EXHIBIT A
---------
DESCRIPTION OF LAND
-------------------
Lot Number 1, in Block A in the subdivision known as "Lots 1 & 2, Block
A, Lot 1, Block B, Lots 1 & 2, Block C, THE JOHNS HOPKINS BELWARD RESEARCH
CAMPUS", as per plat thereof duly recorded in the Land Records of Montgomery
County, Maryland in Plat Book 186 at Plat 20556.
A-1
EXHIBIT B
---------
LIST OF CONSTRUCTION CONTRACTS
------------------------------
1. Construction Management Agreement dated August 27, 1997, between
Gilbane Building Company and MEDCO (captioned "Agreement Between Owner and
Construction Manager where the Construction Manager is also the Constructor").
2. Engineering and Procurement Services Agreement dated August 11,
1997, between Fluor Daniel, Inc. and MEDCO, as amended by Contract Amendment No.
1, dated August 20, 1997, and Contract Amendment No. 2, dated as of October 13,
1997.
3. Site Development Contract dated as of July 24, 1997, between Manekin
Corporation and MEDCO (captioned "Abbreviated Form of Agreement Between Owner
and Contractor for Construction Project of Limited Scope where the Basis of
Payment is a Stipulated Sum").
B-1
EXHIBIT C
---------
LIST OF TENANT'S EQUIPMENT
--------------------------
C-1
EXHIBIT D
---------
SCHEDULE OF OPTION PURCHASE PRICES
----------------------------------
D-1
EXHIBIT E
---------
NOTICE AND PAYMENT ADDRESSES
----------------------------
If to Landlord:
Notices: Maryland Economic Development
Corporation
36 South Charles Street
Suite 2410
Baltimore, Maryland 21202
Attention: Hans F. Mayer,
Executive Director
with a copy to:
S. Nelson Weeks, Esquire
Ballard Spahr Andrews & Ingersoll
300 East Lombard Street
19th Floor
Baltimore, Maryland 21202
George W. Liebmann, Esquire
8 West Hamilton Street
Baltimore, Maryland 21201
Payments: Basic Rent
By Electronic Transfer:
The First National Bank of Maryland
Baltimore, Maryland 21203
Account No. 191 1047 0
By Mail:
MEDCO
36 South Charles Street
Suite 2410
Baltimore, Maryland 21202
Attention: Hans F. Mayer
Executive Director
E-1
If to Tenant:
Notices: Human Genome Sciences, Inc.
9410 Key West Avenue
Rockville, Maryland 20850
Attention: Steven C. Mayer
Senior Vice President
and Chief Financial Officer
with a copy to:
James H. Davis
Senior Vice President and General
Counsel and Secretary
Human Genome Sciences, Inc.
9410 Key West Avenue
Rockville, Maryland 20850
If to the Bank:
Notices: If by mail:
The First National Bank of Maryland
6303 Ivy Lane
Suite 200
Greenbelt, Maryland 20770
Attention: Joseph C. LeMense
Vice President
The First National Bank of Maryland
International Operations
P.O. Box 17086
Mail Code 101-492
Baltimore, Maryland 21203
Attention: Phyllis Malekiania
Otherwise:
The First National Bank of Maryland
6303 Ivy Lane
Suite 200
Greenbelt, Maryland 20770
Attention: Joseph C. LeMense
Vice President
The First National Bank of Maryland
International Operations
25 South Charles Street
15th Floor
Baltimore, Maryland 21201
E-2
Attention: Phyllis Malekiania
with a copy to:
John A. Stalfort, Esquire
Miles & Stockbridge, a Professional
Corporation
10 Light Street, 8th Floor
Baltimore, Maryland 21202
E-3
If to MIDFA:
Notices: Maryland Industrial Development
Financing Authority
217 East Redwood Street
Redwood Tower, 22nd Floor
Baltimore, Maryland 21202
Attention: Executive Director
If to State:
Notices: Department of Business and Economic
Development
217 East Redwood Street, 22nd Floor
Baltimore, Maryland 21202
Attention: Director of Community
Financing Group Programs
E-4