EXHIBIT 10.50
MASTER LEASE AGREEMENT
BY AND BETWEEN
LCOR CLARKSBURG L.L.C., AS LANDLORD
AND
COMSAT CORPORATION, AS TENANT
CLARKSBURG, XXXXXXXXXX COUNTY, MARYLAND
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TABLE OF CONTENTS
INTRODUCTION
Section 1. DEFINITIONS......................................................1
Section 2. LEASE OF MASTER LEASE PROPERTY...................................2
Section 3. TERM.............................................................2
Section 4. RENT.............................................................4
Section 5. USE OF THE MASTER LEASE PROPERTY.................................7
Section 6. DEVELOPMENT; DESIGNATION OF THE EXCLUDED AREAS...................9
Section 7. TAXES AND IMPOSITIONS...........................................11
Section 8. UTILITIES.......................................................15
Section 9. SIGNS...........................................................15
Section 10. AS-IS CONDITION OF MASTER LEASE PROPERTY........................16
Section 11. REPAIRS, MAINTENANCE AND MANAGEMENT.............................16
Section 12. ACCESS TO MASTER LEASE PROPERTY.................................18
Section 13. ALTERATIONS AND PERSONAL PROPERTY...............................19
Section 14. INSURANCE.......................................................22
Section 15. DAMAGE OR DESTRUCTION...........................................25
Section 16. INDEMNIFICATION.................................................31
Section 17. CONDEMNATION....................................................35
Section 18. LIENS...........................................................36
Section 19. EXISTING SPACE LEASES; ASSIGNMENT AND SUBLETTING................37
Section 20. SUBORDINATION OR SUPERIORITY OF LEASE...........................40
Section 21. DEFAULTS AND REMEDIES...........................................40
Section 22. BANKRUPTCY OR INSOLVENCY........................................45
Section 23. SURRENDER OF MASTER LEASE PROPERTY..............................47
Section 24. NON-CONSENSUAL HOLDING OVER.....................................48
Section 25. QUIET ENJOYMENT.................................................48
Section 26. NOTICES.........................................................48
Section 27. HAZARDOUS MATERIALS.............................................49
Section 28. RIGHT TO RENEW TERM.............................................52
Section 29. SECURITY DEPOSIT................................................54
Section 30. MISCELLANEOUS GENERAL PROVISIONS................................54
SCHEDULE I Defined Terms
SCHEDULE II Deductibles
SCHEDULE OF EXHIBITS
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MASTER LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") is entered into and
made effective as of the 12th day of September, 1997 (the "Effective
Date"), by and between LCOR CLARKSBURG L.L.C., a Delaware limited liability
company ("Landlord") and COMSAT Corporation, a District of Columbia
corporation ("Tenant").
WITNESSETH:
(a) Prior to but contemporaneously with the execution and
delivery of this Lease, Tenant sold and transferred the Master Lease
Property to Landlord pursuant to that certain Agreement of Sale dated the
Effective Date, by and between Tenant, as seller, and Landlord, as
purchaser (the "Purchase and Sale Agreement").
(b) Landlord desires to lease to Tenant, and Tenant
desires to lease back from Landlord, the Master Lease Property, all as set
forth and on the terms and conditions contained in this Lease.
NOW THEREFORE, in consideration of the mutual promises
set forth in this Lease and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged by each party, Landlord
and Tenant agree as follows:
SECTION 1. DEFINITIONS
(a) The following terms shall have the meanings ascribed
thereto below:
Agents: The agents, employees, contractors,
subcontractors, affiliates, licensees and invitees of each party
(and in the case of Tenant, subtenants).
Excluded Areas: Any areas of the Master Lease Property
excluded by Landlord pursuant to Section 6.
Expiration Date: The ending date of the Term.
Installations Premises: Certain portions of the Land as
described or shown on Exhibit C attached hereto and made a part hereof,
together with all improvements located thereon.
Land: Approximately 227 acres of land located in
Clarksburg, Xxxxxxxxxx County, Maryland, as described or shown on Exhibit A
attached hereto and made a part hereof.
Main Building: A building complex consisting of three
buildings (the "Component Buildings") which, for the purposes of this
Lease, Landlord and Tenant agree contain, in the aggregate, 496,000 gross
square feet of space (the "Main Building Space"), located on the Land and
commonly known as 22250, 22300, and 22240
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XXXXXX Xxxxx, Xxxxxxxxxx, Xxxxxxxx. Further, for the purposes of this
Lease, Landlord and Tenant agree that the Component Buildings are
designated as, and contain amounts of Main Building Space, as follows:
Building A: The largest of the Component Buildings,
commonly known as the primary building; 446,000 gross
square feet;
Building B: The second largest of the Component
Buildings, commonly known as the Spectra building;
40,000 gross square feet;
Building C: The smallest of the Component Buildings,
commonly known as the etching and plating building;
10,000 gross square feet.
Main Building Area: The Main Building and the Parking
Areas, access drives, and other appurtenant areas serving the Main
Building, as described or shown on Exhibit B attached hereto and made a
part hereof.
Master Lease Property: The Land, together with all
improvements located thereon, less the Installations Premises and
the Excluded Areas. The Master Lease Property includes, without
limitation, the Main Building Area.
Parking Areas: Those certain areas located in the Main
Building Area and designated for use for parking of motor
vehicles as of the Effective Date.
Unimproved Area: The Master Lease Property, less the
Main Building Area.
(b) Other terms shall have meanings ascribed to such
terms in this Lease and as shown on Schedule I attached hereto and made a
part hereof.
SECTION 2. LEASE OF MASTER LEASE PROPERTY
Landlord, for and in consideration of the rents,
covenants and agreements hereinafter reserved, mentioned and contained on
the part of Tenant and its successors and assigns, to be paid, kept and
performed, has leased, rented, let and demised, and by these presents does
lease, rent, let and demise unto Tenant, and Tenant does hereby take and
hire, upon and subject to the covenants, agreements, provisions,
limitations and conditions herein expressed, the Master Lease Property.
SECTION 3. TERM
(a) The initial term of this Lease (the "Initial Term")
shall be for a period of ten (10) years commencing on the Effective Date
and ending at 11:59 p.m. local time on the day preceding the tenth
anniversary of the Effective Date, unless
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this Lease shall be sooner terminated as hereinafter provided or as
provided by law. Notwithstanding the foregoing, if the Term ends on any day
other than the last day of any calendar month, the Term shall be extended
so that the last day of the Term is the last day of such calendar month.
The Initial Term, as may be extended by exercise of the provisions of
Subsection 3(b) or Section 28, may sometimes be collectively referred to in
this Lease as the "Term".
(b) Provided that no Event of Default exists on the date
of the Holdover Notice or the date of commencement of the Holdover Period,
Tenant may holdover under the terms of this Lease with respect to the Main
Building Area for up to six (6) months immediately after the Initial Term,
provided that:
(i) Tenant provides Landlord with written notice
(the "Holdover Notice") at least six (6) months prior to the Expiration
Date of the Initial Term stating the number of months up to six (6) that
Tenant will holdover under the terms of this Lease (the "Holdover Period");
and
(ii) Tenant pays as Base Rent for each month
during the Holdover Period, in addition to all other amounts payable under
this Lease, one hundred twelve and 75/100ths percent (112.75%) of the full
monthly installment of Base Rent due in the last year of the Initial Term.
If Tenant exercises this holdover right, then, upon commencement of the
Holdover Period, any portions of the Unimproved Area remaining subject to
this Lease at the expiration of the Initial Term shall automatically be
released from this Lease as Excluded Area as if released under Section 6;
provided, however, that after the commencement of the Holdover Period,
Tenant shall not record any instrument confirming the grant of easements
described in Section 6(d). At its sole election, Tenant may exercise its
right to the Holdover Period with respect to less than all of the Main
Building Area. If Tenant desires to so holdover with respect to less than
all of the Main Building Area, Tenant shall designate in the Holdover
Notice the space in which it desires to holdover in the Main Building, but
in no event less than two hundred fifty thousand (250,000) gross square
feet (including the aggregate gross square footage of the area of the Main
Building then leased under Existing Space Leases and Subleases, the terms
of which have been extended beyond the Expiration Date of the Initial Term
with Landlord's approval) (the "Holdover Space"). Tenant's payments of Base
Rent and payments of Additional Rent during the Holdover Period shall be
reduced to the proportion that the Holdover Space bears to the Main
Building Space and Tenant shall have the nonexclusive right during the
Holdover Period to use the Parking Areas, access drives, and all other
common areas within the Main Building Area. If Tenant designates a part of
the Holdover Space in Building B in the Holdover Notice, Tenant shall be
required to holdover in the entirety of Building B. If Tenant designates a
part of the Holdover Space in Building C in the Holdover Notice, Tenant
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shall be required to holdover in the entirety of Building C. The amount of
square footage comprising the Holdover Space designated in Building A
shall be determined in accordance with the applicable standard of the
Greater Washington Association of Commercial Realtors and such Holdover
Space shall be so configured as to leave remaining space in Building A
reasonably marketable to third party tenants; provided, however, this
obligation shall not require Tenant to construct Alterations in order to leave
such a marketable space.
(c). As used in this Lease, the term "Lease Year" means
each consecutive period of twelve (12) calendar months during the Term,
commencing on the Effective Date. If, however, the Effective Date is other
than the first day of a calendar month, the first Lease Year shall begin on
the Effective Date and end on the first anniversary of the last day of the
calendar month in which the Effective Date falls, and each succeeding Lease
Year shall be each succeeding consecutive period of twelve (12) calendar
months thereafter during the Term.
SECTION 4. RENT
(a) Tenant covenants and agrees to pay Landlord in lawful
money of the United States, annual base rent for the Master Lease Property
("Base Rent") in twelve (12) equal monthly installments, in advance, on or
before the first day of each and every month throughout the Term, as
follows:
(i) FOUR MILLION NINE HUNDRED SIXTY THOUSAND AND NO/100
DOLLARS ($4,960,000.00) during the first Lease Year.
(ii) FIVE MILLION NINETY-SIX THOUSAND AND FOUR HUNDRED
AND NO/100 DOLLARS ($5,096,400.00), during the second Lease Year.
(iii) FIVE MILLION TWO HUNDRED THIRTY-SIX THOUSAND FIVE
HUNDRED FIFTY-ONE AND NO/100 DOLLARS ($5,236,551.00), during the third
Lease Year.
(iv) FIVE MILLION THREE HUNDRED EIGHTY THOUSAND FIVE
HUNDRED FIFTY-SIX AND 15/100 DOLLARS ($5,380,556.15), during the fourth
Lease Year.
(v) FIVE MILLION FIVE HUNDRED TWENTY-EIGHT THOUSAND FIVE
HUNDRED TWENTY-ONE AND 45/100 DOLLARS ($5,528,521.45), during the fifth
Lease Year.
(vi) FIVE MILLION SIX HUNDRED EIGHTY THOUSAND FIVE
HUNDRED FIFTY-FIVE AND 79/100 DOLLARS ($5,680,555.79), during the sixth
Lease Year.
(vii) FIVE MILLION EIGHT HUNDRED THIRTY-SIX THOUSAND
SEVEN HUNDRED SEVENTY-ONE AND 07/100 DOLLARS ($5,836,771.07), during the
seventh Lease Year.
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(viii) FIVE MILLION NINE HUNDRED NINETY-SEVEN THOUSAND
TWO HUNDRED EIGHTY-TWO AND 27/00 DOLLARS ($5,997,282.27), during the eighth
Lease Year.
(ix) SIX MILLION ONE HUNDRED SIXTY-TWO THOUSAND TWO
HUNDRED SEVEN AND 54/100 DOLLARS ($6,162,207.54), during the ninth Lease
Year.
(x) SIX MILLION THREE HUNDRED THIRTY-ONE THOUSAND SIX
HUNDRED SIXTY-EIGHT AND 24/100 DOLLARS ($6,331,668.24), during the tenth
Lease Year.
Notwithstanding the foregoing, if the Effective Date shall be a day other
than the first day of a calendar month, there shall be due and payable on
the Effective Date, as the installment of Base Rent for such fractional
month, an amount determined by dividing the Base Rent for the first Lease
Year by 365 and multiplying the result by the number of days from the
Effective Date through the end of such month.
(b) Tenant also covenants and agrees to pay, as
additional rent (the "Additional Rent"), all sums, Impositions, costs,
expenses and other payments which Tenant in any of the provisions of this
Lease assumes, agrees or is obligated to pay, or which shall become
otherwise due and payable from Tenant to Landlord under this Lease (other
than Base Rent). Base Rent and Additional Rent may sometimes be
collectively referred to herein as "Rent".
(c) It is the purpose and intent of Landlord and Tenant
that, except as explicitly set forth herein, the Base Rent shall be
absolutely net to Landlord, so that this Lease shall yield, net to
Landlord, the net annual rent specified in Subsection (a) of this Section 4
in each Lease Year during the Term and that all costs, expenses and
obligations of every kind and nature whatsoever, in connection with or
relating to the Master Lease Property shall be the obligation of Tenant and
shall be paid by Tenant.
(d) The Base Rent shall be paid to Landlord promptly when
due without notice or demand therefor, and without any abatement (except as
explicitly stated to the contrary in Section 8, Section 15 and Section 17),
deduction or set-off for any reason whatsoever.
(e) No payment by Tenant or receipt or acceptance by
Landlord of a lesser amount than the correct Rent shall be deemed to be
other than a payment on account, nor shall any endorsement or statement on
any check or any letter accompanying any check or payment be deemed an
accord and satisfaction, and Landlord may accept such check or payment
without prejudice to Landlord's right to recover the balance or pursue any
other remedy in this Lease or as provided by law or in equity.
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(f) If any of the Rent payable under the terms and
provisions of this Lease shall be or become uncollectible, reduced or
required to be refunded because of any rent control or similar act or law
enacted by a valid governmental authority, Tenant shall enter into such
agreements and take such other steps that Landlord may request and as may
be legally permissible to permit Landlord to collect the maximum rents
which, from time to time during the continuance of such legal rent
restriction, may be legally permissible (and not in excess of the amounts
reserved therefor under this Lease). Upon the termination of such legal rent
restriction, (i) the Rent shall become and thereafter be payable in accordance
with the amounts reserved herein for the periods following such termination,
and (ii) Tenant shall promptly pay to Landlord, to the maximum extent legally
permissible, an amount equal to (a) the Rent which would have been paid
pursuant to this Lease but for such legal rent restriction, less (b) the Rent
paid by Tenant during the period such rent restriction was in effect.
(g) All Rent and other payments required to be made by
Tenant to Landlord shall be delivered to Landlord by wire transfer pursuant
to the wire transfer instructions as shown on Exhibit D attached hereto and
made a part hereof or to any other single party that Landlord may specify
from time to time by written notice given to Tenant.
(h) In recognition of the extra costs to Landlord
resulting from Tenant's failure to make timely payment of any installment
of Base Rent, if any such installment is not paid within nine (9) days
after its due date, the delinquent amount shall be subject to a service
charge of five percent (5%) of such delinquent amount, or such lesser
charge as may be the maximum charge permitted by law. In addition, if any
installment of Base Rent or any other sum due Landlord under this Lease
remains unpaid seventy-five (75) days after its due date, the outstanding
amount shall bear interest at an annual rate of two percent (2%) over the
"Prime Rate" then prevailing or such lesser rate as may be the maximum rate
permitted by law (the "Stipulated Rate"), and calculated from the due date
of such sum and continuing through the date such sum is paid in full. As
used in this Lease, the term "Prime Rate" means the prime rate of interest
for large money center banks as published in the Money Rates section of the
Wall Street Journal or if the Wall Street Journal ceases to publish such
rate, as established by reference to such other authority as is generally
accepted in the business community as a source for determining the "Prime
Rate".
SECTION 5. USE OF THE MASTER LEASE PROPERTY
(a) The Main Building may be occupied and used for any
lawful purpose and shall not be used for any other purpose. The remainder
of the Main Building Area may be occupied and used for parking for, access to,
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and other reasonable purposes incidental to use of the Main Building and
shall not be used for any other purpose. The Unimproved Area shall not
be occupied by Tenant but may be used by Tenant for (i) access to the Main
Building Area via roads existing in the Unimproved Area as of the
Effective Date, or as may be relocated as expressly provided for in this
Lease, (ii) purposes which are incidental to use of the Main Building Area,
such as use, maintenance, repair, and replacement of utilities, storm
drainage facilities, and signage serving or used in connection with the Main
Building Area, (iii) use, maintenance, repair, and replacement of antennae,
satellite dishes, and other communications equipment located in the Unimproved
Area as of the Effective Date (but such facilities, excluding footings,
foundations, and concrete bases, shall be removed by Tenant at its own expense
promptly after such Unimproved Area is excluded from this Lease under
Section 6), (iv)reasonable recreation uses, such as use of the existing
recreational facilities, (v) temporary activities and uses that Tenant
reasonably deems desirable, and (vi) such limited purposes as are reasonably
necessary in order for Tenant to fulfill its obligations under this Lease to
Care for the Unimproved Area. Notwithstanding anything to the contrary
contained in this Lease, with respect to the uses described in clauses
(iv) and (v) above, (y) the Tenant shall ensure that such uses do not interfere
with the Development, and (z) no action or omission of Landlord, or its
Agents, successors and assigns that interferes with such uses shall be a
default of Landlord under this Lease.
(b) Tenant further agrees as follows:
(i) Tenant and its Agents shall use the Master
Lease Property and conduct its business thereon in a safe, careful,
reputable and lawful manner.
(ii) Tenant shall obtain, or cause to be obtained,
all certificates, licenses and permits necessary for its, or its
subtenants', occupancy, use, operation and maintenance of the Master Lease
Property. Upon reasonable advance request by Tenant, Landlord shall
reasonably cooperate with Tenant in Tenant's obtaining such necessary
certificates, licenses or permits, including, without limitation, signing
applications for the same within ten (10) business days after Tenant's
request if Landlord's signing is required by Applicable Law or requested by
a governmental authority; provided, that Landlord shall not be required to
incur any out-of-pocket costs to third parties in connection therewith.
Tenant shall promptly reimburse Landlord for any of its reasonable
out-of-pocket costs to third parties for review or advice about such
certificates, licenses or permits.
(iii) Tenant shall not commit, nor allow to be
committed, in, on or about the Master Lease Property, any act of waste,
including any act which might deface, damage or destroy any improvement
thereon, or any part thereof. Further, Tenant shall not permit any noise or
odor to be emitted from the Master Lease Property which is unlawful or
which constitutes a legal nuisance. Notwithstanding the foregoing, Tenant
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shall not have any responsibility for any waste, noise, or odor caused by
Landlord or its Agents.
(iv) Tenant shall promptly comply in all material
respects with all present and future laws, statutes, ordinances, rules,
regulations and orders of any federal, state, municipal or other government
or agency thereof having jurisdiction over and relating to the use,
condition and occupancy of the Master Lease Property, and any covenants,
conditions and restrictions of record existing as of the Effective Date and
governing the Master Lease Property (collectively, the "Applicable Laws").
Tenant acknowledges that the Applicable Laws are of public record and that
Tenant knows the character of its operation on the Master Lease Property.
Tenant shall have sole responsibility for its compliance with the
Applicable Laws in all material respects, and Tenant's inability to so
comply shall not be cause for Tenant to terminate this Lease.
Notwithstanding the foregoing:
(A) Tenant shall not be required to comply
with any Applicable Laws to the extent that Tenant or the Master Lease
Property are legally grandfathered or exempt from the application of such
Applicable Laws or Tenant may obtain from the appropriate authorities a
waiver or variance with respect to compliance.
(B) Tenant shall not be required to comply
with any legal requirements in connection with the Master Lease Property
arising out of or relating to the Development or arising out of other acts
or omissions of Landlord or its Agents on or with respect to the Master
Lease Property. All of such requirements on the Master Lease Property shall
be promptly complied with by Landlord in all material respects, at its own
expense.
(C) Tenant shall not be obligated to
correct any violations of Applicable Laws which may exist on the Master Lease
Property as of the Effective Date, except to the extent specifically
required to do so by written notice from the governmental authority having
jurisdiction.
(D) Tenant shall have the right to contest
by appropriate legal proceedings, conducted diligently and in good faith,
without expense to Landlord, the validity or application of any Applicable
Laws. If compliance with the Applicable Law being contested may legally be
delayed pending the prosecution of the proceeding, Tenant may delay
compliance until the final determination of the proceeding. Landlord shall
execute and deliver, within ten (10) business days after request by Tenant,
any appropriate papers and/or other instruments that may be necessary to
permit Tenant to contest the validity or application of the Applicable Law.
Landlord shall otherwise reasonably cooperate with Tenant in the contest,
provided that Landlord shall not be required to incur any out-of-pocket
costs to third parties in connection therewith. Notwithstanding the
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foregoing, Tenant shall ensure that any such contest does not cause any lien
to be filed against the Master Lease Property or any portion thereof.
SECTION 6. DEVELOPMENT; DESIGNATION OF THE EXCLUDED
AREAS
(a) Tenant acknowledges that, among other purposes,
Landlord purchased the Master Lease Property for possible development
and/or sale of all or portions of the Unimproved Area. Although Landlord is
not required to develop or sell any of the Unimproved Area, Landlord is
contemplating a mixed-use development thereon, consisting of, among other
things, uses of varying densities, sizes and natures, and infrastructure in
order to serve same (all or any portion thereof, the "Development"). The
Development shall be at Landlord's sole cost. Tenant acknowledges that the
Development may require Landlord to change the zoning classification as
well as take other actions to change the land use and character of the
Master Lease Property. Tenant covenants and agrees that during the Term it
shall not object to, and shall reasonably cooperate with Landlord with
respect to, Development by Landlord or its successors of any of the
Unimproved Area and shall reasonably cooperate so as to avoid interference
with the Development. Notwithstanding the foregoing:
(i) The Development by Landlord shall not
interfere with Tenant's or its subtenants' use of the Master
Lease Property.
(ii) No rezoning or other development approvals
sought by Landlord for all or any part of the Master Lease Property shall
prohibit, restrict, or make non-conforming any of the uses which may be
conducted on the Main Building Area or Installations Premises under the I-3
zoning applicable to such property as of the Effective Date.
(iii) Landlord acknowledges that the
uninterrupted operation of antennae, satellite dishes, and other
communications equipment now or in the future installed on the Main
Building Area (the "Communications Facilities") is of critical importance
to Tenant. Landlord shall not oppose the installation or continued
operation of the Communications
Facilities.
(iv) Tenant shall not be required to incur any
liability or out of pocket expense to third parties in providing
cooperation to Landlord or its successors with respect to the Development.
(b) At any time during the Term, without any consent of
Tenant whatsoever, a portion of the Unimproved Area shall be excluded from
the Master Lease Property immediately upon the occurrence of any of the
following (each a "Triggering Event"):
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(i) A written notice from Landlord to Tenant
designating such portion of the Unimproved Area as an Excluded Area. The
notice shall be accompanied by a legal description and drawing of the
Excluded Area.
(ii) The transfer of record title to or the
ground lease of such portion of the Unimproved Area by Landlord to another
party, including entities related to Landlord.
(iii) The commencement of clearing or grading
work for such portion of the Unimproved Area (in which event the Excluded
Area shall include the land to be disturbed by the work, any borrow, fill,
or stockpile areas, any areas for staging of equipment or materials, any
areas upon which sediment control measures are to be implemented).
Landlord may cause Triggering Events with respect to as many portions of
the Unimproved Area, and as often, as Landlord may determine in its sole
and absolute discretion. Landlord shall give Tenant written notice of the
occurrence of the Triggering Events described in (ii) and (iii) above at
least thirty (30) days before their anticipated dates of occurrence. The
notice shall be accompanied by a legal description and plat of the Excluded
Area. It is the intention of (iii) that no development work whatsoever
shall be performed to any portion of the Unimproved Area while it remains
subject to this Lease and that each such portion of the Unimproved Area
must be excluded from the Master Lease Property before work begins.
(c) Upon exclusion of an Excluded Area from the Master
Lease Property, Tenant shall have no further rights or obligations under
this Lease with respect to such Excluded Area. There shall be no reduction
in Base Rent with respect to an Excluded Area, but Landlord and Tenant
shall equitably apportion any Additional Rent with respect to such Excluded
Area as of the date of exclusion and Landlord shall reimburse Tenant at the
time of such exclusion in an amount equal to (i) any Impositions paid by
Tenant, and (ii) any other expenses paid by Tenant (provided that such
expenses are required to be paid by Tenant under this Lease) with respect
to such Excluded Area and attributable to the period of time beginning with
and following the date of exclusion. Such reimbursement shall be a
condition precedent to exclusions of any property. In addition, Landlord,
at its sole expense and as a condition precedent to exclusions of any
property, shall cause such Excluded Area to be established as a separate
tax parcel for the purposes of Impositions at the time such parcel is
excluded.
(d) In the event that an Excluded Area contains any road,
utility line, drainage line, storm water management facility, sign, or
other improvement or amenity then being used by Tenant in connection with
the Main Building Area (collectively, "Appurtenances"), then, automatically
upon exclusion of the Excluded Area, Tenant shall be deemed to have
easements for the continued uninterrupted use of the
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Appurtenances for so long as this Lease remains in effect. The easements
provided for in this subsection shall include the right of Tenant to enter
upon the Excluded Area to inspect, maintain, repair, and replace the
Appurtenances. Notwithstanding the foregoing, Landlord may temporarily
discontinue any of the Appurtenances for a period of not more than
forty-eight (48) hours if Landlord provides Tenant with temporary
Appurtenances, provided such temporary Appurtenances allow Tenant and its
Agents to use the Master Lease Property without any material diminishment
of Tenant's or its Agents' use of the Master Lease Property or any material
interference with the business operations of Tenant or its subtenants on
the Main Building Area.
(e) Notwithstanding anything to the contrary contained in
this Lease, Tenant shall not be required to pay for any incremental,
additional or increased Insurance or any increased costs of Care of the
Master Lease Property which are attributable to Development or any other
acts or omissions of Landlord or its Agents with respect to the Master
Lease Property.
(f) In addition to the easements for existing
Appurtenances provided for in Subsection 6(d), Landlord shall grant to
Tenant, or to any utility company or governmental authority designated by
Tenant, such other easements for utilities, drainage, stormwater
management, and other similar matters on, under, and across the Unimproved
Area as may be reasonably required in connection with the use or occupancy
of the Main Building Area and in accordance with this Lease ("Additional
Easements"). No Additional Easements shall materially and adversely affect
the Development or materially increase the cost of Development. Landlord
shall have a reasonable right of approval of the location of all Additional
Easements. All Additional Easements shall be granted without charge within
ten (10) business days after written request by Tenant, accompanied by the
instrument to be executed and a plat showing the location of the Additional
Easement. Landlord shall make good faith and commercially reasonable
efforts to cause its mortgagees to subordinate their liens against the
Master Lease Property to any Additional Easements.
SECTION 7. TAXES AND IMPOSITIONS
(a) Tenant covenants and agrees to pay, not later than
the first day on which any interest or penalty will accrue or be assessed
for the non-payment thereof, all of the following items applicable to or
affecting the Master Lease Property or any part thereof accruing or payable
from and after the Effective Date and during the Term or applicable
thereto: (i) all real estate taxes and assessments (including, without
limitation, assessments for special business improvement or assessment
districts), (ii) personal property taxes, (iii) occupancy and rent taxes
specifically imposed on tenants in Xxxxxxxxxx County or attributable to the
subtenants of Tenant, (iv) water and sewer rents, rates and charges, (v)
vault taxes and charges, (vi) certificate, license and permit fees, (vii)
any taxes, assessments or governmental levies, general and special,
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ordinary and extraordinary, foreseen and unforeseen, of any kind and nature
whatsoever which at any time prior to or during or applicable to the Term or
any part thereof may be assessed, levied, confirmed, imposed upon, or grow or
accrue or become due and payable out of, or charged with respect to, or
become a lien on, the Master Lease Property or any part thereof, or the
sidewalks or streets in front of or adjoining the Master Lease Property, or
any vault, passageway or space in, over or under such sidewalk or street, or
any other appurtenances to the Master Lease Property, or any personal
property, equipment or other facility used in the operation thereof, or any
use or occupation of the Master Lease Property, or any document by which
Tenant creates or transfers an interest or estate in the Master Lease Property
(except any document releasing an Excluded Area from the Master Lease
Property), and (vii) any fines or penalties or similar governmental charges
applicable with respect to any of the foregoing, together with interest and
costs thereon (all such items aforesaid may sometimes be collectively
referred to herein as "Impositions").
(b) If, by law, any Imposition imposed during the Term,
which is an assessment not related to general real estate taxes, may at the
option of the taxpayer be paid in installments (whether or not interest
shall accrue on the unpaid balance of such Imposition), Tenant may exercise
the option to pay the same (and any accrued interest on the unpaid balance
of such Imposition) in installments and, in such event, shall pay such
installments plus interest as may become due during the Term of this Lease;
provided, that all such payments shall be made before any fine, penalty or
other charge for non-payment of any installment may be added thereto.
(c) Any Imposition (including, without limitation, those
Impositions which have been converted into installment payments by Tenant
as referred to in Subsection (b) above) relating to a period of time which
is partially within the Term and partially beyond the Expiration Date shall
be adjusted between Landlord and Tenant as of the Expiration Date so that
Landlord shall pay that portion of such Imposition which is attributable to
any period of time after the Expiration Date and Tenant shall pay the
remainder thereof. This subsection shall survive termination of the Lease.
(d) Notwithstanding the foregoing, Tenant shall not be
required to pay municipal, state or federal income, excess profits, capital
levy, rental (except as set forth in clause (iii) of Subsection (a)),
estate, succession, inheritance, transfer, recordation (except to the
extent described in Section 30(v)) or gift taxes of Landlord, any corporate
franchise tax imposed upon Landlord or any tax imposed because of the
nature of the business entity of Landlord; provided, however, that if at
any time during the Term, the method of taxation prevailing at the
Effective Date shall be altered so that, in substitution for ad valorem
real estate taxes, any new Imposition or charge, or any part thereof, shall be
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measured by or be based in whole or in part upon the Master Lease Property and
shall be imposed upon Landlord, then all such new Impositions or charges,
or any part thereof, shall be deemed to be included within the term
"Impositions", and Tenant shall pay and discharge the same as herein provided
in respect of the payment of Impositions.
(e) (i) If permitted by Applicable Law, and provided no
Event of Default is then in existence, Tenant shall have the right, at its
own expense, to contest the amount or validity, in whole or in part, of any
Imposition by appropriate proceedings diligently conducted in good faith.
If, under Applicable Law, the contested Imposition must be paid before
undertaking the contest, Tenant shall pay such Imposition (which payment
may be made under protest, at Tenant's option) or, if permitted by Landlord
and any mortgagee of Landlord (including trustees or beneficiaries of deeds
of trust) ("Mortgagee"), either deposit with Landlord, Mortgagee or the
assessing body, as Landlord, Mortgagee or the assessing body may require,
an amount sufficient to pay all amounts referred to in Subsection (ii)
below, or undertake such other method of securing payment of such amounts
as is satisfactory to Landlord, Mortgagee and the assessing body.
(ii) Upon the termination of any such proceeding,
Tenant shall pay the amount of such Imposition or part thereof as finally
determined as due in such proceedings, the payment of which may have been
deferred during the prosecution of such proceedings, together with any
costs, fees, interest, penalties or other liabilities in connection
therewith, and, upon such payment, Landlord shall, provided an Event of
Default is not then in existence, return or request Mortgagee to return any
amount still on deposit with it or with Mortgagee with respect to such paid
Imposition. If at any time during the continuance of such proceedings
Landlord, Mortgagee or the assessing body shall deem the amount deposited
or the undertaking insufficient, Tenant shall, upon thirty (30) days prior
written notice, make an additional undertaking or deposit with Landlord,
Mortgagee or the assessing body, as Landlord or Mortgagee reasonably may
request, or as the assessing body may require, and upon failure of Tenant
to do so, the amount theretofore deposited shall be applied by Landlord,
Mortgagee or the assessing body to the payment, removal and discharge of
such Imposition and the interest and penalties in connection therewith and
any costs, fees (including, without limitation, reasonable attorneys' fees
and disbursements) or other liabilities accruing in any such proceedings,
and the balance, if any, shall be returned to Tenant, or the deficiency, if
any, shall be paid by Tenant immediately on demand of Landlord or Mortgagee
to the taxing authority to which such Imposition is payable. This
subsection shall survive termination of this Lease.
(f) Landlord or Tenant may, if it shall so desire,
endeavor at any time or times to obtain a lowering of the assessed
valuation upon the Master Lease Property, or any part thereof, for the
purpose of reducing Impositions thereon, and in such event, the other party
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will reasonably cooperate in effecting such reduction, but shall not be
required to incur any out-of-pocket costs in so cooperating.
(g) Landlord shall not be required to join in any
proceedings referred to in Subsection (e) above unless the provisions of
any law, rule or regulation at the time in effect shall require that such
proceedings be brought by or in the name of Landlord or any owner of the
Master Lease Property, in which event, Landlord shall join in such
proceedings or permit the same to be brought in its name and shall sign all
documents reasonably necessary to prosecute the proceedings. Landlord shall
not be subject to any liability for the payment of any costs or expenses in
connection with any such proceedings, and Tenant will indemnify and save
harmless Landlord from and against any such costs and expenses, including,
but not limited to, reasonable attorneys' fees and disbursements, and from
any liability resulting from such proceeding. After reimbursing and
indemnifying Landlord for the items referred to in the preceding sentence,
Tenant shall be entitled to any refund with respect to any Imposition and
penalties or interest thereon which have been paid by Tenant (whether
directly or through escrowed funds), or which have been paid by Landlord
but previously reimbursed in full to Landlord by Tenant. Tenant's right to
the refund shall survive termination of this Lease.
(h) The certificate, advice, statements, or xxxx of the
appropriate official designated by law to make or issue the same or to
receive payment of any Imposition shall be prima facie evidence that the
Imposition is due and unpaid at the time of the making or issuance of such
certificate, advice statement or xxxx.
(i) Tenant shall make all payments of Impositions
directly to the appropriate governmental authorities, and Landlord appoints
Tenant the attorney-in-fact of Landlord for the purpose of making all
payments to be made by Tenant pursuant to any of the provisions of this
Lease to persons or entities other than Landlord. In case any person or
entity to whom any sum is directly payable by Tenant under any of the
provisions of this Section 7 shall refuse to accept payment of such sum
from Tenant, Tenant shall thereupon give written notice of such fact to
Landlord and shall pay such sum directly to Landlord and Landlord shall
promptly pay such sum to such person or entity.
(j) Tenant shall deliver to Landlord duplicate receipts
or photostatic copies thereof, or other evidence reasonably satisfactory to
Landlord (followed by such duplicate receipts or copies, when available)
showing the payment of all Impositions, within ten (10) business days after
the respective payments are required to be made by Tenant and Landlord
requests such evidence in writing.
(k) Landlord shall furnish to Tenant copies of all
notices of assessment and bills relating to Impositions within ten (10)
business days after Landlord receives any of the same from the governmental
authorities.
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SECTION 8. UTILITIES
(a) Tenant agrees to pay all charges made against the
Master Lease Property for gas, heat, water, electricity, sewage
disposition, telephone and all other utilities and services related to the
Master Lease Property during the Term (collectively, the "Utilities").
(b) Tenant understands, acknowledges and agrees that any
one or more of the Utilities may be interrupted or diminished by reason of
causes beyond Landlord's reasonable control; that Landlord does not
represent or warrant the uninterrupted avail ability of the Utilities; that
Tenant shall be solely responsible for obtaining and maintaining the use of
the Utilities; and that, unless caused by Landlord or its Agents, any such
interruption or diminishment shall not (i) be deemed an eviction or
disturbance of Tenant's right to possession, occupancy and use of the
Master Lease Property or any part thereof, or (ii) render Landlord liable
to Tenant in damages by abatement of Rent or otherwise, or relieve Tenant
from the obligation to perform its covenants under this Lease. In pursuing
the Development, Landlord shall take and cause its Agents to take best
efforts to avoid the interruption or diminishment of the Utilities.
SECTION 9. SIGNS
(a) Tenant shall not inscribe, paint, affix or display
any sign, advertisement or notice (collectively "Signs") on any portion of
the Main Building Area (or on any interior portion of the Main Building
that is visible from the exterior) not presently located thereon without
the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed.
(b) Tenant shall not inscribe, paint, affix or display
any Sign on any portion of the Unimproved Area not presently located
thereon without the prior written consent of Landlord, which consent shall
be in Landlord's sole and absolute discretion. After a Triggering Event
with respect to an Excluded Area on which any Sign then exists, Landlord
shall have the right, at its sole expense, to remove such Sign. If any Sign
is to be removed pursuant to the preceding sentence, Landlord, if requested
by Tenant, shall relocate the Sign, and any lighting and electrical service
related to the Sign, to another location reasonably agreed upon by the
parties and providing substantially similar visibility to that afforded by
the prior location.
(c) Despite the foregoing, Tenant shall not require
Landlord's consent to replace any Sign existing as of the Effective Date
provided that the dimensions and location of the new Sign are substantially
the same as those of the existing Sign.
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SECTION 10. AS-IS CONDITION OF MASTER LEASE PROPERTY
PRIOR TO THE EFFECTIVE DATE, TENANT OWNED THE LAND FOR APPROXIMATELY THIRTY
(30) YEARS, DEVELOPED THE IMPROVEMENTS THEREON, INCLUDING BUT NOT LIMITED
TO THE MAIN BUILDING, AND OCCUPIED THE MAIN BUILDING. CONSEQUENTLY, UPON
THE EFFECTIVE DATE, TENANT SHALL ACCEPT THE MASTER LEASE PROPERTY IN "AS
IS" CONDITION. TENANT AGREES AND ACKNOWLEDGES THAT LANDLORD HAS NOT MADE
ANY REPRESENTATION RESPECTING OR ANY WARRANTY WHATSOEVER, EXPRESS OR
IMPLIED, REGARDING THE MASTER LEASE PROPERTY, INCLUDING, WITHOUT
LIMITATION, REPRESENTATIONS OR WARRANTIES REGARDING THE PHYSICAL NATURE OR
CONDITION OF THE MASTER LEASE PROPERTY. TENANT ACKNOWLEDGES THAT IT IS
COGNIZANT OF AND SATISFIED WITH ALL ASPECTS OF THE MASTER LEASE PROPERTY,
AND THAT AS PROVIDED HEREIN THIS TRANSACTION IS AN "AS IS" TRANSACTION.
SECTION 11. REPAIRS, MAINTENANCE AND MANAGEMENT
(a) Tenant shall, at its sole expense, keep, maintain,
manage and operate (collectively, "Care" or "Care for" or "Care of" as the
context may require) the Main Building Area in good condition and repair in
a manner consistent with Care for Class B suburban buildings of similar age
and character and used for similar purposes in Xxxxxxxxxx County, Maryland
("Comparable Buildings"), and in compliance with all Applicable Laws in all
material respects. Except as otherwise provided in Subsection 5(b)(iii),
Subsection 5(b)(iv)(A), Subsection 5(b)(iv)(B), Subsection 5(b)(iv)(C),
Subsection 5(b)(iv)(D), Subsection 8(b), Section 10, Subsection 11(a),
Subsection 11(c), Subsection 11(d), Subsection 12(a), Subsection 15,
Subsection 16(b), Subsection 17(a)(i), Subsection 17(a)(iii), Subsection
17(b), Section 23, Subsection 27(b), Subsection 27(f) of this Lease to the
contrary, Tenant shall make and perform all necessary maintenance and
repairs to the Main Building Area, whether structural and non-structural,
ordinary and extraordinary, foreseen and unforeseen, of every nature, kind
and description. All repairs made by Ten ant shall be reasonably suited to
accomplish their intended purposes and shall be in compliance with
Applicable Laws in all material respects. The necessity for or adequacy of
Care shall be measured by the standards which are appropriate for
Comparable Buildings; provided, that Tenant shall in any event make all
repairs necessary to avoid structural damage to the Main Building or other
damage or injury to persons, property and other portions of the Master
Lease Property. However, Landlord shall be responsible for any repairs
necessitated by Landlord or its Agents.
(b) Tenant shall further Care for the remainder of the
Master Lease Property and keep the same in good condition and repair in a
manner consistent with other similar properties in Xxxxxxxxxx County,
Maryland (the "Comparable Properties") and in material compliance with all
Applicable Laws. All repairs made by Tenant shall be reasonably suitable to
accomplish their purposes and shall be in material compliance with
Applicable Laws. Tenant shall in any event make all repairs necessary to
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avoid structural damage to the improvements or other damage or injury to
persons, property and other portions of the Master Lease Property. However,
Landlord shall be responsible for any repairs necessitated by Landlord or its
Agents. Further, Tenant, while it was owner of the Property, recorded a
Declaration of Easements, Covenants, and Restrictions (the "Declaration")
which, among other things, sets forth a standard of Care for the Master Lease
Property. Landlord hereby delegates to Tenant, and Tenant hereby accepts
from Landlord, the maintenance and repair obligations applicable to the
Master Lease Property and described in Section 6 of the Declaration.
(c) If any dispute shall arise between Landlord and
Tenant as to the standard of Care required under Subsection (a) or (b)
above, the matter shall be resolved by binding arbitration in accordance
with the then prevailing Commercial Arbitration Rules of the American
Arbitration Association (the "AAA"). Upon demand for arbitration by either
party in accordance with such rules, the matter shall be decided by a
single arbitrator in Xxxxxxxxxx County, Maryland, selected in accordance
with the prevailing Commercial Arbitration Rules of the AAA. In deciding
any matter relating to the Main Building Area, the arbitrator shall take
into account the age and character of the Main Building, the standards of
Care set forth in this Section 11, and the remaining Term of this Lease.
The arbitrator shall hold a hearing on the matter within forty-five (45)
days after he or she is appointed. At least twenty (20) days before the
hearing, each party shall submit to the other party a written statement of
its case, copies of all documents upon which it intends to rely at the
hearing, and a list of the witnesses it intends to call to testify at the
hearing. The hearing shall be concluded within fifteen (15) days after the
initial hearing date and the arbitrator shall decide the matter within
fifteen (15) days after the hearing is concluded. The arbitrator shall
render his or her decision in writing, setting forth the reasons for the
decision. Each party shall bear its own costs related to the arbitration,
except that the parties shall share equally all filing fees and other costs
imposed by the AAA in connection with the arbitration and the fees of the
arbitrator. The decision of the arbitrator shall be final and
non-appealable and judgment on the decision may be entered in any court of
competent jurisdiction.
(d) Notwithstanding Subsections (a) and (b), unless
required by Applicable Laws, Tenant shall not be required to (i) improve,
upgrade, re-model, retrofit, or renovate all or any part of the Main
Building Area or (ii) make any replacement or major repair of any
component, element or system of the Main Building Area where a more minor
repair may be sufficient to allow the ordinary use and occupancy of the
Main Building Area.
(e) In addition to the Care required by this Section 11,
Tenant, at its sole expense, within five (5) years after the Effective Date
(subject to extension for Unavoidable Delays), shall complete the work (the
"Roof Work") described in Exhibit F attached hereto and made a part hereof.
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(f) Landlord agrees that during the Term, Tenant shall
have the right, after providing prior written notice to Landlord, to
enforce any rights of Landlord under applicable warranties, guarantees,
licenses and permits applicable to the Main Building Area. Landlord shall
sign such documents and otherwise reasonably cooperate with Tenant to
facilitate such enforcement, provided that Landlord shall not be required
to incur any out of pocket expense to third parties in so doing.
SECTION 12. ACCESS TO MASTER LEASE PROPERTY
(a) Tenant acknowledges that Landlord has a significant
economic interest in the Care of the Main Building Area and that Landlord,
pursuant thereto, has a need, from time to time, to inspect the Main
Building Area to insure Tenant's conformity with the covenants of this
Lease. Tenant, therefore, hereby authorizes Landlord and any parties
authorized by Landlord to perform such inspections of the Main Building
Area as Landlord from time to time may reasonably deem appropriate.
Landlord shall have the right to enter any part of the Main Building Area
at all reasonable times, upon reasonable advance notice to Tenant and
accompanied by a representative of Tenant, for the purposes of making such
inspections, showing the Main Building Area to prospective purchasers,
investors, mortgagees and tenants, and making such repairs, alterations or
improvements to the Main Building Area as Landlord may deem necessary or
desirable if Tenant fails to properly Care for same after notice and
opportunity to cure as provided for in Section 21(a). No such entry shall
materially interfere with the use and occupancy of the Main Building Area
by Tenant, its subtenants and licensees. Landlord shall incur no liability
to Tenant for such entry except in the case of death, bodily injury, or
property damage caused by Landlord or its Agents. Notwithstanding the
foregoing, Landlord shall have no right to enter upon those portions of the
Main Building which are secured or confidential areas pursuant to
Applicable Laws or agreements to which Tenant is subject ("Restricted
Areas"). Further, no person who is a foreign national may enter into the
Main Building on behalf of Landlord, unless approval of such person is
obtained from Tenant in advance. Such approval may be withheld only to the
extent entry by such person would violate Applicable Laws or agreements to
which Tenant is subject.
(b) Tenant also acknowledges that Landlord has a
significant economic interest in the Care of the Unimproved Area, and an
on-going need to access the Unimproved Area in connection with Development.
Tenant, therefore, hereby authorizes Landlord and any parties authorized by
Landlord to enter upon the Unimproved Area at any time without notice and
without being accompanied by a representative of Tenant, to perform such
inspections of the Unimproved Area as Landlord from time to time may
reasonably deem appropriate, and further to perform whatever activities
Landlord deems necessary or desirable, in its sole discretion, to aid
Development, provided that such activities do not amount to a Triggering
Event. Additionally, Tenant
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authorizes Landlord and any parties authorized by Landlord to use and
maintain such then existing roads and other infrastructure in the
Unimproved Area, and to grant such easements and rights of way with respect
to the Unimproved Area as Landlord deems necessary or desirable, in its
sole discretion. However, Landlord's exercise of its rights under this
Subsection 12(b) shall not materially interfere with the use of, or access
to, the Unimproved Area or the Main Building Area by Tenant or its Agents.
No development or construction work shall take place in the Unimproved Area
unless such Unimproved Area is first excluded from this Lease in accordance
with Section 6.
SECTION 13. ALTERATIONS AND PERSONAL PROPERTY
(a) Except as required by Tenant's repair and maintenance
obligations under this Lease, Tenant shall not make any alterations,
additions, installations or other improvements ("Alterations") to the
Master Lease Property or any part thereof without the prior written consent
of Landlord, which consent shall not be unreasonably withheld or delayed
with respect to the Main Building Areas but which may be withheld in
Landlord's sole discretion with respect to the Unimproved Area. However,
nothing in this Section shall be deemed to diminish Landlord's obligation
to grant easements under Section 6(e) or Tenant's right to replace Signs
under Section 9(d). Moreover, Tenant need not seek the consent of Landlord
to (i) install any Alteration in the Main Building Area costing One Hundred
Seventy Thousand Dollars ($170,000.00) or less, (ii) install any tenant
improvement work for subleased space in the Main Building, (iii) install
communications equipment on the roof of the Main Building (the "Roof Based
Facilities") (provided any such piece of the Roof Based Facilities does not
exceed twenty (20) feet in diameter), or (iv) dismantle and remove any
clean room contained in the Main Building (collectively, "Preapproved
Alterations"). Notwithstanding anything to the contrary herein, in no event
shall Tenant make any Alterations which would affect the structure or
structural integrity of the Main Building or the facade of the Main
Building or construct or place any communications equipment on the exterior
of the Main Building or other exterior portions of the Main Building Area
(except the Roof Based Facilities described in clause (iii) above) without
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed. Any Alteration in or to the Master Lease
Property, whether or not requiring the approval of Landlord, shall be
subject, however, in all cases to the following:
(i) Except to the extent that any Alteration is a
Preapproved Alteration, no Alteration shall be made without at least 30
days prior notice to Landlord (unless Applicable Laws require otherwise or
except in the case of an emergency, in which case, Tenant shall give
Landlord as much notice as is practicable), accompanied by a copy of the
proposed plans and specifications in detail reasonably sufficient for
Landlord to review same, the identity of the contractor and any
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subcontractors, and a copy of all contracts with respect to the Alteration.
All Alterations shall be made promptly at the sole cost and expense of
Tenant and in a good and workmanlike manner and in material compliance with
all Applicable Laws. Tenant shall promptly reimburse Landlord upon demand,
up to One Thousand Dollars ($1,000) in each instance, for any reasonable
costs and expenses incurred by Landlord to third parties in connection with
Landlord's review of Tenant's proposed plans and specifications, or
revisions thereof (collectively, the "Plans"); provided, however, that
Tenant shall not be obligated to reimburse Landlord for Landlord's review
of any Plans in connection with Restoration (except as provided in Section
15). Upon the request of Landlord, but not more than once each Lease Year,
Tenant shall provide Landlord with a written description of Alterations
made to the Master Lease Property since the later of (i) the Commencement
Date, and (ii) the date of the last such report. In addition, Tenant shall
provide "CAD" drawings to Landlord showing the current configuration of the
Main Building, including, without limitation, any Alterations made to the
Master Lease Property. Such drawings shall be delivered to Landlord
approximately twenty-four (24) months before the Expiration Date and within
thirty (30) days after the expiration or earlier termination of this Lease.
(ii) The Master Lease Property at all times shall
be kept by Tenant free of liens for labor and materials supplied or claimed
to have been supplied to the Master Lease Property in connection with the
Alterations.
(iii) Notice is hereby given that Landlord shall
not be liable for any labor or materials furnished to or for Tenant.
Furthermore, notice is hereby given to Tenant and Tenant's mechanics,
laborers and materialmen with respect to the Master Lease Property that no
mechanic's, materialman's or laborer's lien shall attach to or affect the
reversion or other interest of Landlord in or to the Master Lease Property.
(iv) No Alteration shall, when completed, be of
such a character as to render any part of the Master Lease Property
anything other than a complete, self-contained structural unit.
(v) Worker's compensation, builder's risk and
general liability insurance with respect to the Alteration as required by
Section 14 shall be maintained by Tenant.
(vi) All Alterations, other than roof-top
communications equipment, shall be the property of Landlord. Tenant shall
have no obligation to remove, or to pay for the removal of, any
Alterations, other than roof-top communications equipment, upon termination
of this Lease.
(b) All personal property, including, but not limited to,
trade fixtures, furniture, furnishings, telephone switching equipment,
roof-top communications equipment, generators and
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uninterrupted power supply equipment, and moveable equipment ("Personal
Property") owned by Tenant, and all Restricted Property, upon or in the
Master Lease Property shall remain the property of Tenant, or remain under
Tenant's control, and shall be removed by Tenant, at its sole cost and
expense, upon termination of this Lease or surrender by Tenant of the
Master Lease Property to Landlord. (The term "Personal Property" does not
include Fixtures and Limited Personal Property as defined in the Purchase
and Sale Agreement.) If such removal shall injure or damage the Master
Lease Property, Tenant shall repair the damage at its sole cost and
expense, reasonable wear and tear excepted. If Tenant fails to so remove
and repair, Landlord shall have the right to remove the Personal Property
and Restricted Property and to dispose of the same and to repair the Master
Lease Property without accountability to Tenant, and at the sole cost and
expense of Tenant. The "Restricted Property" shall mean all personal
property, including, but not limited to documents and equipment, which are
required to be secured or kept confidential pursuant to Applicable Laws or
agreements to which Tenant is subject. The Restricted Property shall at all
times, both during and after the Term, be the sole responsibility of
Tenant. Tenant covenants and agrees that no Restricted Property shall be
left in or upon the Master Lease Property after termination of this Lease
or surrender by Tenant of the Master Lease Property to Landlord. Upon the
expiration or earlier termination of this Lease (or, in the case of
Excluded Areas, at the time such areas are excluded from the Master Lease
Property) all right, title and interest to any underground storage tanks
located in the Master Lease Property (or, in the case of Excluded Areas,
located in such Excluded Areas) shall automatically convey to Landlord
without the requirement that either party execute any other documents to
effectuate the conveyance and shall become part of Landlord's property.
SECTION 14. INSURANCE
(a) At all times during the Term, Tenant, at its own cost
and expense, shall carry and maintain the insurance coverage set forth
below (the "Insurance"):
(i) Hazard insurance covering the Master Lease
Property (including, without limitation, all Alterations now or hereafter
made to the Master Lease Property) under an "All Risks of Physical Loss"
policy (an "All Risks Policy") written with full replacement coverage
("Replacement Value"), i.e., in an amount equal to 100% of the full costs
of replacement of the insurable portions of the Master Lease Property,
excluding foundation and excavation costs and subject to such reasonable
deductibles as Tenant may see fit to carry and as Landlord reasonably
approves. For the purposes of this Section 14, deductibles up to the
amounts stated on Schedule II attached hereto shall automatically be deemed
reasonable deductibles without any need for Landlord's approval. The
insurer's determination of Replacement Value shall be binding and
conclusive on Landlord and Tenant. A stipulated value or agreed
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amount endorsement deleting the co-insurance provision of the policy shall
be provided with such insurance. If not otherwise included within the All
Risks Policy specified above, Tenant shall carry or cause to be carried, by
endorsement to such All Risks Policy, coverage against (i) damage due to
water and sprinkler leakage, with limits of coverage reasonably required by
Landlord, and (ii) building ordinance covering increased costs of
construction with a limit of not less than twenty-five percent (25%) of the
value of the Main Building Area and demolition with a limit of not less
than ten percent (10%) of the value of the Main Building Area. The
Replacement Value shall include the cost of debris removal and the value of
grading, paving and landscaping, and architects', engineers' and
development fees. During the course of any Alteration, Tenant shall carry
insurance in the form of a "Builder's Risk" policy with respect thereto in
such amount as reasonably required by Landlord.
(ii) Commercial liability insurance with respect to the
Master Lease Property and the operations related thereto, whether conducted
on or off the Master Lease Property, against liability for death, bodily
injury, and property damage (the "Liability Policy"). The Liability Policy
shall be on an occurrence basis and specifically shall include:
(A) Contractual liability to cover Tenant's
obligations to indemnify Landlord as required under this Lease; and
(B) Water damage and sprinkler leakage legal
liability.
The Liability Policy shall be written for a combined single limit of not
less than Ten Million Dollars ($10,000,000). Such limit shall be subject to
reasonable increase from time to time (but not more than once every
twenty-four (24) months) in accordance with the limits then being
customarily carried with respect to Comparable Buildings and Comparable
Properties, or operations similar to those being conducted on the Master
Lease Property. Tenant may satisfy the required coverage limits for the
Liability Policy by carrying a combination of primary and excess liability
policies providing aggregate coverage in at least the limits stated herein
for such policy.
(iii) Boiler and machinery insurance with limits as from time
to time customary for Comparable Buildings and appropriate in the light of the
cost of repairing potential damage.
(iv) Rent loss insurance ("Rent Insurance") on the "All Risks
of Physical Loss" basis in an amount equal to twenty-four (24) months of
the then current Base Rent.
(b) Tenant further covenants and agrees, at its sole cost
and expense, to procure and maintain or cause to be procured and maintained
at all times all necessary worker's compensation
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insurance covering all persons employed by Tenant, Existing Tenants and
Subtenants in and about the Master Lease Property.
(c) Tenant further covenants and agrees, at its sole cost
and expense, to procure and maintain or cause to be procured and maintained
at all times Comprehensive Automobile Insurance covering all owned,
non-owned, and hired automobiles of tenant in limits of not less than One
Million Dollars ($1,000,000).
(d) In addition to the insurance carried by Tenant,
during the course of any Alteration or Care work undertaken by a contractor
hired by or for Tenant, Tenant shall require such contractor to carry
public liability insurance in limits of not less than Two Million Dollars
($2,000,000).
(e) Tenant may at its option provide any Insurance
coverage under a blanket insurance policy instead of a separate policy or
policies, provided that the certificate or certificates issued under such
blanket insurance policy, and the coverage afforded thereby, conforms in
all respects to the requirements hereof (a "Blanket Policy").
(f) Tenant acknowledges that it currently carries flood
and earthquake coverage ("Flood and Earthquake Insurance"). Tenant not
shall not be required to maintain the Flood and Earthquake Insurance during
the Term; provided, however, Tenant shall give Landlord at least thirty
(30) days written notice prior to any discontinuance of the Flood and
Earthquake Insurance. Notwithstanding the foregoing, (i) in the event that
any portion of the Property is classified as being located in (A) a Class A
flood zone or any other flood zone indicating a higher frequency of
predicted flooding than a Class A flood zone as indicated by the Federal
Emergency Management Agency (a "Flood Zone"), or (B) a B3 seismic activity
zone or any other seismic activity zone indicating a higher frequency of
predicted seismic activity than B3 seismic activity zone as indicated by a
consensus of insurance underwriters that underwrite such policies for
earthquake coverage (a "Seismic Activity Zone"), Tenant shall procure Flood
and Earthquake Insurance if such coverage is customary for Comparable
Buildings and Comparable Properties, or (ii) to the extent the Master Lease
Property is insured under a Blanket Policy and such Blanket Policy contains
Flood and Earthquake Insurance for any other property under such Blanket
Policy, Tenant shall maintain Flood and Earthquake Coverage on the Master
Lease Property.
(g) All Insurance, except for Flood and Earthquake
Insurance if the Property is not in Flood Zone or Seismic Activity Zone,
shall be in such form and shall be issued by such responsible insurance
companies licensed to do business in the State of Maryland as are
reasonably approved by Landlord. Any insurance company rated by Bests
Insurance Reports (or any successor publication of comparable standing) as
"A-, VIII" or better and by Standard & Poor's (or any successor of
comparable standing) as "A" or better (or the equivalent of such rating)
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(collectively, the "Standard Rating") shall be deemed a responsible company
and acceptable to Landlord. Notwithstanding the foregoing, in the event
that the rating of such insurance falls below the Standard Rating during
the term of the policy of such insurance, Tenant shall not be required to
procure replacement coverage until the scheduled expiration or earlier
termination of such policy; provided, however, in no event shall such
period exceed twelve (12) months. Upon the Effective Date, and thereafter,
not less than five (5) days prior to the expiration dates of the expiring
policies of Insurance, originals of replacement policies or renewal
certificates, as the case may be, bearing notations evidencing the payment
of premiums or accompanied by other evidence reasonably satisfactory to
Landlord of each payment, shall be delivered by Tenant to Landlord
("Insurance Notice"). If Tenant does not provide Landlord with the
Insurance Notice or if Tenant lets any Insurance lapse, Landlord shall have
the right, without providing any notice to Tenant, to procure replacement
coverage that is effective upon such lapse and Tenant shall promptly
reimburse Landlord for the reasonable cost thereof.
(h) All policies of Insurance shall name Landlord,
Tenant, and, if requested by Landlord in writing, any Mortgagee as
insureds, as their respective interests may appear. All policies of
Insurance other than the Liability Policy shall, if requested in writing by
Landlord, name the Mortgagee as a loss payee, as the interest of such
Mortgagee may appear, but subject to the provisions of Section 15. Any
request of coverage as to a Mortgagee shall set forth the name and address
of the Mortgagee.
(i) Tenant shall not violate or permit to be violated any
of the conditions, provisions or requirements of any Insurance policy, and
Tenant shall perform, satisfy and comply with, or cause to be performed,
satisfied and complied with, the conditions, provisions and requirements of
all Insurance policies and the companies writing such policies so that, at
all times, the Insurance shall be provided by companies reasonably
acceptable to Landlord, except as otherwise provided in Subsection 14(g).
(j) Each policy or certificate of Insurance shall contain
(i) an agreement by the insurer that such policy shall not be canceled,
modified or denied renewal without at least thirty (30) days prior written
notice to Landlord and any Mortgagee named as an insured or loss payee,
except that if the reason for cancellation or denial of renewal is
nonpayment of premiums, the notice will be at least ten (10) days, and (ii)
a waiver of subrogation by the insurer.
(k) If by reason of changed economic conditions the
Insurance amounts referred to in this Lease become inadequate, upon
Landlord's request, the limits shall be reasonably increased by Tenant from
time to time (but not more often than once every twenty-four (24) months)
to meet the changed conditions, but any changes in limits shall be
consistent with what is customary for
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Comparable Buildings and Comparable Properties or for operations similar to
those conducted on the Master Lease Property. Upon the reasonable request
of Landlord, Tenant shall procure and obtain such types of insurance in
lieu of the current insurance then required under this Lease; provided that
such replacement coverage is of a substantially similar scope and nature as
the Insurance then required under this Lease and is the type of insurance
that is customary for Comparable Buildings and Comparable Properties or for
operations similar to those conducted on the Master Lease Property.
Notwithstanding the foregoing, in the event that Landlord makes such
request during the term of the policy of the insurance that is being
replaced, Tenant shall not be required to procure replacement coverage
until the scheduled expiration or earlier termination of such policy;
provided, however, in no event shall such period exceed twelve (12) months.
(l) Notwithstanding any provisions in this Section 14 or
elsewhere in this Lease to the contrary, any deductible to the All Risk
Policy shall be deemed an amount covered by Insurance and shall be promptly
paid by Tenant in the event of an Insurable Casualty.
SECTION 15. DAMAGE OR DESTRUCTION
(a) In case of damage to or destruction of the Master
Lease Property or any part thereof by fire or other casualty ("Damage"),
Tenant will promptly give written notice thereof to Landlord. If the Damage
is caused by an Insurable Casualty, Tenant shall, in accordance with the
provisions of this Section and all other provisions of this Lease, restore
the same as nearly as possible to its condition and character immediately
prior to such Damage, subject to Tenant's right to make Alterations in
substantial conformity with and subject to the conditions of Section 13
hereof, and in conformity with the plans and specifications required to be
prepared pursuant to Section 13 and subject to any restrictions imposed by
Applicable Laws ("Restoration"), whether or not insurance proceeds are
sufficient to pay in full the cost of the work. The Restoration shall be
commenced within sixty (60) days after the loss is finally adjusted with
the insurer, the plans, specifications and contract for the Restoration
have been approved by Landlord under Section 15(b)(i) and (ii), and all
necessary permits for the Restoration have been issued. Tenant shall pursue
such adjustment of the loss, approvals of Landlord, and issuance of permits
with reasonable diligence after the Damage. The Restoration shall be
prosecuted and completed with reasonable diligence after its commencement,
Unavoidable Delays excepted. Landlord shall cooperate fully with Tenant in
order to obtain the largest possible insurance recovery and shall execute
any and all consents and other instruments and take all other actions
reasonably necessary to accomplish the same and to cause the insurance
proceeds to be paid as provided in Subsection (c) below.
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(b) In the event that the cost of Restoration exceeds One
Hundred Seventy Thousand Dollars ($170,000), Tenant agrees to furnish to
Landlord at least twenty (20) days before the
commencement of Restoration, the following:
(i) Complete plans and specifications for
Restoration prepared by a licensed and reputable architect reasonably
satisfactory to Landlord (the "Architect"), which plans and specifications
shall meet with the reasonable approval of Landlord, together with the
approval thereof by all governmental authorities then exercising
jurisdiction with regard to such work, and which plans and specifications
shall be and become the sole and absolute property of Landlord in the event
that, for any reason, this Lease shall be terminated.
(ii) A contract then customary in the trade with
(A) the Architect, and (B) a reputable and responsible general contractor
reasonably approved by Landlord, providing for the completion of
Restoration in accordance with said plans and specifications, which
contract shall meet with the reasonable approval of Landlord.
(iii) Assignment of the contract with the
Architect and the general contractor so furnished, duly executed and
acknowledged by Tenant, the Architect and the general contractor, by their
terms to be effective upon any termination of this Lease or upon Landlord's
re-entry upon the Master Lease Property prior to the complete performance
of such contracts.
(c) All insurance proceeds payable on account of Damage
shall be paid to Mortgagee (provided such Mortgagee is an Institutional
Mortgagee) or to a trustee designated by Mortgagee ("Insurance Trustee")
and applied to the payment of the cost of Restoration, including the cost
of temporary repairs or for the protection of the Master Lease Property
pending the completion of permanent work pursuant to the plans,
specifications and contracts (all of which temporary repairs, protection of
Master Lease Property and permanent work shall be deemed to be part of the
Restoration). In the event of Damage in which the proceeds of insurance are
Five Hundred Thousand Dollars ($500,000.00) or less, such proceeds shall be
payable directly to Tenant, in trust, to be applied to the Restoration.
Such funds shall be used only for such purposes until the Restoration is
completed and any excess proceeds shall be retained by Tenant for its own
account. In the event of Damage in which the proceeds of insurance exceed
Five Hundred Thousand Dollars ($500,000.00), such proceeds shall be
deposited with Mortgagee or with the Insurance Trustee in a bank in the
Washington D.C. metropolitan area as designated by Landlord and, upon
written request of Tenant, shall be paid out to Tenant from time to time
(but no more often than once per month) as Restoration progresses, in
trust, for the purposes of paying the cost of Restoration. The receipt by
Landlord and its Mortgagee of the following are conditions precedent to
each payment of insurance proceeds by the Mortgagee or Insurance Trustee to
Tenant:
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(i) A requisition ("Requisition") signed by
Tenant, dated not more than 30 days prior to such request, certifying the
following:
(A) that the sum then requested either has
been paid by Tenant or is justly due to contractors, subcontractors,
materialmen, engineers, architects or other persons who have rendered
services or furnished materials for the portion of the Restoration therein
specified, and giving a brief description of such services and material and
the several amounts so paid or due to each of said persons in respect
thereof, and stating that such amounts have not been the subject of any
previous Requisition and do not exceed the value of the services and
materials described in the Requisition, and stating, in reasonable detail,
the progress of the work in connection with Restoration up to the date of
the Requisition;
(B) that, to the best of Tenant's knowledge,
except for the amount set forth in the Requisition and except for any
amount related to services or materials furnished after the date of the
Requisition, there is no other amount then due for services or materials in
connection with Restoration which, if unpaid, might become the basis of a
mechanic's, materialmen's, or similar lien upon the Master Lease Property
or any part thereof; and
(C) that, to the best of Tenant's knowledge,
the materials, fixtures and equipment for which payment is being requested
pursuant to this Section are substantially in accordance with the plans and
specifications approved by Landlord.
For the purposes of this Subsection 15(c)(i), (i) "Institutional Mortgagee"
shall mean Nomura Asset Capital Corporation and its successors and assigns
or any federally insured savings bank, federally insured commercial bank,
trust company, life insurance company, casualty insurance company, pension
fund, real estate investment trust, mortgage company, credit union, college
or university, charitable institution, or government agency or fund with
tangible net worth in excess of Two Hundred Fifty Million Dollars
($250,000,000), and (ii) "Tenant's knowledge" shall mean the then current
knowledge of the General Manager of Corporate Services of Tenant or such
other authorized representative of Tenant overseeing the Restoration.
(ii) A certificate or report of a title insurance
company reasonably satisfactory to Landlord and such Mortgagee, or other
evidence reasonably satisfactory to Landlord and such Mortgagee, to the
effect that there has not been filed with respect to the Master Lease
Property or any part thereof or upon Tenant's leasehold interest therein
any mechanic's, materialman's or other lien in respect of such services
rendered or materials furnished which has not been discharged of record.
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(iii) A certificate from Tenant stating that, to
the best of Tenant's knowledge, no Event of Default then exists.
Simultaneously with receipt of the insurance proceeds, Tenant shall deliver
to Landlord and such Mortgagee acknowledgments of payment and waivers of
lien from all vendors, mechanics and laborers receiving payment, to the
extent of the work performed through the date of the previous Requisition.
(d) If the insurance proceeds shall be insufficient to
pay the entire cost of Restoration, Tenant will pay the deficiency.
(e) Upon receipt by Landlord or any such Mortgagee of
satisfactory evidence of the character required by Subsection (c) above
that Restoration has been completed and paid for in full (including,
without limitation, a copy of the permanent or temporary certificate of
occupancy for the Main Building, if a new certificate is issued or if the
then existing certificate is modified, and a then current, complete set of
"as built" plans for the Restoration, if the cost of such plans is covered
by Insurance) and that there are no Events of Default then in existence,
any balance of the insurance proceeds at the time held by Mortgagee or the
Insurance Trustee shall be paid to and may be retained by Tenant for its
own account.
(f) Notwithstanding the foregoing, if at the time of any
Damage, Tenant fails to maintain a credit rating for Tenant's corporate
debt of at least BB as rated by an "Approved Credit Rating Agency", the
following provisions shall apply:
(i) All references in Subsection 15(c) to "Five
Hundred Thousand Dollars ($500,000)" shall be deemed references to "One
Hundred Thousand Dollars ($100,000)";
(ii) The following shall be additional
conditions precedent to those set forth in Subsection 15(c) in order for
Tenant to receive insurance proceeds held by the Mortgagee or Insurance Trustee:
(A) A Certificate from the Architect
stating that the materials, fixtures and equipment for which payment is
being requested pursuant to this Section are substantially in accordance with
the plans and specifications approved by the Landlord.
(B) Upon occurrence of Damage, Tenant
shall deposit with Mortgagee or the Insurance Trustee any deductible under
the Insurance. In addition, Tenant shall deposit with the Mortgagee and
Insurance Trustee any excess cost of the Restoration over the Insurance
Proceeds and Deductible held by Landlord at the time of final adjustment of
the loss or at the time of any Requisition.
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(C) Ten percent (10%) of the cost of the
Restoration shall be held back by Mortgagee or the Insurance Trustee until
Tenant has complied with all of the provisions of this Section 15.
For purposes of this Subsection 15(f), an "Approved Credit Rating Agency"
shall mean Standard & Poor's, Xxxxx'x or any other nationally recognized
rating agency.
(g) If any Damage shall occur, then, to the extent
Landlord is compensated by the Rent Insurance required by Section
14(a)(iv), Base Rent shall xxxxx from the date of the Damage, until the
date the Restoration is completed, to the extent that the Main Building is
rendered unusable by the Damage.
(h) Despite the foregoing, if (i) Damage in excess of TWO
MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($2,500,000) or in excess
of an amount equal to the remaining payments of Base Rent due under this
Lease, whichever is less, is caused by a casualty which is not an Insurable
Casualty, or (ii) during the last two (2) Lease Years of the Term, Damage
is caused by an Insurable Casualty and the loss amounts to twenty-five
percent (25%) or more of the Replacement Value of the Main Building, then,
in either event, Tenant shall have the right to terminate this Lease by
giving written notice of termination to Landlord within ninety (90) days
after the occurrence of such Damage provided that the Rent Insurance
required by Section 14(a)(iv) is then in effect. In the event of such
termination, the Term of this Lease shall expire and come to an end thirty
(30) days after the day that the notice is given with the same force and
effect as if that day had been the Expiration Date and any insurance
proceeds payable for the Damage shall exclusively belong to Landlord.
Thereafter, neither party shall have any further rights or liabilities
under this Lease, except with respect to any obligations which arose or
accrued before the termination or with respect to any rights or liabilities
which expressly survive termination under the terms of this Lease. As used
in this Lease "Insurable Casualty" means any casualty, regardless of the
degree of the Damage, covered by Insurance which Tenant is required to
maintain under Section 14, whether or not Tenant maintains such insurance.
Notwithstanding any other provision contained in this Section, Tenant shall
not be entitled to terminate this Lease (A) if the Damage is caused by (i)
any fraudulent or dishonest act or acts committed by the Tenant or any of
the Tenant's employees with the manifest intent to (a) cause the Tenant to
sustain such loss and (b) obtain financial benefit for the Tenant, Tenant's
employee, or for any other person or organization intended by the Tenant or
the Tenant's employee to receive such benefit (other than salaries,
commissions, fees, bonuses, promotions, awards, profit sharing, pensions,
or other employee benefits earned in the normal course of employment), or
(ii) the risks of contraband or illegal trade, or (iii) any of the
following: (1) defective design or specifications, faulty material, or
faulty workmanship; (2) mechanical breakdown; (3) ordinary wear and tear,
gradual deterioration, insect, vermin, inherent vice and loss of use; (4)
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normal settling or shrinkage of walls, floors, or ceilings; or (5) loss of
market, business interruption, or extra expense loss due to delay with
respect to property in transit; or (B) in the case of clause (i) of the
first sentence of this Subsection 15(h), if Landlord provides the funds, in
excess of the applicable amount set forth in such clause (i), necessary to
cause Restoration of the Main Building, in which event such funds will be
applied in the manner provided in Subsection 15(c), as if such funds were
insurance proceeds.
(i) Notwithstanding any other provision contained in this
Section, all insurance proceeds payable for loss or damage to Tenant's
Personal Property shall be the exclusive property of and be paid directly
to Tenant.
(j) Tenant hereby releases Landlord and Landlord hereby
releases Tenant from any and all liability for any loss, damage or injury
to person or property occurring in, on, about or to the Master Lease
Property, the Main Building Area or personal property within the Main
Building Area, by reason of fire or other casualty, to the extent proceeds
of Insurance are received for such loss, damage, or injury or to the extent
such proceeds should have been received under Insurance required to be
carried by this Lease. Because the provisions of this Subsection will
preclude the assignment of any claim mentioned herein by way of subrogation
or otherwise to an insurance company or any other person, Tenant shall give
to each insurance company which has issued to it one or more policies of
insurance, notice of the terms of the release contained in this Subsection,
and have such insurance policies properly endorsed, if necessary, to
prevent the invalidation of insurance coverages by reason of the release
contained in this Subsection.
SECTION 16. INDEMNIFICATION
(a) Tenant will protect, indemnify and save harmless
Landlord from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including without
limitation, reasonable attorneys' fees and expenses) imposed upon or
incurred by or asserted against Land lord by reason of (i) any accident,
injury to or death of persons or loss of or damage to property occurring on
or about the Master Lease Property or any part thereof caused by the
negligence or intentional misconduct of Tenant or its Agents; (ii) any
failure on the part of Tenant to perform or comply with any of the terms of
this Lease; or (iii) performance of any labor or services or the furnishing
of any materials or other property in respect of the Master Lease Property
or any part thereof at the direction of Tenant. Tenant hereby releases
Landlord from any and all liability for the same.
(b) Landlord will protect, indemnify and save harmless
Tenant from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including without
limitation, reasonable attorneys' fees and
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expenses) imposed upon or incurred by or asserted against Tenant by reason
of (i) any accident, injury to or death of persons or loss of or damage to
property occurring on or about the Master Lease Property or any part
thereof, caused by the negligence or intentional misconduct of Landlord or
its Agents; (ii) any failure on the part of Landlord to perform or comply
with any of the terms of this Lease; or (iii) performance of any labor or
services or the furnishing of any materials or other property in respect of
the Master Lease Property or any part thereof at the direction of Landlord.
Landlord hereby releases Tenant from any and all liability for the same.
(c) The amount which any party (an "Indemnifying Party")
is or may be required to pay to any other party (an "Indemnitee") pursuant
to this Section 16 shall be reduced (including, without limitation,
retroactively) by any insurance proceeds (or the amount of insurance
proceeds that would have been recovered had insurance required by this
Lease been obtained) or other amounts actually recovered by or on behalf of
such Indemnitee, in reduction of the related loss. If an Indemnitee shall
have received payment (an "Indemnity Payment") required by this Lease from
an Indemnifying Party in respect of any loss and shall subsequently
actually receive insurance proceeds or other amounts in respect to such
loss, then such Indemnitee shall pay to such Indemnifying Party a sum equal
to the amount of such insurance proceeds or other amounts actually received
(up to but not in excess of the amount of any Indemnity Payment made
hereunder). An insurer who would otherwise be obligated to pay any claim
shall not be relieved of the responsibility with respect thereto, or,
solely by virtue of the indemnification provisions hereof, have any
subrogation rights with respect thereto, it being expressly understood and
agreed no insurer or any other third party shall be entitled to a
"windfall" (i.e., a benefit they would not be entitled to receive in the
absence of the indemnification provisions) by virtue of the indemnification
provisions hereof.
(d) Procedures for indemnification of Third Party Claims
shall be as follows:
(i) If an Indemnitee shall receive notice or
otherwise learn of the assertion by a person (including, without
limitation, any governmental entity) who is not a party to this Lease (or a
subsidiary an affiliate of either party) of a claim or of the commencement
by any such person of any action (a "Third Party Claim") with respect to
which an Indemnifying Party may be obligated to provide indemnification
pursuant to this Section 16 or any other Section of this Lease, such
Indemnitee shall give such Indemnifying Party written notice thereof
promptly after becoming aware of such Third Party Claim; provided that the
failure of any Indemnitee to give notice as provided in this Section 16(d)
shall not relieve the Indemnifying Party of its obligations hereunder,
except to the extent that such Indemnifying Party is actually prejudiced by
such failure to give
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notice. Such notice shall describe the Third Party Claim in
reasonable detail.
(ii) An Indemnifying Party may elect to defend
or to seek to settle or compromise, at such Indemnifying Party's own expense
and such Indemnifying Party's own counsel, any Third Party Claim, as
provided hereafter. Within thirty (30) days after receipt of notice from an
Indemnitee in accordance with Subsection 16(d)(i) (or sooner, if the nature
of such Third Party Claim so requires), the Indemnifying Party shall notify
the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim. After notice from an
Indemnifying Party to an Indemnitee of its election to assume the defense
of a Third Party Claim, such Indemnifying Party shall not be liable to such
Indemnitee under this Section 16 for any legal or other expenses (except
expenses approved in advance by the Indemnifying Party) subsequently
incurred by such Indemnitee in connection with the defense thereof;
provided that if the defendants with respect to any such Third Party Claim
include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more
of such Indemnitees and such Indemnifying Party exists in respect to such
claim, such Indemnitees shall have the right to employ separate counsel to
represent such Indemnitees and in that event the reasonable fees and
expenses of such separate counsel (but not more than one separate counsel
reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume
responsibility for defending a Third Party Claim, or fails to notify an
Indemnitee of its election as provided in this Subsection 16(d)(ii), such
Indemnitee may defend or, subject to the remainder of this Subsection
16(d)(ii), seek to compromise or settle such Third Party Claim without
prejudice to such Indemnitee's rights, if any, to continue to seek
indemnification hereunder. Notwithstanding the foregoing, neither an
Indemnifying Party nor an Indemnitee may settle or compromise any claim
over the objection of the other; provided, however, that consent to
settlement or compromise shall not be unreasonably withheld or delayed.
Neither an Indemnifying Party nor an Indemnitee shall consent to entry of
any judgment or enter into any settlement of any Third Party Claim which
does not include as an unconditional term thereof the giving by a claimant
or plaintiff to such Indemnitee, in the case of a consent or settlement by
an Indemnifying Party, or to the Indemnifying Party, in the case of a
consent or settlement by an Indemnitee, of a written release from all
liability in respect to such Third Party Claim.
(iii) If an Indemnifying Party chooses to defend
or to seek to compromise or settle any Third Party Claim, the related
Indemnitee shall make reasonably available to such Indemnifying Party any
personnel or any books, records or other documents within its control or
which it otherwise has the ability to make available that are necessary or
appropriate for such defense, settlement or compromise of such Third Party
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Claims, subject to the establishment of reasonably appropriate
confidentiality arrangements and arrangements to preserve any applicable
privilege (including, the attorney-client privilege) and shall cooperate in
such defense, compromise or settlement. If an Indemnifying Party chooses to
defend or to seek to compromise or settle any Third Party Claim, the
related Indemnitee shall be entitled to attend and participate in any such
proceeding, discussion or negotiation at its own expense.
(iv) Notwithstanding anything else in this
Section 16 to the contrary, if an Indemnifying Party notifies the related
Indemnitee in writing of such Indemnifying Party's desire to settle or
compromise a Third Party Claim on the basis set forth in such notice
(provided that such settlement or compromise includes as an unconditional
term thereof the giving by the claimant or plaintiff of a written release
of the Indemnitee from all liability in respect thereof and does not
include any non-monetary remedy) and provides the Indemnitee a copy of a
written proposal of the applicable claimant to settle on such terms, and
the Indemnitee notifies the Indemnifying Party in writing within ten (10)
business days of such notice that such Indemnitee declines to accept any
such settlement or compromise, such Indemnitee may continue to contest such
Third Party Claim, free of any participation by such Indemnifying Party, at
such Indemnitee's sole expense. In such event, the obligation of such
Indemnifying Party to such Indemnitee with respect to such Third Party
Claim shall be equal to (i) the costs and expenses of such Indemnitee prior
to the date such Indemnifying Party notifies such Indemnitee of the offer
to settle or compromise (to the extent such costs and expenses are
otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the amount
of any offer of settlement or compromise which such Indemnitee declined to
accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing
to defend such Third Party Claim (including attorneys fees and expenses).
(v) Any claim on account of a loss which does not
result from a Third Party Claim shall be asserted by written notice given
by the Indemnitee to the related Indemnifying Party. Such Indemnifying
Party shall have a period of 30 days after the receipt of such notice
within which to respond thereto. If such Indemnifying Party does not
respond within such thirty (30) day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such thirty (30) day period or
rejects such claim in whole or in part, such Indemnitee shall follow the
dispute resolution procedures set forth in Subsection 11(c).
(vi) In addition to any adjustments required
pursuant to Subsection 16(c), if the amount of any loss shall, at any time
subsequent to the payment required by this Lease, be reduced by recovery,
settlement or otherwise, the amount of such reduction, less any expenses
incurred in connection therewith,
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shall promptly be repaid by the Indemnitee to the Indemnifying Party.
(vii) In the event of payment by an Indemnifying
Party to any Indemnitee in connection with any Third Party Claim, such
Indemnifying Party shall be subrogated to and shall stand in the place and
the place of such Indemnitee as to any events or circumstances in respect
of which such Indemnitee may have any right or claim relating to such Third
Party Claim against any claimant or plaintiff asserting such Third Party
Claim or against any other person. Such Indemnitee shall cooperate with
such Indemnifying Party in a reasonable manner, and at the cost and expense
of such Indemnifying Party, in prosecuting any subrogated right or claim.
(vii) If any indemnity payment required to be made
hereunder is denominated in a currency other than United States dollars,
such payment shall be made in United States dollars and the amount thereof
shall be computed using the foreign exchange rate for such currency
determined as of the date that notice of the claim with respect to which
such indemnity payment is made or given by, or on behalf of, the Indemnitee
to the Indemnifying Party.
(e) The provisions of this Section 16 shall survive any
termination of this Lease.
SECTION 17. CONDEMNATION
(a) (i) If any part of the Master Lease Property is taken
or condemned for a public or quasi-public use (a sale in lieu of
condemnation to be deemed a taking or condemnation) ("Taken" or a "Taking",
as the context shall require), this Lease shall, as to the part Taken,
terminate as of the date title shall vest in the condemnor and continue in
full force as to the remainder. In the event of such a partial Taking, Rent
shall be equitably adjusted by Landlord and Tenant taking into account the
portion of the Master Lease Property so Taken; provided, that there shall
be no adjustment in Base Rent unless, and only to the extent that, a
portion of the Main Building is Taken. With respect to any other portions
of the Master Lease Property Taken, adjustment shall be made only to the
Additional Rent applicable to and the obligation to Care for such portion.
Tenant, at its cost and expense, shall proceed with Restoration, subject to
Unavoidable Delays, of the remaining portion of the Master Lease Property
to a complete architectural unit, to the extent practicable and
economically feasible and to the extent the net condemnation award is
sufficient to pay in full the cost of such Restoration. Such Restoration
shall be performed in the same manner and pursuant to the same conditions
as set forth in Section 15 hereof with respect to Restoration as a result
of Damage. If the parties cannot agree upon such Rent adjustment or
Restoration requirements, such dispute shall be decided by binding
arbitration comparable to that provided for in Section 11(c).
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(ii) Tenant waives all claims against Landlord and
any Mortgagee by reason of any partial Taking, and Tenant covenants and
agrees that Tenant will make no claim against the condemning authority by
reason of the partial Taking, except for damages payable for injury to
Personal Property or any Alterations that Tenant is entitled to remove upon
the expiration of this Lease, for loss of use of the Main Building Area, or
for relocation expenses; provided, however, that Tenant's claims do not
reduce Landlord's award for its fee interest subject to Tenant's leasehold
interest. In such event, Tenant shall be entitled to receive such amounts.
Landlord or any Mortgagee having a right thereto shall be entitled to
receive any and all awards paid by the condemning authority in connection
with such partial Taking, provided that such condemnation award received by
Landlord or such Mortgagee, less the reasonable costs incurred by Landlord
and such Mortgagee in connection with the collection of such award shall be
applied to the cost of such Restoration, subject to the same conditions to
release set forth in Section 15 hereof. Any balance of the award remaining
after completion of such Restoration and not used for such Restoration, may
be retained by Landlord or such Mortgagee.
(iii) Notwithstanding the foregoing provisions of
this Subsection (a), in the case of partial Taking of the Main Building, if
Landlord or Tenant shall reasonably determine that the remaining portion of
the Main Building cannot practicably be so restored to a complete
architectural unit or that such Restoration is not economically feasible or
that after the Restoration, the remainder of the Main Building would not be
suitable for the uses permitted hereunder, then either Landlord or Tenant
may terminate this Lease by notice to the other party, and, upon such
termination, Tenant and Landlord shall have no further obligations
hereunder, except with respect to any obligations which arose or accrued
before the termination of this Lease or to the extent obligations are to
survive the termination of this Lease as otherwise provided in this Lease.
Any dispute as to the right of Landlord or Tenant to terminate this Lease
under this Subsection (iii) shall be determined by arbitration in
accordance with Section 11(c). In the event of a Taking that does not
result in the termination of this Lease, but results in a Taking of any
portion of the Main Building Area, Landlord shall provide Tenant with a
portion of the Unimproved Area for use for replacement parking adjacent to
the remaining Main Building Area and access and utilities to the Main
Building to the extent such items are affected by the Taking. Nothing
herein shall be construed to require Landlord to incur any material expense
in connection therewith.
(b) In the event of a total Taking of the Main Building
Area, this Lease shall terminate as of the date title shall vest in the
condemnor and, upon such termination, Landlord and Tenant shall have no
further obligations hereunder, except with respect to any breaches which
occurred before the termination of this Lease or to the extent obligations
are to survive the termination of this Lease as otherwise provided in
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this Lease. Landlord shall be entitled to receive any and all awards paid
by the condemning authority in connection with such Taking, except to the
extent Tenant is entitled to recovery under Subsection 17(a)(ii).
SECTION 18. LIENS
If, because of any act or omission of Tenant or anyone
claiming by, through, or under Tenant, any mechanic's lien or other lien
shall be filed against the Master Lease Property or any portion thereof, or
against other property of Landlord, whether or not such lien is valid or
enforceable as such, Tenant shall, at its own expense, cause the same to be
discharged of record within a reasonable time, not to exceed 30 days, after
the date of filing thereof, and shall also defend and indemnify Landlord
and any Mortgagee and hold them harmless from any and all claims, losses,
damages, judgments, settlements, costs and expenses, including reasonable
attorneys' fees, resulting therefrom or incurred in connection therewith.
Tenant shall not mortgage, pledge, hypothecate or assign as security its
interest in the Master Lease Property or under this Lease.
SECTION 19. EXISTING SPACE LEASES; ASSIGNMENT AND
SUBLETTING
(a) On the Effective Date, the Main Building is subject
to those certain leases listed in Exhibit G attached hereto and made a part
hereof (the "Existing Space Leases"), which were entered into by Tenant, as
lessor thereunder, prior to closing under the Sales Agreement. Landlord has
not assumed any of Tenant's obligations thereunder. For so long as this
Lease remains in effect, Tenant covenants and agrees to continue to
discharge all of the lessor's obligations under the Existing Space Leases,
whether accrued or accruing before or during the Term. Tenant shall
indemnify, defend, and hold harmless Landlord against any obligation of
Landlord under the Existing Space Leases arising or accruing during the
Term, except to the extent Tenant is unable to perform such obligations as
a result of Landlord's breach of its obligations under this Lease. During
the Term, Tenant shall have the right to (i) collect and retain for its own
account (subject to Subsection (c) below) all rents and other payments due
from tenants under Existing Space Leases ("Existing Tenants"), (ii) hold
and apply any security deposits of Existing Tenants in accordance with the
Existing Space Leases (provided, however, that Tenant shall deliver such
security deposits to Landlord at the expiration or earlier termination of
this Lease to the extent such security deposits have not been applied by
Tenant pursuant to the applicable Existing Space Lease or returned to the
applicable Existing Tenant, and the term of the applicable Existing Space
Lease extends beyond the Term), and (iii) terminate, modify or otherwise
deal with the Existing Space Leases as Tenant, in its sole discretion,
deems appropriate; provided, however, (A) such right shall automatically
end upon the termination of this Lease for any reason, (B) none of the
Existing Space Leases shall be modified to provide for a term
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which extends beyond the Term, unless Landlord gives its prior written
consent to such extended term, which consent may be granted or withheld in
Landlord's sole discretion, (C) each modification of an Existing Space
Lease shall be subject and subordinate to this Lease, and in the event of
the expiration or termination of this Lease, Landlord shall not be required
to recognize such modification without its express written agreement to be
bound by same, which may be given or not in Landlord's sole discretion, and
(D) Tenant shall promptly provide to Landlord copies of all documents
terminating or modifying any Existing Space Lease.
(b) Tenant may assign its interest in this Lease (an
"Assignment") or sublet all or any portion of the Main Building (a
"Sublease"), without the consent of Landlord. The term of any such Sublease
shall not exceed the Term, unless Landlord gives its prior written consent
to such extended term, which consent may be granted or withheld in
Landlord's sole discretion. In the event of any Assignment or Sublease,
Tenant shall nevertheless at all times remain fully responsible and liable
for the payment of Rent and the performance and observance of all of
Tenant's other obligations under this Lease. Each Sublease shall be subject
and subordinate to this Lease. If requested by Tenant, Landlord shall enter
into a nondisturbance agreement with respect to any Sublease on
substantially the same terms as are contained in the nondisturbance
agreement attached hereto as Exhibit H (the "Landlord Approved SNDA"),
provided that (i) the Sublease does not, in any material respect, impose
greater obligations on the sublandlord or grant greater rights to the
subtenant than those existing as of the Effective Date under the Existing
Space Leases, (ii) term of the Sublease does not extend past the Term
(unless expressly approved by Landlord as provided above), and (iii) the
Sublease (y) is an arms-length transaction and such subtenant was obtained,
and the economic terms of such Sublease were negotiated by, a third party
leasing agent using marketing efforts customarily used for Comparable
Properties, or (z) requires the subtenant to pay basic rent at Fair Market
Sublease Rent and a pro rata share of increases in operating expenses,
taxes and insurance (a "Non-Broker Sublease"). Landlord agrees at any time
hereafter, upon ten (10) business days prior written notice, to execute and
deliver, and cause its Mortgagee to recognize, the Landlord Approved SNDA,
provided the Landlord Approved SNDA has been duly executed by Tenant and
such subtenant. Promptly upon entering into any Assignment or Sublease,
Tenant shall provide Landlord with copies of all documents effecting such
Assignment or Sublease.
(c) In the event of a Non-Broker Sublease, Landlord and
Tenant shall attempt in good faith to agree as to the Fair Market Sublease
Rent, and if Landlord and Tenant fail to promptly agree as to the Fair
Market Sublease Rent (the "Sublease Arbitration Deadline"), Fair Market
Sublease Rent shall be determined as follows:
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(i) Fair Market Sublease Rent shall be the rent
which would be asked of subtenants as of the anticipated date of execution
of the Sublease for space comparable to the subject space of the Sublease
in the Germantown/Clarksburg areas of Xxxxxxxxxx County, Maryland, taking
into account the term of the Sublease, the size of the premises being
subleased and the value of brokerage commissions, rental abatements, rental
credits, and tenant allowances, if any, being offered or paid under such
subleases.
(ii) Landlord and Tenant shall use the same
methodology of the arbitration proceedings described in
Subsections 28(d)(ii) and (iii).
(d) As a part of Additional Rent, Tenant shall pay to
Landlord one-half of any Profit derived from any renewal of an Existing
Lease (a "Lease Renewal") or from any Assignment or Sublease during the
Term. As to each Lease Renewal, Assignment, and Sublease, "Profit" shall
mean the excess, if any, of the following: the gross amount collected by
Tenant under or with respect to the Lease Renewal, Assignment, or Sublease
over a specific period of time (the "Measuring Period"), less (i) the Base
Rent paid by Tenant to Landlord over the Measuring Period for the same
space as is the subject of the Lease Renewal, Assignment, or Sublease (the
"Subject Space"), (ii) all other amounts paid by Tenant with respect to the
Measuring Period and relating to the Master Lease Property as required by
this Lease, pro-rated based upon the rentable area of the Subject Space
compared to the rentable area of the Main Building, (iii) a management fee
to Tenant equal to three percent (3%) of the amount collected by Tenant
under or with respect to the Lease Renewal, Assignment, or Sublease over
the Measuring Period, (iv) all reasonable costs of collection paid by
Tenant to collect the sums payable under the Lease Renewal, Assignment, or
Sublease, and (v) reasonable and customary brokerage fees, the cost of
tenant improvements, reasonable attorneys' fees and all other out of pocket
costs paid by Tenant to third parties in connection with the Lease Renewal,
Assignment, or Sublease. Tenant shall provide to Landlord on or before the
sixtieth (60th) day following each Lease Year in which Profit is received
by Tenant a calculation and payment of Profit for the preceding Lease Year.
The calculation shall be certified by Tenant as being accurate and
complete, to the best of its knowledge, along with such information and
materials (including, but not limited to, copies of invoices, calculations
and allocations) in support thereof, as Landlord may reasonably request.
Despite the foregoing, no calculation or payment of Profit shall be
required with respect to any Assignment or Sublease to a subsidiary of
Tenant or arising from a sale of any division or subsidiary of Tenant, a
sale of all or substantially all of the assets or capital stock of Tenant,
or any merger or consolidation of Tenant.
(e) If there is an Event of Default, in addition to any
other remedies provided by this Lease or by law or in equity, at its
option, Landlord may collect directly from any Existing
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Tenant, Assignee or lessee under a Sublease ("Subtenant") all rent becoming
due to Tenant by reason of the applicable Existing Lease, Assignment or
Sublease. Any collection by Landlord from the Existing Tenant, Assignee or
Subtenant shall not be construed to constitute a novation or release of
Tenant from the further performance of its obligations under this Lease or
an acceptance of the terms of such Existing Lease, Assignment or Sublease.
(f) Any amounts collected by Landlord pursuant to Section
19(e) or otherwise from an Existing Tenant, Assignee or Subtenant which are
applicable to any period preceding the Expiration Date (had this Lease run
its full Initial Term as may have been extended), less Landlord's share of
any Profit attributable to such amounts and less Landlord's reasonable
costs of collection, shall be applied by Landlord to the reduction of
Tenant's remaining liability, if any, under this Lease.
SECTION 20. SUBORDINATION OR SUPERIORITY OF LEASE
(a) Except as otherwise provided in this Section, the
rights and interest of Tenant under this Lease shall be subject and
subordinate to any mortgages that may be placed upon the Master Lease
Property and to any and all advances to be made thereunder, and to the
interest thereon, and all renewals, replacements, extensions, bifurcations
and splits thereof, if the Mortgagee named in said mortgage shall elect to
subject and subordinate the rights and interest of Tenant under this Lease
to the lien of its mortgage. Any Mortgagee may elect to give the rights and
interest of Tenant under this Lease priority over the lien of its mortgage.
In the event of either such election and upon notification by such
Mortgagee to Tenant to that effect, the rights and interest of Tenant under
this Lease shall be deemed to be subordinate to, or to have priority over,
as the case may be, the lien of said mortgage, whether this Lease is dated
prior to or subsequent to the date of said mortgage without any further
action required by Landlord or Mortgagee; provided, however, that as a
condition precedent to any subordination of this Lease, Landlord delivers
in advance a non-disturbance agreement duly executed by Mortgagee and
Landlord. The non-disturbance agreement shall be substantially in the form
attached to and made a part of this Lease as Exhibit I (the "Tenant
Approved SNDA") or in a commercially reasonable form and subject to the
approval of Tenant, not to be unreasonably withheld. Tenant agrees at any
time hereafter, upon ten (10) business days prior written notice, to
execute and deliver the Tenant Approved SNDA.
(b) Nothing contained in this Lease shall limit or
curtail Landlord's right to sell, mortgage or otherwise transfer its fee
interest in the Master Lease Property, or affect Landlord's right to assign
the Rent payable under this Lease either as collateral security under a
mortgage or otherwise. Any such sale, mortgage, transfer or assignment
shall be binding on Tenant but shall be subject to this Lease.
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SECTION 21. DEFAULTS AND REMEDIES
(a) The occurrence of any one or more of the following
events shall be a default and breach of this Lease by Tenant (collectively,
"Events of Default"):
(i) Tenant shall fail to pay any installment of
Rent when the same shall be due and payable and fail to cure such default
within nine (9) days after receiving written notice from Landlord
specifying the default. For the purposes of this Subparagraph 21(a)(i),
Tenant agrees notice by Mortgagee, or Landlord's loan service provider,
given according to the terms of Section 26, shall be deemed sufficient
notice.
(ii) Tenant shall fail to perform or observe any
other term, condition, covenant or obligation required to be performed or
observed by it under this Lease for a period of thirty (30) days after
written notice from Landlord specifying such default; provided, however,
that if the term, condition, covenant or obligation to be performed by
Tenant is of such nature that the same cannot reasonably be performed
within such thirty (30) day period, such default shall be deemed to have
been cured if Tenant commences such performance within the thirty (30) day
period and thereafter diligently undertakes to complete the cure and in all
events cures the default within one hundred twenty (120) days of Landlord's
notice, subject to extension for Unavoidable Delays.
(iii) An Event of Default, as defined therein,
shall occur under that certain lease agreement, dated of even date
herewith, between Landlord and Tenant with respect to the Installations
Premises (the "Facilities Lease").
(iv) Termination or rejection of this Lease
pursuant to Section 22.
(v) Assumption or assignment of this Lease, under
the conditions referred to in Section 22, unless the requirements of
Section 22 applicable to such assumption or assignment are satisfied.
(b) Upon the occurrence of any Event of Default, Landlord
shall have the following rights and remedies, in addition to those allowed
by law or equity, any one or more of which may be exercised concurrently
and without further notice to or demand upon Tenant:
(i) Landlord may re-enter the Master Lease
Property and cure any default of Tenant, in which event Tenant shall
reimburse Landlord as Additional Rent for any reasonable costs and expenses
which Landlord may incur to cure such default; and Landlord shall not be
liable to Tenant for any loss or damage which Tenant may sustain by reason
of Landlord's action, except loss or damage caused by Landlord's negligence
or intentional misconduct.
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(ii) Landlord may terminate this Lease, in which
event: (A) Tenant shall not thereafter be entitled to possession of the
Master Lease Property and Tenant shall immediately thereafter surrender, or
cause to be surrendered, the Master Lease Property to Landlord; (B)
Landlord may re-enter the Master Lease Property and dispossess Tenant by
summary proceedings, ejectment or other legal process and may remove its
effects, without prejudice to any other remedy which Landlord may have for
possession or arrearages in Rent; and (C) Tenant shall be liable for all
loss or damage which Landlord may sustain by reason of such termination and
re-entry; and Landlord may re-let all or any part of the Master Lease
Property for a term different from that which would otherwise have
constituted the balance of the Term and for Rent and on terms and
conditions different from those contained herein, whereupon Tenant shall be
obligated to pay to Landlord the deficiency, if any, between the Rent
provided for herein and that provided for in any lease covering a
subsequent re-letting of the Master Lease Property, for the period which
would otherwise have constituted the balance of the Term, together with all
of Landlord's reasonable costs and expenses of preparing the Master Lease
Property for re-letting, including all repairs, tenant finish improvements,
brokers' and attorneys' fees, and all loss or damage which Landlord may
sustain by reason of such re-letting, it being expressly understood and
agreed that the liabilities and remedies specified above shall survive the
termination of this Lease. Landlord shall make diligent efforts to mitigate
its damages in the event of an Event of Default.
(iii) (A) Notwithstanding the termination of this
Lease, Landlord may declare all Base Rent which would have been due under
this Lease for the balance of the Term to be immedi ately due and payable.
In that event, Tenant shall be obligated to pay an amount in cash that
would be necessary to purchase U.S. Obligations in such amounts and having
such maturities that the principal and interest of such U.S. Obligations
would be sufficient to provide funds as close as possible but in no event
less or later than the payments due under this Lease as Base Rent as and
when such payments would be due if no acceleration of the Base Rent had
occurred (the "Accelerated Payment"). U.S. Obligations are obligations or
securities not subject to prepayment, call or early redemption which are
direct obligations of, or obligations fully guaranteed as to timely payment
by, the United States of America or any agency or instrumentality thereof,
the obligations of which are backed by the full faith and credit of the
United States of America.
(B) Upon receipt of the Accelerated Payment,
Landlord shall use commercially reasonable efforts to lease the vacant
areas of the Main Building at the then currently existing fair market
rental rate for Comparable Buildings. From and after the Event of Default
all rent and other payments, except for security deposits, collected under
leases entered into after the Event of Default ("Post Default Leases") and
under any Existing Space Leases, Subleases, or occupancy or concession
agreements in effect as of the Event of Default shall be placed in a
separate
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escrow account (the "Escrow Account") held by a mutually acceptable
escrowee (the "Escrowee"). Also, any refunds of Impositions paid by Tenant
and received by Landlord shall be placed in the Escrow Account. The Escrow
Account shall be interest bearing and earn at least a money market rate of
interest. All interest earned shall become part of the escrow fund and be
treated in the same manner as the principal in the Escrow Account. The Post
Default Leases and all Existing Space Leases, Subleases, and occupancy and
concession agreements in effect as of the Event of Default are collectively
referred to as the "Mitigation Leases". The funds contained in the Escrow
Account shall be disbursed in the following manner and with the following
priority: (i) all direct and reasonable operating expenses ("Operating
Expenses") paid by Landlord relating to the Master Lease Property during
the "Default Measuring Period" (defined below) shall be paid to Landlord,
(ii) a management fee equal to three percent (3%) of the amount collected
by Landlord from the Mitigation Leases during the Default Measuring Period
shall be paid to Landlord, (iii) all direct and reasonable costs of
collection paid by Landlord to collect the sums payable under the
Mitigation Leases shall be paid to Landlord, (iv) reasonable and customary
brokerage fees, the reasonable cost of designing, constructing and
installing tenant improvements, reasonable attorneys' fees and all other
reasonable out of pocket costs paid by Landlord during the Default
Measuring Period to third parties in connection with the Mitigation Leases
(including the fees of the Escrowee and the Escrow Account) shall be paid
to Landlord, (v) Tenant shall be paid up to the amount that Tenant was
scheduled to pay as Base Rent during the Default Measuring Period, and (vi)
the remainder shall be shared equally by Landlord and Tenant. As used in
this Section, the term "Default Measuring Period" shall mean (1) as to the
payments contemplated in (i) through (iv) above, each consecutive one (1)
month period after the establishment of the Escrow Account until the date
the Term would have expired but for the early termination of this Lease,
and (2) as to the payments contemplated in (v) and (vi) above, each
consecutive three (3) month period after the establishment of the Escrow
Account until the date the Term would have expired but for the early
termination of this Lease. The first Default Measuring Period, however,
shall also include the period from the date of the Event of Default to the
date the Escrow Account was established. Escrowee shall make disbursements
to the parties in the priority described above on or about the fifteenth
(15th) day after the end of each Default Measuring Period. Within ten (10)
days after the end of each Default Measuring Period relating to the
payments contemplated in (i) through (iv) above, Landlord shall furnish to
Escrowee and Tenant a written statement setting forth in reasonable detail
all amounts paid into the Escrow Account and all amounts for which Landlord
is claiming payment with respect to the immediately preceding Default
Measuring Period. The statement shall be certified by Landlord as being
accurate and shall be accompanied by invoices and other documentation
reasonably evidencing the amounts claimed for payment. Escrowee shall
withhold from the payments made under (v) and (vi) above one-fourth of the
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reasonably estimated real estate taxes and Insurance premiums which are
next due with respect to the Master Lease Property, less the amounts of any
real estate taxes or Insurance premiums required to be directly paid by
tenants under the Mitigation Leases (the "Tax and Insurance Holdbacks").
Escrowee shall release Tax and Insurance Holdbacks to Landlord when and to
the extent that real estate taxes and Insurance premiums are payable by
Landlord with respect to the Master Lease Property. At the time of each
such disbursement to Landlord, Escrowee shall also disburse to Tenant the
amount, if any, by which the Tax and Insurance Holdbacks held by Escrowee
exceed the tax xxxx or Insurance premiums paid with such Tax and Insurance
Holdbacks. Although the last Default Measuring Period shall end on the date
the Term would have expired but for the early termination of this Lease,
any amounts collected by Landlord under the Mitigation Leases after that
date and attributable to any period which occurred prior to that date shall
be paid directly by Landlord to Tenant. No party shall be paid for any
amount described in this Subsection (B) to the extent such party was
otherwise reimbursed for such amount, including, without limitation,
previous payment by the Escrowee or previous reimbursement under the
Mitigation Leases. For the purposes of this Section, "Operating Expenses"
includes the amortized cost of capital improvements properly allocable to
the Default Measuring Period but excludes (1) debt service and other costs
of Landlord's financing, (2) capital expenditures (except for the amortized
portion properly allocable to the Default Measuring Period), (3) management
fees, (4) overhead, (5) depreciation, (6) accountants' fees, (7) any losses
or expenses covered by Insurance, whether or not such Insurance is in fact
maintained, or compensable by condemnation proceeds, (8) any amount
incurred by reason of the negligence or intentional misconduct of Landlord
or its Agents, (9) fines or penalties, and (10) any amounts paid by
specific tenants. Any refunds, discounts, or recoupments of Operating
Expenses received by Landlord shall be accounted for by Landlord and
credited back to Tenant. Tenant, at reasonable times and upon reasonable
notice, shall have the right to audit Landlord's books and records relating
to Operating Expenses; provided, however, in no event shall Landlord be
required to keep such underlying receipts for Operating Expenses beyond a
date which is three (3) years after Escrowee makes a disbursement for such
Operating Expenses. The cost of capital expenditures shall be amortized
over the useful life of each such capital expenditure as determined for
federal income tax purposes. Notwithstanding the foregoing, Landlord shall
not be entitled to payment from the Escrow Account for any costs of capital
improvements, repairs, or maintenance that Tenant would not have been
obligated to undertake under the standard of Care set forth in Section 11
of this Lease or for any other Operating Costs which Tenant would not have
been obligated to pay under this Lease. Notwithstanding anything to the
contrary contained herein, until the expiration of 91 days after Landlord's
receipt of the Accelerated Payment, Tenant shall not make any claim against
Landlord that Landlord has failed to use diligent efforts to mitigate its
damages after the Event of
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Default which gave rise to the Accelerated Payment. This provision shall
survive the termination of this Lease.
(C) In the event that Landlord exercises its
remedy under Subsection (iii)(A) of this Section, performance of Landlord's
obligations under Subsection (iii)(B) of this Subsection shall be deemed
satisfaction of Landlord's duty to mitigate its damages.
(iv) Landlord may xxx for injunctive relief or to
recover damages for any loss resulting from the breach.
(c) Any agreement for an extension of the Term or for any
other additional period after the Term shall not thereby prevent Landlord
from terminating this Lease for any reason specified in this Lease. If any
such right of termination is exercised by Landlord during the Term or any
extension thereof, Tenant's right to any extension or additional period
shall thereby be automatically canceled. Any such right of termination of
Landlord contained herein shall continue during the Term and any subsequent
extension hereof.
(d) The failure or delay by either party to enforce or
exercise at any time any of the rights or remedies or other provisions of
this Lease shall not be construed to be a waiver thereof, nor affect the
validity of any part of this Lease or the right of that party thereafter to
enforce each and every such right or remedy or other provisions. No waiver
of any default or breach of this Lease shall be held to be a waiver of any
other default or breach. No act or omission by Landlord during the Term
shall be deemed an acceptance of a surrender of the Master Lease Property
and no agreement to accept such a surrender shall be valid unless in
writing and signed by Landlord.
(e) If either party defaults under this Lease and the
other party places the enforcement of all or any part of this Lease or the
collection of any sum due or to become due under this Lease or the recovery
of possession of the Master Lease Property in the hands of an attorney, and
such party prevails in litigation concerning such issue, the defaulting
party agrees to reimburse the prevailing party for the reasonable
attorney's fees incurred thereby.
SECTION 22. BANKRUPTCY OR INSOLVENCY
Landlord and Tenant agree that the following shall apply
in the event of the bankruptcy or insolvency of Tenant:
(a) If a petition is filed by, or an order for relief is
entered against Tenant under Chapter 7 of the Bankruptcy Code and the
trustee of Tenant elects to assume this Lease for the purpose of assigning
it, such assumption and assignment may be made only if all of the terms and
conditions of Subsections (b) and (d) below are satisfied. To be effective,
an election to assume this Lease must be in writing, addressed to Landlord, and
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all of the conditions herein stated, which Landlord and Tenant acknowledge
to be commercially reasonable, must have been satisfied. If the trustee
fails so to elect to assume this Lease within sixty (60) days after such
filing or order or such additional time as the Bankruptcy Court, for cause,
may fix, this Lease will be deemed to have been rejected, and Landlord
shall then immediately be entitled to possession of the Master Lease
Property without further obligation to Tenant or the trustee, and this
Lease shall be terminated. Landlord's right to be compensated for damages
in the bankruptcy proceeding, however, shall survive such termination.
(b) If Tenant files a petition for reorganization under
Chapters 11 or 13 of the Bankruptcy Code, or if a pro ceeding filed by or
against Tenant under any other chapter of the Bankruptcy Code is converted
to a chapter 11 or 13 proceeding and Tenant's trustee or Tenant as
debtor-in-possession fails to assume this Lease within 60 days from the
date of the filing of such petition or conversion or such additional time
as the Bankruptcy Court, for cause, may fix, then the trustee or the
debtor-in-possession shall be deemed to have rejected this Lease. To be
effective, any election to assume this Lease must be in writing, addressed
to Landlord and, if there has been a default under the Lease, all of the
following conditions, which Landlord and Tenant acknowledge to be
commercially reasonable, must have been satisfied:
(i) The trustee or the debtor-in-possession has
cured or has provided to Landlord adequate
assurance that:
(A) It will cure all monetary
defaults under this Lease
within the number of days
specified in Section 21(a)(I)
of this Lease from the date of
assumption; and
(B) It will cure all nonmonetary
defaults under this Lease
within the number of days
specified in Section 21(a)(ii)
of this Lease from the date of
assumption.
(ii) The trustee or the debtor-in-possession
has compensated Landlord, or has
provided Landlord with adequate
assurance that Landlord will be
compensated promptly for any pecuniary
loss it has incurred arising from the
default of Tenant, the trustee, or the
debtor-in-possession.
(iii) The trustee or the debtor-in-possession
has provided Landlord with adequate
assurance of the future performance of
each of Tenant's obligations under this
Lease; provided,
however, that:
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(A) From and after the date of
assumption of this Lease, until
the date of the assignment of
this Lease, it shall pay all
monetary obligations,
including, without limitation,
the Rent payable under this
Lease, in advance on each date
that such amounts are payable.
(B) It shall also deposit with
Landlord, as security for the
timely payment of Rent, an
amount equal to three months'
Base Rent and other monetary
charges accruing under this
Lease;
(C) If not otherwise required by
the terms of this Lease, it
shall also pay in advance, on
each day that any installment
of Base Rent is payable,
one-twelfth (1/12) of Tenant's
Imposition, Insurance and other
obligations under this Lease.
(c) If the trustee or the debtor-in-possession has
assumed this Lease, pursuant to Subsection (a) or (b) above, and elects to
assign Tenant's interest under this Lease or the estate created by that
interest to any other person, such interest or estate may be assigned only
if the intended assignee has provided adequate assurance of future
performance of all of the terms, covenants, and conditions of this Lease.
For the purposes of this Subsection (d), "adequate assurance of future
performance" means that Landlord has ascertained that each of the following
condition has been satisfied:
The assignee has submitted a current
financial statement which shows a net worth and
working capital in amounts sufficient to assure
the future performance by the assignee of
Tenant's obliga tions under this Lease.
(d) When, pursuant to the Bankruptcy Code, the trustee or
the debtor-in-possession is obligated to pay reasonable use and occupancy
charges for the use of all or part of the Master Lease Property, it is
agreed that such charges will not be less than the Base Rent as defined in
this Lease, plus Additional Rent and other monetary obligations of Tenant
included herein.
(e) Except to the extent provided by law, neither
Tenant's interest in this Lease nor any estate of Tenant created in this
Lease shall pass to any trustee, receiver, assignee for the benefit of
creditors, or any other person or entity, nor otherwise by operation of law
under the laws of any state having jurisdiction of the person or property
of Tenant, unless Landlord consents in writing to such transfer. Landlord's
acceptance of Rent or any other payments from any trustee, receiver,
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assignee, person, or other entity will not be deemed to have waived, or waive,
either the requirement of Landlord's consent or Landlord's right to terminate
this Lease for any transfer of Tenant's inter est under this Lease without
such consent.
SECTION 23. SURRENDER OF MASTER LEASE PROPERTY
Upon the expiration or earlier termination of this Lease,
Tenant shall surrender the Master Lease Property to Landlord, broom-clean,
in good order, condition and repair (except for ordinary wear and tear and
conditions which existed on the Master Lease Property prior to the
Effective Date and subject to Sections 15 and 17), free of all Personal
Property and Restricted Property (except for Restricted Property belonging
to any Existing Tenant or Subtenant whose Existing Lease or Sublease
Landlord has expressly agreed in writing may continue), and free of
violation of Applicable Laws in all material respects subject to Section
5(b)(iv). To the extent Tenant fails to comply with the requirements of
this Section, Landlord may restore the Master Lease Property to such
condition at Tenant's expense.
SECTION 24. NON-CONSENSUAL HOLDING OVER
In the event Tenant remains in possession of the Master
Lease Property or any part thereof without the consent of Landlord after
the expiration or earlier termination of this Lease, Tenant shall be
deemed, at Landlord's election, to hold the Master Lease Property as a
tenant at sufferance subject to all of the terms, conditions, covenants and
provisions of this Lease which shall be applicable during such time (the
"Non- Consensual Holdover Period"), except that, for each month during the
Non-Consensual Holdover Period, Tenant shall pay to Landlord one hundred
fifty percent (150%) of the sum of the last current full monthly
installment of Base Rent plus Additional Rent, which shall be payable to
Landlord within five (5) business days of notice from Landlord. In
addition, such election shall not preclude Landlord from seeking, and shall
be cumulative with, any other remedy under this Lease or granted by law or
in equity. No holding over by Tenant, as described in this Section 24,
whether with or without the consent of Landlord, shall operate to extend
this Lease.
SECTION 25. QUIET ENJOYMENT
If and for so long as Tenant pays the prescribed Rent and
performs or observes all of the terms, conditions, covenants and
obligations of this Lease required to be performed or observed by it
hereunder, Tenant shall at all times during the Term have the peaceable and
quiet enjoyment, possession, occupancy and use of the Master Lease Property
without any inter xxxxxxx from Landlord, or anyone claiming through or
under Landlord, subject to any matters of record as of the Effective Date
to which this Lease is subject.
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SECTION 26. NOTICES
Any notice, demand or request required or permitted to be
given under this Lease or by law shall be deemed to have been given if in
writing and delivered addressed to the party who is to receive such notice,
demand or request at the address set forth below or at such other address
as Landlord or Tenant may specify from time to time by notice. Delivery
hereunder shall be deemed to include pre-paid courier delivery (by a
reputable courier delivery service), pre-paid overnight delivery (by a
reputable overnight delivery service), postage and fees paid U.S. Postal
Service express mail or certified mail, return receipt requested, or
facsimile transmission with electronic verification during normal business
hours, if sent to the address of the parties designated hereunder, and
shall be deemed received on the next business day such notice is delivered
or refused at such address except notices sent by fax shall be deemed
received upon electronic verification.
Landlord: LCOR Incorporated
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attn: Mr. R. Xxxxxxx Xxxx
Facsimile: (000) 000-0000
with copies to: Xxxxx, Day, Xxxxxx & Xxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
LCOR Incorporated
000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xx. Xxxxx XxXxxxx
Facsimile: (000) 000-0000
Tenant: COMSAT Corporation
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: General Manager Corporate
Services
Facsimile: (000) 000-0000
with a copy to: COMSAT Corporation
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
Any copies required to be sent as above provided are for the convenience of
the parties and no such copy shall constitute adequate notice for the
purposes of this Section.
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SECTION 27. HAZARDOUS MATERIALS
Landlord and Tenant agree as follows with respect to the
existence or use of "Hazardous Material" on the Master Lease Property or in
the Main Building.
(a) If the use, storage, handling, generation, or
disposal of Hazardous Material on or in the Master Lease Property during
the Term results in the release or threatened release of Hazardous
Materials at, on or under the Master Lease Property in violation of
Applicable Law, or otherwise necessitates investigation or cleanup of
Hazardous Material as required under Applicable Law ("Environmental
Conditions"), Tenant shall indemnify, defend and hold Landlord harmless
from any and all claims, judgments, damages, penalties, fines, costs,
liabilities or losses (including, without limitation, sums paid in
settlement of claims, attorneys' fees, consultant fees and expert fees but
excluding consequential damages and any injury to the value of the
Property, provided that this clause shall not be construed as reducing the
Remediation Obligation) which arise during or after the Term as a direct
result thereof. This indemnification of Landlord by Tenant includes,
without limitation, reasonable costs incurred in connection with any
investigation of site conditions or any cleanup, remedial, removal or
restoration work required by any federal, state or local governmental
agency because of Hazardous Material present in the soil or groundwater on
or under the Master Lease Property or in any improvements on the Master
Lease Property. This indemnification, however, shall not apply to any
Environmental Conditions caused by the acts or omissions of Landlord or its
Agents. The indemnification and hold harmless obligations of Tenant under
this Section 27 shall survive any termination of this Lease for a period of
twenty-four (24) months after the termination. At the end of the
twenty-four (24) month period, this indemnification and all of Tenant's
obligations under this Section shall expire, except as to matters
specifically made the subject of a lawsuit filed against Tenant before the
expiration of the twenty-four (24) month period. Without limiting the
foregoing, if the use, storage, handling, generation, or disposal of
Hazardous Material on or in the Master Lease Property during the Term
results in any Environmental Conditions, then, provided that the
Environmental Condition is not caused by the acts or omissions of Landlord
or its Agents, Tenant shall promptly take all actions, at its sole expense,
as are necessary to return the Master Lease Property to substantially the
condition existing prior to thereto or to such other condition as may
satisfy the applicable governmental authorities (the "Remediation
Obligation"). Landlord's approval of such actions shall first be obtained,
which approval shall not be unreasonably withheld. Nothing in this Section
shall be deemed to prohibit or limit any action by Tenant against any party
or parties responsible for the contamination.
(b) Landlord and Tenant acknowledge that asbestos
containing materials ("ACM") are located in certain portions of the Main
Building. Except for the ACM to be removed by Tenant as part of the Roof Work,
and so long as not required by Applicable Laws, Tenant shall not be required to
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remove or otherwise treat or xxxxx the other ACM located in the Main Building;
provided, that during the Term Tenant covenants and agrees (i) to continue
implementation of the Operations and Maintenance Plan described in Exhibit J
attached hereto and made a part hereof at all times in compliance with
Applicable Laws in all material respects; (ii) to take such actions with
respect to the ACM as may be necessary to comply with Applicable Laws and to
maintain the habitability of the Main Building; and (iii) to indemnify and hold
Landlord harmless (except to the extent caused by Landlord) from any and all
claims, judgments, damages, penalties, fines, costs, liabilities or
losses (including, without limitation, reasonable attorneys' fees and costs)
arising out of or relating to claims for tort liability brought by Tenant
or its Agents for events occurring or accruing during the Term as a result
of the existence of the ACM in the Main Building.
(c) Landlord shall have the right, at any time, to cause
the groundwater, soil, improvements and air at the Master Lease Property to
be investigated to detect the presence of Hazardous Material during the
Term, including, but not limited to, the installation of testing xxxxx and
other devices in locations selected by Landlord at Landlord's sole
discretion. Landlord shall supply Tenant with copies of final investigation
reports. The cost of such investigations and of the maintenance, repair and
replacement of such xxxxx and other devices shall be fully paid for by
Landlord, unless Landlord's investigations reveal Environmental Conditions
which Tenant is obligated to remediate under this Section. In that event,
Tenant, within 30 days after receiving a copy of such investigation report
and a statement of charges from Landlord, shall pay for the cost of the
investigation. Any dispute under this Subsection shall be resolved under
the arbitration proceedings set forth in Subsection 11(c).
(d) As used herein, the term "Hazardous Material" means
any hazardous or toxic substance, material or waste which is or becomes
regulated by any local governmental authority, the State of Maryland or the
United States Government or other Applicable Law. The term "Hazardous
Material" includes, without limitation, any material or substance which is
(i) designated as a "hazardous substance" pursuant to Section 307 of the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq. (33
U.S.C. Section 1317), (ii) defined as a "hazardous waste" pursuant to
Section 3001 of the Federal Solid Waste Disposal Act, 42 U.S.C. Section
6901 et seq. (42 U.S.C. Section 6921), or (iii) defined as a "hazardous
substance" pursuant to Section 101 of the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq.
(42 U.S.C. Section 9601), or (iv) petroleum, petroleum product,
polychlorinated biphenyls or urea formaldehyde.
(e) Within 30 days of the Expiration Date, if requested
by Landlord, Tenant shall remove all fuel oil and other liquid contents and
Hazardous Materials (collectively, the "Contents") from all now or
hereafter active underground storage tanks located on the Master Lease Property
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and dispose of such contents off of the Master Lease Property and in accordance
with Applicable Laws. Tenant shall not be obligated to remove, close or
take any other action to de-commission the tanks during or after the Term.
If, however, during the Term governmental authorities require such removal,
closure or other action and the requirement is not prompted by Landlord's
request to remove the Contents or any Development by Landlord or its Agents,
Tenant shall comply with such request subject to Subsection 5(B)(iv)(d).
(f) Notwithstanding anything contained in this Lease,
Tenant shall have no obligation or liability to Landlord with respect to:
(i) Any Hazardous Material which may exist on
the Master Lease Property as of the Effective Date, except to the extent that
Tenant is specifically required to take action regarding such Hazardous
Material by the governmental authority having jurisdiction.
(ii) Hazardous Material that migrates, flows,
percolates, diffuses or in any way moves on to or under the Master Lease
Property from sources outside the Master Lease Property.
(iii) Hazardous Material present on or in the
Master Lease Property as a result of any discharge, dumping or spilling
(whether accidental or otherwise) on areas of the Master Lease Property,
except the Main Building Area, by persons other than Tenant or its Agents.
SECTION 28. RIGHT TO RENEW TERM
(a) Provided that this Lease is then in full force and
effect, and provided that no Event of Default exists at the time of the
Renewal Notice or the date of commencement of the Renewal Term, Landlord
hereby grants to the Tenant an option (the "Renewal Option") to renew the
Initial Term of this Lease on the same terms, conditions and provisions as
contained in this Lease, except as noted herein, for a period of five (5)
years after the Expiration Date of the Initial Term (the "Renewal Term"),
which Renewal Option period shall, except as provided below, commence
immediately following the expiration of the Initial Term and end at 11:59
p.m. of the fifth anniversary of such date.
(b) The Renewal Option shall be exercised, if at all, by
written notice (the "Renewal Notice") from Tenant to Landlord of its
election, said notice to be given no later than the twenty-four (24) months
prior to the Expiration Date of the Initial Term. If the Renewal Notice is
not so given by Tenant to Landlord, the Renewal Option shall be deemed
waived.
(c) The Renewal Term shall be upon the same terms,
covenants and conditions as provided in this Lease except as follows:
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(i) Tenant shall not have any further right to
extend the Term or holdover after the end of the Term.
(ii) The annual Base Rent for the first year of
the Renewal Term shall be equal to the lesser of (i) the Fair Market Rent,
and (ii) one hundred two and 75/100ths percent (102.75%) of the Base Rent
rate in effect under this Lease immediately prior to commencement of the
Renewal Term; but in no event less than the annual Base Rent rate in effect
during the sixth Lease Year of the Initial Term (as reflected in Subsection
4(a)(vi)).
(iii) The annual Base Rent shall be increased
during the Renewal Term by two and 75/100ths percent (2.75%) per year on a
cumulative compounded basis.
(d) Landlord and Tenant shall attempt in good faith to
agree as to the Fair Market Rent, and if Landlord and Tenant fail to agree
as to the Fair Market Rent at least six (6) months prior to the Expiration
Date of the Initial Term (the "Arbitration Deadline"), Fair Market Rent
shall be determined as follows:
(i) Fair Market Rent shall be the triple net rent
which would be asked of tenants as of the date of commencement of the
Renewal Term for space comparable to the Main Building under five (5) year
leases in the Germantown/Clarksburg areas of Xxxxxxxxxx County, Maryland,
taking into account the size of the premises being leased by Tenant and the
value of brokerage commissions, rental abatements, rental credits, and
tenant allowances, if any, being offered or paid under such leases.
(ii) Tenant shall initiate the process to
determine Fair Market Rent by giving written notice to Landlord setting
forth the name and address of a leasing broker selected by Tenant to
determine the Fair Market Rent. Within five (5) days after receipt of
Tenant's notice, Landlord shall notify Tenant in writing of the name and
address of a leasing broker selected by Landlord to determine the Fair
Market Rent. Each broker shall independently make his or her determination
of the Fair Market Rent within twenty (20) days after the appointment of
Landlord's broker. The Fair Market Rent shall be deemed to be the average
of the two determinations unless the higher of such determinations is
greater than one hundred five percent (105%) of the lower of the
determinations. If the higher determination is greater than one hundred
five (105%) of the lower determination, the brokers selected by Landlord
and Tenant shall together select a third broker within five (5) days after
rendering their determinations. The third broker shall have ten (10) days
to make his or her determination of the Fair Market Rent and upon such
determination, the Fair Market Rent shall be deemed to be the median
determination made by the three (3) brokers. If Landlord fails to give
Tenant timely notice of Landlord's selection of a broker, the broker
selected by Tenant shall solely determine Fair Market Rent.
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(iii) Each broker appointed pursuant to this
Subsection shall be a disinterested broker licensed in the State of
Maryland having recognized competence in the field of commercial leasing
and a minimum of ten (10) years experience as a commercial leasing broker
or agent in the Xxxxxxxxxx County area. Each party shall pay for the cost
of the broker which it selects and the parties shall share equally the cost
of the third broker, if any.
(e) Upon the valid exercise by Tenant of the Renewal
Option, at the request of either party hereto and within thirty (30) days
after such request, Landlord and Tenant shall enter into a written
supplement to this Lease incorporating the terms, conditions and provisions
applicable to the Renewal Term as determined in accordance with the
provisions of this Section; provided, that if the amount of Base Rent for
the first year of the Renewal Term has not then been set, such amount shall
be entered into such supplement when determined.
SECTION 29. SECURITY DEPOSIT
If at any time during the Term, the credit rating of
Tenant's corporate debt drops below BBB as rated by Standard & Poor's (or
the equivalent rating by any other national rating agency designated by
Landlord), upon notice from Landlord, Tenant shall deposit a sum with
Landlord equal to one month's installment of the then applicable annual
Base Rent ("Security Deposit"), as security for the full and faithful
performance by Tenant, of each and every term, covenant, and condition of
this Lease. If there an event of Default, Landlord may use the Security
Deposit as payment of any Rent or other payment due from Tenant to Landlord
or to otherwise cure any default of Tenant hereunder. To the extent that
any of the Security Deposit is used for this purpose, Tenant shall pay such
amount to Landlord along with the next month's Rent in order to replenish
the Security Deposit to the original amount stated herein. The Security
Deposit shall be returned to Tenant within thirty (30) days of the
Expiration Date or earlier termination of this Lease to the extent that
such amount is not depleted in order to remedy any default by Tenant
hereunder.
SECTION 30. MISCELLANEOUS GENERAL PROVISIONS
(a) Payments Deemed Rent. Any amounts of money to be paid
by Tenant to Landlord pursuant to the provisions of this Lease, whether or
not such payments are denominated Rent or Additional Rent and whether or
not they are to be periodic or recurring, shall be deemed Rent or
Additional Rent for purposes of this Lease; and any failure to pay any of
same shall entitle Landlord to exercise all of the rights and remedies
afforded hereby or by law or in equity for the collection and enforcement
of Tenant's obligation to pay Rent. Tenant's obligation to pay any such
Rent or Additional Rent pursuant to the provisions of this Lease shall
survive the expiration or other termination of
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this Lease and the surrender of possession of the Master Lease Property.
(b) Interest on Deposits. Any amount deposited with
Landlord under this Lease shall be held by Landlord in a federally insured,
interest bearing account. Any interest earned on such deposit shall accrue
to Tenant and shall be transferred to Tenant promptly after the Expiration
Date or such earlier time as may be specified in this Lease unless Landlord
is required by Applicable Laws to return such interest to Tenant sooner
than stated herein. Any amount deposited with Mortgagee by Tenant (or by
Landlord on Tenant's behalf) shall be held by Mortgagee pursuant to
Applicable Laws and pursuant to the security documents between Landlord and
Mortgagee. No interest shall accrue unless required by Applicable Laws or
such security documents. Notwithstanding the foregoing, any amounts placed
in the Escrow Account shall be governed by the provisions of Subsection
21(b)(iii)(B).
(c) Landlord Cross Default. Any default by Landlord
under the Facilities Lease shall be a default by Landlord under
this Lease.
(d) Estoppel Letters. Tenant shall, within ten (10)
business days following written request from Landlord, execute, acknowledge
and deliver to Landlord or to any then existing or prospective lender,
investor or purchaser, with respect to the Master Lease Property or any
part thereof, designated by Landlord, a written statement certifying (i)
that this Lease is in full force and effect (if such is the case) and
unmodified (or, if modified, stating the nature of such modification), (ii)
the date to which Rent has been paid, (iii) that there are not, to Tenant's
actual knowledge, any uncured defaults by Landlord or Tenant (or specifying
such defaults if any are claimed), and (iv) such other matters as Landlord
may reasonably request. Any such statement may be relied upon by any such
then existing or prospective lender, investor or purchaser. If Tenant fails
to deliver such statement within the ten (10) business day period and if
following the expiration of that period Landlord gives a second written
request for the statement and Tenant fails to deliver the statement within
five (5) business days after the second request, Tenant shall conclusively
be deemed to have responded that this Lease is in full force and effect and
unmodified and that there are no uncured defaults in Landlord's performance
hereunder.
(e) Brokers. Each party represents and warrants to the
other that no broker procured this Lease on its behalf and that such party
had no conversations or negotiations with any broker concerning the leasing
of the Master Lease Property, other than Barnes, Morris, Xxxxxx and Xxxxxx,
which firm is receiving a commission from Tenant in connection with the
Purchase and Sale Agreement and is not entitled to a commission in
connection with this Lease. Each party shall indemnify the other against
liability in connection with a breach of its representation and
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warranty in this Subsection and in connection with any claim for a
brokerage or finder's commission or fee arising out of its acts. This
indemnification shall survive any termination of this Lease.
(f) Applicable Law. This Lease and all matters pertinent
thereto shall be construed and enforced in accordance with the Applicable
Laws of the State of Maryland, excluding choice of laws principles.
(g) Entire Agreement. This Lease, including all exhibits
hereto, constitutes the entire agreement between the parties hereto with
respect to the leasing of the Master Lease Property and may not be modified
except by an instrument in writing executed by the parties hereto.
(h) Binding Effect. This Lease and the respective rights
and obligations of the parties hereto shall inure to the benefit of and be
binding upon the successors and assigns of the parties hereto as well as
the parties themselves; subject, however, to Subsection (o) below.
(i) Survival. All provisions of this Lease which by their
express terms survive termination of this Lease or which by the operation
of their terms are intended to be performed, in whole or in part, after
termination of this Lease, shall survive any termination of this Lease.
(j) Severability. If any provision of this Lease shall be
held to be invalid, void or unenforceable, such provision shall be deemed
reformed to be valid, in effect and enforceable, and to be as close in
meaning and intent as the defective provision and still the remaining
provisions hereof shall not be affected or impaired, and such remaining
provisions shall remain in full force and effect.
(k) Headings, Gender, etc. As used in this Lease, the
word "person" shall mean and include, where appropriate, an individual,
corporation, partnership or other entity; the plural shall be substituted
for the singular, and the singular for the plural, where appropriate; and
words of any gender shall include any other gender. The topical headings of
the several paragraphs of this Lease are inserted only as a matter of
convenience and reference, and do not affect, define, limit or describe the
scope or intent of this Lease. References in this Lease to Sections and
Subsections are references to Sections and Subsections of this Lease.
(l) Waiver of Jury. To the extent permitted by Applicable
Laws, each of Landlord and Tenant hereby waives any right it may have to a
jury trial in the event of litigation between Landlord and Tenant
pertaining to this Lease.
(m) Landlord's Right to Cure. Landlord may, but shall
not be obligated to, cure any default by Tenant, specifically including, but
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not by way of limitation, Tenant's failure to pay Impositions, obtain
Insurance, Care for the Master Lease Property, or satisfy lien claims,
after complying with any applicable notice and cure provisions established
under this Lease; and whenever Landlord so elects, all reasonable out of
pocket costs and expenses paid by Landlord in curing such default, including,
without limitation, reasonable attorneys' fees, shall be Additional Rent due
on the next scheduled Rent payment date.
(n) Relationship of Parties. Nothing contained herein
shall be deemed or construed by the parties hereto, nor by any third party,
as creating the relationship of principal and agent or of partnership, or
of joint venture by the parties hereto, it being understood and agreed that
no provision contained in this Lease nor any act of the parties hereto
shall be deemed to create any relationship other than the relationship of
Landlord and Tenant.
(o) Landlord Means Owner. The term "Landlord" as used in
this lease, so far as covenants or obligations on the part of Landlord are
concerned, shall be limited to mean and include only the owner or owners at
the time in question of the Master Lease Property and, in the event of any
transfer or transfers of the title to all of the Master Lease Property,
Landlord herein named (and in case of any subsequent transfer or
conveyances, the then grantor) shall be automatically freed and relieved,
from and after the date of such transfer or conveyance, of all liability as
respects the performance of any covenants or obligations on the part of
Landlord contained in this Lease thereafter to be performed (but not any
liabilities accrued prior to the date of transfer); provided that any funds
in the hands of such Landlord or the then grantor at the time of such
transfer, in which Tenant has an interest, shall be turned over to the
grantee, and any amount then due and payable to Tenant by Landlord or the
then grantor under any provisions of this Lease, shall be paid to Tenant
and further provided that the transferee assumes in writing all of the
covenants and obligations of Landlord to observed and performed on and
after the date of transfer.
(p) References to Size. Landlord and Tenant acknowledge
and agree that any references in this Lease to the size of the Property,
the Main Building Area, the Main Building or any portion thereof are for
convenience only and regardless of whether the actual size of such areas is
greater or less than the size stated in this Lease, all obligations of the
parties hereunder, including without limitation, the obligation to pay Rent
shall remain the same and shall not be affected by any errors in references
to size.
(q) Unavoidable Delays. For purposes of this Lease, the
term "Unavoidable Delays" shall mean delays caused by strikes, lockouts,
acts of God, inability to obtain labor or materials, governmental
restrictions or inaction, enemy action, civil commotion, fire, terrorist
action, epidemic, public utility failure, unavoidable casualty, moratorium
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or similar laws prohibiting performance, weather conditions or any other
similar matter which shall be beyond the reasonable control of Landlord or
Tenant, as the case way be; but the lack or insufficiency of funds shall not
constitute an Unavoidable Delay.
(r) Landlord's Approvals. Wherever Landlord's consent or
approval are required under this Lease, Landlord shall approve or
disapprove the matter within ten (10) business days after Tenant requests
the consent or approval in writing. If Landlord fails to do so and if,
following the expiration of the ten (10) business day period, Tenant gives
a second written request for the consent or approval and Landlord fails to
approve or disapprove the matter within five (5) business days after the
second request, Landlord shall conclusively be deemed to have consented to
or approved the matter, as the case may be.
(s) Rate of Interest. If any amount owed by Landlord to
Tenant under this Lease remains unpaid after such amount is due and notice
thereof has been given to Landlord, the outstanding amount shall bear
interest at the Stipulated Rate from the date such amount is due and such
notice is given to the date such amount is paid.
(t) Cooperation of Parties. Whenever the parties are
required to cooperate with each other under this Lease but are entitled to
reimbursement for their out-of-pocket costs to third parties, the party
that is obligated to cooperate shall provide an estimate of such third
party costs to the party requesting such cooperation and obtain the prior
written approval from such other party not to be unreasonably withheld or
delayed before such costs are incurred.
(u) Reconciliation. Nothing in this Lease shall prevent
or impair Tenant from performing its obligations or observing its covenants
under the Existing Space Leases. Further, nothing in this Lease shall
prevent or impair any of the Existing Tenants from exercising their rights
and privileges under the Existing Space Leases. No such action by Tenant or
the Existing Tenants in accordance with the Existing Space Leases shall be
deemed to be a breach or default by Tenant under this Lease.
(v) Memorandum of Lease. Upon request of either party the
other party shall promptly execute and deliver a memorandum or other short
form version of this Lease setting forth the basic terms of this Lease
excluding Rent. The party recording such memorandum, short form version, or
other document giving notice of this Lease shall pay any and all
recordation and transfer taxes due in connection with such recordation.
(w) Financial Reports. In the event that Tenant is no
longer a publicly traded company with common stock trading on either the
New York Stock Exchange, the American Stock Exchange or the NASDAQ Stock
Exchange (or, in the event the Tenant's stock is no longer traded on such
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exchanges, or a successor or reasonably equivalent exchange), Tenant shall
supply Landlord, within ten (10) business days of Landlord's request
therefor (to be no more frequent than once per year), copies of Tenant's most
recent financial reports. Such reports shall (i) include an income
statement, balance sheet, statement owner's equity and statement of cash
flows, (ii) shall be audited by a certified public accountant or, to the
extent audited Financial Reports are not otherwise obtained by Tenant for
other purposes, certified by the chief financial officer of Tenant, to
his/her knowledge, as being true, correct and complete financial reports,
and (iii) shall be dated no later than twelve months prior to Landlord's
request. Notwithstanding the foregoing, in the event that Landlord requests
such financial reports within one hundred twenty (120) days after Tenant's
fiscal year end, Tenant shall have up to one hundred twenty (120) days
from such fiscal year end to supply such reports to Landlord; provided
Tenant has given Landlord its most recent financial reports and such reports
are not dated earlier than twelve (12) months prior to Tenant's fiscal year end.
(x) Landlord's Affiliates. Notwithstanding anything
contained in this Lease to the contrary, any act or omission of an
affiliate of Landlord on any Excluded Areas shall not be a default of
Landlord under this Lease. In no event shall this provision be construed in
any manner as a waiver of any right that Tenant has at law or in equity
against such affiliate as a result of such act or occurrence.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this
Lease to be executed as of the day and year stated herein.
LANDLORD:
LCOR CLARKSBURG L.L.C.
By: Clarksburg Management, Inc.
By:/s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
TENANT:
COMSAT CORPORATION
By: /s/ Xxxxx X. Flower
Name: Xxxxx X. Flower
Title: Vice President and
Chief Financial Officer
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SCHEDULE I
Defined Terms
AAA: Section 11(c)
ACM: Section 27(b)
Accelerated Payment: Section 21(b)(iii)(A)
Additional Easements: Section 6(f)
Additional Rent: Section 4(b)
Adequate Assurance of
Future Performance: Section 22(d)
All Risks Policy: Section 14(a)(i)
Alterations: Section 13(a)
Applicable Laws: Section 5(b)(iv)
Appurtenances: Section 6(d)
Arbitration Deadline: Section 28(d)
Architect: Section 15(b)(i)
Assignment: Section 19(b)
Base Rent: Section 4(a)
Blanket Policy: Section 14(e)
Building A, B or C: Definitions of Main Building
Care, Care for,
Care of: Section 11(a)
Communication Facilities: Section 6(a)(iii)
Comparable Buildings: Section 11(a)
Comparable Properties: Section 11(b)
Contents: Section 27(e)
Damage: Section 15(a)
Declaration: Section 11(b)
Default Measuring Period: Section 21(b)(iii)(B)
Development: Section 6(a)
Effective Date: Preamble
Environmental Conditions: Section 27(a)
Escrow Account: Section 21(b)(iii)(B)
Escrowee: Section 21(b)(iii)(B)
Events of Default: Section 21(a)
Existing Space Leases: Section 19(a)
Existing Tenants: Section 19(a)
Facilities Lease: Section 21(a)(iii)
Flood and Earthquake
Insurance: Section 14(f)
Flood Zone: Section 14(f)
Hazardous Material: Section 27 and 27(d)
Holdover Notice: Section 3(b)(i)
Holdover Period: Section 3(b)(i)
Holdover Space: Section 3(b)(ii)
Impositions: Section 7(a) and (d)
Indemnifying Party: Section 16(c)
Indemnitee: Section 16(c)
Indemnity Payment: Section 16(c)
Initial Term: Section 3(a)
Institutional Mortgagee: Section 15(c)(i)
Insurable Casualty: Section 15(h)
Insurance: Section 14(a)
Insurance Notice: Section 14(g)
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SCHEDULE I (cont'd)
Insurance Trustee: Section 15(c)
Landlord: Preamble; Section 30(o)
Landlord Approved SNDA: Section 19(b)
Lease: Preamble
Lease Renewal: Section 19(d)
Lease Year: Section 3(c)
Liability Policy: Section 14(a)(ii)
Measuring Period: Section 19(d)
Mitigation Leases: Section 21(b)(iii)(B)
Mortgagee: Section 7(e)(i)
Non-Broker Sublease: Section 19(b)
Non-Consensual Holdover
Period: Section 24
Operating Expenses: Section 21(b)(iii)(B)
Personal Property: Section 13(b)
Plans: Section 13(a)(i)
Post Default Leases: Section 21(b)(iii)(B)
Preapproved Alterations: Section 13(a)
Prime Rate: Section 4(h)
Profit: Section 19(d)
Purchase and Sale
Agreement: Recital (a)
Remediation Obligation: Section 27(a)
Renewal Notice: Section 28(b)
Renewal Option,
Renewal Term: Section 28(a)
Rent: Section 4(b)
Rent Insurance: Section 14(a)(iv)
Replacement Value: Section 14(a)(i)
Requisition: Section 15(c)(i)
Restoration: Section 15(a)
Restricted Areas: Section 12(a)
Restricted Property: Section 13(b)
Roof Based Facilities: Section 13(a)
Roof Work: Section 11(e)
Security Deposit: Section 29
Seismic Activity Zone: Section 14(f)
Signs: Section 9(a)
Standard Rating: Section 14(g)
Stipulated Rate: Section 4(h)
Sublease: Section 19(b)
Sublease Arbitration
Deadline: Section 19(c)
Subject Space: Section 19(d)
Subtenant: Section 19(e)
Taken, Taking: Section 17(a)(i)
Tax and Insurance
Holdbacks: Section 21(b)(iii)(B)
Tenant: Preamble
Tenant Approved SNDA: Section 20(a)
Tenant's Knowledge: Section 15(c)(ii)
Term: Section 3(a)
Third Party Claim: Section 16(d)(i)
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Triggering Event: Section 6(b)
Unavoidable Delays: Section 30(q)
Utilities: Section 8(a)
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Schedule II
Deductibles
I. All Risk Policy $100,000
Flood and Earthquake Insurance $150,000
II. In the event that Tenant's corporate debt drops below BB, as rated
by an Approved Credit Rating Agency, the following deductibles
shall apply:
All Risk Policy $25,000
Flood and Earthquake Insurance $50,000
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SCHEDULE OF EXHIBITS
EXHIBIT SECTION
Exhibit A (Description of Land) 1(a)
Exhibit B (Description of Main 1(a)
Building Area)
Exhibit C (Description of 1(a)
Installations Premises)
Exhibit D Intentionally Omitted
Exhibit E (Wire Instructions) 4(g)
Exhibit F (Roof Work) 11(e)
Exhibit G (Existing Space Leases) 19(a)
Exhibit H (Landlord Approved SNDA) 19(b)
Exhibit I (Tenant Approved SNDA) 20(a)
Exhibit J (Operations and 27(b)
Maintenance Plan)
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