-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jvkdr0ft9I55TArDzbCp41eac8kQpOp49+lKE94SOIYD1L/GkN3va0fYJDIkctZh Shi2rl22pSAihyUfvmDQtA== 0001104659-04-040463.txt : 20041220 0001104659-04-040463.hdr.sgml : 20041220 20041220171158 ACCESSION NUMBER: 0001104659-04-040463 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20041214 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041220 DATE AS OF CHANGE: 20041220 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SINCLAIR BROADCAST GROUP INC CENTRAL INDEX KEY: 0000912752 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 521494660 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26076 FILM NUMBER: 041214836 BUSINESS ADDRESS: STREET 1: 2000 WEST 41ST ST CITY: BALTIMORE STATE: MD ZIP: 21211 BUSINESS PHONE: 4104675005 MAIL ADDRESS: STREET 1: 2000 W 41ST ST CITY: BALTIMORE STATE: MD ZIP: 21211 8-K 1 a04-14991_18k.htm 8-K

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 


 

Form 8-K

 

CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (D)

OF THE SECURITIES EXCHANGE ACT OF 1934

 


 

Date of Report (Date of earliest event reported) December 14, 2004

 

Commission File Number 000-26076

 

SINCLAIR BROADCAST GROUP, INC.

(Exact name of registrant)

 

Maryland

52-1494660

(State of organization)

(I.R.S. Employer Identification Number)

 

 

10706 Beaver Dam Road

Cockeysville, MD 21030

(Address of principal executive offices and zip code)

 

 

(410) 568-1500

(Registrant’s telephone Number)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 



 

SINCLAIR BROADCAST GROUP, INC.

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On December 14, 2004, Sinclair Broadcast Group, Inc. (the “Company”) and the Company’s controlling shareholders, David Smith, Frederick Smith, J. Duncan Smith and Robert Smith (collectively, the “Controlling Shareholders”), entered into certain agreements to memorialize in writing certain transactions that had previously been agreed and implemented, but that had not previously been documented.  Set forth below is a summary of such agreements.

 

The Company entered into an operating agreement effective as of May 30, 1996 with the Controlling Shareholders (the “Operating Agreement”) to organize and operate Beaver Dam, LLC, a Maryland limited liability company (“Beaver Dam”).  The Operating Agreement is filed herewith as Exhibit 10.1.

 

The Operating Agreement allocated the membership interests in Beaver Dam based on aggregate initial capital contributions as follows:  13.75% to each of the Controlling Shareholders for capital contributions of $111,203.48 each and 45.00% to the Company for a capital contribution of $363,938.66.  The Operating Agreement also allocated profit, loss and distributions among the members in accordance with their membership interests, subject to certain special allocations set forth in the Operating Agreement, and established transfer restrictions on the membership interests.

 

In April 1997, the Company retired and redeemed its interest in Beaver Dam in exchange for $407,033.84 and withdrew from Beaver Dam.  The amendment reflecting this retirement, redemption and withdrawal was the First Amendment to the Operating Agreement effective as of April 18, 1997 (the “First Amendment”).  The First Amendment is filed herewith as Exhibit 10.2.

 

In May 1998, David Smith retired and redeemed his interest in Beaver Dam in exchange for $135,541.49 and withdrew from Beaver Dam. The amendment reflecting this retirement, redemption and withdrawal was the Second Amendment to the Operating Agreement effective as of May 6, 1998 (the “Second Amendment”).  The Second Amendment is filed herewith as Exhibit 10.3.

 

As previously disclosed, Beaver Dam owns office space that the Company leases for its corporate headquarters pursuant to five lease agreements; two dated December 18, 1998, two dated May 25, 2000 and one dated May 14, 2002 between Beaver Dam and the Company (collectively, the “Lease Agreement”).  Two of the leases expire on July 31, 2009 and three of the leases expire on April 30, 2010. The Lease Agreement provides for the rental of an aggregate of 66,051square feet for an aggregate annual rental payment of $1,504,354 in 2004, subject to annual increases. The Lease Agreement is filed herewith as Exhibit 10.4.

 

The foregoing description does not purport to be a complete statement of the parties’ rights and obligations under the Operating Agreement, the First Amendment, the Second Amendment, the Lease Agreement or the transactions contemplated by the Operating Agreement, the First Amendment, the Second Amendment or the Lease Agreement.  The foregoing description is qualified in its entirety by reference to the Operating Agreement, the First Amendment, the Second Amendment and the Lease Agreement, copies of which are attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4 and which are incorporated herein by reference.

 

2



 

Item 9.01 Financial Statements and Exhibits.

 

(c) Exhibits

 

Exhibit 10.1 Beaver Dam Limited Liability Company Operating Agreement

 

Exhibit 10.2 First Amendment to the Operating Agreement and Agreement to Retire

 

Exhibit 10.3 Second Amendment to the Operating Agreement and Agreement to Retire

 

Exhibit 10.4 Agreements of Lease between Beaver Dam Limited Liability Company and Sinclair Broadcast Group

 

3



 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

SINCLAIR BROADCAST GROUP, INC.

 

 

 

 

 

By:

/s/ David R. Bochenek

 

 

Name:

David R. Bochenek

 

Title:

Chief Accounting Officer

Dated: December 20, 2004

 

4


EX-10.1 2 a04-14991_1ex10d1.htm EX-10.1

EXHIBIT 10.1

 

BEAVER DAM LIMITED LIABILITY COMPANY

 

OPERATING AGREEMENT

 

This Operating Agreement (this “Agreement”) is entered into as of the 30th day of May, 1996, by and among David D. Smith, Frederick G. Smith, J. Duncan Smith, Robert E. Smith, and Sinclair Broadcast Group, Inc., a Maryland corporation.

 

Explanatory Statement

 

The parties have agreed to organize and operate a limited liability company in accordance with the terms of, and subject to the conditions set forth in, this Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the parties, intending legally to be bound, agree as follows:

 

Section I

Defined Terms

 

The following capitalized terms shall have the meanings specified in this Section I. Other terms are defined in the text of this Agreement; and, throughout this Agreement, those terms shall have the meanings respectively ascribed to them.

 

“Act” means the Maryland Limited Liability Company Act, as amended from time to time.

 

“Adjusted Capital Account Deficit” means, with respect to any Interest Holder, the deficit balance, if any, in the Interest Holder’s Capital Account as of the end of the relevant taxable year, after giving effect to the following adjustments:

 

(i) the deficit shall be decreased by the amounts which the Interest Holder is obligated to restore pursuant to Section 4.4.2 or is deemed obligated to restore pursuant to Regulation Sections 1.704-2(g)(1) and (i)(5) (i.e., the Interest Holder’s share of Minimum Gain and Member Minimum Gain); and

 

(ii) the deficit shall be increased by the items described in Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6).

 

“Affiliate” means, with respect to any Member, any Person:  (i) which owns more than fifty percent (50%) of the voting interests in the Member; (ii) in which the Member owns more than fifty percent (50%) of the voting interests; or (iii) in which more than fifty

 



 

percent (50%) of the voting interests are owned by a Person who has a relationship with the Member described in clause (i) or (ii) above.

 

“Agreement” means this Agreement, as amended from time to time.

 

“Capital Account” means the account maintained by the Company for each Interest Holder in accordance with the following provisions:

 

(i) an Interest Holder’s Capital Account shall be credited with the Interest Holder’s Capital Contributions, the amount of any Company liabilities assumed by the Interest Holder (or which are secured by Company property distributed to the Interest Holder), the Interest Holder’s allocable share of Profit and any item in the nature of income or gain specially allocated to such Interest Holder pursuant to the provisions of Section IV (other than Section 4.3.3); and

 

(ii) an Interest Holder’s Capital Account shall be debited with the amount of money and the fair market value of any Company property distributed to the Interest Holder, the Interest Holder’s allocable share of Loss, and any item in the nature of expenses or losses specially allocated to the Interest Holder pursuant to the provisions of Section IV (other than Section 4.3.3).

 

If any Interest is transferred pursuant to the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent the Capital Account is attributable to the transferred Interest. If the book value of Company property is adjusted pursuant to Section 4.3.3, the Capital Account of each Interest Holder shall be adjusted to reflect the aggregate adjustment in the same manner as if the Company had recognized gain or loss equal to the amount of such aggregate adjustment. It is intended that the Capital Accounts of all Interest Holders shall be maintained in compliance with the provisions of Regulation Section 1.704-1(b), and all provisions of this Agreement relating to the maintenance of Capital Accounts shall be interpreted and applied in a manner consistent with that Regulation.

 

“Capital Contribution” means the total amount of cash and the fair market value of any other assets contributed (or deemed contributed under Regulation Section 1.704-1(b)(2)(iv)(d)) to the Company by a Member, net of liabilities assumed or to which the assets are subject.

 

“Cash Flow” means all cash funds derived from operations of the Company (including interest received on reserves), without reduction for any non-cash charges, but less cash funds used to pay current operating expenses and to pay or establish reasonable reserves for future expenses, debt payments, capital improvements, and replacements as determined by the Members. Cash Flow shall be increased by the reduction of any reserve previously established.

 

“Code” means the Internal Revenue Code of 1986, as amended, or any corresponding provision of any succeeding law.

 



 

“Company” means the limited liability company organized in accordance with this Agreement.

 

“Family” means with respect to a Member who is a natural person: (i) such Member’s spouse, (ii) such Member’s children (without regard to age and including adopted children and stepchildren), and (iii) trusts for the exclusive benefit of a Member or any one or more of the of the foregoing individuals.

 

“Interest” means a Person’s share of the Profits and Losses of, and the right to receive distributions from, the Company.

 

“Interest Holder” means any Person who holds an Interest, whether as a Member or as an unadmitted assignee of a Member.

 

“Involuntary Withdrawal” means, with respect to any Member, the occurrence of any of the events set forth in Act Section 4A-606(3) through (9).

 

“Member” means each Person signing this Agreement and any Person who subsequently is admitted as a member of the Company.

 

“Member Minimum Gain” has the meaning set forth in Regulation Section 1.704-2(i) for “partner nonrecourse debt minimum gain.”

 

“Membership Rights” means all of the rights of a Member in the Company, including a Member’s:  (i) Interest; (ii) right to inspect the Company’s books and records; (iii) right to participate in the management of and vote on matters coming before the Company; and (iv) unless this Agreement or the Articles of Organization provide to the contrary, right to act as an agent of the Company.

 

“Minimum Gain” has the meaning set forth in Regulation Section 1.704-2(d). Minimum Gain shall be computed separately for each Interest Holder in a manner consistent with the Regulations under Code Section 704(b).

 

“Negative Capital Account” means a Capital Account with a balance of less than zero.

 

“Percentage” means, as to a Member, the percentage set forth after the Member’s name on Exhibit A, as amended from time to time, and as to an Interest Holder who is not a Member, the Percentage of the Member whose Interest has been acquired by such Interest Holder, to the extent the Interest Holder has succeeded to that Member’s Interest.

 

“Person” means and includes an individual, corporation, partnership, association, limited liability company, trust, estate, or other entity.

 



 

“Positive Capital Account” means a Capital Account with a balance greater than zero.

 

“Profit” and “Loss” means, for each taxable year of the Company (or other period for which Profit or Loss must be computed) the Company’s taxable income or loss determined in accordance with Code Section 703(a), with the following adjustments:

 

(i) all items of income, gain, loss, deduction, or credit required to be stated separately pursuant to Code Section 703(a)(1) shall be included in computing taxable income or loss;

 

(ii)  any tax-exempt income of the Company, not otherwise taken into account in computing Profit or Loss, shall be included in computing taxable income or loss;

 

(iii) any expenditures of the Company described in Code Section 705(a)(2)(B) (or treated as such pursuant to Regulation Section 1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing Profit or Loss, shall be subtracted from taxable income or loss;

 

(iv)  gain or loss resulting from any taxable disposition of Company property shall be computed by reference to the adjusted book value of the property disposed of, notwithstanding the fact that the adjusted book value differs from the adjusted basis of the property for federal income tax purposes;

 

(v) in lieu of the depreciation, amortization or cost recovery deductions allowable in computing taxable income or loss, there shall be taken into account the depreciation computed based upon the adjusted book value of the asset; and

 

(vi) notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Section 4.3 hereof shall not be taken into account in computing Profit or Loss.

 

“Regulation” means the income tax regulations, including any temporary regulations, from time to time promulgated under the Code.

 

“SDAT” means the State Department of Assessments and Taxation of Maryland.

 

“Transfer” means, when used as a noun, any voluntary sale, hypothecation, pledge, assignment, attachment, or other transfer, and, when used as a verb, means voluntarily to sell, hypothecate, pledge, assign, or otherwise transfer.

 

“Voluntary Withdrawal” means a Member’s dissociation with the Company by means other than a Transfer or an Involuntary Withdrawal.

 



 

Section II

Formation and Name; Office; Purpose; Term

 

2.1.  Organization.  The parties hereby organize a limited liability company pursuant to the Act and the provisions of this Agreement and, for that purpose, have caused Articles of Organization to be prepared, executed, and filed with SDAT on May 30, 1996.

 

2.2.  Name of the Company.  The name of the Company shall be “Beaver Dam Limited Liability Company.” The Company may do business under that name and under any other name or names upon which the Members agree. If the Company does business under a name other than that set forth in its Articles of Organization, then the Company shall file a trade name application as required by law.

 

2.3.  Purpose.  Company is organized to engage in any lawful activities permitted by a limited liability company under the laws of Maryland.

 

2.4.  Term.  The term of the Company began upon the acceptance of the Articles of Organization by SDAT and shall continue in existence until January 1, 2200, unless its existence is sooner terminated pursuant to Section VII of this Agreement.

 

2.5.  Principal Office.  The principal office of the Company in the State of Maryland shall be located at 2000 W. 41st Street, Baltimore, Maryland 21211, or at any other place within the State of Maryland upon which the Members agree.

 

2.6. Resident Agent.  The name and address of the Company’s resident agent in the State of Maryland shall be Steven A. Thomas, Thomas & Libowitz, P.A., USF&G Tower, Suite 1100, 100 Light Street, Baltimore, Maryland 21202-1053.

 

2.7. Members.  The name, present mailing address, taxpayer identification number and Percentage of each Member are set forth on Exhibit A.

 

Section III

 

Members; Capital; Capital Accounts

 

3.1.  Initial Capital Contributions.  Upon the execution of this Agreement, the Members shall contribute to the Company cash in the amounts respectively set forth on Exhibit A.

 

3.2.  No Other Capital Contributions Required.  No Member shall be required to contribute any additional capital to the Company, and except as set forth in the Act, no Member shall have any personal liability for any obligations of the Company.

 

3.3.  No Interest on Capital Contributions.  Interest Holders shall not be paid interest on their Capital Contributions.

 

3.4. Return of Capital Contributions.  Except as otherwise provided in this Agreement, no Interest Holder shall have the right to receive the return of any Capital Contribution.

 



 

3.5. Form of Return of Capital.  If an Interest Holder is entitled to receive a return of a Capital Contribution, the Company may distribute cash, notes, property, or a combination thereof to the Interest Holder in return of the Capital Contribution.

 

3.6. Capital Accounts.  A separate Capital Account shall be maintained for each Interest Holder.

 

3.7. Loans.  Any Member may, at any time, make or cause a loan to be made to the Company in any amount and on those terms upon which the Company and the Member agree.

 

Section IV

 

Profit, Loss, and Distributions

 

4.1.  Distributions of Cash Flow.  Cash Flow for each taxable year of the Company shall be distributed to the Interest Holders in proportion to their Percentages no later than seventy-five (75) days after the end of the taxable year.

 

4.2.  Allocation of Profit or Loss.  After giving effect to the special allocations set forth in Section 4.3, for any taxable year of the Company, Profit or Loss shall be allocated to the Interest Holders in proportion to their Percentages.

 

4.3. Regulatory Allocations.

 

4.3.1. Qualified Income Offset.  No Interest Holder shall be allocated Losses or deductions if the allocation causes an Interest Holder to have an Adjusted Capital Account Deficit. If an Interest Holder receives (1) an allocation of Loss or deduction (or item thereof) or (2) any distribution which causes the Interest Holder to have an Adjusted Capital Account Deficit at the end of any taxable year, then all items of income and gain of the Company (consisting of a pro rata portion of each item of Company income, including gross income and gain) for that taxable year shall be allocated to that Interest Holder before any other allocation is made of Company items for that taxable year, in the amount and in proportions required to eliminate the excess as quickly as possible. This Section 4.3.1 is intended to comply with, and shall be interpreted consistently with, the “qualified income offset” provisions of the Regulations promulgated under Code Section 704(b).

 

4.3.2. Minimum Gain Chargeback.  Except as set forth in Regulation Section 1.704-2(f)(2), (3), and (4), if, during any taxable year, there is a net decrease in Minimum Gain, each Interest Holder, prior to any other allocation pursuant to this Section IV, shall be specially allocated items of gross income and gain for such taxable year (and, if necessary, subsequent taxable years) in an amount equal to that Interest Holder’s share of the net decrease of Minimum Gain, computed in accordance with Regulation Section 1.704-2(g)(2). Allocations of gross income and gain pursuant to this Section 4.3.2 shall be made first from gain recognized from the disposition of Company assets subject to nonrecourse

 



 

liabilities (within the meaning of the Regulations promulgated under Code Section 752), to the extent of the Minimum Gain attributable to those assets, and thereafter, from a pro rata portion of the Company’s other items of income and gain for the taxable year. It is the intent of the parties hereto that any allocation pursuant to this Section 4.3.2 shall constitute a “minimum gain chargeback” under Regulation Section 1.704-2(f).

 

4.3.3.  Contributed Property and Book-Ups.  In accordance with Code Section 704(c) and the Regulations thereunder, as well as Regulation Section 1.704-1(b)(2)(iv)(d)(3), income, gain, loss, and deduction with respect to any property contributed (or deemed contributed) to the Company shall, solely for tax purposes, be allocated among the Interest Holders so as to take account of any variation between the adjusted basis of the property to the Company for federal income tax purposes and its fair market value at the date of contribution (or deemed contribution). If the adjusted book value of any Company asset is adjusted as provided herein, subsequent allocations of income, gain, loss, and deduction with respect to the asset shall take account of any variation between the adjusted basis of the asset for federal income tax purposes and its adjusted book value in the manner required under Code Section 704(c) and the Regulations thereunder.

 

4.4. Liquidation and Dissolution.

 

4.4.1.  If the Company is liquidated, the assets of the Company shall be distributed to the Interest Holders in accordance with the balances in their respective Capital Accounts, after taking into account the allocations of Profit or Loss pursuant to Section 4.2, if any, and distributions, if any, of cash or property, pursuant to Section 4.1.

 

4.4.2.  No Interest Holder shall be obligated to restore a Negative Capital Account.

 

4.5. General.

 

4.5.1.  Except as otherwise provided in this Agreement, the timing and amount of all distributions shall be determined by the Members.

 

4.5.2.  If any assets of the Company are distributed in kind to the Interest Holders, those assets shall be valued on the basis of their fair market value, and any Interest Holder entitled to any interest in those assets shall receive that interest as a tenant-in-common with all other Interest Holders so entitled. Unless the Members otherwise agree, the fair market value of the assets shall be determined by an independent appraiser who shall be selected by the Members. The Profit or Loss for each unsold asset shall be determined as if the asset had been sold at its fair market value, and the Profit or Loss shall be allocated as provided in Section 4.2 and shall be properly credited or charged to the Capital Accounts of the Interest Holders prior to the distribution of the assets in liquidation pursuant to Section 4.4.

 

4.5.3.  All Profit and Loss shall be allocated, and all distributions shall be made, to the Persons shown on the records of the Company to have been Interest Holders as

 



 

of the last day of the taxable year for which the allocation or distribution is to be made. Notwithstanding the foregoing, unless the Company’s taxable year is separated into segments, if there is a Transfer or an Involuntary Withdrawal during the taxable year, the Profit or Loss shall be allocated between the original Interest Holder and the successor on the basis of the number of days each was an Interest Holder during the taxable year; provided, however, the Company’s taxable year shall be segregated into two or more segments in order to account for Profit, Loss, or proceeds attributable to any extraordinary non-recurring items of the Company.

 

4.5.4.  The Members are hereby authorized, upon the advice of the Company’s tax counsel, to amend this Article IV to comply with the Code and the Regulations promulgated under Code Section 704(b); provided, however, that no amendment shall materially affect distributions to an Interest Holder without the Interest Holder’s prior written consent.

 

Section V

 

Management:  Rights, Powers, and Duties

 

5.1.  Management.  The Company shall be managed by the Members. Except as otherwise provided in this Agreement, each Member shall have the right to act for and bind the Company in the ordinary course of its business.

 

5.2. Meetings of and Voting by Members.

 

5.2.1.  A meeting of the Members may be called at any time by any Member. Meetings of Members shall be held at the Company’s principal place of business or at any other place in Baltimore, Maryland or in any county bordering Baltimore, Maryland, designated by the Member calling the meeting. Not less than ten (10) nor more than ninety (90) days before each meeting, the Member calling the meeting shall give written notice of the meeting to each Member. The notice shall state the time, place, and purpose of the meeting. Notwithstanding the foregoing provisions, each Member waives notice if before or after the meeting the Member signs a waiver of the notice which is filed with the records of Members’ meetings, or is present at the meeting in person or by proxy. Unless this Agreement provides otherwise, at a meeting of Members, the presence in person or by proxy of Members holding not less than fifty-one percent (51%) of the Percentages then held by Members constitutes a quorum. A Member may vote either in person or by written proxy signed by the Member or by the Member’s duly authorized attorney in fact.

 

5.2.2.  Except as otherwise provided in this Agreement, the affirmative vote of the Members holding fifty-one percent (51%) or more of the Percentages then held by Members shall be required to approve any matter coming before the Members.

 

5.2.3.  In lieu of holding a meeting, the Members may vote or otherwise take action by a written instrument indicating the consent of Members holding fifty-one percent (51%) or more of the Percentages then held by Members.

 



 

5.2.4.  Except as otherwise provided in this Agreement, wherever the Act requires unanimous consent to approve or take any action, that consent shall be given in writing and, in all cases, shall mean, rather than the consent of all Members, the consent of the Members holding sixty-six and two-thirds percent (66-2/3%) or more of the Percentages then held by Members. Notwithstanding anything to the contrary in this Agreement, the Company shall not Transfer substantially all of its assets without the consent in writing of the Members holding sixty-six and two-thirds percent (66-2/3%) or more of the Percentages then held by Members.

 

5.3. Personal Services.  No Member shall be required to perform services for the Company solely by virtue of being a Member. Unless approved by the Members, no Member shall be entitled to compensation for services performed for the Company. However, upon substantiation of the amount and purpose thereof, the Members shall be entitled to reimbursement for expenses reasonably incurred in connection with the activities of the Company.

 

5.4. Duties of Parties.

 

5.4.1. A Member shall not be liable, responsible, or accountable in damages or otherwise to the Company or to any other Member for any action taken or any failure conferred on the Member by this Agreement or by law, unless the action taken or omission was made fraudulently or in bad faith or unless the action or omission constituted gross negligence.

 

5.4.2. Except as otherwise expressly provided in Section 5.4.3., nothing in this Agreement shall be deemed to restrict in any way the rights of any Member, or of any Affiliate of any Member, to conduct any other business or activity whatsoever, and no Member shall be accountable to the Company or to any other Member with respect to that business or activity even if the business or activity competes with the Company’s business. The organization of the Company shall be without prejudice to the Members’ respective rights (or the rights of their respective Affiliates) to maintain, expand, or diversify such other interests and activities and to receive and enjoy profits or compensation therefrom. Each Member waives any rights the Member might otherwise have to share or participate in such other interests or activities of any other Member or the Member’s Affiliates.

 

5.4.3. Each Member understands and acknowledges that the conduct of the Company’s business may involve business dealings and undertakings with Members and their Affiliates. In any of those cases, those dealings and undertakings shall be at arm’s length and on commercially reasonable terms.

 

5.5. Liability and Indemnification.

 

5.5.1.  A Member shall not be liable, responsible, or accountable, in damages or otherwise, to any other Member or to the Company for any act performed by the Member

 



 

with respect to Company matters, except for fraud, gross negligence, or a breach of this Agreement.

 

5.5.2.  The Company shall indemnify each Member for any act performed by the Member with respect to Company matters, except for fraud, gross negligence, or a breach of this Agreement.

 

Section VI

 

Transfer of Interests and Withdrawals of Members

 

6.1. Transfers.

 

6.1.1.  No Person may Transfer all, or any portion of, or any interest or rights in, the Person’s Membership Rights or Interest unless the following conditions (“Conditions of Transfer”) are satisfied.

 

6.1.1.1. the Transfer will not require registration of Interests or Membership Rights under any federal or state securities laws;

 

6.1.1.2.  the transferee delivers to the Company a written agreement to be bound by the terms of this Agreement;

 

6.1.1.3. the Transfer will not result in the termination of the Company pursuant to Code Section 708;

 

6.1.1.4.  the Transfer will not result in the Company being subject to the Investment Company Act of 1940, as amended;

 

6.1.1.5. the transferor or the transferee delivers the following information to the Company: (i) the transferee’s taxpayer identification number, and (ii) the transferee’s initial tax basis in the Transferred Interest; and

 

6.1.1.6. the transferor complies with the provisions set forth in Section 6.1.4.

 

6.1.2. If the Conditions of Transfer are satisfied, then a Member or Interest Holder may Transfer all or any portion of that Person’s Interest or Membership Rights.

 

6.1.3. Each Member hereby acknowledges the reasonableness of the prohibition contained in this Section 6.1 in view of the purposes of the Company and the relationship of the Members. The Transfer of any Membership Rights or Interests in violation of the prohibition contained in this Section 6.1 shall be deemed, null, void, and of no force and effect. Any Person to whom Membership Rights are attempted to be transferred in violation of this Section shall not be entitled to vote on matters coming before

 



 

the Members, participate in the management of the Company, act as an agent of the Company, or have any other rights in or with respect to the Membership Rights.

 

6.1.4.  Right of First Refusal.

 

6.1.4.1.  If a Member (individually, a “Transferor”) receives a bona fide written offer (the “Transferee Offer”) from any other Person (a Transferee”) to purchase all or any portion of or interest or rights in the Transferor’s Membership Rights (the “Transferor Interest”) for a purchase price denominated and payable in United States dollars, then, prior to any Transfer of the Transferor’s Interest, the Transferor shall first give the remaini­ng Members (the “Remaining Members”) written notice (the “Transfer Notice”). The Transfer Notice shall contain each of the following:

 

6.1.4.1.1.  The identity of the Transferee.

 

6.1.4.1.2.  A true, correct and complete copy of the Transferee Offer.

 

6.1.4.1.3.  The Transferor’s offer (the “Offer”) to sell the Transferor Interest to the Remaining Members for a total price equal to the price set forth in the Transferee Offer (the “Transfer Purchase Price”), which shall be payable on the terms of payment set forth in the Transferee Offer.

 

6.1.4.2.  The Offer shall be and remain irrevocable for a period (the “Offer Period”) ending at 11:59 P.M., local time at the Company’s principal office, on the thirtieth (30th) Day following the date the Transfer Notice was given to the Remaining Members. At any time during the Offer Period, a Remaining Member may accept the Offer by giving written notice to the Transferor that the Remaining Member intends to purchase all, but not less than all, of the Transferor Interest. If two or more Remaining Members desire to accept the Offer, then, in the absence of an agreement between or among them, each such Remaining Member shall purchase the Transferor Interest in the proportion that his respective Percentage bears to the total Percentages of all of the Remaining Members who desire to accept the Offer. If one or more Remaining Members accept the Offer, then the parties shall fix a closing date (the “Transfer Closing Date”) for the purchase which shall be not be earlier than ten (10) nor later than ninety (90) Days after the expira­tion of the Offer Period.

 

6.1.4.3.  If any Remaining Member accepts the Offer, the Transfer Purchase Price shall be paid in immediately available funds on the Transfer Closing Date in accordance with the terms set forth in the Transferee Offer.

 

6.1.4.4.  If no Remaining Member accepts the Offer (within the time and in the manner specified in this Section), then the Transferor shall be free for a period (the “Free Transfer Period”) of thirty (30) Days from the expiration of the Offer Period to Transfer the Transferor Interest to the Transferee, for the same or greater price and on the same terms and conditions as set forth in the Transfer Notice. The Transfer shall be subject,

 



 

however, to the Conditions of Transfer (other than Section 6.1.1.6). If the Transferor does not Transfer the Transferor Shares within the Free Transfer Period, the Transferor’s right to Transfer the Transferor Interest pursuant to this Section shall cease and terminate.

 

6.1.4.5.  Any Transfer by the Transferor after the last day of the Free Transfer Period or made without strict compliance with the terms, provisions and conditions of this Section and the other terms, provisions and conditions of this Agreement shall be absolutely null and void and of no force and effect.

 

6.1.5.  Transfers to Affiliates and Family .  Notwithstanding anything set forth in this Agreement to the contrary, but provided that the Conditions of Transfer other than Section 6.1.1.6 are satisfied, any Member may at any time, and from time to time, Transfer all, or any portion of, or any interest or rights in, the Member’s Interest or Membership Rights to (i) any other Member, (ii) any member of the Member’s Family, (or) (iii) any Affiliate of the Member.

 

6.1.6.  Admission of Transferee as Member. If the Conditions of Transfer are satisfied, then the transferee shall be admitted as a Member and shall be entitled to exercise the rights of a Member after the consent of Members whose Interests represent more than one-half (1/2) of the aggregate of all of the Interests, except the Interest of the Member whose Interest is being transferred has been obtained.

 

6.1.7.  Collective Exercise of Membership Rights Involving Family Transfers.  Notwithstanding anything to the contrary in this Agreement, with respect to any Membership Rights (other than the Interest portion of Membership Rights) of a particular Member transferred pursuant to clause (ii) of Section 6.1.5, such Membership Rights must be exercised with respect to the Company and the other Members not parties to the Transfer, on a collective and en masse basis with: (i) all of the other transferees of such Membership Rights of such Member, (ii) all subsequent transferees of such Membership Rights to the extent such transferees’ Membership Rights were originally derived from such Member, and (iii) if the Member who transferred such Membership Rights remains a Member, with such Member as well. To ensure that such Membership Rights are exercised on a collective en masse basis, the holders of such Membership Rights shall designate in writing (which writing shall be filed with the records of the Company) one Person (who shall be the same Person) who shall be a Member who shall exercise all such Membership Rights of such holders. Any purported exercise of such Membership Rights with respect to the Company or any other Member who was not a party to such Transfer of such Membership Rights that is not done on a collective and en masse basis shall be null and void and of no force and effect with respect to the Company and such other Members. Notwithstanding the foregoing provisions of this Section 6.1.7, if such Membership Rights are subsequently retransferred pursuant to Section 6.1.4, the provisions of this Section 6.1.7 shall not apply to such Membership Rights that are so transferred, unless and until they are again retransferred pursuant to clause (ii) of Section 6.1.5. For purposes of this Section 6.1.7, and in particular clauses (i)-(iii) of the first sentence of this Section 6.1.7, such Membership Rights shall then be treated as being derived from the Member who last acquired them pursuant to Section 6.1.4.

 



 

6.2.  Voluntary Withdrawal.  No Member shall have the right or power to Voluntarily Withdraw from the Company.

 

6.3.  Involuntary Withdrawal.  Immediately upon the occurrence of an Involuntary Withdrawal, the successor of the Withdrawn Member shall thereupon become an Interest Holder but shall not become a Member. If the Company is continued as provided in Section 7.1.3, the successor Interest Holder shall have all the rights of an Interest Holder but shall not be entitled to receive in liquidation of the Interest, pursuant to Section 4A-905(1)(ii) of the Act, the fair market value of the Member’s Interest as of the date the Member involuntarily withdrew from the Company.

 

Section VII

 

Dissolution, Liquidation, and

Termination of the Company

 

7.1.  Events of Dissolution.  The Company shall be dissolved upon the happening of any of the following events:

 

7.1.1. when the period fixed for its duration in Section 2.4 has expired;

 

7.1.2. upon the unanimous written agreement of the Members; or

 

7.1.3. upon the death, insanity, retirement, resignation, expulsion, or bankruptcy of a Member or the occurrence of any other event which terminated the continued membership of a Member in the Company, unless Members holding a majority of the Interests in the Company and more than one-half (1/2) of the Capital Accounts of the Company other than the Interest and Capital Account held by the Member who dies, becomes insane, retires, resigns, is expelled, or becomes bankrupt, within ninety (90) days after the event or occurrence, elect to continue the business of the Company.

 

7.2.  Procedure for Winding Up and Dissolution.  If the Company is dissolved, the remaining Members shall wind up its affairs. On winding up of the Company, the assets of the Company shall be distributed, first, to creditors of the Company, including Interest Holders who are creditors, in satisfaction of the liabilities of the Company, and then to the Interest Holders in accordance with Section 4.4.

 

7.3.  Filing of Articles of Cancellation.  If the Company is dissolved, the Members shall promptly file Articles of Cancellation with SDAT. If there are no remaining Members, the Articles shall be filed by the last Person to be a Member; if there are no remaining Members, or a Person who last was a Member, the Articles shall be filed by the legal or personal representatives of the Person who last was a Member.

 



 

Section VIII

 

Books, Records, Accounting, and Tax Elections

 

8.1. Bank Accounts.  All funds of the Company shall be deposited in a bank account or accounts opened in the Company’s name. The Members shall determine the institution or institutions at which the accounts will be opened and maintained, the types of accounts, and the Persons who will have authority with respect to the accounts and the funds therein.

 

8.2. Books and Records.  The Members shall keep or cause to be kept complete and accurate books and records of the Company and supporting documentation of the transactions with respect to the conduct of the Company’s business. The books and records shall be maintained in accordance with sound accounting principles and practices and shall be available at the Company’s principal office for examination by any Member or the Member’s duly authorized representative at any and all reasonable times during normal business hours.

 

8.3. Annual Accounting Period.  The annual accounting period of the Company shall be its taxable year. The Company’s taxable year shall be selected by the Members, subject to the requirements and limitations of the Code.

 

8.4. Reports.  Within seventy-five (75) days after the end of each taxable year of the Company, the Members shall cause to be sent to each Person who was a Member at any time during the taxable year then ended a complete accounting of the affairs of the Company for the taxable year then ended. In addition, within seventy five (75) days after the end of each taxable year of the Company, the Members shall cause to be sent to each Person who was an Interest Holder at any time during the taxable year then ended, that tax information concerning the Company which is necessary for preparing the Interest Holder’s income tax returns for that year. At the request of any Member, and at the Member’s expense, the Members shall cause an audit of the Company’s books and records to be prepared by independent accountants for the period requested by the Member.

 

Section IX

 

General Provisions

 

9.1.  Assurances.  Each Member shall execute all such certificates and other documents and shall do all such filing, recording, publishing, and other acts as the Members deem appropriate to comply with the requirements of law for the formation and operation of the Company and to comply with any laws, rules, and regulations relating to the acquisition, operation, or holding of the property of the Company.

 

9.2.  Notifications.  Any notice, demand, consent, election, offer, approval, request, or other communication (collectively, a “notice”) required or permitted under this Agreement must be in writing and either delivered personally or sent by certified or registered mail, postage prepaid, return receipt requested. A notice must be addressed to an Interest Holder at the Interest Holder’s last known address on the records of the Company. A notice to the Company must be addressed to the Company’s principal office. A notice

 



 

delivered personally will be deemed given only when acknowledged in writing by the person to whom it is delivered. A notice that is sent by mail will be deemed given three (3) business days after it is mailed. Any party may designate, by notice to all of the others, substitute addresses or addressees for notices; and, thereafter, notices are to be directed to those substitute addresses or addressees.

 

9.3.  Specific Performance.  The parties recognize that irreparable injury will result from a breach of any provision of this Agreement and that money damages will be inadequate to fully remedy the injury. Accordingly, in the event of a breach or threatened breach of one or more of the provisions of this Agreement, and subject to the provisions of Section 9.8 of this Agreement, any party who may be injured (in addition to any other remedies which may be available to that party) shall be entitled to one or more preliminary or permanent orders (i) restraining and enjoining any act which would constitute a breach or (ii) compelling the performance of any obligation which, if not performed, would constitute a breach.

 

9.4.  Complete Agreement.  This Agreement constitutes the complete and exclusive statement of the agreement among the Members. It supersedes all prior written and oral statements, including any prior representation, statement, condition, or warranty. Except as expressly provided otherwise herein, this Agreement may not be amended without the written consent of all of the Members.

 

9.5.  Applicable Law.  All questions concerning the construction, validity, and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by the internal law, not the law of conflicts, of the State of Maryland.

 

9.6.  Section Titles.  The headings herein are inserted as a matter of convenience only, and do not define, limit, or describe the scope of this Agreement or the intent of the provisions hereof.

 

9.7.  Binding Provisions.  This Agreement is binding upon, and inures to the benefit of, the parties hereto and their respective heirs, executors, administrators, personal and legal representatives, successors, and permitted assigns.

 

9.8. Arbitration.  The parties hereto agree that the provisions of the Maryland Uniform Arbitration Act and the Federal Arbitration Act are applicable to this Agreement.  Any question, dispute, claim and/or controversy arising out of, relating to or in connection with this Agreement (including, without limitation, the scope or applicability of this Section 9.8) or any breach or alleged breach of this Agreement, shall be submitted to arbitration conducted in accordance with the rules and procedures of the American Arbitration Association (and if there is a conflict between such rules and procedures on the one hand, and/or the Federal Arbitration Act or the Maryland Uniform Arbitration Act on the other hand, the rules and procedures of the American Arbitration Association shall control).  Arbitration proceedings shall be held in Baltimore, Maryland.  The decision in the arbitration proceeding shall be final and may be entered and enforced in any court of

 



 

competent jurisdiction.  Nothing within this Section 9.8 shall be deemed to preclude any party hereto from seeking interim or provisional relief or protection from a court of competent jurisdiction, whether before, during or after any arbitration proceeding.

 

9.9.  Approval or Ratification.  The obligations of Sinclair Broadcast Group, Inc. under this Agreement are subject to the approval or ratification of this Agreement by its Board of Directors.

 

9.10.  Terms.  Common nouns and pronouns shall be deemed to refer to the masculine, feminine, neuter, singular and plural, as the identity of the Person may in the context require.

 

9.11.  Separability of Provisions.  Each provision of this Agreement shall be considered separable; and if, for any reason, any provision or provisions herein are determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or affect those portions of this Agreement which are valid.

 

9.12.  Counterparts.  This Agreement may be executed simultaneously in two or more counterparts each of which shall be deemed an original, and all of which, when taken together, constitute one and the same document.  The signature of any party to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart.

 



 

IN WITNESS WHEREOF, the parties have executed, or caused this Agreement to be executed, under seal, as of the date set forth hereinabove.

 

WITNESS OR ATTEST:

 

MEMBERS:

 

 

 

 

 

 

 

 

 

/s/ Hyris Feldman

 

/s/ David D. Smith

(SEAL)

 

 

David D. Smith

 

 

 

 

 

 

 

 

 

/s/ Hyris Feldman

 

/s/ Frederick G. Smith

(SEAL)

 

 

Frederick G. Smith

 

 

 

 

 

 

 

 

 

/s/ Hyris Feldman

 

/s/ J. Duncan Smith

(SEAL)

 

 

J. Duncan Smith

 

 

 

 

 

 

 

 

 

/s/ Hyris Feldman

 

/s/ Robert E. Smith

(SEAL)

 

 

Robert E. Smith

 

 

 

 

 

 

 

 

 

 

 

SINCLAIR BROADCAST GROUP, INC.

 

 

 

 

 

 

 

 

 

/s/ Cam Smart

 

By:

  /s/ David B. Amy

 

(SEAL)

 

 

 

 

 

 

 

 

Name:

David B. Amy

 

 

 

 

Title:

Executive Vice President and Chief Financial Officer

 

 



 

Beaver Dam Limited Liability Company

Operating Agreement

 

Exhibit A

 

List of Members, Capital, and Percentages

 

Name, Address,
and Taxpayer
I.D. Number

 

Initial
Cash Capital
Contribution

 

Percentages

 

 

 

 

 

 

 

David D. Smith

 

$

111,203.48

 

13.75

%

802 Hillstead Drive

 

 

 

 

 

Lutherville, MD 21093

 

 

 

 

 

###-##-####

 

 

 

 

 

 

 

 

 

 

 

Frederick G. Smith

 

$

111,203.48

 

13.75

%

7 Timberpark Court

 

 

 

 

 

Lutherville, MD 21093

 

 

 

 

 

###-##-####

 

 

 

 

 

 

 

 

 

 

 

J. Duncan Smith

 

$

111,203.48

 

13.75

%

1345 Ivy Hill Road

 

 

 

 

 

Cockeysville, MD 21030

 

 

 

 

 

###-##-####

 

 

 

 

 

 

 

 

 

 

 

Robert E. Smith

 

$

111,203.48

 

13.75

%

3600 Butler Road

 

 

 

 

 

Glyndon, MD 21071

 

 

 

 

 

###-##-####

 

 

 

 

 

 

 

 

 

 

 

Sinclair Broadcast Group, Inc.

 

$

363,938.66

 

45.00

%

2000 W. 41st Street

 

 

 

 

 

Baltimore, MD 21211

 

 

 

 

 

52-1494660

 

 

 

 

 

 


EX-10.2 3 a04-14991_1ex10d2.htm EX-10.2

EXHIBIT 10.2

 

FIRST AMENDMENT TO OPERATING AGREEMENT

AND AGREEMENT TO RETIRE

 

THIS FIRST AMENDMENT TO OPERATING AGREEMENT AND AGREEMENT TO RETIRE (this “Amendment”) is made as of the 18th day of April, 1997 (the “Effective Date”), by and among BEAVER DAM LIMITED LIABILITY COMPANY, a Maryland limited liability company (the “Company”), party of the first part, DAVID D. SMITH, FREDERICK G. SMITH, J. DUNCAN SMITH and ROBERT E. SMITH (collectively, the “Remaining Members”), parties of the second part, and SINCLAIR BROADCAST GROUP, INC., a Maryland corporation (“SBG”), party of the third part.

 

Explanatory Statement

 

A.            The Remaining Members and SBG are all of the members of the Company. The Remaining Members and SBG entered into an Operating Agreement (the “Operating Agreement”) with respect to the Company dated May 30, 1996. Except as otherwise defined herein, capitalized terms used herein other than proper nouns shall have the respective meanings ascribed to them in the Operating Agreement.

 

B.            The Percentages are held as follows:

 

David

 

13.75

%

Frederick

 

13.75

%

Duncan

 

13.75

%

Robert

 

13.75

%

SBG

 

45.00

%

 

C.            The parties hereto have agreed that SBG’s entire right, title and interest in and to the Company (the “Redemption Interest”) shall be retired and redeemed by the Company and that SBG shall withdraw from the Company all as set forth herein.

 

D.            The Remaining Members wish to amend Exhibit A to the Operating Agreement.

 

E.             The parties wish to enter into such other covenants and agreements as are more fully hereafter set forth.

 



 

NOW, THEREFORE, in consideration of the premises and the mutual covenants more fully hereafter set forth, the parties hereto agree as follows:

 

1.             Assignment; Deliveries.

 

1.1. For the payment by the Company to SBG of Three Hundred Sixty-Three Thousand Nine Hundred Thirty-Eight Thousand Dollars and Sixty-Six Cents ($407,033.84), receipt of which is hereby acknowledged by SBG, SBG hereby assigns, transfers and conveys to the Company all of SBG’s right, title and interest in and to all of the Redemption Interest (including, without limitation, SBG’s Membership Rights) in redemption thereof, all effective as of the Effective Date. It is understood and agreed by the parties hereto that from and after the Effective Date, SBG shall no longer be a Member (or be an Interest Holder) or have any Membership Rights whatsoever and that as of the Effective Date SBG has withdrawn from the Company.

 

2.             Liability, Profits and Assets.  SBG shall be relieved of (and is hereby released by the Company and the Remaining Members from) any liability for any and all debts, obligations and liabilities of the Company or under the Operating Agreement, to the extent that, on or after the Effective Date, such debts, obligations or liabilities arise, increase or accrue (collectively, the “Future Debts, Obligations and Liabilities”), and SBG shall not be entitled to any share of the profits, losses, assets or distributions of the Company (except for SBG’s share of the profits, distributions, assets and losses, if any, that SBG was entitled to on or before the Effective Date). The Remaining Members shall be entitled to all of the profits, distributions, assets and losses of the Company (except for the profits, distributions, assets or losses, if any, SBG was entitled to on or before the Effective Date) that SBG would have otherwise been entitled to but for this Amendment and the transactions contemplated hereby, and the Remaining Members hereby assume from SBG all Future Debts, Obligations and Liabilities that SBG would have been liable for but for this Amendment and the transactions contemplated hereby. The Remaining Members hereby jointly and severally agree to defend, indemnify and hold harmless SBG from, against, and in respect of, any and all claims, costs, expenses, fees (including, without limitation, the reasonable fees of counsel), liabilities, obligations, losses, damages, actions, suits, or proceedings, of any nature, in connection with or arising from under or out of the Future Debts, Obligations and Liabilities.

 

3.             Amendment to Operating Agreement; Consent.  The parties hereto agree that the provisions of Exhibit A to the Operating Agreement are hereby amended as of the Effective Date by deleting them in their entirety and by inserting in lieu thereof the provisions of Exhibit A to this Amendment. The Remaining Members and SBG all consent to the Company entering into this Agreement

 

4.             SBG Board Approval or Ratification.  If not previously approved or ratified by SBG’s Board of Directors, this Amendment and the parties’ obligations, covenants and agreements hereunder are subject to the approval or ratification of this Amendment by SBG’s Board of Directors.

 



 

5.             Attorneys’ Fees.  In the event of a breach or threatened breach of this Amendment, the breaching party or the party threatening to breach, as the case may be, shall pay the reasonable attorneys’ fees, costs and other expenses of the other party incurred as a result of or in connection with such breach or threatened breach, including, without limitation, any such attorneys’ fees, costs or other expenses incurred by such other party in any litigation to recover damages hereunder or to otherwise enforce this Amendment.

 

6.             Miscellaneous.

 

6.1.  Section Headings.  Section headings are inserted for convenience only and shall not limit or otherwise affect any of the provisions of this Amendment

 

6.2.  Entire Agreement.  This Amendment, any supplements hereto or thereto, and any instruments or documents delivered or to be delivered in connection herewith or therewith represents the entire agreement and understanding concerning the subject matter hereof and thereof between the parties hereto, and supersede all other prior agreements, understanding, negotiations and discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject matter hereof, whether oral or written.

 

6.3.  Waivers; Amendments.  Any of the terms or conditions of this Amendment may be waived but only in writing by the party which is entitled to the benefit thereof, and this Agreement may be amended or modified in whole or in part only by an agreement in writing, executed by all of the parties to this Agreement.

 

6.4.  Binding Nature of Amendment.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns.

 

6.5.  Word Usage.  As used herein, any reference to the masculine, feminine or neuter gender shall include all genders, the plural shall include the singular, and the singular shall include the plural.

 

6.6.  Governing Law.  This Amendment shall be governed by, and interpreted in accordance with, the law of the State of Maryland.

 

6.7.  Counterparts.  This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

6.8.  Severability.  In the event that any provision of this Agreement shall be found to be unenforceable in any action or proceeding, the remaining provisions shall remain in full force and effect.

 



 

6.9.  Survival.  This Amendment shall survive the closing of the transactions contemplated hereby.

 

6.10.  Arbitration.  The parties hereto agree that the provisions of the Maryland Uniform Arbitration Act and the Federal Arbitration Act are applicable to this Amendment. Any question, dispute, claim and/or controversy arising out of, relating to or in connection with this Amendment (including, without limitation, the scope or applicability of this Section 6.10) or any breach or alleged breach of this Amendment, shall be submitted to arbitration conducted in accordance with the rules and procedures of the American Arbitration Association (and if there is a conflict between such rules and procedures on the one hand, and/or the Federal Arbitration Act or the Maryland Uniform Arbitration Act on the other hand, the rules and procedures of the American Arbitration Association shall control). Arbitration proceedings shall be held in Baltimore, Maryland. The decision in the arbitration proceeding shall be final and may be entered and enforced in any court of competent jurisdiction. Nothing within this Section 6.10 shall be deemed to preclude any party hereto from seeking interim or provisional relief or protection from a court of competent jurisdiction, whether before, during or after any arbitration proceeding.

 



 

IN WITNESS WHEREOF, the parties hereto have executed or caused this Amendment to be executed, under seal, effective as of the date first set forth above.

 

WITNESS OR ATTEST:

BEAVER DAM LIMITED
LIABILITY COMPANY

 

 

  /s/ Hyris Feldman

 

 /s/ David D. Smith

(SEAL)

 

David D. Smith

 

 

 

 

  /s/ Hyris Feldman

 

  /s/ Frederick G. Smith

(SEAL)

 

Frederick G. Smith

 

 

 

 

  /s/ Hyris Feldman

 

  /s/ J. Duncan Smith

(SEAL)

 

J. Duncan Smith

 

 

 

 

  /s/ Hyris Feldman

 

  /s/ Robert E. Smith

(SEAL)

 

Robert E. Smith

 

 

 

SINCLAIR BROADCAST GROUP, INC.

 

 

  /s/ Cam Smart

 

By:

  /s/ David B. Amy

(SEAL)

 

 

Name:

 David B. Amy

 

 

 

Title:

Executive Vice President and Chief
Financial Officer

 

 



 

Beaver Dam Limited Liability Company

Operating Agreement

 

Exhibit A

 

List of Members, Capital, and Percentages

(as of April 18th, 1997)

 

Name, Address,
and Taxpayer
I.D. Number

 

Cash Capital
Contribution

 

Percentages

 

 

 

 

 

 

 

David D. Smith

 

$

116,203.48

 

13.75

%

802 Hillstead Drive

 

 

 

 

 

Lutherville, MD 21093

 

 

 

 

 

###-##-####

 

 

 

 

 

 

 

 

 

 

 

Frederick G. Smith

 

$

251,881.42

 

28.75

%

7 Timber Park Court

 

 

 

 

 

Lutherville, MD 21093

 

 

 

 

 

###-##-####

 

 

 

 

 

 

 

 

 

 

 

J. Duncan Smith

 

$

251,881.43

 

28.75

%

1345 Ivy Hill Road

 

 

 

 

 

Cockeysville, MD 21030

 

 

 

 

 

###-##-####

 

 

 

 

 

 

 

 

 

 

 

Robert E. Smith

 

$

251,881.43

 

28.75

%

3600 Butler Road

 

 

 

 

 

Glyndon, MD 21071

 

 

 

 

 

###-##-####

 

 

 

 

 

 



 

April 18, 1997

 

Mr. David Amy, Chief Financial Officer

Sinclair Broadcast Group, Inc.

2000 W. 41st Street

Baltimore, MD 21211

 

Dear David,

 

Please find enclosed a check in the amount of $407,033.84 to reimburse Sinclair Broadcast for their capital contribution, $380,273.66, plus 8% interest, $26,760.18. Sinclair’s 40% interest is being bought by Fred, Duncan and Rob Smith through Beaver Dam Limited Partnership.

 

Thank you for Sinclair’s initial interest in Beaver Dam LP and we wish Sinclair the best of luck in all their future endeavors.

 

 

Sincerely,

 

 

 

/s/ Frederick G. Smith

 

 

/s/ J. Duncan Smith

 

 

/s/ Robert E. Smith

 

 

Frederick G. Smith

 

J. Duncan Smith

 

Robert E. Smith

 


EX-10.3 4 a04-14991_1ex10d3.htm EX-10.3

EXHIBIT 10.3

 

SECOND AMENDMENT TO OPERATING AGREEMENT

AND AGREEMENT TO REDEEM

MEMBERSHIP RIGHTS

 

THIS SECOND AMENDMENT TO OPERATING AGREEMENT AND AGREEMENT TO REDEEM MEMBERSHIP RIGHTS (this “Agreement”), is made as of the 6th day of May, 1998 (the “Effective Date”), by and between David D. Smith (“David”), Beaver Dam Limited Liability Company, a Maryland limited liability company, and J. Duncan Smith, Frederick G. Smith and Robert E. Smith (the “Remaining Members”).

 

Explanatory Statement

 

A.            Beaver Dam Limited Liability Company, a Maryland limited liability company (the “Company”), is governed by the provisions of an Operating Agreement (the “Operating Agreement”) dated May 30th 1996, by and between David, Duncan, Frederick, and Robert. Except as otherwise defined herein, capitalized terms used herein shall have the respective meanings ascribed to them in the Operating Agreement.

 

B.            The Percentages are held as follows:

 

Member

 

Percentages

 

 

 

 

 

David

 

13.75

%

Frederick

 

28.75

%

Duncan

 

28.75

%

Robert

 

28.75

%

 

C.            David desires to sell, assign, transfer and convey all of his Membership Rights as hereinafter set forth, and the Company desires to buy the same as hereinafter set forth.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, the parties agree as follows:

 

1.             Assignment; Deliveries.  For the payment by the Company to David of One Hundred Thirty-Five Thousand Five Hundred Forty-One Dollars and Forty-Nine Cents ($135,541.49), receipt of which is hereby acknowledged by David, David hereby sells, assigns, transfers and conveys to the Company all rights, title and interest in any and all Membership Rights that he owns either directly or indirectly, effective as of the Effective Date. It is understood and agreed by the parties hereto that from and after the Effective Date, David shall no longer be a Member (or be an Interest Holder) or have any Membership Rights whatsoever and that as of the Effective Date, David has withdrawn from the Company.

 



 

2.             Liability, Profits and Assets.  David shall be relieved of (and is hereby released by the Company and the Remaining Members from) any liability for any and all debts, obligations and liabilities of the Company or under the Operating Agreement, to the extent that, on or after the Effective Date, such debts, obligations or liabilities arise, increase or accrue (collectively, the “Future Debts, Obligations and Liabilities”), and David shall not be entitled to any share of the profits losses, assets or distributions of the Company (except for David’s share of the profits, distributions, assets and losses, if any, that David was entitled to on or before the Effective Date). The Remaining Members shall be entitled to all of the profits, distributions, assets and losses of the Company that David would have otherwise been entitled to but for this Agreement and the transactions contemplated hereby, and the Remaining Members hereby assume from David all Future Debts, Obligations and Liabilities that David would have been liable for but for this Agreement and the transactions contemplated hereby. The Remaining Members hereby jointly and severally agree to defend, indemnify, and hold harmless David from, against, and in respect of, any and all claims, costs, expenses, fees (including, without limitation, the reasonable fees of counsel), liabilities, obligations, losses, damages, actions, suits, or proceedings, of any nature, in connection with or arising from under or out of the Future Debts, Obligations and Liabilities.

 

3.             Amendment to Operating Agreement; Consent.  The parties hereto agree that the provisions of Exhibit A to the Operating Agreement are hereby amended as of the Effective Date by deleting them in their entirety and by inserting in lieu thereof the provisions of Exhibit A to this Amendment. The Remaining Members all consent to the Company entering into this Agreement

 

4.             Attorneys’ Fees.  In the event of a breach or threatened breach of this Agreement, the breaching party or the party threatening to breach, as the case may be, shall pay the reasonable attorneys’ fees, costs and other expenses of the other party incurred as a result of or in connection with such breach or threatened breach, including, without limitation, any such attorneys’ fees, costs or other expenses incurred by such other party in any litigation to recover damages hereunder or to otherwise enforce this Agreement.

 

5.             Miscellaneous.

 

5.1           Section Headings.  Section headings are inserted for convenience only and shall not limit or otherwise affect any of the provisions of this Agreement.

 

5.2.          Entire Agreement.  This Agreement, any supplements hereto or thereto, and any instruments or documents delivered or to be delivered in connection herewith or therewith represents the entire agreement and understanding concerning the subject matter hereof and thereof between the parties hereto, and supersede all other prior agreements, understanding, negotiations and discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject matter hereof, whether oral or written.

 

5.3           Waivers; Amendments.  Any of the terms or conditions of this Agreement may be waived but only in writing by the party which is entitled to the benefit thereof, and this Agreement may be amended or modified in whole or in part only by an agreement in writing, executed by all of the parties to this Agreement.

 

2



 

5.4.          Binding Nature of Amendment.  This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, personal representatives, successors, and assigns.

 

5.5           Word Usage.  As used herein, any reference to the masculine, feminine or neuter gender shall include all genders, the plural shall include the singular, and the singular shall include the plural.

 

5.6           Governing Law.  This Agreement shall be governed by, and interpreted in accordance with, the law of the State of Maryland.

 

5.7           Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

5.8           Severability.  In the event that any provision of this Agreement shall be found to be unenforceable in any action or proceeding, the remaining provisions shall remain in full force and effect.

 

5.9           Survival.  This Agreement shall survive the closing of the transactions contemplated hereby.

 

5.10         Arbitration.  The parties hereto agree that the provisions of the Maryland Uniform Arbitration Act and the Federal Arbitration Act are applicable to this Agreement. Any question, dispute, claim and/or controversy arising out of, relating to or in connection with this Agreement (including, without limitation, the scope or applicability of this Section 4.10) or any breach or alleged breach of this Agreement, shall be submitted to arbitration conducted in accordance with the rules and procedures of the American Arbitration Association (and if there is a conflict between such rules and procedures on the one hand, and/or the Federal Arbitration Act or the Maryland Uniform Arbitration Act on the other hand, the rules and procedures of the American Arbitration Association shall control). Arbitration proceedings shall be held in Baltimore, Maryland. The decision in the arbitration proceeding shall be final and may be entered and enforced in any court of competent jurisdiction. Nothing within this Section 4.10 shall be deemed to preclude any party hereto from seeking interim or provisional relief or protection from a court of competent jurisdiction, whether before, during or after any arbitration proceeding.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

3



 

IN WITNESS WHEREOF, each party hereto has executed and sealed this Agreement or caused it to be executed and sealed on its behalf by its duly authorized representative, as of the day and year first above written.

 

WITNESS:

 

 

 

/s/ Hyris Feldman

 

/s/ David D. Smith

(SEAL)

 

David D. Smith, individually

 

 

 

 

/s/ Hyris Feldman

 

/s/ Frederick G. Smith

(SEAL)

 

Frederick G. Smith, Member

 

 

 

 

/s/ Hyris Feldman

 

/s/ J. Duncan Smith

(SEAL)

 

J. Duncan Smith, Member

 

 

 

 

/s/ Hyris Feldman

 

/s/ Robert E. Smith

(SEAL)

 

Robert E. Smith, Member

 

 

 

 

 

BEAVER DAM LIMITED LIABILITY COMPANY

 

 

 

 

/s/ Cam Smart

 

By:

/s/ J. Duncan Smith

(SEAL)

 

 

J. Duncan Smith, Member

 

4



 

Beaver Dam Limited Liability Company

Operating Agreement

 

Exhibit A

 

List of Members, Capital, and Percentages

(as of May 6, 1998)

 

Name, Address,
and Taxpayer
I.D. Number

 

Cash Capital
Contribution

 

Percentages

 

 

 

 

 

 

 

Frederick G. Smith

 

$

500,508.32

 

33 1/3

%

7 Timber Park Court

 

 

 

 

 

Lutherville, MD 21093

 

 

 

 

 

###-##-####

 

 

 

 

 

 

 

 

 

 

 

J. Duncan Smith

 

$

500,508.34

 

33 1/3

%

1345 Ivy Hill Road

 

 

 

 

 

Cockeysville, MD 21030

 

 

 

 

 

###-##-####

 

 

 

 

 

 

 

 

 

 

 

Robert E. Smith

 

$

500,508.33

 

33 1/3

%

3600 Butler Road

 

 

 

 

 

Glyndon, MD 21071

 

 

 

 

 

###-##-####

 

 

 

 

 

 

5


EX-10.4 5 a04-14991_1ex10d4.htm EX-10.4

Exhibit 10.4

 

AGREEMENT OF LEASE

 

THIS AGREEMENT OF LEASE (“Lease”) is made this 18 day of December 1998 by and between BEAVER DAM LIMITED LIABILITY COMPANY, a Maryland limited liability company (“Landlord”) and SINCLAIR COMMUNICATIONS, INC. (“Tenant”).

 

Intending to be legally bound, Landlord and Tenant agree as set forth below.  See attached Addenda sheets. p. 15, 16

 

1.     DEMISED PREMISES. Landlord, for the term and subject to the provisions and conditions hereof, leases to Tenant, and Tenant rents from Landlord, the space (the “Demised Premises”) containing 41,334 rentable square feet, as shown on Exhibit “A” attached hereto and made part of hereof, in the building erected on certain land (the “Land”) located at 10706 Beaver Dam Road, Cockeysville, Maryland 21030, together with rights of ingress and egress thereto, and with the right in common with others to use, to the extent applicable, the elevators and common passageways, stairways, vestibules, and to pass over and park on that portion of land owned by Landlord and designated by the Landlord for Tenant’s parking. The Building contains 90,000 rentable square feet.

 

2.     LEASE TERM. The lease term (the “Lease Term”) shall commence on the commencement date (the “Commencement Date”) which shall be August 1, 1999 and shall continue until July 31, 2009 and thereafter unless extended or sooner terminated as provided herein.

 

3.     FIXED RENT. Fixed rent (the “Fixed Rent”) is payable by Tenant beginning on the Commencement Date in monthly installations each equal to (See Rent Schedule - Rider #1), representing one-twelfth (1/12) of the annual Fixed Rent (the “Annual Fixed Rent”) equal to (See Rent Schedule - - Rider #1), without prior notice or demand, and without any setoff or deduction whatsoever, in advance, on the first day of each month at such place as Landlord may direct.  Annual Fixed Rent shall include the Operating Expense Allowance as set forth in Section I (1) of Exhibit “C” hereto. Annual Fixed Rent shall be subject to adjustment as provided in Section II of Exhibit “C” hereto. In addition, if the Lease Term commences on a day other than the first day of a calendar month, Tenant shall pay to Landlord, on or before the Commencement Date of the Lease Term, a pro rata portion of the monthly installment of rent (Including Fixed Rent and any Additional Rent as herein provided), such pro rata portion to be based on the actual number of calendar days remaining in such partial month after the Commencement Date of the Lease Term. If the Lease Term shall expire on other than the last day of a calendar month, such monthly installment of Fixed Rent and Additional Rent shall be prorated for each calendar day of such partial month. If any portion of Fixed Rent, Additional Rent, or any other sum payable to Landlord hereunder shall be due and unpaid for more than five (5) days, the balance due shall be subject to and include a 10 percent penalty. In addition, if any portion of Fixed Rent, Additional Rent or any other sum payable to Landlord hereunder shall be due and unpaid for more than five (5) days after written notice of non-payment by Landlord to Tenant (which written notice shall not be required more than two times in any period of twelve (12) consecutive months), it shall thereafter bear interest at a rate equal to three percent (3%) per annum greater than the highest prime rate of interest announced from time to time by NationsBank (or its successor) (the “Default Rate”), as the same may change from time to time, from the due date until the date of payment thereof by Tenant, provided, however, that nothing herein contained shall be construed or implemented in such a manner as to allow Landlord to charge or receive interest in excess of the maximum legal rate then allowed by law.

 

4.     ADDITIONAL RENT. Tenant shall pay as additional rent (“Additional Rent”) its proportionate share of all operating expenses in the amounts and in the manner set forth in Exhibit “C” hereto and all other sums due hereunder.

 

5.     SECURITY DEPOSIT. Tenant has deposited with Landlord the sum of Seventy-One Thousand Four Hundred Ninety-Four and 50/100 Dollars ($71,494.50) as security for the faithful performance and observance by Tenant of the terms, provisions and conditions of this Lease. It is agreed that in the event Tenant defaults in respect of any of the terms, provisions and conditions of this Lease, including, but not limited to, the payment of rent and additional rent, Landlord may use, apply or retain the whole or any part of the security so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which Tenant is in default or for any sum which Landlord may expend or may be required to expend by reason of Tenant’s default in respect of any of the terms, covenants and conditions of this Lease, including but not limited to any damages or deficiency in the reletting of the leased premises, whether such damages or deficiency accrued before or after summary proceedings or other re-entry by Landlord. In the event that Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease, the

 

Please Initial:

 

 

 

 

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 

1



 

security shall be returned to Tenant, without interest, after the date fixed as the end of the Lease and after delivery of entire possession of the leased premises to Landlord. In the event of a sale of the land and building of which the leased premises form a part, hereinafter referred to as the Building, or leasing of the building, Landlord shall have the right to either transfer the security to the Tenant and Landlord shall thereupon be released by Tenant from all liability for the return of such security or transfer the security to the new Landlord in which case Tenant agrees to look to the new Landlord solely for the return of said security. Tenant further covenants that it will not assign or encumber or attempt to assign or encumber the monies deposited herein as security and that neither Landlord nor its successors or assigns shall be bound by and such assignment, encumbrance, attempted assignment or attempted encumbrance.

 

In the event of any bankruptcy or other insolvency proceeding against Tenant, it is agreed that all such security deposit held hereunder shall be deemed to be applied by Landlord to rent, sales tax and other charges due to Landlord for the last month of the lease term and each preceding month until such security deposit is fully applied.

 

6.     USE OF DEMISED PREMISES. Tenant covenants and agrees to use and occupy the Demised Premises for general office purposes and other uses incidental to and associated with Class A office buildings and only in conformity with the law. Tenant shall not use or permit any use of the Demised Premises which creates any safety or environmental hazard, or which would: (i) be dangerous to the Demised Premises, the Building or other tenants, or (ii) be disturbing to other tenants of the Building, or (iii) cause any increase in the premium cost for any insurance which Landlord may then have in effect with respect the Building generally.

 

7.     IMPROVEMENTS TO PREMISES.

 

7.1.    By Landlord.

 

7.1.1.  The Tenant shall cause detailed working drawings to be fully prepared at its expense by a designer of its choice, who shall consult with the Landlord in preparing the same, and shall deliver such working drawings to Landlord, on or before May 1, 1999. Such working drawings must be in sufficient detail to allow Landlord to (a) calculate the cost of constructing all of Tenant’s improvements, and (b) obtain a building and any other necessary permits for the construction of Tenant’s improvements. Within five (5) days after Landlord provides Tenant with the calculations of the costs of constructing Tenant’s improvements, Tenant shall approve the working drawings and the costs of construction. Any costs or expenses incurred by Landlord because of changes to the working drawings made by Tenant after final approval of the costs, shall be paid to the Landlord by the Tenant. If (a)(i) the Tenant defaults in furnishing such working drawings to the Landlord by the time set forth above, (ii) the Tenant fails to give final approval to the working drawings and the costs by the time set forth above, (iii) the Tenant requests any changes to the working drawings after the Tenant has approved the costs of construction, or (iv) the Tenant has requirements in its working drawings that cause unreasonable delays in commencing or completing Tenant’s improvements, (b) as a result thereof, the Landlord is delayed in commencing and/or completing such improvements beyond the dates on which, but for such delay, the Landlord would in its reasonable judgment have commenced or completed them, and (c) such completion occurs after the date which would have been the Commencement Date, then (without altering or impairing the Landlord’s rights under the provisions of this Lease on account of such default, and without altering or impairing any other of Landlord’s rights, including, without limitation, such rights set forth in Section 5.1.2) the Commencement Date shall be the date which would have been the Commencement Date for purposes of the provisions of this Lease, had such delay not occurred.

 

7.1.2.  Allocation of costs. The cost of such improvements shall be allocated between the Landlord and the Tenant in the following manner:

 

(a)  Except as is otherwise provided herein, the Landlord shall bear the expense of (i) providing and installing as part of such improvements those materials and other items of improvements, of such manufacture, design, capacity, finish and color, which are described in a schedule attached hereto as \ (hereinafter referred to as “the Standard Improvement Items”), (ii) to such maximum extent or in such maximum quantity (hereinafter referred to as “the Standard Allowance”) as is specified therein. If the improvements to be made to the Premises pursuant to the provisions of this subparagraph utilize less or fewer than the Standard Allowance of any Standard Improvement Item, the Tenant shall receive no credit against the Rent or otherwise on account thereof.

 

(b)  The Landlord shall submit the working drawings, as provided by the Tenant, to the Landlord’s general contractor for the Building promptly upon their approval by the Landlord and the Tenant, for such contractor’s calculation the price which it will charge for constructing such improvements. The

 

2



 

Landlord shall notify the Tenant in writing of such price as calculated by such contractor (and shall in such notice allocate such price between (i) those of such improvements which are included in the Standard Allowance of Standard Improvement Items, and (ii) the remainder of such improvements), and the Tenant shall, at the Landlord’s option, be deemed to have approved such price and allocation for all purposes of the provisions of this Lease unless the Tenant gives the Landlord written notice to the contrary within five (5) days thereafter. All improvements shall be done by Landlord’s general contractor.

 

(c)  If the improvements to be made to the Premises pursuant to the provisions of this subsection require materials or other items other than the Standard Improvement Items, and/or Standard Improvement Items in excess of the Standard Allowance, and the cost of constructing such improvements shall, if and to the extent that it exceeds the cost which would have been incurred if such improvements consisted only of the Standard Allowance of Standard Improvement Items, be borne by the Tenant. The Tenant shall pay the amount of such excess to the Landlord in two (2) equal installments, the first of which shall be due when such price and allocation are approved by the Tenant, as aforesaid, and the second of which shall be due at the Commencement Date.

 

7.1.3. The Landlord shall use its reasonable efforts to complete such improvements promptly, but shall have no liability to the Tenant hereunder if prevented from doing so by reason of any (a) strike, lock-out or other labor troubles, (b) governmental restrictions or limitations, (c) failure or shortage of electrical power, gas, water, fuel oil, or other utility or service, (d) riot, war, insurrection or other national or local emergency, (e) accident, flood, fire or other casualty, (f) adverse weather condition, (g) other act of God, (h) inability to obtain a building permit or a certificate of occupancy, or (i) other cause similar or dissimilar to any of the foregoing and beyond the Landlord’s reasonable control. In such event, (a) the Commencement Date shall (subject to the operation and effect of the provisions of paragraph 5.1.1) be postponed for a period equaling the length of such delay, (b) the Termination Date shall be determined pursuant to the provisions of subsection 1.1 by reference to the Commencement Date as so postponed, and (c) the Tenant shall accept possession of the Premises within ten (10) days after such completion.

 

7.2.    Acceptance of possession. Except for (a) latent defects or incomplete work which would not reasonably have been revealed by an inspection of the Premises made for the purpose of discovering the same when the Landlord delivers possession of the Premises to the Tenant, and (b) any other item of incomplete work set forth on a “punch list” prepared by the Tenant and approved in writing by the Landlord before such delivery of possession, by its assumption of possession of the Premises the Tenant shall for all purposes of the provisions of this Lease be deemed to have accepted them and to have acknowledged them to be in the condition called for hereunder.

 

8.     ALTERATIONS OR IMPROVEMENTS BY TENANT.

 

8.1     During the Lease Term, Tenant shall not make any alterations, additions, improvements, redecorating or other changes to the Demised Premises without the prior written approval (such approval not to be unreasonable withheld or delayed) of Landlord and then only in accordance with plans and specifications previously approved in writing by Landlord and subject to such conditions as Landlord may require, including, without limitations, that Tenant be required to pay for any increased cost to Landlord occasioned thereby or attributed thereto. Prior to the termination of this Lease and without additional notice to Tenant by Landlord, Tenant shall either: (i) remove any such alterations or additions and repair any damage to the Building or the Demised Premises occasioned by their installation or removal and restore the Demised Premises to substantially the same condition as existed prior to the time when any such alterations or additions were made, or (ii) reimburse Landlord for the cost of removing such alterations or additions and the restoration of the Demised Premises. Landlord shall determine any such cost as called for in clause (ii) above prior to the termination of this Lease and Tenant shall reimburse Landlord within thirty (30) days of receipt of such notice.

 

8.2     After the time of initial occupancy of the Demised Premises by Tenant, Tenant shall have the right to construct and alter the Demised premises, subject to paragraph 8.1, provided, however, that such construction does not include any alterations affecting the exterior or structural components of the Building, or any material alterations to the systems of the Building, including, but not limited to HVAC, electric or plumbing. Any Tenant construction shall be performed by Tenant’s contractors and shall be solely Tenant’s responsibility. All of Tenant’s construction shall be at Tenant’s expense.

 

8.3     Prior to commencement of construction:

 

(a)  Landlord shall approve in writing (such approval not to be unreasonably withheld or delayed) the plans and specifications for any alterations to the Demised Premises, such approval by Landlord shall not be deemed to be an approval by Landlord of any work performed pursuant thereto or approval or

 

3



 

acceptance by Landlord of any material furnished with respect thereto or a representation by Landlord as to the fitness of such work or materials, and shall not give rise to any liability or responsibility of Landlord.

 

(b)  Landlord shall approve in writing (such approval not to be unreasonably withheld or delayed) each contractor and subcontractor (which shall each be of sound financial status and good reputation in the community and a duly licensed and qualified professional in the state and, to the extent necessary, township in which the Building is located) to perform such alterations.

 

(c)  Tenant shall deliver to Landlord a certificate evidencing each contractor’s liability, completed operations and worker’s compensation insurance and naming Landlord as an additional insured, which insurance shall be with a carrier, in amounts and otherwise on terms satisfactory to Landlord.

 

(d)  Each contractor shall execute and Tenant shall cause to be filed with the appropriate governmental agency in a timely manner such waivers and releases of liens and other documents necessary to insure against imposition of any mechanics’ and material suppliers’ liens for labor furnished and material supplied in connection with the alterations and improvements. Tenant shall deliver copies of such waivers and releases of liens to Landlord together with evidence of the timely filing thereof.

 

8.4     Tenant covenants and agrees:

 

(a)  To secure and pay for all necessary building and other permits and fees in connection with the alterations and improvements.

 

(b)  All construction shall be done in compliance with all applicable laws and ordinances and in a good and workerlike manner in accordance with the approved plans and specifications.

 

(c)  To obtain and deliver to Landlord a Certificate of Occupancy (or its equivalent) issued by the appropriate governmental authority upon completion of the construction of the Demised Premises.

 

(d)  To abide by any collective bargaining agreements or other union contracts applicable to Tenant, the Building or Landlord.

 

(e)  All materials, supplies and workers shall enter the Demised Premises and all work shall be performed at times and by means satisfactory to Landlord.

 

8.5     Tenant and any approved contractor, subcontractor or material supplier may, after notice to Landlord, enter the Demised Premises during reasonable times after the execution hereof for the purpose of constructing the improvements as aforesaid and inspecting and measuring the Demised Premises, provided that such entry does not, in Landlord’s reasonable judgment, interfere with the operations of the Building or with Landlord’s work therein, or that of any other tenants in the Building. Tenant shall be responsible of any and all damage or injury caused by such contractors, subcontractors, material suppliers and Tenant in the course of constructing the improvements, and Tenant’s obligation to indemnify, defend and hold Landlord harmless set forth in Article 14 shall, include without limitation all work done by Tenant pursuant to this paragraph 7 and shall commence on the date of execution hereof.

 

8.6     Landlord and its agents or other representatives shall be permitted to enter the Demised Premises to examine and inspect the construction of the alterations and improvements, provided, that no such inspection or examination shall constitute an approval or warranty or give rise to any liability of Landlord with respect to any thereof.

 

9.     COVENANTS OF LANDLORD.  Landlord will supply for normal office use during normal business hours (excluding holidays), heat and air conditioning (except that, in the event that such utilities are separately metered and are paid for by Tenant, Landlord shall supply only the equipment for such utilities), elevator service (where applicable), janitorial and cleaning services, electricity, and hot and cold water, all in amounts consistent with services provided in similar buildings in the community, provided that: (i) Landlord shall not be liable for failure to supply or interruption of any such service by reason of any cause beyond Landlord’s reasonable control (ii) if Tenant’s use of electricity in Landlord’s judgement exceeds a normal office use level (which includes only customary office lighting levels and operation of desktop portable office equipment), Landlord may, at Tenant’s expense, install meters to measure the electricity consumed on the Demised Premises and bill Tenant for any cost thereof above normal office use levels; (iii) if Tenant requires janitorial and cleaning services beyond those provided by Landlord, Tenant shall arrange for such additional services through Landlord, and Tenant shall pay Landlord upon receipt of billing therefor; and (iv) if Tenant requires installation a separate or supplementary heating, cooling, ventilating and/or air conditioning system

 

4



 

Tenant shall pay all costs in connection with the furnishing, installation and operation thereof. Landlord shall be responsible, at its sole cost and expense, for structural repairs and capital improvements (unless otherwise provided for herein) to the Building, unless such repairs are necessitated by damage caused by the negligence or misconduct of Tenant or Tenant’s officers, directors, employees, invitees or agents.

 

10.   COVENANTS OF TENANT. Tenant will (at Tenant’s sole cost and expense):

 

10.1   Keep the Demised Premises in good order and repair, reasonable wear and tear expected;

 

10.2   Surrender the Demised Premises at the end of this Lease in the same condition in which Tenant has agreed to keep it during the Lease Term;

 

10.3   Not place, erect, maintain or display any sign or other marking of any kind whatsoever on the windows, doors or exterior walls of the Demised Premises and not use or place any curtains, blinds, drapes or coverings over any exterior windows or upon the window surfaces which are visible from the outside of the Building; except the Tenant shall be permitted to install its standard signage and logo on Tenant’s entrance door with the approval of Landlord (which approval shall not be unreasonably withheld or delayed), and Tenant shall be listed on the directories on the elevator lobby of Tenant’s floor, the Building lobby and Building exterior in the same manner as other tenants in the Building;

 

10.4   Be financially responsible for the maintenance of all plumbing and other fixtures in the Demised Premises, whether installed by Landlord or by Tenant and for repairs and replacements to the Demised Premises and the Building made necessary by reason of damage thereto caused by Tenant or its agents, servants, invitees or employees. In the event Tenant shall fail to perform such maintenance or make such repairs within sixty (60) days of the date such work becomes necessary, Landlord may, but shall not be required to, perform such work and charge the amount of the expense therefor, with interest accruing and payable thereon, all in accordance with Article 18 below;

 

10.5   Comply with all laws, enactments and regulations of any governmental authority relating or applicable to Tenant’s occupancy of the Demised Premises and any covenants, easements and restrictions governing the Land or Building, and indemnify, defend and hold Landlord harmless from all consequences from its failure to do so;

 

10.6   Promptly notify Landlord of any damage to or defects in the Demised Premises, any notices of violation received by Tenant and of any injuries to persons or property which occur therein or claims relating thereto;

 

10.7   Subject to Article 7, pay for any alterations, improvements or additions to the Demised Premises and any light bulbs, tubes and non-standard Building items installed by or for Tenant, and allow no lien to attach to the Building with respect to any of the foregoing;

 

10.8   Without the prior written consent of Landlord, not place within the Demised Premises or bring into the Building (i) any machinery, equipment or other personalty other than customary office furnishings and small machinery, or any machinery or (ii) other personalty having a weight in excess of the design capacity of the Building;

 

10.9   Not use the Demised Premises for the generation, manufacture, refining, transportation, treatment, storage or disposal of any hazardous substance or waste or for any purpose which poses a substantial risk of damage to the environment; in this regard Tenant represents that it does not have a Standard Industrial Classification number as designated in the Standard Industrial Classifications Manual prepared by the Office of Management and Budget in the Executive Office of the President of the United States that is any of 22-39 inclusive, 46-49 inclusive, 51 or 76 and will not engage in any activity which would subject Tenant to the provisions of the Federal Comprehensive Environmental Response, Liability and Clean-Up Act (42 U.S.C. Section 9601 et seg.), the Federal Water Pollution Control (33 U.S.C.A. Section 1151 et seg.), the Clean Water Act of 1977 (33 U.S.C.A. Section 1251 et seg.), or any other federal, state or local environmental law, regulation or ordinance;

 

10.10 Comply with all rules and regulations which may hereafter be promulgated by Landlord and with all reasonable changes and additions thereto upon notice by Landlord to Tenant (such rules and regulations, together with all changes and additions thereto, are part of this Lease); Landlord shall notify Tenant in writing at least fifteen (15) days prior to the promulgation of such rules and regulations or changes thereto. Landlord agrees to enforce such rules and regulations against all tenants in the Building in a non-

 

5



 

discriminating fashion and to take reasonable action to cause a cessation of any violation of all rules that interfere with Tenant’s use and quiet enjoyment of the Premises;

 

10.11 Comply with all reasonable recommendations of Landlord’s or Tenant’s insurance carriers relating to layout, use storage of materials and maintenance of the Demised Premises.

 

11.   ASSIGNMENT AND SUBLETTING. Tenant shall not assign, pledge, mortgage or otherwise transfer or encumber this Lease, nor sublet all or any part of the Demised Premises or permit the same to be occupied or used by anyone other than Tenant or its employees without Landlord’s prior written consent (such consent not to be unreasonable withheld or delayed). Notwithstanding the foregoing, Tenant shall have the right to assign this Lease or sublet the Demised Premises or any part thereof, without the consent of Landlord, to any parent, subsidiary or affiliate of Tenant. Any consent by Landlord hereunder (or assignment where such consent is not required) shall not constitute a waiver of strict future compliance by Tenant of the provisions of this Article 11 or a release of Tenant from the full performance by Tenant with any of the terms, covenants, provisions or conditions in this Lease. For purposes of this Article 11, any transfer or change in control of Tenant (or any subtenant, assignee or occupant) by operation of law or otherwise, shall be deemed an assignment hereunder, including, without limitation, any merger, consolidation, dissolution or any change in the controlling equity interests of Tenant or any subtenant, assignee, or occupant (in a single transaction or a series of related transaction). Any assignment or subletting in contravention of the provisions of this Article 11 shall be void.

 

12.   EMINENT DOMAIN.  If the whole or more than fifty percent (50%) of the Demised Premises (or use or occupancy of the Demised Premises) shall be taken or condemned by an governmental or quasi-governmental authority for any public or quasi-public use or purpose (including sale under threat of such a taking), or if the owner elects to convey title to the condemnor by a deed in lieu of condemnation, or if all or any portion of the Land or Building are so taken, condemned or conveyed and as a result thereof, in Landlord’s judgement, the Demised Premises cannot be used for Tenant’s permitted use as set forth herein, then this Lease shall cease and terminate as of the date when title vests in such governmental or quasi-governmental authority and the Fixed Rent and Additional Rent shall be abated on the date when such title vests in such governmental or quasi-governmental authority.  If less than fifty percent (50%) of the Demised Premises is taken or condemned by any governmental or quasi-governmental authority for any public or quasi-public use or purpose (including sale under threat of such a taking), the Fixed Rent and Tenant’s proportionate share shall be equitably adjusted )on the basis of the number of square feet before and after such event) on the date when title vests in such governmental or quasi-governmental authority and the Lease shall otherwise continue in full force and effect. In any case, Tenant shall have no claim against Landlord for any portion of the amount that may be awarded as damages as a result of any governmental or quasi-governmental taking or condemnation (or sale under threat or such taking or condemnation); and all rights of Tenant to damages therefor are hereby assigned by Tenant to Landlord. The foregoing shall not, however, deprive Tenant of any separate award for moving expenses, dislocation damages or for any other award which would not reduce the award payable to Landlord.

 

13.   CASUALTY DAMAGE.

 

13.1   In the event of damage to or destruction of the Demised Premises caused by fire or other casualty, or any such damage or destruction to the Building or the facilities necessary to provide services and normal access to the Demised Premises in accordance herewith, Landlord, after receipt of written notice thereof from Tenant, shall undertake to make repairs and restorations with reasonable diligence as hereinafter provided, unless this Lease has been terminated by Landlord or Tenant as hereinafter provided or unless any mortgagee which is entitled to receive casualty insurance proceeds fails to make available to Landlord a sufficient amount of such proceeds to cover the cost of such repairs and restoration. If (i) the damage is of such nature or extent that, in Landlord’s sole judgement, more than one hundred and twenty (120) days would be required (with normal work crews and hours) to repair and restore the part of the Demised Premises or Building which has been damaged, or (ii) the Demised Premises or Building is so damaged that, in Landlord’s sole judgement, it is uneconomical to restore or repair the Demised Premises or the Building, as the case may be, or (iii) less than two (2) years then remain on the current Lease Term, Landlord shall so advise Tenant promptly, and either party, in the case described in clause (i) above, or Landlord, in the cases described in clauses (ii) or (iii) above, within thirty (30) days after any such damage or destruction shall have the right to terminate this Lease by written notice to the other, as of the date specified in such notice, which termination date shall be no later than thirty (30) days after the date of such notice.

 

13.2   In the event of fire or other casualty damage, provided this Lease is not terminated pursuant to the terms of this Article 13 and is otherwise in full force and effect, and sufficient casualty insurance proceeds are available for application to such restoration or repair, Landlord shall proceed diligently to restore the Demised Premises to substantially its condition prior to the occurrence of the damage. Landlord shall not

 

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be obligated to repair or restore any alterations, additions, fixtures or equipment which Tenant may have installed (whether or not Tenant has the right or the obligation to remove the same or is required to leave the same on the Demised Premises as of the expiration or earlier termination of this Lease) unless Tenant, in a manner satisfactory to Landlord, assures payment in full of all costs as may be incurred by Landlord in connection therewith.

 

13.3   Landlord shall not insure any improvements or alterations to the Demised Premises in excess of Building standard tenant improvements, or any fixtures, equipment or other property of Tenant. Tenant shall, at its sole expense, insure the value of its leasehold improvements, fixtures, equipment and personal property located in or on the Demised Premises, for the purpose of providing funds to Landlord to repair and restore the Demised Premises to substantially its condition prior to occurrences of the casualty occurrence. If there are any such alterations, fixtures or additions and Tenant does not assure or agree to assure payment of the cost of restoration or repair as aforesaid, Landlord shall have the right to restore the Demised Premises to substantially the same condition as existed prior to the damage, excepting such alterations, additions or fixtures.

 

13.4   The validity and effect of this Lease shall not be impaired in any way by the failure of Landlord to complete repairs and restoration of the Demised Premises or of the Building within one hundred and twenty (120) days after commencement of the work, even if Landlord had in good faith notified Tenant that the repair and restoration could be completed within such period, provided that Landlord proceeds diligently with such repair and restoration. In the case of damage to the Demised Premises which is of a nature or extent that Tenant’s continued occupancy is in the reasonable judgement of Landlord and Tenant substantially impaired, then the Annual Fixed Rent and Tenant’s Proportionate Share otherwise payable by Tenant hereunder shall be equitably abated or adjusted for the duration of such impairment. Tenant shall be responsible to repair all of Tenant’s leasehold improvements and all equipment, fixtures and personal property located in or on the Demised Premises subject to Article 8, and to such other conditions as Landlord may require.

 

14.   INSURANCE AND INDEMNIFICATION OF LANDLORD; WAIVER OF SUBROGATION.

 

14.1   Tenant covenants and agrees to exonerate, indemnify, defend, protect and save Landlord, its representatives and Landlord’s managing agent, if any, harmless from and against any and all claims, demands, expenses, losses, suits and damages as may be occasioned by reason of (i) any accident or matter occurring on or about the Demised Premises, causing injury to persons or damage to property (including, without limitation, the Demised Premises), unless such accident or other matter resulted solely from the negligence or otherwise tortious act of Landlord or Landlord’s agents or employees, (ii) the failure of Tenant fully and faithfully to perform the obligations and observe the conditions of this Lease, and (iii) the negligence or otherwise tortious act of Tenant or anyone in or about the Building on behalf of or at the invitation or right of Tenant. Tenant shall maintain in full force and effect, at its own expense, comprehensive general liability insurance (including a contractual liability and fire legal liability insurance endorsement) naming as an additional insured Landlord and Landlord’s managing agents, if any, against claims for bodily injury, death or property damage in amounts not less than $1,000,000 (or such higher limits as may be determined by Landlord from time to time) and business interruption insurance in an amount equal to Tenant’s gross income for twelve (12) months. All policies shall be issued by companies having a Best’s financial rating of A or better and a size class rating of XII (12) or larger or otherwise acceptable to Landlord.  At or prior to the Commencement Date, Tenant shall deposit the policy or policies of such insurance, or certificates thereof, with Landlord and shall deposit with Landlord renewals thereof at least fifteen (15) days prior to each expiration. Said policy or policies of insurance or certificates thereof shall have attached thereto an endorsement that such policy shall not be canceled without at least thirty (30) prior written notice to Landlord and Landlord’s managing agent, if any, that no act or omission of Tenant shall invalidate the interest of Landlord under said insurance and expressly waiving all rights of subrogation as set forth below. At Landlord’s request, Tenant shall provide Landlord with a letter from an authorized representative of its insurance carrier stating that Tenant’s current and effective insurance coverage complies with the requirements contained herein.

 

14.2   Landlord and Tenant hereby release the other from any and all liability or responsibility to the other or anyone claiming through or under them by way of subrogation or otherwise for any loss or damage to property covered by insurance then in force, even if any such fire or other casualty occurrence shall have been caused by the fault or negligence of the other party, or anyone for whom such party may be responsible. This release shall be applicable and in full force and effect, however, only to the extent of and with respect to any loss or damage occurring during such time as the policy or policies of insurance covering said loss shall contain a clause or endorsements to the effect that this release shall not adversely affect or impair said insurance or prejudice the right of the insured to recover thereunder. To the extent available, Landlord

 

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and tenant further agree to provide such endorsements for said insurance policies agreeing to the waiver of subrogation as required herein.

 

15.   INSPECTION; ACCESS; CHANGES IN BUILDING FACILITIES.

 

15.1   Landlord and its agents or other representatives shall be permitted to enter the Demised Premises at reasonable times (i) to examine, inspect and protect the Demised Premises and the Building and (ii) during the last six (6) months of the original or any renewal term, to show it to prospective tenants and to affix to any suitable part of the exterior of the Building in which the Demised Premises is located a notice for letting the Demised Premises or the Building or (at any time during the original or any renewal term) selling the Building.

 

15.2   Landlord shall have access to and use of all areas in the Demised Premises (including exterior Building walls, core corridor walls and doors and any core corridor entrances), any roofs adjacent to the Demised Premises, and any space in or adjacent to the Demised Premises used for shafts, stacks, pipes, conduits, fan rooms, ducts, electric or other utilities, sinks or other Building facilities, as well as access to and through the Demised Premises for the purpose of operation, maintenance, decoration and repair, provided, however, that except in emergencies such access shall not be exercised so as to interfere unreasonable with Tenant’s use of the Demised Premises. Tenant shall permit Landlord to install, use and maintain pipes, ducts and conduits within the demising walls, bearing columns and ceilings of the Demised Premises, provided that the installation work is performed at such times and by such methods as will not materially interfere with Tenant’s use of the Demised Premises, materially reduce the floor area thereof or materially and adversely affect Tenant’s layout, and further provided that Landlord performs all work with due diligence and care so as to not damage Tenant’s property or the Demised Premises. Landlord and Tenant shall cooperate with each other in the location of Landlord’s and Tenant’s facilities requiring such access.

 

15.3   Landlord reserves the right at any time, without incurring any liability to Tenant therefor, to make such changes in or to the Building and the fixtures and equipment thereof, as well as in or to the street entrances, halls, foyers, passages, elevators, if any, and stairways thereof, as it may deem necessary or desirable; provided that there shall be no change that materially detracts from the character or quality of the Building.

 

16.   DEFAULT.  Any other provisions in this Lease notwithstanding, it shall be an event of default (“Event of Default”) under this Lease if: (i) Tenant fails to pay any installment of Fixed Rent, Additional Rent or other sum payable by Tenant hereunder when due and such failure continues for a period of five (5) days after written notice of such non-payment be Landlord to Tenant (which written notice shall not be required more than two times in any period of twelve (12) consecutive months), or (ii) Tenant fails to observe or perform any other covenant or agreement of Tenant herein contained and such failure continues after written notice given by or on behalf of Landlord to Tenant for more than thirty (30) days, or (iii) Tenant uses or occupies the Demised Premises other than as permitted hereunder, or (iv) Tenant assigns or sublets, or purports to assign or sublet, the Demised Premises or any part thereof other than in the manner and upon the conditions set forth herein, or (v) Tenant abandons or vacates the Demised Premises or, without Landlord’s prior written consent, Tenant removes or attempts to remove or manifests an intention to remove any or all of Tenant’s property from the Demised Premises other than in the ordinary and usual course of business, or (vi) Tenant (which, for purposes of this clause, includes any guarantor hereunder) files a petition commencing a voluntary case, or has filed against it a petition commencing an involuntary case, under the Federal Bankruptcy Code (Title 11 of the Unites States Code), as now or hereafter in effect, or under any similar law, or files or has filed against it a petition or answer in bankruptcy or for reorganization or for an arrangement pursuant to any state bankruptcy law or any similar state law, and, in the case of any such involuntary action, such action shall not be dismissed, discharged or denied within sixty (60) days after the filing thereof, or Tenant consents or acquiesces in the filing thereof, or (vii) if Tenant is a banking organization, Tenant files an application for protection, voluntary liquidation or dissolution applicable to banking organization, or (viii) a custodian, receiver, trustee or liquidator of Tenant or of all or substantially all of Tenant’s property or of the Demised Premises shall be appointed in any proceedings brought by or against Tenant and, in the latter case, such entity shall not be discharged within sixty (60) days after such appointment or Tenant consents to or acquiesces in such appointment, or (ix) Tenant shall generally not pay Tenant’s debts as such debts become due, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or (x) any of the foregoing occurs as to any guarantor or surety of Tenant’s performance under this Lease, or such guarantor or surety defaults on any provision under its guaranty or suretyship agreement. The notice and grace period provisions in clauses (i) and (ii) above shall have no application to the Events of Default referred to in clauses (iii) through (ix) above or, to the extent applicable (x).

 

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17.   LANDLORD’S REMEDIES.

 

17.1   In the event of any Event of Default, Landlord at any time thereafter may at its option exercise any one or more of the following remedies:

 

(a)  Termination of Leases. Landlord may terminate this Lease, by written notice to Tenant, without any right by Tenant to reinstate its rights by payment of rent due or other performance of the terms and conditions hereof. Upon such termination Tenant shall immediately surrender possession of the Demised Premises to Landlord, and Landlord shall immediately become entitled to receive from Tenant an amount equal to the difference between the aggregate of all Fixed Rent and Additional Rent reserved under this Lease for the balance of the Lease Term, and the fair rental value of the Demised Premises for that period, determined as of the date of such termination.

 

(b)  Reletting. With or without terminating this Lease, as Landlord may elect, Landlord may re-enter and repossess the Demised Premises, or any part thereof, and lease them to any other person upon such terms as Landlord shall deem reasonable, for a term within or beyond the term of this Lease; provided, that any such reletting prior to termination shall be for the account of Tenant, and Tenant shall remain liable for (i) all Annual Fixed Rent, Additional Rent and other sums which would be payable under this Lease by Tenant in the absence of such expiration, termination or repossession, less (ii) the net proceeds, if any, of any reletting effected for the account of Tenant after deducting from such proceeds all of Landlord’s expenses, attorneys’ fees and expenses, employees’ expenses, reasonable alteration costs, expenses of preparation for such reletting and all costs and expenses, direct or indirect, incurred as a result of Tenant’s breach of the Lease. Landlord shall have no obligation to relet the Demised Premises if Landlord, or any of its affiliates, shall have other comparable space available for rent. If the Demised Premises are at the time of default sublet or leased by Tenant to others, Landlord may, as Tenant’s agent, collect rents due from any subtenant or other tenant and apply such rents to the rent and other amounts due hereunder without in any way affecting Tenant’s obligation to Landlord hereunder. Such agency, being given for security, is hereby declared to be irrevocable.

 

(c)  Acceleration of Rent. Landlord may declare Fixed Rent and all items of Additional Rent (the amount thereof to be based on historical amounts and Landlord’s estimates for future amounts) for the entire balance of the then current Lease Term immediately due and payable, together with all other charges, payments, costs, and expenses payable by Tenant as though such amounts were payable in advance on the date the Event of Default occurred.

 

(d)  Removal of Contents by Landlord. With respect to any portion of the Demised Premises which is vacant or which is physically occupied by Tenant, Landlord may remove all persons and property therefrom, and store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant, without service of notice or resort to legal process (all of which Tenant expressly waives) and without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby. Landlord shall have a lien for the payment of all sums agreed to be paid by Tenant herein upon all Tenant’s property, which lien is to be in addition to Landlord’s lien now or hereafter provided by law.

 

(e)  Right of Distress and Lien. In addition to all other rights and remedies of Landlord, if an Event of Default shall occur, Landlord shall, to the extent permitted by law, have a right of distress for rent and lien on all of Tenant’s fixtures, merchandise and equipment in the Demised Premises, as security for rent and all other charges payable hereunder.

 

(f)   Tenant hereby empowers an attorney of any Court of Record to appear for Tenant in any and all actions which may be brought for rent and/or the charges, payments, costs, and expenses herein reserved as rent, or herein agreed to be paid by Tenant and/or to sign for Tenant an agreement for entering in any competent Court and action to confess judgment, or actions for the recovery of such rent or other charges or expenses in said suits or in said action or actions to confess judgment against Tenant for all or part of the rent specified in this Lease and then due and unpaid, and other charges, payments, costs, and expenses reserved as rent or agreed to be paid by Tenant and then due and unpaid; and for interest and costs and attorney’s fees of fifteen percent (15%) of the amount due by Tenant. Such authority shall not be exhausted by one exercise thereof, but judgment may be confessed as aforesaid from time to time as often as any said rent and/or other charges reserved as rent or agreed to be paid by Tenant shall fall due or be in arrears.

 

(g)  Upon the expiration of the then current term of this lease of the earlier termination or surrender hereof as provided in this lease, it shall be lawful for any attorney to appear as attorney for Tenant as well as for all persons claiming by, through or under Tenant and to sign an agreement for entering in any competent Court an action to confess judgment in ejectment against Tenant and all persons claiming by, through or under Tenant and therein confess judgment for the recovery by Landlord of possession of the

 

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premises, for which this lease (or a copy thereof) shall be its sufficient warrant, whereupon, if Landlord so desires, a writ of possession or the appropriate writ under the Rules of Civil Procedure then in effect may issue forthwith, without any prior writ or proceedings; provided, however, if for any reason after such action shall have commenced, the same shall be determined and possession of the premises remain in or be restored to Tenant, Landlord shall have the right for the same default and upon any subsequent default or defaults, or upon expiration of the term of this lease to bring one more further action to confess judgment or actions as hereinbefore set forth to recover possession of the premises and confess judgment for the recovery of possession of the premises as hereinbefore provided.

 

(h)  In any action to confess judgment in ejectment and/or for rent in arrears, Landlord shall first cause to be filed in such action an affidavit made by him or someone acting for him, setting forth the facts necessary to authorize the entry of judgment, and, if a true copy of this lease (and of the truth of the copy such affidavit shall be sufficient evidence) be filed in such action, it shall not be necessary to file in such action, it shall not be necessary to file the original as a warrant of attorney, and rule of Court, custom or practice to the contrary notwithstanding Tenant hereby releases to Landlord and to any and all attorneys who may appear for Tenant all errors in said proceedings and all liability therefor. If proceedings shall be commenced by Landlord to recover possession under the Acts of Assembly and Rules of Civil Procedure, either at the end of the term or earlier termination of this lease, or for non-payment of rent or any other reason, Tenant specifically waives the right to the three months’ notice and to the fifteen or thirty days’ notice required by the Landlord and Tenant Act of 1951, and agrees that five days’ notice shall be sufficient in either or any such case.

 

17.2   Injunction. In the event of breach or threatened breach by Tenant of any provision of this Lease, Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity in addition to other remedies provided for herein.

 

17.3   Waiver of Redemption. Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future law in the event this Lease is terminated, or in the event of Landlord obtaining possession of the Demised Premises, or Tenant is evicted or dispossessed for any cause, by reason of violation by Tenant of any of the provisions of this Lease.

 

17.4   Not Exclusive Right. No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy herein or by law provided, but each shall be cumulative and in addition to every other right or remedy given herein or now or hereafter existing at law or in equity by statute.

 

17.5   Expenses. In the event that Landlord commences suit for the repossession of the Demised Premises, for the recovery or rent or any other amount due under the provisions of this Lease, or because of the breach of any other covenant herein contained on the part of Tenant to be kept or performed, and a breach shall be established, Tenant shall pay to Landlord all expenses incurred in connection therewith, including reasonable attorneys’ fees.

 

18.   LANDLORD’S RIGHT TO CURE TENANT’S DEFAULT. If Tenant defaults in the making of any payment or in the doing of any act herein required to be made or done by Tenant, then Landlord may, but shall not be required to, make such payment or do such act, and charge the amount of Landlord’s expense to Tenant, with interest accruing and payable thereon at the Default Rate as of the date of the expenditure by Landlord or as of the date of payment thereof by Tenant, whichever is higher, from the date paid or incurred by Landlord to the date of payment hereof by Tenant; provided, however, that nothing herein contained shall be construed or implemented in such a manner as to allow Landlord to charge or receive interest in excess of the maximum legal rate then allowed by law. Such payment and interest shall constitute Additional Rent hereunder due and payable with the next monthly installment of Fixed Rent; but the making of such payment or the taking of such action by Landlord shall not operate to cure such default by Tenant or to estop Landlord from the pursuit of any remedy to which Landlord would otherwise be entitled.

 

19.   ESTOPPEL CERTIFICATE.  Tenant shall immediately prior to occupancy execute Tenant Estoppel Certificate as provided for herein and attached hereto as Exhibit “G”, and from time to time, at the request of Landlord, upon ten (10) business days notice, execute and deliver to Landlord a statement provided by Landlord to Tenant, it being intended that any such statement delivered pursuant hereto may be relied upon by others with whom Landlord may be dealing. Failure to execute said Estoppel Certificate shall constitute a default under this lease.

 

20.   HOLDING OVER.   If Tenant retains possession of the Demised Premises or any part thereof after the termination of this Lease or expiration of the Lease Term or otherwise in the absence of any written

 

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agreement between Landlord and Tenant concerning any such continuance of the term, Tenant shall pay Landlord (1) as liquidated damages for such holding over alone, an amount, calculated on a per diem basis for each day of such unlawful retention, equal to the greater of (a) twice the Annual Fixed Rent, or (b) the established market rental for the Demised Premises, for the time Tenant thus remains in possession, plus, in each case, all Additional Rent and other sums payable hereunder, and (ii) all other damages, costs and expenses sustained by Landlord by reason of Tenant’s holding over. Without limiting any rights and remedies of Landlord resulting by reason of the wrongful holding over by Tenant, or creating any right in Tenant to continue in possession of the Demised Premises, all Tenant’s obligations with respect to the use, occupancy and maintenance of the Demised Premises shall continue during such period of unlawful retention.

 

21.   RELOCATION OF TENANT.   Landlord, at its sole expense, on at least thirty (30) days prior written notice to Tenant, may require Tenant to move from the Premises to another suite of comparable size and decor in the Building or in the Business Park in order to permit Landlord to consolidate the Premises with other adjoining space or to be leased to another tenant in the Building. In the event of any such relocation, Landlord shall pay all the expenses of preparing and decorating the new premises so that they will be substantially similar to the Premises and shall also pay the expenses of moving Tenant’s furniture and equipment to the new premises.

 

22.   SURRENDER OF DEMISED PREMISES. Tenant shall, at the end of the Lease Term, or any extension thereof, promptly surrender the Demised Premises in good order and condition and in conformity with the applicable provisions of this Lease, excepting only reasonable wear and tear.

 

23.   SUBORDINATION AND ATTORNMENT. This Lease and the estate, interest and rights hereby created are subordinate to any mortgage now or hereafter placed upon the Building or the Land or any estate or interest therein, including, without limitation, any mortgage on any leasehold estate, and to all renewals, modifications, consolidations, replacements and extensions of the same as well as any substitutions therefor, as provided for on the attached Exhibit “F”. Tenant agrees that in the event any person, firm, corporation or other entity acquires the right to possession of the Building or the Land, including any mortgagee or holder of any estate or interest having priority over this Lease, Tenant shall, if requested by such person, firm, corporation or other entity, attorn to and become the tenant of such person, firm, corporation or other entity, upon the same terms and conditions as are set forth herein for the balance of the Lease Term. Notwithstanding the foregoing, any mortgagee may, at any time, subordinate its mortgage to this Lease, without Tenant’s consent, by notice in writing to Tenant, and thereupon this Lease shall be deemed prior to such mortgage without regard to their respective dates of execution and delivery, and in that event, such mortgagee shall have the same rights with respect to this Lease as though it had been executed prior to the execution and delivery of the mortgage. Tenant, if requested by Landlord, shall execute any such instruments in recordable form as may be reasonably required by Landlord in order to confirm or effect the subordination or priority of this Lease, as the case may be, and the attornment of Tenant to future landlords in accordance with the terms of this Article. Landlord shall furnish to Tenant a non-disturbance agreement from the holder of such mortgage providing that so long as Tenant is not in default of this Lease Tenant’s occupancy shall not be disturbed and the obligations of Landlord will continue to be performed.

 

24.   BROKERS. Each party represents and warrants to the other that it, he, she or they have not made any agreement or taken any action which may cause anyone to become entitled to a commission as a result of the transactions contemplated by this Lease, and each will indemnify and defend the other from any all claims, actual or threatened, for compensation by any such third person by reason of such party’s breach of its, his, her or their representation or warranty contained in the Article 23 except for KLNB, Inc.

 

25.   NOTICES. All notices or other communications hereunder shall be in writing and shall be deemed to have been given (i) if hand delivered or sent by an express mail or delivery service or by courier, then if and when delivered to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby), or (ii) if mailed, then on the next business day following the date on which such communication is deposited in the United States mails, by first class registered or certified mail, return receipt requested, postage prepaid, and addressed to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby). All notices and communications to Tenant may also be given by leaving the same at the Demised Premises during business hours.

 

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25.1   If to Landlord:

 

25.2   If to Tenant:

 

26.   MISCELLANEOUS.

 

26.1   Successors and Assigns. The obligations of this Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that Landlord and each successive owner of the Building and/or the Land shall be liable only for obligations accruing during the period of its ownership or interest in the Building, and from and after the transfer by Landlord or such successive owner of its ownership or other interest in the Building, Tenant shall look solely to the successors in title for the performance of Landlord’s obligations hereunder arising thereafter.

 

26.2   Waivers. No delay or forbearance by Landlord in exercising any right or remedy hereunder or in undertaking or performing any act matter which is not expressly required to be undertaken by Landlord shall be construed, respectively, to be a waiver of Landlord’s rights or to represent any agreement by Landlord to undertake or perform such act or matter thereafter.

 

26.3   Waiver of Trial by Jury. Tenant hereby consents to the exclusive jurisdiction of the courts of the state where the Demised Premises are located and in any and all actions or proceedings arising hereunder or pursuant hereto, and irrevocably agrees to service of process in accordance with Article 24 above. Landlord and Tenant agree to waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant’s use of or occupancy of the Demised Premises and/or any claim of injury or damage and any emergency or any other statutory remedy.

 

26.4   Limitation of Landlord’s Liabilities. Tenant shall look solely to the Demised Premises and rents derived therefrom and Landlord’s insurance proceeds for enforcement of any obligation hereunder or by law assumed or enforceable against Landlord, and no other property or other assets of Landlord shall be subjected to levy, execution or other enforcement procedure for the satisfaction of Tenant’s remedies or with respect to this Lease, the relationship of Landlord and tenant hereunder or Tenant’s use and occupancy of the Demised Premises.

 

26.5   Time of the Essence. All times, wherever specified herein for the performance by Landlord or Tenant of their respective obligations hereunder, are of the essence of this Lease.

 

26.6   Severability. Each covenant and agreement in this Lease shall for all purposes be construed to be a separate and independent covenant or agreement. If any provision in this Lease or the application thereof shall to any extent be invalid, illegal or otherwise unenforceable, the remainder of this Lease, and the application of such provision other than as invalid, illegal or unenforceable, shall not be affected thereby; and such provisions in this Lease shall be valid and enforceable to the fullest extent permitted by law.

 

26.7   Amendment and Modification. This Lease, including all Exhibits hereto, each of which is incorporated in this Lease, contains the entire agreement between the parties hereto, and shall not be amended, modified or supplemented unless by agreement in writing signed by both Landlord and Tenant.

 

26.8   Headings and Terms. The title and headings and table of contents of this Lease are for convenience of reference only and shall not in any way be utilized to construe or interpret the agreement of the parties as otherwise set forth herein. The term “Landlord” and term “Tenant” as used herein shall mean, where appropriate, all persons acting by or on behalf of the respective parties, except as to any required approval, consents or amendments, modifications or supplements hereunder when such terms shall only mean the parties originally named on the first page of this Lease as Landlord and Tenant, respectively, and their agents so authorized in writing.

 

26.9   Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State of Maryland.

 

12



 

IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed on the day and year first above written.

 

 

LANDLORD:

 

BEAVER DAM LIMITED LIABILITY COMPANY

 

 

Witness:

By:

Frederick Smith, General Partner

 

 

 

 

 

 

/s/ Leiloni Reynolds

 

By:

/s/ Frederick Smith

 

 

 

 

 

 

 

 

 

 

 

 

 

TENANT:

 

 

 

 

 

 

Witness:

 

By:

SINCLAIR COMMUNICATIONS, INC.

 

 

 

 

 

 

 

 

 

 

 

/s/ Leiloni Reynolds

 

By:

/s/ David B. Amy

 

 

 

Name:

David B. Amy

 

 

 

Title:

Secretary

 

 

13



 

 

RENT SCHEDULE

RIDER #1

 

Year

 

Monthly

 

Annually

 

 

 

 

 

 

 

1

 

 

$

71,494.50

 

$

857,934.00

 

 

 

 

 

 

 

 

2

 

 

$

73,639.33

 

$

883,672.02

 

 

 

 

 

 

 

 

3

01-02

 

$

75,848.51

 

$

910,182.18

 

 

 

 

 

 

 

 

4

02-03

 

$

78,123.97

 

$

937,487.64

 

 

 

 

 

 

 

 

5

03-04

 

$

80,467.68

 

$

965,612.27

 

 

 

 

 

 

 

 

6

04-05

 

$

82,881.72

 

$

994,580.64

 

 

 

 

 

 

 

 

7

05-06

 

$

85,368.17

 

$

1,024,418.06

 

 

 

 

 

 

 

 

8

06-07

 

$

87,929.17

 

$

1,055,150.60

 

 

 

 

 

 

 

 

9

07-08

 

$

90,567.09

 

$

1,086,805.12

 

 

 

 

 

 

 

 

10

08-09

 

$

93,284.10

 

$

1,119,409.27

 

 

14



 

ADDENDA TO SCI/BEAVER DAM LLC LEASE

 

Section 1. Demise Premises.   Beaver Dam LLC will grant SBG/SCI first right of refusal on any space on the second floor as well as on the first floor.

 

Section 2. Lease Term.   Beaver Dam LLC will grant a 5-year option with the rate not to exceed the fair market value of like space. However, in no instance will the rate be less than the rent paid for the last year on the current lease. The Lease term will begin the day the general contractor, Roy L. Kirby and Sons, has released the building to Beaver Dam LLC in compliance with state and county laws to function for public use. This release date would be the date that Sinclair Communications, Inc. would have full access to initiate occupancy or additional tenant improvements of their leased space. This date would be a minimum of 60 days after the tenant improvements are undertaken by the tenant. The projected occupancy date is currently July 1, 1999.

 

Section3. Fixed Rent.   See Exhibit C Addendum.

 

Section 7. Improvements to Premises.   Add to Exhibit B: SBG/SCI will be allotted $15 per square foot of the rentable square feet as Tenant improvements. Beaver Dam LLC will provide a ceiling. The ceiling will be 2x2 or 2x4 grids which will be provided above and beyond the $15 per sq. ft. Tenant improvement allowance. This ceiling will be provided at no cost to SBG/SCI. All other improvements to the space will be at the expense of SBG/SCI.

 

Section 9. Covenants to Landlord.   Normal business hours will be 8:00 A.M.-6:00 P.M., Monday-Friday, 9:00 A.M.-1:00 P.M., Saturday, no holidays or Sundays.

 

Section 10. Covenants of Tenant.   If allowed by law, signage will be present on the parking lot as well as a first floor lobby directory. At this time, it is the intent of Beaver Dam LLC to place an external sign fixed to the building which will read “Sinclair”.

 

Section 11. Assignment and Subletting.   The Tenant will have the right to assign their lease to the purchaser of the Tenant’s business. The purchase of said business will have the identical responsibilities to the Landlord as did the Tenant/seller of the business. Assignee must have a net worth equal to or greater than that of the Tenant as of the Lease Commencement Date and as of the effective date of the proposed assignment or subletting.

 

Section 21. Allocation of Tenant.   Delete section.

 

Section 24. Broker.   KLNB, Inc. is the agent of the Landlord. The Landlord is responsible for KLNB’s fees.

 

Exhibit C.  Provision regarding additional rent and adjustment to fix rent. As a point of clarification, the baseline for operating expenses will be established during the first year

 

15



 

of the Tenant’s lease. This will be covered by the Tenant’s sq. ft. cost. However, at the beginning of the second year of the lease, any increases in costs above the Year 1 baseline related to items under Exhibit “C” will be paid by the Tenant’s on a pro-rata per sq. ft. share.

 

16



 

EXHIBIT “B”

 

SPECIAL STIPULATIONS

 

Please Initial:

 

 

 

 

 

 

 

 

 

Landlord

 

Tenant

 



 

EXHIBIT “C”

 

PROVISIONS REGARDING ADDITIONAL RENT AND ADJUSTMENTS TO FIX RENT

 

1.   Definitions.

 

A.          Essential Capital Improvements” shall mean (a) a labor saving device, energy saving device or other installation, improvement or replacement which is intended to reduce Operating Expenses, whether or not voluntary or required by governmental mandate, or (b) an installation or improvement required by reason of any law, ordinance or regulation which did not exist on the date of the execution of this Lease, or (c) an installation or improvement intended to improve the safety of tenants in the Building generally, whether or not voluntary or required by governmental mandate.

 

B.          Operating Expense Allowance” shall mean and equal -Tenant’s Proportionate Share of the amount of Operating Expenses for the calendar year 1999.

 

C.          Operating Expenses” shall mean all of Landlord’s operating costs and expenses of whatever kind or nature paid or incurred in the operation and maintenance of the Building and the Land, all computed on the accrual basis and in accordance with the terms of this Lease, including, but not limited to, the following:

 

1.     Gas, electricity, steam, fuel, water, sewer and other utility charges (including surcharge’s) of whatever nature (excluding use of utilities by other tenants such as may be submetered or separately metered pursuant to their leases);

 

2.     Insurance premiums and the amounts of any deductibles paid by Landlord;

 

3.     Building personnel costs, including, but not limited to, salaries, wages, fringe benefits, taxes, insurance and other direct and indirect costs;

 

4.     Costs of service and maintenance contracts including, but not limited to, cleaning and security services;

 

5.     All other maintenance and repair expenses (excluding repairs and general maintenance paid by proceeds of insurance or by Tenant or other third parties, and alterations solely attributable to tenants of the Building other than Tenant) and the cost of materials and supplies;

 

6.     Any other costs and expenses (i.e. items which are not capital improvements) incurred by Landlord in operating the Building, including ground rent, if any;

 

7.     The cost of any additional services not provided to the Building on the Commencement Date but thereafter provided by Landlord in the prudent management of the Building;

 

8.     The annual amortization of any Essential of Capital Improvement which is made by Landlord after completion of initial construction of the Building, based on the useful life of the improvement plus interest at the Prime Rate on the date of the expenditure on the underappreciated portion thereof;

 

9.     Landlord’s central office accounting costs and overhead applicable to the Building;

 

10.   Accounting fees for preparing the Operating Expense statement;

 

11.   Management fees payable to the managing agent; and

 

12.   Taxes, allocated on a per diem basis if the tax year is different than the Operating Year.

 

Please Initial:

 

 

 

 

 

 

 

/s/ D.A.

 

Landlord

 

Tenant

 

C-1



 

Operating Expenses shall not include:

 

1.     Special cleaning or other services, not offered to all tenants of the Building;

 

2.     Any charge for depreciation, interest or rents (except, if applicable) (ground rents) paid or incurred by Landlord; or

 

3.     Leasing commissions.

 

If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would constitute and Operating Expense) to a tenant who has undertaken to perform such work or service in lieu of performance by Landlord, Operating Expenses shall nevertheless be deemed to include the amount Landlord would reasonably have incurred if Landlord has in fact performed the work or service at its expense.

 

Not withstanding the foregoing, Operating Expenses shall not include interest and amortization, depreciation, ground rents, expenses for work performed for other tenants in Building, expenses for repairs or other work occasioned by fire or other insurable casualty (to the extent covered by insurance), expenses for leasing or processing new tenants, leasing commissions, advertising expenses), legal expenses incurred in enforcing the terms of any tenant leases, salaries for any employees of Landlord above those attributable the management, operation and maintenance of the Building, incurred by Landlord in connection with the operation and maintenance of the Building.

 

D.    Operating Year” shall mean each calendar year or such other period of twelve (12) months as hereafter may be adopted by Landlord as its fiscal year, occurring during the Lease Term.

 

E.     Taxes” shall mean all taxes, assessments and governmental charges, whether Federal, state, county or municipal, and whether general or special, ordinary or extraordinary, foreseen or unforeseen, imposed upon the Building or the Land or their operation, whether or not directly paid by Landlord. Taxes shall not include income taxes, excess profit taxes, franchise taxes, or other taxes imposed or measured on or by the income of Landlord from the operation of the Building or the Land; provided, however, that if, due to a future change in the method of taxation or assessment, any income, profit, franchise or other tax, however designated, shall be imposed in substitution, in whole or in part, for (or in lieu of) any tax, assessment or charge which would otherwise be included within the definition of Taxes, such other tax shall be deemed to be included with Taxes as defined herein to the extent of such substitution. There shall be added to Taxes the expenses of any contests (administrative or otherwise) of Taxes incurred during the Operating Year. Tenant shall pay to the appropriate governmental authority any use and occupancy tax. In the event that Landlord is required by law to collect such tax, Tenant shall pay such use and occupancy tax to Landlord as Additional Rent upon demand and Landlord shall remit any amounts so paid to Landlord to the appropriate governmental authority.

 

F.     Tenants’s Proportionate Share” shall mean a fraction; the numerator of which shall be the rentable square feet of Demised Premises, and the denominator of which is 74,200 rentable square feet which is the aggregate rentable square feet in the Building.

 

2.             Additional Rent for Operating Expenses.

 

2.1   Commencing on August 1, 1999, Tenant shall pay during the Lease Term as Additional Rent, the amount by which Tenants’ Proportionate Share of Operating Expenses exceeds the Operating Expense Allowance.

 

2.2   As soon as available in each Operating Year during the Lease Term, Landlord shall provide Tenant with a written statement setting forth the Operating Expense Allowance and a projection of Tenant’s Proportionate Share of Operating Expenses for such year commencing on the first day of the first month following receipt of such statement and continuing until receipt by Tenant of Landlord’s statement of the next projected Tenant’s Proportionate Share of Operating Expenses, Tenant shall pay to Landlord with each monthly installment of Fixed Rent an amount equal to one-twelfth (1/12th) of the excess of such projected Tenant’s Proportionate Share of Operating Expenses over the Operating Expense Allowance. Concurrently with the first payment required hereinabove, Tenant shall pay to Landlord an amount equal to the excess of such projected Tenant’s Proportionate Share of Operating Expenses over the Operating Expense Allowance multiplied by a fraction, the numerator of which is the number of calendar months of the Operating Year in question which have elapsed prior to the due date of such first payment and the denominator of which is twelve (12), less any payments made by Tenant during said period on account of such excess Operating Expenses.

 

C-2



 

2.3   Landlord shall, as soon as possible after the close each such Operating Year, provide Tenant with a statement of the actual operating expenses for such period. Any underpayment by Tenant during such Operating Year due to the fact that projected Operating Expenses were less than actual Operating Expenses shall be paid to Landlord within 30 days after Tenant’s receipt of a statement for such deficiency. Any overpayment by Tenant due to the fact that projected Operating Expenses were greater than actual Operating Expenses for such year shall be credited to the next Additional Rent payable by Tenant under this Exhibit “C.” If the Operating Expenses are less than the Operating Expense Allowance, a credit or check will not be issued.

 

3.       Adjustment for Vacancies. In determining Operating Expenses for any Operating Year, if the Building was less than fully occupied during such entire year, or was not in operation during such entire year, then Operating Expenses shall be adjusted by Landlord to reflect the amount that such expenses would normally be expected to have been, in the reasonable opinion of Landlord, had the Building been fully occupied and operational throughout such year, except that in no event shall such adjustment result in an amount less than the actual Operating Expenses. Any such annualization shall be explained in Landlord’s statement under Section 2.3 hereof.

 

4.       Pro-Rations. Should this Lease commence or terminate at any time other than the first day of an Operating Year, the Additional Rent payable by Tenant on account of Operating Expenses shall be first calculated on the basis of the entire Operating Year and then pro-rated on the basis of the number of days of occupancy.

 

5.       Audit. Tenant shall have the right at all reasonable times within thirty (30) days after Landlord has provided Tenant with a statement of the actual Operating Expenses, and at its sole expense, to audit Landlord’s books and records relating to this Lease for that Operating Year.

 

6.       Minimums. Notwithstanding anything contained herein to the contrary, in no event shall Tenant’s Proportionate Share of Operating Expenses for any calendar year be less than the Operating Expense Allowance.

 

7.       Personal Property Taxes. Tenant will be responsible for ad valorem taxes on its personal property and on the value of the leasehold improvements in the Demised Premises to the extent that the same exceed Building Standard allowances (and if the taxing authorities do not separately assess Tenant’s leasehold improvements, Landlord may make a reasonable allocation of impositions to such improvements).

 

8.       Survival. If, upon expiration or termination of this Lease for any cause, the amount of any Additional Rent due hereunder has not yet been determined, an appropriate payment from Tenant to Landlord or refund from Landlord to Tenant, shall be made promptly after such determination.

 

C-3



 

EXHIBIT “D”

 

Please Initial:

 

 

 

 

 

 

 

 

 

Landlord

 

Tenant

 



 

EXHIBIT “E”

RULES AND REGULATIONS

 

1.      The sidewalks, lobbies, passages, elevators and stairways shall not be obstructed or used by Tenant for any purpose other than ingress and egress from and to Tenant’s offices. Landlord shall in all cases retain the right to control or prevent access thereto of all persons whose presence, in the judgement of Landlord, shall be prejudicial to the safety, peace, character or reputation of the building or of any of the tenants.

 

2.      The toilet rooms, water closets, sinks, faucets, plumbing or other service apparatus of any kind shall not be used by Tenant for any purposes other than those for which they were designed and installed. No sweeping, rubbish, rags, ashes, chemicals or other refuse or injurious substances (which shall include medical waste) shall be placed therein or used in connection therewith by Tenant or left by Tenant in the lobbies, passages, elevators or stairways.

 

3.      Nothing shall be placed by Tenant on the outside of the building or on its window sills or projections. Skylights, windows, doors and transoms shall not be covered or obstructed by Tenant, and no window shades, blinds, curtains, screens, storm windows, awnings or other materials shall be installed or placed on any of the windows or in any of the window spaces, except as approved in writing by Landlord.

 

4.      No sign, lettering, insignia, advertisement, or notices shall be inscribed, painted, installed or placed on any window or in any window spaces or any other part of the outside or inside of the building, unless first approved in writing by Landlord. Names shall be placed on suite entrance doors for Tenant by Landlord and not otherwise, and at Tenant’s expense. In all instances the lettering is to be of design and form approved by Landlord.

 

5.      Tenant shall not place additional locks upon any doors and shall surrender all keys for all locks at the end of the tenancy.

 

6.      Tenant shall not do or commit, or suffer, or permit to be done or committed, any act or thing whereby, or in consequence whereof, the rights of other tenants will be obstructed or interfered with, or other tenants will in any other way be injured or annoyed. Tenant shall not use nor keep, nor permit to be used or kept in the building any matter having an offensive odor, nor any kerosene, gasoline, benzine, fuel, or other explosive or highly flammable material. No birds, fish or animals shall be brought into or kept in or about the premises.

 

7.      In order that the premises may be kept in good state of preservation and cleanliness, Tenant shall, during the continuance of its possession, permit personnel and contractors approved by Landlord, and no one else, to clean the premises. Landlord shall be in no way responsible to Tenant for the removal, disposal or cleaning of any medical equipment or waste or for any damage done to furniture or other effects of Tenant or others by any of Tenant’s employees, or any persons, or for any loss of Tenant’s employees, or for any loss of property of any kind in or from the premises, however occurring. Tenant shall see each day that the windows are closed, the lights turned out, and doors securely locked before leaving the premises.

 

8.      If Tenant desires to introduce signaling, telegraphic, telephonic, protective alarm or other wires, apparatus or devices, Landlord shall direct when and how the same are to be placed, and except as so directed, no installation, boring or cutting shall be permitted. Landlord shall have the right to prevent and to cut off the transmission of excessive or dangerous current of electricity or annoyances into or through the building or premises and to require the changing of wiring connections or layout at Tenant’s expense, to the extent that Landlord may deem necessary, and further to require compliance with such reasonable rules as Lessor may establish relating thereto, and in the event of non-compliance with the requirements or rules, Landlord shall have the right immediately to cut wiring or to do what it considers necessary to remove the danger, annoyance or electrical interference with apparatus in any part of the building. All wires installed by Tenant must be clearly tagged at the distributing boards and junction boxes, and elsewhere as required by Landlord, with the number of the office to which said wires lead, and for the purpose for which the wires respectively are used, together with the name of the concern, if any, operating same.

 

9.      No furniture, packages, equipment, supplies or merchandise of Tenant will be received in the building, or carried up or down in the elevators or stairways, except during such hours as shall be designated by Landlord, and Landlord in all cases shall also have the exclusive right to prescribe the method and manner in which the same shall be brought in or taken out of the building. Tenant shall in all cases have the right to exclude heavy furniture, safes, and other articles from the building which may be hazardous or to require them

 

Please Initial:

 

 

 

 

 

/s/

 

/s/ D.A.

 

Landlord

 

Tenant

 

E-1



 

to be located at designated places in the premises. The cost of repairing any damage to the building caused by taking in or out furniture, safes or any articles or any damage caused while the same be in the premises, shall be paid by Tenant.

 

10.     Without Landlord’s written consent, nothing shall be fastened to, nor shall holes be drilled or nails or screws driven into walls of partitions; nor shall walls or partitions be painted, papered, or otherwise covered or moved in any way, or marked or broken; nor shall any connection be made to electric wires for running fans or motors or other apparatus, devices or equipment; nor shall machinery of any kind other than customary small business machines be allowed on the premises; nor shall Tenant use any other method of heating, air conditioning or air cooling than that provided by Landlord. Telephones, switchboards and telephone wiring and equipment shall be placed only where designated by Landlord. No mechanics, other than those employed by Landlord, shall be allowed to work in or about the building without the written consent of Landlord first have been obtained.

 

11.     Access may be had by Tenant to the premises at any time, Access may be refused at Landlord’s election, unless the person seeking it is known to the watchman in charge, or has a pass issued by Landlord, or is properly identified to the watchman’s satisfaction. Landlord shall in no case be responsible for the admission or exclusion of any person. In case of invasion, hostile attack, insurrection, mob violence, riot, bomb threats, explosion fire or any casualty. Landlord reserves the right to bar or limit access to the building for the safety of occupants or protection of property.

 

12.     Landlord reserves the right to rescind, suspend or modify any rules or regulations, and to make such other rules or regulations as, in Landlord’s judgement, may from time to time be needed for the safety, care, maintenance, operation and cleanliness of the building, or for the preservation of good order therein. Tenant agrees to comply with new or modified regulations of any Federal, State or Municipal authority having appropriate jurisdiction or any regulatory agencies as they may affect the premises or building. Notice of any action by Landlord referred to in this paragraph, when given to Tenant, shall have the same force and effect as if originally made a part of the foregoing lease. But new rules and regulations will not, however, be unreasonably inconsistent with the proper and rightful enjoyment of the premises by Tenant under this lease.

 

13.     The use of rooms as sleeping quarters is prohibited at all times.

 

E-2



 

EXHIBIT “F”

SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT

 

THIS AGREEMENT, made as of the       day of                            , 19    , by and between                                           , a                                corporation, having an office at                                                     (the “Lender”), and                  , a                        corporation having an office at                                                                (the “Tenant”).

 

WITNESSETH:

 

WHEREAS, the Lender has made a loan (together with any present or future amendments or increases thereto, the “Loan”) to                                                                (“Landlord”) evidenced by a Promissory Note of Landlord (together with any present or future amendments or increases thereto, the “Note”) secured by a mortgage from the Landlord, as amended, increased, renewed, modified, consolidated, replaced, or extended being hereinafter referred to as the “Mortgage”, covering all of the Landlord’s right, title and interest in the land, buildings, improvements and other items of property described therein, located in Baltimore County, Maryland and more particularly described in Exhibit “A” annexed hereto and made a part hereof (said land, buildings, improvements, and such other property being hereinafter collectively referred to as the “Mortgaged Premises”) and further secured by an Assignment of Rents and Other Interest (together with any present or future amendments or increases thereto, the “Assignment Rents”), both recorded in the Office of the Recorder of Deeds of Baltimore County, Maryland:

 

WHEREAS, the Landlord and the Tenant entered into a lease dated as of                                , 19   , (said lease, as the same may be amended, renewed, modified, consolidated, replaced or extended being hereinafter referred to as the “Lease”), covering a portion of the Mortgaged Premises (the “Leased Premises”).

 

WHEREAS, the Assignment of Rents assigned to Lender all of Landlord’s right, title, interest in and to the Lease and any other present or future lease of all or any part of the Mortgaged Premises;

 

WHEREAS, the Lender, as a condition to making the loan secured by Mortgage, has required that the Lease be and continue to be subordinate in every respect to the Mortgage; and

 

WHEREAS, the parties hereto desire to effect the subordination of the lease to the Mortgage and to provide for the non-disturbance of the Tenant by the Lender;

 

NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency whereof are hereby acknowledged, Tenant and Lender, intending to be legally bound hereby, covenant and agree as follows:

 

1.          The Lease (and all provisions thereof, including any purchase option) shall at all times be subject and subordinate to the provisions of this Agreement in each and every respect to the Mortgage (and all provisions thereof) subject, nevertheless, to the provisions of this Agreement. The foregoing provision shall be self-operative; however, the Tenant, upon request, shall execute and deliver any certificate which the Landlord or the Lender may request to confirm said subordination by the Tenant.

 

2.          The Tenant certifies that (a) the Lease is presently in full force and effect and unmodified, except as noted in this Agreement, and constitutes the sole agreement between Landlord and Tenant relating to Tenant’s occupancy of the Leased Premises, (b) to the best of its knowledge, no event has occurred which constitutes a default under the Lease by the Landlord or which, with the giving of notice, the passage of time or both, would constitute a default by the Landlord under the Lease; (c) to the best of its knowledge, as of the date hereof Tenant has no charge, lien or claim of offset under the Lease and Landlord does not owe any sums to Tenant under the Lease or any other agreement. The full minimum monthly rental of $                     is payable             , and Tenant has been given no rent concessions or free rent other than as specifically set forth in the Lease. The Landlord shall be a third party beneficiary of the certifications as set forth in this paragraph.

 

3.          The Lease and rentals thereunder have been assigned to Lender as security for repayment of the Loan. Lender, as such assignee, hereby directs Tenant to pay to Landlord all rentals and other moneys due and to become due to Landlord under the Lease until receipt of further direction from Lender. Upon receipt by Tenant of subsequent direction from Lender, Tenant shall pay to Lender, or in accordance with such

 

Please Initial:

 

 

 

 

 

 

 

/s/ D.A.

 

Landlord

 

Tenant

 

F-1



 

subsequent directions of Lender, all such rentals and other sums due under the Lease, or amounts equal thereto. Tenant shall have no responsibility or ascertain whether such direction by Lender is permitted under the Mortgage or such Assignment of Rents and Other Interests. Landlord, by its execution of consent form attached hereto, consents to the foregoing.

 

4.          Tenant acknowledges that without the prior written consent of the Lender, or except as permitted by the terms of the lease that no modification of the Lease so as to materially reduce the rents and other charges payable thereunder, or shorten or extend or renew the term thereof or adversely affect the rights or increase the obligations of the Landlord thereunder, or prepay rents or other charges under the Lease for more than on month in advance. In the event of any default on the part of the Landlord under the Lease, Tenant will give written notice thereof to the Lender, or its successor or assigns whose name and address previously shall have been furnished to the Tenant in writing. Any right or remedy of Tenant resulting from or dependent upon such notice shall take effect only after notice is go given to the Lender. Performance by the Lender of any of the Landlord’s obligations under the Lease in accordance with the terms of the Lease shall satisfy provisions of the Lease requiring performance by the Landlord, and the Lender, exercising reasonably due diligence, shall have the reasonable additional period of time under the circumstances to complete such performance.

 

5.          If the interest of the Landlord under the Lease Premises shall be transferred by reason of a foreclosure action or other proceedings for enforcement of the Mortgage or pursuant to a transfer in lieu of foreclosure, the Tenant shall be bound to and shall attorn to the person acquiring the interests of the Landlord as a result of any such action or proceeding and such person’s successors and assigns (any of the foregoing being hereafter referred to as the “Successors”) upon the Successor succeeding to the interest of the Landlord in and to the Lease Premises. Said attornment shall be effective and self-operative without the execution of any further instruments. The Tenant, upon request, shall execute and deliver any certificate or other instrument necessary or appropriate which the Lender or the Successor may request to effect or confirm said attornment by the Tenant.

 

6.          If the interest of the Landlord under the Lease shall be transferred by reason of foreclosure or other proceedings for enforcement of the Mortgage or pursuant to a transfer in lieu of foreclosure then, except as provided in this Agreement, the Successor shall be bound to the Tenant under all of the terms, covenants, and conditions of the Lease for the balance of the term thereof remaining, with the same force and effect as if the Successor were the Landlord (but subject to Paragraph 7 below).

 

7.          The Successor shall not and shall not be deemed to (a) adopt or in any other manner be responsible or liable for any representations and warranties made by the Landlord in the Lease (b) be liable for any act, omission or default of Landlord or any prior Landlord and will not be subject to any offsets or defenses which the Tenant might have against Landlord or any prior Landlord, (c) be bound by any amendment or modification of the Lease or by any prepayment of rents or other charges under the Lease for more than one month unless such amendment, modification or prepayment was approved in writing by the Lender, (d) be liable to Tenant for any refund of any security deposit made by the Tenant pursuant to the Lease, except to the extent that the Successor has actually received that security deposit, or (e) be liable to Tenant in any event for any matter relating to the operation, maintenance, or condition of the Mortgaged Premises or Leased Premises prior to the date Successor acquires title to the Lease Premises. Any rights of the Tenant to terminate or cancel the Lease by reason of the failure of Landlord or any prior Landlord under the Lease to perform any of its obligations under the Lease shall be suspended if and while the Successor is exercising reasonably diligent efforts under the circumstances to cause such obligations to be performed. The obligations and liability of the Successor shall be limited to and enforceable only against the Successor’s estate and interest in the Leased Premises and not out of or against any other assets or properties of the Successor.

 

8.          Notwithstanding anything in the Lease to the contrary, if the interest of the Landlord under the Lease shall be transferred to the Successor, then (a) the Successor shall not be obligated to reconstruct the Leased Premises following a casualty or condemnation thereto.

 

9.          If Tenant is not in default hereunder or under the terms of the Lease, the Tenant will not be joined as a party defendant for the purpose of terminating the lease in any foreclosure action or proceeding which may be instituted or taken by the Lender, nor will the Tenant be evicted from the Leased Premises, nor will the Tenant’s leasehold estate under the Lease be terminated or disturbed, nor will any of the Tenant’s rights under the Lease be affected in any way by reason of any default under the Mortgage.

 

10.        This Agreement may not be modified except by an agreement in writing signed by the parties hereto or their respective successors in interest. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their respective heirs, representatives, successors and assigns.

 

F-2



 

11.        Upon a valid expiration or termination of the Lease for any reason, and provided the Lease shall not have been renewed or otherwise extended and Tenant shall have no right to possession of the Leased Premises, Tenant shall execute, acknowledge and deliver to the Landlord, the Lender, and the Successor, a certificate attesting to the expiration or termination of the Lease and waiving all rights to possession of the Leased Premises.

 

12.        All notices, demands or requests made pursuant to, under or by virtue of this Agreement must be in writing and mailed to the party to whom the notice, demand or request is being made by certified or registered mail, return receipt requested, at its address set forth above. Any party may change the place that notices and demands are to be sent by written notice delivered in accordance with this Agreement.

 

13.        This Agreement is fully integrated and not in need of parol evidence in order to reflect the intentions of the parties hereto. The parties hereto intend the literal words of this Agreement to govern the subject matter hereof and all prior negotiations, drafts and other extrinsic communications shall have no significance or evidentiary effect. This Agreement shall be the whole and only agreement between the parties hereto with regard to the subordination of the Lease and the leasehold interest of Tenant thereunder to the lien or charge of the Mortgage in favor of Lender, and shall supersede and control any prior agreements as to such, or any subordination, including, but not limited to, those provisions, if any, contained in the Lease which provide for the subordination of the Lease and the leasehold interest of Tenant thereunder to a deed or deeds of trust or to a mortgage or mortgages to be thereafter executed. In the event any one or more of the provisions of this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

 

14.        This Agreement shall continue in effect until all sums due by Landlord to Lender under the Note, the Mortgage and the Assignment of Rents have been paid in full.

 

15.        Tenant shall neither suffer nor itself manufacture, store, handle, transport, dispose of, spill, leak, dump any toxic or hazardous waste, medical waste or other waste products or substance (as they may be defined in any federal or state statue, rule or regulation pertaining to or governing such wastes, waste products or substances) on the Premises at any time during the term, or extended term, of the Lease, except in compliance with all applicable laws and regulations.

 

F-3



 

IN WITNESS WHEREOF, the parties hereto have hereunto caused this Agreement to be duly executed as of the day and year first above written.

 

 

LENDER:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BY:

 

 

 

 

 

 

 

 

 

 

TENANT:

 

 

 

 

 

 

 

 

BY:

 

 

 

 

 

 

 

 

 

 

CONSENT

 

 

 

 

 

The undersigned consents to the foregoing.

 

 

 

 

 

 

 

 

LANDLORD:

 

 

BEAVER DAM LIMITED LIABILITY COMPANY

 

 

 

 

 

 

 

BY:

 

 

 

 

F-4



 

EXHIBIT “G”

TENANT’S ESTOPPEL CERTIFICATE AND AGREEMENT

 

LANDLORD:

 

TENANT:

 

DATE OF LEASE:

 

PREMISES:

 

The undersigned (“Tenant”) hereby certifies to and agrees with                                       , its successors and assigns (“                    ) that:

 

1.           Tenant has accepted possession of the Premises pursuant to the Lease. The Lease term commenced on             . The termination date of the Lease term, excluding renewals and extensions is                        .

 

2.           Any improvements required by the terms of the Lease to be made by Landlord have been completed to the satisfaction of Tenant in all respects, except for the “punchlist” items, if any, set forth on Schedule 1 attached hereto. Landlord has (as of the date hereof) fulfilled all of its duties under the Lease (except as otherwise set forth on Schedule 1). No sums are due by Landlord to Tenant under the Lease or any other agreement between Landlord and Tenant.

 

3.           The Lease has not been assigned, modified, supplemented or amended in any way. The Lease constitutes the entire agreement between the parties and there are no other agreements between Landlord and Tenant concerning the Premises.

 

4.           The Lease is valid and in full force and effect, and to the best of Tenant’s knowledge, neither Landlord nor Tenant is in default thereunder. Tenant has no defense, setoff or counterclaim against Landlord arising out of the Lease or in any way relating thereto, or arising out of any other transaction between Tenant and Landlord, and no event has occurred and no condition exists, which with the giving of notice or the passage of time, or both, will constitute a default under the Lease.

 

5.           The monthly rent presently payable under the Lease is $                   per month payable in advance. All rent and other sums due under the Lease are current and have been paid through              , 19       .  No rent or other sum payable under the Lease has been paid more than one month in advance.

 

6.           All notices and other communications from Tenant to                              shall be in writing and shall be delivered or mailed by registered mail, postage paid, return receipt requested, addressed to               at:

 

 

or at such other address as                             , a successor, purchaser, or transferee shall furnish to Tenant in writing.

 

7.           This certificate may not be modified, except by an agreement in writing signed by the parties hereto (or their respective successors and assigns) and                    . This Estoppel Certificate shall be binding on the undersigned, it successors and assigns (including future tenants under the Lease) and shall insure to the benefit of                       , it successors and assigns.

 

 

TENANT:

 

 

Attest/Witness:

 

 

 

 

 

BY:

 

 

 

 

 

 

 

 

 

DATE:

 

, 19

 

 

 

G-1



 

AGREEMENT OF LEASE

 

THIS AGREEMENT OF LEASE (“Lease”) is made this 18 day of December 1998 by and between BEAVER DAM LIMITED LIABILITY COMPANY, a Maryland limited liability company (“Landlord”) and SBG GROUP (“Tenant”).

 

Intending to be legally bound, Landlord and Tenant agree as set forth below.  See attached addenda pages 15 & 16.

 

1.     DEMISED PREMISES. Landlord, for the term and subject to the provisions and conditions hereof, leases to Tenant, and Tenant rents from Landlord, the space (the “Demised Premises”) containing 9,400 rentable square feet, as shown on Exhibit “A” attached hereto and made part of hereof, in the building erected on certain land (the “Land”) located at 10706 Beaver Dam Road, Cockeysville, Maryland 21030, together with rights of ingress and egress thereto, and with the right in common with others to use, to the extent applicable, the elevators and common passageways, stairways, vestibules, and to pass over and park on that portion of land owned by Landlord and designated by the Landlord for Tenant’s parking. The Building contains 90,000 square feet.

 

2.     LEASE TERM. The lease term (the “Lease Term”) shall commence on the commencement date (the “Commencement Date”) which shall be August 1, 1999 and shall continue until July 31, 2009 and thereafter unless extended or sooner terminated as provided herein.

 

3.     FIXED RENT. Fixed rent (the “Fixed Rent”) is payable by Tenant beginning on the Commencement Date in monthly installations each equal to (See Rent Schedule - Rider #1), representing one-twelfth (1/12) of the annual Fixed Rent (the “Annual Fixed Rent”) equal to (See Rent Schedule - Rider #1), without prior notice or demand, and without any setoff or deduction whatsoever, in advance, on the first day of each month at such place as Landlord may direct. Annual Fixed Rent shall include the Operating Expense Allowance as set forth in Section I (1) of Exhibit “C” hereto. Annual Fixed Rent shall be subject to adjustment as provided in Section II of Exhibit “C” hereto. In addition, if the Lease Term commences on a day other than the first day of a calendar month, Tenant shall pay to Landlord, on or before the Commencement Date of the Lease Term, a pro rata portion of the monthly installment of rent (Including Fixed Rent and any Additional Rent as herein provided), such pro rata portion to be based on the actual number of calendar days remaining in such partial month after the Commencement Date of the Lease Term. If the Lease Term shall expire on other than the last day of a calendar month, such monthly installment of Fixed Rent and Additional Rent shall be prorated for each calendar day of such partial month. If any portion of Fixed Rent, Additional Rent, or any other sum payable to Landlord hereunder shall be due and unpaid for more than five (5) days, the balance due shall be subject to and include a 10 percent penalty. In addition, if any portion of Fixed Rent, Additional Rent or any other sum payable to Landlord hereunder shall be due and unpaid for more than five (5) days after written notice of non-payment by Landlord to Tenant (which written notice shall not be required more than two times in any period of twelve (12) consecutive months), it shall thereafter bear interest at a rate equal to three percent (3%) per annum greater than the highest prime rate of interest announced from time to time by NationsBank (or its successor) (the “Default Rate”), as the same may change from time to time, from the due date until the date of payment thereof by Tenant, provided, however, that nothing herein contained shall be construed or implemented in such a manner as to allow Landlord to charge or receive interest in excess of the maximum legal rate then allowed by law.

 

4.     ADDITIONAL RENT. Tenant shall pay as additional rent (“Additional Rent”) its proportionate share of all operating expenses in the amounts and in the manner set forth in Exhibit “C” hereto and all other sums due hereunder.

 

5.     SECURITY DEPOSIT. Tenant has deposited with Landlord the sum of Sixteen Thousand Four Hundred Fifty and 00/100 Dollars ($16,450.00) as security for the faithful performance and observance by Tenant of the terms, provisions and conditions of this Lease. It is agreed that in the event Tenant defaults in respect of any of the terms, provisions and conditions of this Lease, including, but not limited to, the payment of rent and additional rent, Landlord may use, apply or retain the whole or any part of the security so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which Tenant is in default or for any sum which Landlord may expend or may be required to expend by reason of Tenant’s default in respect of any of the terms, covenants and conditions of this Lease, including but not limited to any damages or deficiency in the reletting of the leased premises, whether such damages or deficiency accrued before or after summary proceedings or other re-entry by Landlord. In the event that Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease, the security shall

 

Please Initial:

 

 

 

 

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 

1



 

be returned to Tenant, without interest, after the date fixed as the end of the Lease and after delivery of entire possession of the leased premises to Landlord. In the event of a sale of the land and building of which the leased premises form a part, hereinafter referred to as the Building, or leasing of the building, Landlord shall have the right to either transfer the security to the Tenant and Landlord shall thereupon be released by Tenant from all liability for the return of such security or transfer the security to the new Landlord in which case Tenant agrees to look to the new Landlord solely for the return of said security. Tenant further covenants that it will not assign or encumber or attempt to assign or encumber the monies deposited herein as security and that neither Landlord nor its successors or assigns shall be bound by and such assignment, encumbrance, attempted assignment or attempted encumbrance.

 

In the event of any bankruptcy or other insolvency proceeding against Tenant, it is agreed that all such security deposit held hereunder shall be deemed to be applied by Landlord to rent, sales tax and other charges due to Landlord for the last month of the lease term and each preceding month until such security deposit is fully applied.

 

6.     USE OF DEMISED PREMISES. Tenant covenants and agrees to use and occupy the Demised Premises for general office purposes and other uses incidental to and associated with Class A office buildings and only in conformity with the law. Tenant shall not use or permit any use of the Demised Premises which creates any safety or environmental hazard, or which would: (i) be dangerous to the Demised Premises, the Building or other tenants, or (ii) be disturbing to other tenants of the Building, or (iii) cause any increase in the premium cost for any insurance which Landlord may then have in effect with respect the Building generally.

 

7.     IMPROVEMENTS TO PREMISES.

 

7.1.    By Landlord.

 

7.1.1.  The Tenant shall cause detailed working drawings to be fully prepared at its expense by a designer of its choice, who shall consult with the Landlord in preparing the same, and shall deliver such working drawings to Landlord, on or before May 1, 1999. Such working drawings must be in sufficient detail to allow Landlord to (a) calculate the cost of constructing all of Tenant’s improvements, and (b) obtain a building and any other necessary permits for the construction of Tenant’s improvements. Within five (5) days after Landlord provides Tenant with the calculations of the costs of constructing Tenant’s improvements, Tenant shall approve the working drawings and the costs of construction. Any costs or expenses incurred by Landlord because of changes to the working drawings made by Tenant after final approval of the costs, shall be paid to the Landlord by the Tenant. If (a)(i) the Tenant defaults in furnishing such working drawings to the Landlord by the time set forth above, (ii) the Tenant fails to give final approval to the working drawings and the costs by the time set forth above, (iii) the Tenant requests any changes to the working drawings after the Tenant has approved the costs of construction, or (iv) the Tenant has requirements in its working drawings that cause unreasonable delays in commencing or completing Tenant’s improvements, (b) as a result thereof, the Landlord is delayed in commencing and/or completing such improvements beyond the dates on which, but for such delay, the Landlord would in its reasonable judgment have commenced or completed them, and (c) such completion occurs after the date which would have been the Commencement Date, then (without altering or impairing the Landlord’s rights under the provisions of this Lease on account of such default, and without altering or impairing any other of Landlord’s rights, including, without limitation, such rights set forth in Section 5.1.2) the Commencement Date shall be the date which would have been the Commencement Date for purposes of the provisions of this Lease, had such delay not occurred.

 

7.1.2.  Allocation of costs. The cost of such improvements shall be allocated between the Landlord and the Tenant in the following manner:

 

(a)  Except as is otherwise provided herein, the Landlord shall bear the expense of (i) providing and installing as part of such improvements those materials and other items of improvements, of such manufacture, design, capacity, finish and color, which are described in a schedule attached hereto as Exhibit B (hereinafter referred to as “the Standard Improvement Items”), (ii) to such maximum extent or in such maximum quantity (hereinafter referred to as “the Standard Allowance”) as is specified therein. If the improvements to be made to the Premises pursuant to the provisions of this subparagraph utilize less or fewer than the Standard Allowance of any Standard Improvement Item, the Tenant shall receive no credit against the Rent or otherwise on account thereof.

 

(b)  The Landlord shall submit the working drawings, as provided by the Tenant, to the Landlord’s general contractor for the Building promptly upon their approval by the Landlord and the Tenant, for such contractor’s calculation of the price which it will charge for constructing such improvements. The

 

2



 

Landlord shall notify the Tenant in writing of such price as calculated by such contractor (and shall in such notice allocate such price between (i) those of such improvements which are included in the Standard Allowance of Standard Improvement Items, and (ii) the remainder of such improvements), and the Tenant shall, at the Landlord’s option, be deemed to have approved such price and allocation for all purposes of the provisions of this Lease unless the Tenant gives the Landlord written notice to the contrary within five (5) days thereafter. All improvements shall be done by Landlord’s general contractor.

 

(c)  If the improvements to be made to the Premises pursuant to the provisions of this subsection require materials or other items other than the Standard Improvement Items, and/or Standard Improvement Items in excess of the Standard Allowance, and the cost of constructing such improvements shall, if and to the extent that it exceeds the cost which would have been incurred if such improvements consisted only of the Standard Allowance of Standard Improvement Items, be borne by the Tenant. The Tenant shall pay the amount of such excess to the Landlord in two (2) equal installments, the first of which shall be due when such price and allocation are approved by the Tenant, as aforesaid, and the second of which shall be due at the Commencement Date.

 

7.1.3.  The Landlord shall use its reasonable efforts to complete such improvements promptly, but shall have no liability to the Tenant hereunder if prevented from doing so by reason of any (a) strike, lock-out or other labor troubles, (b) governmental restrictions or limitations, (c) failure or shortage of electrical power, gas, water, fuel oil, or other utility or service, (d) riot, war, insurrection or other national or local emergency, (e) accident, flood, fire or other casualty, (f) adverse weather condition, (g) other act of God, (h) inability to obtain a building permit or a certificate of occupancy, or (i) other cause similar or dissimilar to any of the foregoing and beyond the Landlord’s reasonable control. In such event, (a) the Commencement Date shall (subject to the operation and effect of the provisions of paragraph 5.1.1) be postponed for a period equaling the length of such delay, (b) the Termination Date shall be determined pursuant to the provisions of subsection 1.1 by reference to the Commencement Date as so postponed, and (c) the Tenant shall accept possession of the Premises within ten (10) days after such completion.

 

7.2.    Acceptance of possession. Except for (a) latent defects or incomplete work which would not reasonably have been revealed by an inspection of the Premises made for the purpose of discovering the same when the Landlord delivers possession of the Premises to the Tenant, and (b) any other item of incomplete work set forth on a “punch list” prepared by the Tenant and approved in writing by the Landlord before such delivery of possession, by its assumption of possession of the Premises the Tenant shall for all purposes of the provisions of this Lease be deemed to have accepted them and to have acknowledged them to be in the condition called for hereunder.

 

8.     ALTERATIONS OR IMPROVEMENTS BY TENANT.

 

8.1     During the Lease Term, Tenant shall not make any alterations, additions, improvements, redecorating or other changes to the Demised Premises without the prior written approval (such approval not to be unreasonable withheld or delayed) of Landlord and then only in accordance with plans and specifications previously approved in writing by Landlord and subject to such conditions as Landlord may require, including, without limitations, that Tenant be required to pay for any increased cost to Landlord occasioned thereby or attributed thereto. Prior to the termination of this Lease and without additional notice to Tenant by Landlord, Tenant shall either: (i) remove any such alterations or additions and repair any damage to the Building or the Demised Premises occasioned by their installation or removal and restore the Demised Premises to substantially the same condition as existed prior to the time when any such alterations or additions were made, or (ii) reimburse Landlord for the cost of removing such alterations or additions and the restoration of the Demised Premises, Landlord shall determine any such cost as called for in clause (ii) above prior to the termination of this Lease and Tenant shall reimburse Landlord within thirty (30) days of receipt of such notice.

 

8.2     After the time of initial occupancy of the Demised Premises by Tenant, Tenant shall have the right to construct and alter the Demised premises, subject to paragraph 8.1, provided, however, that such construction does not include any alterations affecting the exterior or structural components of the Building, or any material alterations to the systems of the Building, including, but not limited to HVAC, electric or plumbing. Any Tenant construction shall be performed by Tenant’s contractors and shall be solely Tenant’s responsibility. All of Tenant’s construction shall be at Tenant’s expense.

 

8.3     Prior to commencement of construction:

 

(a)  Landlord shall approve in writing (such approval not to be unreasonably withheld or delayed) the plans and specifications for any alterations to the Demised Premises, such approval by Landlord shall not be deemed to be an approval by Landlord of any work performed pursuant thereto or approval or

 

3



 

acceptance by Landlord of any material furnished with respect thereto or a representation by Landlord as to the fitness of such work or materials, and shall not give rise to any liability or responsibility of Landlord.

 

(b)  Landlord shall approve in writing (such approval not to be unreasonably withheld or delayed) each contractor and subcontractor (which shall each be of sound financial status and good reputation in the community and a duly licensed and qualified professional in the state and, to the extent necessary, township in which the Building is located) to perform such alterations.

 

(c)  Tenant shall deliver to Landlord a certificate evidencing each contractor’s liability, completed operations and worker’s compensation insurance and naming Landlord as an additional insured, which insurance shall be with a carrier, in amounts and otherwise on terms satisfactory to Landlord.

 

(d)  Each contractor shall execute and Tenant shall cause to be filed with the appropriate governmental agency in a timely manner such waivers and releases of liens and other documents necessary to insure against imposition of any mechanics’ and material suppliers’ liens for labor furnished and material supplied in connection with the alterations and improvements. Tenant shall deliver copies of such waivers and releases of liens to Landlord together with evidence of the timely filing thereof.

 

8.4     Tenant covenants and agrees:

 

(a)  To secure and pay for all necessary building and other permits and fees in connection with the alterations and improvements.

 

(b)  All construction shall be done in compliance with all applicable laws and ordinances and in a good and workerlike manner in accordance with the approved plans and specifications.

 

(c)  To obtain and deliver to Landlord a Certificate of Occupancy (or its equivalent) issued by the appropriate governmental authority upon completion of the construction of the Demised Premises.

 

(d)  To abide by any collective bargaining agreements or other union contracts applicable to Tenant, the Building or Landlord.

 

(e)  All materials, supplies and workers shall enter the Demised Premises and all work shall be performed at times and by means satisfactory to Landlord.

 

8.5     Tenant and any approved contractor, subcontractor or material supplier may, after notice to Landlord, enter the Demised Premises during reasonable times after the execution hereof for the purpose of constructing the improvements as aforesaid and inspecting and measuring the Demised Premises, provided that such entry does not, in Landlord’s reasonable judgment, interfere with the operations of the Building or with Landlord’s work therein, or that of any other tenants in the Building. Tenant shall be responsible of any and all damage or injury caused by such contractors, subcontractors, material suppliers and Tenant in the course of constructing the improvements, and Tenant’s obligation to indemnify, defend and hold Landlord harmless set forth in Article 14 shall, include without limitation all work done by Tenant pursuant to this paragraph 7 and shall commence on the date of execution hereof.

 

8.6     Landlord and its agents or other representatives shall be permitted to enter the Demised Premises to examine and inspect the construction of the alterations and improvements, provided, that no such inspection or examination shall constitute an approval or warranty or give rise to any liability of Landlord with respect to any thereof.

 

9.     COVENANTS OF LANDLORD. Landlord will supply for normal office use during normal business hours (excluding holidays), heat and air conditioning (except that, in the event that such utilities are separately metered and are paid for by Tenant, Landlord shall supply only the equipment for such utilities), elevator service (where applicable), janitorial and cleaning services, electricity, and hot and cold water, all in amounts consistent with services provided in similar buildings in the community, provided that: (i) Landlord shall not be liable for failure to supply or interruption of any such service by reason of any cause beyond Landlord’s reasonable control (ii) if Tenant’s use of electricity in Landlord’s judgement exceeds a normal office use level (which includes only customary office lighting levels and operation of desktop portable office equipment), Landlord may, at Tenant’s expense, install meters to measure the electricity consumed on the Demised Premises and bill Tenant for any cost thereof above normal office use levels; (iii) if Tenant requires janitorial and cleaning services beyond those provided by Landlord, Tenant shall arrange for such additional services through Landlord, and Tenant shall pay Landlord upon receipt of billing therefor; and (iv) if Tenant requires installation a separate or supplementary heating, cooling, ventilating and/or air conditioning system

 

4



 

Tenant shall pay all costs in connection with the furnishing, installation and operation thereof. Landlord shall be responsible, at its sole cost and expense, for structural repairs and capital improvements (unless otherwise provided for herein) to the Building, unless such repairs are necessitated by damage caused by the negligence or misconduct of Tenant or Tenant’s officers, directors, employees, invitees or agents.

 

10.   COVENANTS OF TENANT. Tenant will (at Tenant’s sole cost and expense):

 

10.1   Keep the Demised Premises in good order and repair, reasonable wear and tear expected;

 

10.2   Surrender the Demised Premises at the end of this Lease in the same condition in which Tenant has agreed to keep it during the Lease Term;

 

10.3   Not place, erect, maintain or display any sign or other marking of any kind whatsoever on the windows, doors or exterior walls of the Demised Premises and not use or place any curtains, blinds, drapes or coverings over any exterior windows or upon the window surfaces which are visible from the outside of the Building; except the Tenant shall be permitted to install its standard signage and logo on Tenant’s entrance door with the approval of Landlord (which approval shall not be unreasonably withheld or delayed), and Tenant shall be listed on the directories on the elevator lobby of Tenant’s floor, the Building lobby and Building exterior in the same manner as other tenants in the Building;

 

10.4   Be financially responsible for the maintenance of all plumbing and other fixtures in the Demised Premises, whether installed by Landlord or by Tenant and for repairs and replacements to the Demised Premises and the Building made necessary by reason of damage thereto caused by Tenant or its agents, servants, invitees or employees. In the event Tenant shall fail to perform such maintenance or make such repairs within sixty (60) days of the date such work becomes necessary, Landlord may, but shall not be required to, perform such work and charge the amount of the expense therefor, with interest accruing and payable thereon, all in accordance with Article 18 below;

 

10.5   Comply with all laws, enactments and regulations of any governmental authority relating or applicable to Tenant’s occupancy of the Demised Premises and any covenants, easements and restrictions governing the Land or Building, and indemnify, defend and hold Landlord harmless from all consequences from its failure to do so;

 

10.6   Promptly notify Landlord of any damage to or defects in the Demised Premises, any notices of violation received by Tenant and of any injuries to persons or property which occur therein or claims relating thereto;

 

10.7   Subject to Article 7, pay for any alterations, improvements or additions to the Demised Premises and any light bulbs, tubes and non-standard Building items installed by or for Tenant, and allow no lien to attach to the Building with respect to any of the foregoing;

 

10.8   Without the prior written consent of Landlord, not place within the Demised Premises or bring into the Building (i) any machinery, equipment or other personalty other than customary office furnishings and small machinery, or any machinery or (ii) other personalty having a weight in excess of the design capacity of the Building;

 

10.9   Not use the Demised Premises for the generation, manufacture, refining, transportation, treatment, storage or disposal of any hazardous substance or waste or for any purpose which poses a substantial risk of damage to the environment; in this regard Tenant represents that it does not have a Standard Industrial Classification number as designated in the Standard Industrial Classifications Manual prepared by the Office of Management and Budget in the Executive Office of the President of the United States that is any of 22-39 inclusive, 46-49 inclusive, 51 or 76 and will not engage in any activity which would subject Tenant to the provisions of the Federal Comprehensive Environmental Response, Liability and Clean-Up Act (42 U.S.C. Section 9601 etseg.), the Federal Water Pollution Control (33 U.S.C.A. Section 1151 et seg.), the Clean Water Act of 1977 (33 U.S.C.A. Section 1251 et seg.), or any other federal, state or local environmental law, regulation or ordinance;

 

10.10 Comply with all rules and regulations which may hereafter be promulgated by Landlord and with all reasonable changes and additions thereto upon notice by Landlord to Tenant (such rules and regulations, together with all changes and additions thereto, are part of this Lease); Landlord shall notify Tenant in writing at least fifteen (15) days prior to the promulgation of such rules and regulations or changes thereto. Landlord agrees to enforce such rules and regulations against all tenants in the Building in a non-

 

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discriminating fashion and to take reasonable action to cause a cessation of any violation of all rules that interfere with Tenant’s use and quiet enjoyment of the Premises;

 

10.11 Comply with all reasonable recommendations of Landlord’s or Tenant’s insurance carriers relating to layout, use storage of materials and maintenance of the Demised Premises.

 

11.   ASSIGNMENT AND SUBLETTING. Tenant shall not assign, pledge, mortgage or otherwise transfer or encumber this Lease, nor sublet all or any part of the Demised Premises or permit the same to be occupied or used by anyone other than Tenant or its employees without Landlord’s prior written consent (such consent not to be unreasonable withheld or delayed). Notwithstanding the foregoing, Tenant shall have the right to assign this Lease or sublet the Demised Premises or any part thereof, without the consent of Landlord, to any parent, subsidiary or affiliate of Tenant. Any consent by Landlord hereunder (or assignment where such consent is not required) shall not constitute a waiver of strict future compliance by Tenant of the provisions of this Article 11 or a release of Tenant from the full performance by Tenant with any of the terms, covenants, provisions or conditions in this Lease. For purposes of this Article 11, any transfer or change in control of Tenant (or any subtenant, assignee or occupant) by operation of law or otherwise, shall be deemed an assignment hereunder, including, without limitation, any merger, consolidation, dissolution or any change in the controlling equity interests of Tenant or any subtenant, assignee, or occupant (in a single transaction or a series of related transaction). Any assignment or subletting in contravention of the provisions of this Article 11 shall be void.

 

12.   EMINENT DOMAIN.   If the whole or more than fifty percent (50%) of the Demised Premises (or use or occupancy of the Demised Premises) shall be taken or condemned by an governmental or quasi-govemmental authority for any public or quasi-public use or purpose (including sale under threat of such a taking), or if the owner elects to convey title to the condemnor by a deed in lieu of condemnation, or if all or any portion of the Land or Building are so taken, condemned or conveyed and as a result thereof, in Landlord’s judgement, the Demised Premises cannot be used for Tenant’s permitted use as set forth herein, then this Lease shall cease and terminate as of the date when title vests in such governmental or quasi-governmental authority and the Fixed Rent and Additional Rent shall be abated on the date when such title vests in such governmental or quasi-governmental authority.  If less than fifty percent (50%) of the Demised Premises is taken or condemned by any governmental or quasi-governmental authority for any public or quasi-public use or purpose (including sale under threat of such a taking), the Fixed Rent and Tenant’s proportionate share shall be equitably adjusted )on the basis of the number of square feet before and after such event) on the date when title vests in such governmental or quasi-governmental authority and the Lease shall otherwise continue in full force and effect. In any case, Tenant shall have no claim against Landlord for any portion of the amount that may be awarded as damages as a result of any governmental or quasi-governmental taking or condemnation (or sale under threat or such taking or condemnation); and all rights of Tenant to damages therefor are hereby assigned by Tenant to Landlord. The foregoing shall not, however, deprive Tenant of any separate award for moving expenses, dislocation damages or for any other award which would not reduce the award payable to Landlord.

 

13.   CASUALTY DAMAGE.

 

13.1   In the event of damage to or destruction of the Demised Premises caused by fire or other casualty, or any such damage or destruction to the Building or the facilities necessary to provide services and normal access to the Demised Premises in accordance herewith, Landlord, after receipt of written notice thereof from Tenant, shall undertake to make repairs and restorations with reasonable diligence as hereinafter provided, unless this Lease has been terminated by Landlord or Tenant as hereinafter provided or unless any mortgagee which is entitled to receive casualty insurance proceeds fails to make available to Landlord a sufficient amount of such proceeds to cover the cost of such repairs and restoration. If (i) the damage is of such nature or extent that, in Landlord’s sole judgement, more than one hundred and twenty (120) days would be required (with normal work crews and hours) to repair and restore the part of the Demised Premises or Building which has been damaged, or (ii) the Demised Premises or Building is so damaged that, in Landlord’s sole judgement, it is uneconomical to restore or repair the Demised Premises or the Building, as the case may be, or (iii) less than two (2) years then remain on the current Lease Term, Landlord shall so advise Tenant promptly, and either party, in the case described in clause (i) above, or Landlord, in the cases described in clauses (ii) or (iii) above, within thirty (30) days after any such damage or destruction shall have the right to terminate this Lease by written notice to the other, as of the date specified in such notice, which termination date shall be no later than thirty (30) days after the date of such notice.

 

13.2   In the event of fire or other casualty damage, provided this Lease is not terminated pursuant to the terms of this Article 13 and is otherwise in full force and effect, and sufficient casualty insurance proceeds are available for application to such restoration or repair, Landlord shall proceed diligently to restore the Demised Premises to substantially its condition prior to the occurrence of the damage, Landlord shall not

 

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be obligated to repair or restore any alterations, additions, fixtures or equipment which Tenant may have installed (whether or not Tenant has the right or the obligation to remove the same or is required to leave the same on the Demised Premises as of the expiration or earlier termination of this Lease) unless Tenant, in a manner satisfactory to Landlord, assures payment in full of all costs as may be incurred by Landlord in connection therewith.

 

13.3   Landlord shall not insure any improvements or alterations to the Demised Premises in excess of Building standard tenant improvements, or any fixtures, equipment or other properly of Tenant. Tenant shall, at its sole expense, insure the value of its leasehold improvements, fixtures, equipment and personal property located in or on the Demised Premises, for the purpose of providing funds to Landlord to repair and restore the Demised Premises to substantially its condition prior to occurrences of the casualty occurrence. If there are any such alterations, fixtures or additions and Tenant does not assure or agree to assure payment of the cost of restoration or repair as aforesaid, Landlord shall have the right to restore the Demised Premises to substantially the same condition as existed prior to the damage, excepting such alterations, additions or fixtures.

 

13.4   The validity and effect of this Lease shall not be impaired in any way by the failure of Landlord to complete repairs and restoration of the Demised Premises or of the Building within one hundred and twenty (120) days after commencement of the work, even if Landlord had in good faith notified Tenant that the repair and restoration could be completed within such period, provided that Landlord proceeds diligently with such repair and restoration. In the case of damage to the Demised Premises which is of a nature or extent that Tenant’s continued occupancy is in the reasonable judgement of Landlord and Tenant substantially impaired, then the Annual Fixed Rent and Tenant’s Proportionate Share otherwise payable by Tenant hereunder shall be equitably abated or adjusted for the duration of such impairment. Tenant shall be responsible to repair all of Tenant’s leasehold improvements and all equipment, fixtures and personal property located in or on the Demised Premises subject to Article 8. and to such other conditions as Landlord may require.

 

14.   INSURANCE AND INDEMNIFICATION OF LANDLORD; WAIVER OF SUBROGATION.

 

14.1   Tenant covenants and agrees to exonerate, indemnify, defend, protect and save Landlord, its representatives and Landlord’s managing agent, if any, harmless from and against any and all claims, demands, expenses, losses, suits and damages as may be occasioned by reason of (i) any accident or matter occurring on or about the Demised Premises, causing injury to persons or damage to property (including, without limitation, the Demised Premises), unless such accident or other matter resulted solely from the negligence or otherwise tortious act of Landlord or Landlord’s agents or employees, (ii) the failure of Tenant fully and faithfully to perform the obligations and observe the conditions of this Lease, and (iii) the negligence or otherwise tortious act of Tenant or anyone in or about the Building on behalf of or at the invitation or right of Tenant. Tenant shall maintain in full force and effect, at its own expense, comprehensive general liability insurance (including a contractual liability and fire legal liability insurance endorsement) naming as an additional insured Landlord and Landlord’s managing agents, if any, against claims for bodily injury, death or property damage in amounts not less than $1,000,000 (or such higher limits as may be determined by Landlord from time to time) and business interruption insurance in an amount equal to Tenant’s gross income for twelve (12) months. All policies shall be issued by companies having a Best’s financial rating of A or better and a size class rating of XII (12) or larger or otherwise acceptable to Landlord.   At or prior to the Commencement Date, Tenant shall deposit the policy or policies of such insurance, or certificates thereof, with Landlord and shall deposit with Landlord renewals thereof at least fifteen (15) days prior to each expiration. Said policy or policies of insurance or certificates thereof shall have attached thereto an endorsement that such policy shall not be canceled without at least thirty (30) prior written notice to Landlord and Landlord’s managing agent, if any, that no act or omission of Tenant shall invalidate the interest of Landlord under said insurance and expressly waiving all rights of subrogation as set forth below. At Landlord’s request, Tenant shall provide Landlord with a letter from an authorized representative of its insurance carrier stating that Tenant’s current and effective insurance coverage complies with the requirements contained herein.

 

14.2   Landlord and Tenant hereby release the other from any and all liability or responsibility to the other or anyone claiming through or under them by way of subrogation or otherwise for any loss or damage to property covered by insurance then in force, even if any such fire or other casualty occurrence shall have been caused by the fault or negligence of the other party, or anyone for whom such party may be responsible. This release shall be applicable and in full force and effect, however, only to the extent of and with respect to any loss or damage occurring during such time as the policy or policies of insurance covering said loss shall contain a clause or endorsements to the effect that this release shall not adversely affect or impair said insurance or prejudice the right of the insured to recover thereunder. To the extent available, Landlord

 

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and tenant further agree to provide such endorsements for said insurance policies agreeing to the waiver of subrogation as required herein.

 

15.   INSPECTION; ACCESS; CHANGES IN BUILDING FACILITIES.

 

15.1   Landlord and its agents or other representatives shall be permitted to enter the Demised Premises at reasonable times (i) to examine, inspect and protect the Demised Premises and the Building and (ii) during the last six (6) months of the original or any renewal term, to show it to prospective tenants and to affix to any suitable part of the exterior of the Building in which the Demised Premises is located a notice for letting the Demised Premises or the Building or (at any time during the original or any renewal term) selling the Building.

 

15.2   Landlord shall have access to and use of all areas in the Demised Premises (including exterior Building walls, core corridor walls and doors and any core corridor entrances), any roofs adjacent to the Demised Premises, and any space in or adjacent to the Demised Premises used for shafts, stacks, pipes, conduits, fan rooms, ducts, electric or other utilities, sinks or other Building facilities, as well as access to and through the Demised Premises for the purpose of operation, maintenance, decoration and repair, provided, however, that except in emergencies such access shall not be exercised so as to interfere unreasonable with Tenant’s use of the Demised Premises. Tenant shall permit Landlord to install, use and maintain pipes, ducts and conduits within the demising walls, bearing columns and ceilings of the Demised Premises, provided that the installation work is performed at such times and by such methods as will not materially interfere with Tenant’s use of the Demised Premises, materially reduce the floor area thereof or materially and adversely affect Tenant’s layout, and further provided that Landlord performs all work with due diligence and care so as to not damage Tenant’s property or the Demised Premises. Landlord and Tenant shall cooperate with each other in the location of Landlord’s and Tenant’s facilities requiring such access.

 

15.3   Landlord reserves the right at any time, without incurring any liability to Tenant therefor, to make such changes in or to the Building and the fixtures and equipment thereof, as well as in or to the street entrances, halls, foyers, passages, elevators, if any, and stairways thereof, as it may deem necessary or desirable; provided that there shall be no change that materially detracts from the character or quality of the Building.

 

16.   DEFAULT.  Any other provisions in this Lease notwithstanding, it shall be an event of default (“Event of Default”) under this Lease if: (i) Tenant fails to pay any installment of Fixed Rent, Additional Rent or other sum payable by Tenant hereunder when due and such failure continues for a period of five (5) days after written notice of such non-payment be Landlord to Tenant (which written notice shall not be required more than two times in any period of twelve (12) consecutive months), or (ii) Tenant fails to observe or perform any other covenant or agreement of Tenant herein contained and such failure continues after written notice given by or on behalf of Landlord to Tenant for more than thirty (30) days, or (iii) Tenant uses or occupies the Demised Premises other than as permitted hereunder, or (iv) Tenant assigns or sublets, or purports to assign or sublet, the Demised Premises or any part thereof other than in the manner and upon the conditions set forth herein, or (v) Tenant abandons or vacates the Demised Premises or, without Landlord’s prior written consent, Tenant removes or attempts to remove or manifests an intention to remove any or all of Tenant’s property from the Demised Premises other than in the ordinary and usual course of business, or (vi) Tenant (which, for purposes of this clause, includes any guarantor hereunder) files a petition commencing a voluntary case, or has filed against it a petition commencing an involuntary case, under the Federal Bankruptcy Code (Title 11 of the Unites States Code), as now or hereafter in effect, or under any similar law, or files or has filed against it a petition or answer in bankruptcy or for reorganization or for an arrangement pursuant to any state bankruptcy law or any similar state law, and, in the case of any such involuntary action, such action shall not be dismissed, discharged or denied within sixty (60) days after the filing thereof, or Tenant consents or acquiesces in the filing thereof, or (vii) if Tenant is a banking organization, Tenant files an application for protection, voluntary liquidation or dissolution applicable to banking organization, or (viii) a custodian, receiver, trustee or liquidator of Tenant or of all or substantially all of Tenant’s property or of the Demised Premises shall be appointed in any proceedings brought by or against Tenant and, in the latter case, such entity shall not be discharged within sixty (60) days after such appointment or Tenant consents to or acquiesces in such appointment, or (ix) Tenant shall generally not pay Tenant’s debts as such debts become due, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or (x) any of the foregoing occurs as to any guarantor or surety of Tenant’s performance under this Lease, or such guarantor or surety defaults on any provision under its guaranty or suretyship agreement. The notice and grace period provisions in clauses (i) and (ii) above shall have no application to the Events of Default referred to in clauses (iii) through (ix) above or, to the extent applicable (x).

 

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17.   LANDLORD’S REMEDIES.

 

17.1   In the event of any Event of Default, Landlord at any time thereafter may at its option exercise any one or more of the following remedies:

 

(a)  Termination of Leases. Landlord may terminate this Lease, by written notice to Tenant, without any right by Tenant to reinstate its rights by payment of rent due or other performance of the terms and conditions hereof. Upon such termination Tenant shall immediately surrender possession of the Demised Premises to Landlord, and Landlord shall immediately become entitled to receive from Tenant an amount equal to the difference between the aggregate of all Fixed Rent and Additional Rent reserved under this Lease for the balance of the Lease Term, and the fair rental value of the Demised Premises for that period, determined as of the date of such termination.

 

(b)  Reletting. With or without terminating this Lease, as Landlord may elect, Landlord may re-enter and repossess the Demised Premises, or any part thereof, and lease them to any other person upon such terms as Landlord shall deem reasonable, for a term within or beyond the term of this Lease; provided, that any such reletting prior to termination shall be for the account of Tenant, and Tenant shall remain liable for (i) all Annual Fixed Rent, Additional Rent and other sums which would be payable under this Lease by Tenant in the absence of such expiration, termination or repossession, less (ii) the net proceeds, if any, of any reletting effected for the account of Tenant after deducting from such proceeds all of Landlord’s expenses, attorneys’ fees and expenses, employees’ expenses, reasonable alteration costs, expenses of preparation for such reletting and all costs and expenses, direct or indirect, incurred as a result of Tenant’s breach of the Lease. Landlord shall have no obligation to relet the Demised Premises if Landlord, or any of its affiliates, shall have other comparable space available for rent. If the Demised Premises are at the time of default sublet or leased by Tenant to others, Landlord may, as Tenant’s agent, collect rents due from any subtenant or other tenant and apply such rents to the rent and other amounts due hereunder without in any way affecting Tenant’s obligation to Landlord hereunder. Such agency, being given for security, is hereby declared to be irrevocable.

 

(c)  Acceleration of Rent. Landlord may declare Fixed Rent and all items of Additional Rent (the amount thereof to be based on historical amounts and Landlord’s estimates for future amounts) for the entire balance of the then current Lease Term immediately due and payable, together with all other charges, payments, costs, and expenses payable by Tenant as though such amounts were payable in advance on the date the Event of Default occurred.

 

(d)  Removal of Contents by Landlord. With respect to any portion of the Demised Premises which is vacant or which is physically occupied by Tenant, Landlord may remove all persons and property therefrom, and store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant, without service of notice or resort to legal process (all of which Tenant expressly waives) and without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby. Landlord shall have a lien for the payment of all sums agreed to be paid by Tenant herein upon all Tenant’s property, which lien is to be in addition to Landlord’s lien now or hereafter provided by law.

 

(e)  Right of Distress and Lien. In addition to all other rights and remedies of Landlord, if an Event of Default shall occur, Landlord shall, to the extent permitted by law, have a right of distress for rent and lien on all of Tenant’s fixtures, merchandise and equipment in the Demised Premises, as security for rent and all other charges payable hereunder.

 

(f)   Tenant hereby empowers an attorney of any Court of Record to appear for Tenant in any and all actions which may be brought for rent and/or the charges, payments, costs, and expenses herein reserved as rent, or herein agreed to be paid by Tenant and/or to sign for Tenant an agreement for entering in any competent Court and action to confess judgment, or actions for the recovery of such rent or other charges or expenses in said suits or in said action or actions to confess judgment against Tenant for all or part of the rent specified in this Lease and then due and unpaid, and other charges, payments, costs, and expenses reserved as rent or agreed to be paid by Tenant and then due and unpaid; and for interest and costs and attorney’s fees of fifteen percent (15%) of the amount due by Tenant. Such authority shall not be exhausted by one exercise thereof, but judgment may be confessed as aforesaid from time to time as often as any said rent and/or other charges reserved as rent or agreed to be paid by Tenant shall fall due or be in arrears.

 

(g)  Upon the expiration of the then current term of this lease of the earlier termination or surrender hereof as provided in this lease, it shall be lawful for any attorney to appear as attorney for Tenant as well as for all persons claiming by, through or under Tenant and to sign an agreement for entering in any competent Court an action to confess judgment in ejectment against Tenant and all persons claiming by, through or under Tenant and therein confess judgment for the recovery by Landlord of possession of the

 

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premises, for which this lease (or a copy thereof) shall be its sufficient warrant, whereupon, if Landlord so desires, a writ of possession or the appropriate writ under the Rules of Civil Procedure then in effect may issue forthwith, without any prior writ or proceedings; provided, however, if for any reason after such action shall have commenced, the same shall be determined and possession of the premises remain in or be restored to Tenant, Landlord shall have the right for the same default and upon any subsequent default or defaults, or upon expiration of the term of this lease to bring one more further action to confess judgment or actions as hereinbefore set forth to recover possession of the premises and confess judgment for the recovery of possession of the premises as hereinbefore provided.

 

(h)  In any action to confess judgment in ejectment and/or for rent in arrears, Landlord shall first cause to be filed in such action an affidavit made by him or someone acting for him, setting forth the facts necessary to authorize the entry of judgment, and, if a true copy of this lease (and of the truth of the copy such affidavit shall be sufficient evidence) be filed in such action, it shall not be necessary to file in such action, it shall not be necessary to file the original as a warrant of attorney, and rule of Court, custom or practice to the contrary notwithstanding Tenant hereby releases to Landlord and to any and all attorneys who may appear for Tenant all errors in said proceedings and all liability therefor. If proceedings shall be commenced by Landlord to recover possession under the Acts of Assembly and Rules of Civil Procedure, either at the end of the term or earlier termination of this lease, or for non-payment of rent or any other reason, Tenant specifically waives the right to the three months’ notice and to the fifteen or thirty days’ notice required by the Landlord and Tenant Act of 1951, and agrees that five days’ notice shall be sufficient in either or any such case.

 

17.2   Injunction. In the event of breach or threatened breach by Tenant of any provision of this Lease, Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity in addition to other remedies provided for herein.

 

17.3   Waiver of Redemption. Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future law in the event this Lease is terminated, or in the event of Landlord obtaining possession of the Demised Premises, or Tenant is evicted or dispossessed for any cause, by reason of violation by Tenant of any of the provisions of this Lease.

 

17.4   Not Exclusive Right. No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy herein or by law provided, but each shall be cumulative and in addition to every other right or remedy given herein or now or hereafter existing at law or in equity by statute.

 

17.5   Expenses. In the event that Landlord commences suit for the repossession of the Demised Premises, for the recovery or rent or any other amount due under the provisions of this Lease, or because of the breach of any other covenant herein contained on the part of Tenant to be kept or performed, and a breach shall be established, Tenant shall pay to Landlord all expenses incurred in connection therewith, including reasonable attorneys’ fees.

 

18.   LANDLORD’S RIGHT TO CURE TENANT’S DEFAULT. If Tenant defaults in the making of any payment or in the doing of any act herein required to be made or done by Tenant, then Landlord may, but shall not be required to, make such payment or do such act, and charge the amount of Landlord’s expense to Tenant, with interest accruing and payable thereon at the Default Rate as of the date of the expenditure by Landlord or as of the date of payment thereof by Tenant, whichever is higher, from the date paid or incurred by Landlord to the date of payment hereof by Tenant; provided, however, that nothing herein contained shall be construed or implemented in such a manner as to allow Landlord to charge or receive interest in excess of the maximum legal rate then allowed by law. Such payment and interest shall constitute Additional Rent hereunder due and payable with the next monthly installment of Fixed Rent; but the making of such payment or the taking of such action by Landlord shall not operate to cure such default by Tenant or to estop Landlord from the pursuit of any remedy to which Landlord would otherwise be entitled.

 

19.   ESTOPPEL CERTIFICATE.  Tenant shall immediately prior to occupancy execute Tenant Estoppel Certificate as provided for herein and attached hereto as Exhibit “G”, and from time to time, at the request of Landlord, upon ten (10) business days notice, execute and deliver to Landlord a statement provided by Landlord to Tenant, it being intended that any such statement delivered pursuant hereto may be relied upon by others with whom Landlord may be dealing. Failure to execute said Estoppel Certificate shall constitute a default under this lease.

 

20.   HOLDING OVER.   If Tenant retains possession of the Demised Premises or any part thereof after the termination of this Lease or expiration of the Lease Term or otherwise in the absence of any written

 

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agreement between Landlord and Tenant concerning any such continuance of the term, Tenant shall pay Landlord (1) as liquidated damages for such holding over alone, an amount, calculated on a per diem basis for each day of such unlawful retention, equal to the greater of (a) twice the Annual Fixed Rent, or (b) the established market rental for the Demised Premises, for the time Tenant thus remains in possession, plus, in each case, all Additional Rent and other sums payable hereunder, and (ii) all other damages, costs and expenses sustained by Landlord by reason of Tenant’s holding over. Without limiting any rights and remedies of Landlord resulting by reason of the wrongful holding over by Tenant, or creating any right in Tenant to continue in possession of the Demised Premises, all Tenant’s obligations with respect to the use, occupancy and maintenance of the Demised Premises shall continue during such period of unlawful retention.

 

21.   RELOCATION OF TENANT.   Landlord, at its sole expense, on at least thirty (30) days prior written notice to Tenant, may require Tenant to move from the Premises to another suite of comparable size and decor in the Building or in the Business Park in order to permit Landlord to consolidate the Premises with other adjoining space or to be leased to another tenant in the Building. In the event of any such relocation, Landlord shall pay all the expenses of preparing and decorating the new premises so that they will be substantially similar to the Premises and shall also pay the expenses of moving Tenant’s furniture and equipment to the new premises.

 

22.   SURRENDER OF DEMISED PREMISES. Tenant shall, at the end of the Lease Term, or any extension thereof, promptly surrender the Demised Premises in good order and condition and in conformity with the applicable provisions of this Lease, excepting only reasonable wear and tear.

 

23.   SUBORDINATION AND ATTORNMENT. This Lease and the estate, interest and rights hereby created are subordinate to any mortgage now or hereafter placed upon the Building or the Land or any estate or interest therein, including, without limitation, any mortgage on any leasehold estate, and to all renewals, modifications, consolidations, replacements and extensions of the same as well as any substitutions therefor, as provided for on the attached Exhibit “F”. Tenant agrees that in the event any person, firm, corporation or other entity acquires the right to possession of the Building or the Land, including any mortgagee or holder of any estate or interest having priority over this Lease, Tenant shall, if requested by such person, firm, corporation or other entity, attorn to and become the tenant of such person, firm, corporation or other entity, upon the same terms and conditions as are set forth herein for the balance of the Lease Term. Notwithstanding the foregoing, any mortgagee may, at any time, subordinate its mortgage to this Lease, without Tenant’s consent, by notice in writing to Tenant, and thereupon this Lease shall be deemed prior to such mortgage without regard to their respective dates of execution and delivery, and in that event, such mortgagee shall have the same rights with respect to this Lease as though it had been executed prior to the execution and delivery of the mortgage. Tenant, if requested by Landlord, shall execute any such instruments in recordable form as may be reasonably required by Landlord in order to confirm or effect the subordination or priority of this Lease, as the case may be, and the attornment of Tenant to future landlords in accordance with the terms of this Article. Landlord shall furnish to Tenant a non-disturbance agreement from the holder of such mortgage providing that so long as Tenant is not in default of this Lease Tenant’s occupancy shall not be disturbed and the obligations of Landlord will continue to be performed.

 

24.   BROKERS. Each party represents and warrants to the other that it, he, she or they have not made any agreement or taken any action which may cause anyone to become entitled to a commission as a result of the transactions contemplated by this Lease, and each will indemnify and defend the other from any all claims, actual or threatened, for compensation by any such third person by reason of such party’s breach of its, his, her or their representation or warranty contained in the Article 23 except for KLNB, Inc.

 

25.   NOTICES. All notices or other communications hereunder shall be in writing and shall be deemed to have been given (i) if hand delivered or sent by an express mail or delivery service or by courier, then if and when delivered to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby), or (ii) if mailed, then on the next business day following the date on which such communication is deposited in the United States mails, by first class registered or certified mail, return receipt requested, postage prepaid, and addressed to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby). All notices and communications to Tenant may also be given by leaving the same at the Demised Premises during business hours.

 

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25.1    If to Landlord:

 

25.2   If to Tenant:

 

26.   MISCELLANEOUS.

 

26.1   Successors and Assigns. The obligations of this Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that Landlord and each successive owner of the Building and/or the Land shall be liable only for obligations accruing during the period of its ownership or interest in the Building, and from and after the transfer by Landlord or such successive owner of its ownership or other interest in the Building, Tenant shall look solely to the successors in title for the performance of Landlord’s obligations hereunder arising thereafter.

 

26.2   Waivers. No delay or forbearance by Landlord in exercising any right or remedy hereunder or in undertaking or performing any act matter which is not expressly required to be undertaken by Landlord shall be construed, respectively, to be a waiver of Landlord’s rights or to represent any agreement by Landlord to undertake or perform such act or matter thereafter.

 

26.3   Waiver of Trial by Jury. Tenant hereby consents to the exclusive jurisdiction of the courts of the state where the Demised Premises are located and in any and all actions or proceedings arising hereunder or pursuant hereto, and irrevocably agrees to service of process in accordance with Article 24 above. Landlord and Tenant agree to waive trial by jury in any action, proceeding or counterclaim brought by either of the parries hereto against the other on any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant’s use of or occupancy of the Demised Premises and/or any claim of injury or damage and any emergency or any other statutory remedy.

 

26.4   Limitation of Landlord’s Liabilities. Tenant shall look solely to the Demised Premises and rents derived therefrom and Landlord’s insurance proceeds for enforcement of any obligation hereunder or by law assumed or enforceable against Landlord, and no other property or other assets of Landlord shall be subjected to levy, execution or other enforcement procedure for the satisfaction of Tenant’s remedies or with respect to this Lease, the relationship of Landlord and tenant hereunder or Tenant’s use and occupancy of the Demised Premises.

 

26.5   Time of the Essence. All times, wherever specified herein for the performance by Landlord or Tenant of their respective obligations hereunder, are of the essence of this Lease.

 

26.6   Severability. Each covenant and agreement in this Lease shall for all purposes be construed to be a separate and independent covenant or agreement. If any provision in this Lease or the application thereof shall to any extent be invalid, illegal or otherwise unenforceable, the remainder of this Lease, and the application of such provision other than as invalid, illegal or unenforceable, shall not be affected thereby; and such provisions in this Lease shall be valid and enforceable to the fullest extent permitted by law.

 

26.7   Amendment and Modification. This Lease, including all Exhibits hereto, each of which is incorporated in this Lease, contains the entire agreement between the parties hereto, and shall not be amended, modified or supplemented unless by agreement in writing signed by both Landlord and Tenant.

 

26.8   Headings and Terms. The title and headings and table of contents of this Lease are for convenience of reference only and shall not in any way be utilized to construe or interpret the agreement of the parties as otherwise set forth herein. The term “Landlord” and term “Tenant” as used herein shall mean, where appropriate, all persons acting by or on behalf of the respective parties, except as to any required approval, consents or amendments, modifications or supplements hereunder when such terms shall only mean the parties originally named on the first page of this Lease as Landlord and Tenant, respectively, and their agents so authorized in writing.

 

26.9   Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State of Maryland.

 

12



 

IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed on the day and year first above written.

 

 

LANDLORD:

 

BEAVER DAM LIMITED LIABILITY COMPANY

 

 

Witness:

By:

Frederick Smith, General Partner

 

 

 

 

 

 

/s/ Leiloni Reynolds

 

By:

  /s/ Frederick Smith

 

 

 

 

 

 

 

 

TENANT:

 

 

 

 

 

 

Witness:

 

By:

SBG GROUP

 

 

 

 

 

 

 

 

 

 

 

/s/ Leiloni Reynolds

 

By:

/s/ David B. Amy

 

 

 

Name:

David B. Amy

 

 

 

Title:

V.P. CFO

 

 

13



 

RENT SCHEDULE
RIDER #1

 

 

Year

 

Monthly

 

Annually

 

 

 

 

 

 

 

 

1

 

 

$

16,450.00

 

$

197,400.00

 

 

 

 

 

 

 

 

 

 

2

 

 

$

16,943.50

 

$

203,322.00

 

 

 

 

 

 

 

 

 

 

3

 

 

$

17,451.80

 

$

209,421.66

 

 

 

 

 

 

 

 

 

 

4

 

 

$

17,975.35

 

$

215,704.30

 

 

 

 

 

 

 

 

 

 

5

 

 

$

18,514.61

 

$

222,175.43

 

 

 

 

 

 

 

 

 

 

6

 

 

$

19,070.05

 

$

228,840.70

 

 

 

 

 

 

 

 

 

 

7

 

 

$

19,642.16

 

$

235,705.92

 

 

 

 

 

 

 

 

 

 

8

 

 

$

20,231.42

 

$

242,777.10

 

 

 

 

 

 

 

 

 

 

9

 

 

$

20,838.36

 

$

250,060.41

 

 

 

 

 

 

 

 

 

 

10

 

 

$

21,463.51

 

$

257,562.22

 

 

14



 

EXHIBIT “B”

 

SPECIAL STIPULATIONS

 

Please Initial:

 

 

 

 

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 



 

ADDENDA TO SBG/BEAVER DAM LLC LEASE

 

Section 1. Demise Premises. Beaver Dam LLC will grant SBG/SCI first right of refusal on any space on the second floor as well as on the first floor.

 

Section 2. Lease Term. Beaver Dam LLC will grant a 5-year option with the rate not to exceed the fair market value of like space. However, in no instance will the rate be less than the rent paid for the last year on the current lease. The Lease term will begin the day the general contractor, Roy L. Kirby and Sons, has released the building to Beaver Dam LLC in compliance with state and county laws to function for public use. This release date would be the date that Sinclair Broadcast Group, Inc. would have full access to initiate occupancy or additional tenant improvements of their leased space. This date would be a minimum of 60 days after the tenant improvements are undertaken by the tenant. The projected occupancy date is currently July 1, 1999.

 

Section 3. Fixed Rent. See Exhibit C Addendum.

 

Section 7. Improvements to Premises. Add to Exhibit B: SBG/SCI will be allotted $15 per square foot of the rentable square feet as Tenant improvements. Beaver Dam LLC will provide a ceiling. The ceiling will be 2x2 or 2x4 grids which will be provided above and beyond the $15 per sq. ft. Tenant improvement allowance. This ceiling will be provided at no cost to SBG/SCI. All other improvements to the space will be at the expense of SBG/SCI.

 

Section 9. Covenants to Landlord. Normal business hours will be 8:00 A.M.-6:00 P.M., Monday-Friday, 9:00 A.M.-l :00 P.M., Saturday, no holidays or Sundays.

 

Section 10. Covenants of Tenant. If allowed by law, signage will be present on the parking lot as well as a first floor lobby directory. At this time, it is the intent of Beaver Dam LLC to place an external sign fixed to the building which will read “Sinclair”.

 

Section 11. Assignment and Subletting. The Tenant will have the right to assign their lease to the purchaser of the Tenant’s business. The purchase of said business will have the identical responsibilities to the Landlord as did the Tenant/seller of the business. Assignee must have a net worth equal to or greater than that of the Tenant as of the Lease Commencement Date and as of the effective date of the proposed assignment or subletting.

 

Section 21. Allocation of Tenant. Delete section.

 

Section 24. Broker. KLNB, Inc. is the agent of the Landlord. The Landlord is responsible for KLNB’s fees.

 

Exhibit C. Provision regarding additional rent and adjustment to fix rent. As a point of clarification, the baseline for operating expenses will be established during the first year

 

15



 

of the Tenant’s lease. This will be covered by the Tenant’s sq. ft. cost. However, at the beginning of the second year of the lease, any increases in costs above the Year 1 baseline related to items under Exhibit “C” will be paid by the Tenant’s on a pro-rata per sq. ft. share.

 

16



 

EXHIBIT “C”

 

PROVISIONS REGARDING ADDITIONAL RENT AND ADJUSTMENTS TO FIX RENT

 

1.   Definitions.

 

A.          Essential Capital Improvements” shall mean (a) a labor saving device, energy saving device or other installation, improvement or replacement which is intended to reduce Operating Expenses, whether or not voluntary or required by governmental mandate, or (b) an installation or improvement required by reason of any law, ordinance or regulation which did not exist on the date of the execution of this Lease, or (c) an installation or improvement intended to improve the safety of tenants in the Building generally, whether or not voluntary or required by governmental mandate.

 

B.           Operating Expense Allowance” shall mean and equal -Tenant’s Proportionate Share of the amount of Operating Expenses for the calendar year 1999.

 

C.           Operating Expenses” shall mean all of Landlord’s operating costs and expenses of whatever kind or nature paid or incurred in the operation and maintenance of the Building and the Land, all computed on the accrual basis and in accordance with the terms of this Lease, including, but not limited to, the following:

 

1.     Gas, electricity, steam, fuel, water, sewer and other utility charges (including surcharge’s) of whatever nature (excluding use of utilities by other tenants such as may be submetered or separately metered pursuant to their leases);

 

2.     Insurance premiums and the amounts of any deductibles paid by Landlord;

 

3.     Building personnel costs, including, but not limited to, salaries, wages, fringe benefits, taxes, insurance and other direct and indirect costs;

 

4.     Costs of service and maintenance contracts including, but not limited to, cleaning and security services;

 

5.     All other maintenance and repair expenses (excluding repairs and general maintenance paid by proceeds of insurance or by Tenant or other third parties, and alterations solely attributable to tenants of the Building other than Tenant) and the cost of materials and supplies;

 

6.     Any other costs and expenses (i.e. items which are not capital improvements) incurred by Landlord in operating the Building, including ground rent, if any;

 

7.     The cost of any additional services not provided to the Building on the Commencement Date but thereafter provided by Landlord in the prudent management of the Building;

 

8.     The annual amortization of any Essential of Capital Improvement which is made by Landlord after completion of initial construction of the Building, based on the useful life of the improvement plus interest at the Prime Rate on the date of the expenditure on the underappreciated portion thereof;

 

9.     Landlord’s central office accounting costs and overhead applicable to the Building;

 

10.   Accounting fees for preparing the Operating Expense statement;

 

11.   Management fees payable to the managing agent; and

 

12.   Taxes, allocated on a per diem basis if the tax year is different than the Operating Year.

 

Please Initial:

 

 

 

 

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 

C-1



 

Operating Expenses shall not include:

 

1.     Special cleaning or other services, not offered to all tenants of the Building;

 

2.     Any charge for depreciation, interest or rents (except, if applicable) (ground rents) paid or incurred by Landlord; or

 

3.     Leasing commissions.

 

If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would constitute and Operating Expense) to a tenant who has undertaken to perform such work or service in lieu of performance by Landlord, Operating Expenses shall nevertheless be deemed to include the amount Landlord would reasonably have incurred if Landlord has in fact performed the work or service at its expense.

 

Not withstanding the foregoing, Operating Expenses shall not include interest and amortization, depreciation, ground rents, expenses for work performed for other tenants in Building, expenses for repairs or other work occasioned by fire or other insurable casualty (to the extent covered by insurance), expenses for leasing or processing new tenants, leasing commissions, advertising expenses), legal expenses incurred in enforcing the terms of any tenant leases, salaries for any employees of Landlord above those attributable the management, operation and maintenance of the Building, incurred by Landlord in connection with the operation and maintenance of the Building.

 

D.    “Operating Year” shall mean each calendar year or such other period of twelve (12) months as hereafter may be adopted by Landlord as its fiscal year, occurring during the Lease Term.

 

E.     “Taxes” shall mean all taxes, assessments and governmental charges, whether Federal, state, county or municipal, and whether general or special, ordinary or extraordinary, foreseen or unforeseen, imposed upon the Building or the Land or their operation, whether or not directly paid by Landlord. Taxes shall not include income taxes, excess profit taxes, franchise taxes, or other taxes imposed or measured on or by the income of Landlord from the operation of the Building or the Land; provided, however, that if, due to a future change in the method of taxation or assessment, any income, profit, franchise or other tax, however designated, shall be imposed in substitution, in whole or in part, for (or in lieu of) any tax, assessment or charge which would otherwise be included within the definition of Taxes, such other tax shall be deemed to be included with Taxes as defined herein to the extent of such substitution. There shall be added to Taxes the expenses of any contests (administrative or otherwise) of Taxes incurred during the Operating Year. Tenant shall pay to the appropriate governmental authority any use and occupancy tax. In the event that Landlord is required by law to collect such tax, Tenant shall pay such use and occupancy tax to Landlord as Additional Rent upon demand and Landlord shall remit any amounts so paid to Landlord to the appropriate governmental authority.

 

F.     “Tenants’s Proportionate Share” shall mean a fraction; the numerator of which shall be the rentable square feet of Demised Premises, and the denominator of which is 74,200 rentable square feet which is the aggregate rentable square feet in the Building.

 

2.             Additional Rent for Operating Expenses.

 

2.1   Commencing on August 1, 1999, Tenant shall pay during the Lease Term as Additional Rent, the amount by which Tenants’ Proportionate Share of Operating Expenses exceeds the Operating Expense Allowance.

 

2.2   As soon as available in each Operating Year during the Lease Term, Landlord shall provide Tenant with a written statement setting forth the Operating Expense Allowance and a projection of Tenant’s Proportionate Share of Operating Expenses for such year commencing on the first day of the first month following receipt of such statement and continuing until receipt by Tenant of Landlord’s statement of the next projected Tenant’s Proportionate Share of Operating Expenses, Tenant shall pay to Landlord with each monthly installment of Fixed Rent an amount equal to one-twelfth (1/12th) of the excess of such projected Tenant’s Proportionate Share of Operating Expenses over the Operating Expense Allowance. Concurrently with the first payment required hereinabove, Tenant shall pay to Landlord an amount equal to the excess of such projected Tenant’s Proportionate Share of Operating Expenses over the Operating Expense Allowance multiplied by a fraction, the numerator of which is the number of calendar months of the Operating Year in question which have elapsed prior to the due date of such first payment and the denominator of which is twelve (12), less any payments made by Tenant during said period on account of such excess Operating Expenses.

 

C-2



 

2.3   Landlord shall, as soon as possible after the close each such Operating Year, provide Tenant with a statement of the actual operating expenses for such period. Any underpayment by Tenant during such Operating Year due to the fact that projected Operating Expenses were less than actual Operating Expenses shall be paid to Landlord within 30 days after Tenant’s receipt of a statement for such deficiency. Any overpayment by Tenant due to the fact that projected Operating Expenses were greater than actual Operating Expenses for such year shall be credited to the next Additional Rent payable by Tenant under this Exhibit “C.” If the Operating Expenses are less than the Operating Expense Allowance, a credit or check will not be issued.

 

3.       Adjustment for Vacancies. In determining Operating Expenses for any Operating Year, if the Building was less than fully occupied during such entire year, or was not in operation during such entire year, then Operating Expenses shall be adjusted by Landlord to reflect the amount that such expenses would normally be expected to have been, in the reasonable opinion of Landlord, had the Building been fully occupied and operational throughout such year, except that in no event shall such adjustment result in an amount less than the actual Operating Expenses. Any such annualization shall be explained in Landlord’s statement under Section 2.3 hereof.

 

4.       Pro-Rations. Should this Lease commence or terminate at any time other than the first day of an Operating Year, the Additional Rent payable by Tenant on account of Operating Expenses shall be first calculated on the basis of the entire Operating Year and then pro-rated on the basis of the number of days of occupancy.

 

5.       Audit. Tenant shall have the right at all reasonable times within thirty (30) days after Landlord has provided Tenant with a statement of the actual Operating Expenses, and at its sole expense, to audit Landlord’s books and records relating to this Lease for that Operating Year.

 

6.       Minimums. Notwithstanding anything contained herein to the contrary, in no event shall Tenant’s Proportionate Share of Operating Expenses for any calendar year be less than the Operating Expense Allowance.

 

7.       Personal Property Taxes. Tenant will be responsible for ad valorem taxes on its personal property and on the value of the leasehold improvements in the Demised Premises to the extent that the same exceed Building Standard allowances (and if the taxing authorities do not separately assess Tenant’s leasehold improvements, Landlord may make a reasonable allocation of impositions to such improvements).

 

8.       Survival. If, upon expiration or termination of this Lease for any cause, the amount of any Additional Rent due hereunder has not yet been determined, an appropriate payment from Tenant to Landlord or refund from Landlord to Tenant, shall be made promptly after such determination.

 

C-3



 

EXHIBIT “D”

 

Please Initial:

 

 

 

 

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 



 

EXHIBIT “E”

RULES AND REGULATIONS

 

1.     The sidewalks, lobbies, passages, elevators and stairways shall not be obstructed or used by Tenant for any purpose other than ingress and egress from and to Tenant’s offices. Landlord shall in all cases retain the right to control or prevent access thereto of all persons whose presence, in the judgement of Landlord, shall be prejudicial to the safety, peace, character or reputation of the building or of any of the tenants.

 

2.     The toilet rooms, water closets, sinks, faucets, plumbing or other service apparatus of any kind shall not be used by Tenant for any purposes other than those for which they were designed and installed. No sweeping, rubbish, rags, ashes, chemicals or other refuse or injurious substances (which shall include medical waste) shall be placed therein or used in connection therewith by Tenant or left by Tenant in the lobbies, passages, elevators or stairways.

 

3.     Nothing shall be placed by Tenant on the outside of the building or on its window sills or projections. Skylights, windows, doors and transoms shall not be covered or obstructed by Tenant, and no window shades, blinds, curtains, screens, storm windows, awnings or other materials shall be installed or placed on any of the windows or in any of the window spaces, except as approved in writing by Landlord.

 

4.     No sign, lettering, insignia, advertisement, or notices shall be inscribed, painted, installed or placed on any window or in any window spaces or any other part of the outside or inside of the building, unless first approved in writing by Landlord. Names shall be placed on suite entrance doors for Tenant by Landlord and not otherwise, and at Tenant’s expense. In all instances the lettering is to be of design and form approved by Landlord.

 

5.     Tenant shall not place additional locks upon any doors and shall surrender all keys for all locks at the end of the tenancy.

 

6.     Tenant shall not do or commit, or suffer, or permit to be done or committed, any act or thing whereby, or in consequence whereof, the rights of other tenants will be obstructed or interfered with, or other tenants will in any other way be injured or annoyed. Tenant shall not use nor keep, nor permit to be used or kept in the building any matter having an offensive odor, nor any kerosene, gasoline, benzine, fuel, or other explosive or highly flammable material. No birds, fish or animals shall be brought into or kept in or about the premises.

 

7.     In order that the premises may be kept in good state of preservation and cleanliness, Tenant shall, during the continuance of its possession, permit personnel and contractors approved by Landlord, and no one else, to clean the premises. Landlord shall be in no way responsible to Tenant for the removal, disposal or cleaning of any medical equipment or waste or for any damage done to furniture or other effects of Tenant or others by any of Tenant’s employees, or any persons, or for any loss of Tenant’s employees, or for any loss of property of any kind in or from the premises, however occurring. Tenant shall see each day that the windows are closed, the lights turned out, and doors securely locked before leaving the premises.

 

8.     If Tenant desires to introduce signaling, telegraphic, telephonic, protective alarm or other wires, apparatus or devices, Landlord shall direct when and how the same are to be placed, and except as so directed, no installation, boring or cutting shall be permitted. Landlord shall have the right to prevent and to cut off the transmission of excessive or dangerous current of electricity or annoyances into or through the building or premises and to require the changing of wiring connections or layout at Tenant’s expense, to the extent that Landlord may deem necessary, and further to require compliance with such reasonable rules as Lessor may establish relating thereto, and in the event of non-compliance with the requirements or rules, Landlord shall have the right immediately to cut wiring or to do what it considers necessary to remove the danger, annoyance or electrical interference with apparatus in any part of the building. All wires installed by Tenant must be clearly tagged at the distributing boards and junction boxes, and elsewhere as required by Landlord, with the number of the office to which said wires lead, and for the purpose for which the wires respectively are used, together with the name of the concern, if any, operating same.

 

9.     No furniture, packages, equipment, supplies or merchandise of Tenant will be received in the building, or carried up or down in the elevators or stairways, except during such hours as shall be designated by Landlord, and Landlord in all cases shall also have the exclusive right to prescribe the method and manner in which the same shall be brought in or taken out of the building. Tenant shall in all cases have the right to exclude heavy furniture, safes, and other articles from the building which may be hazardous or to require them

 

Please Initial:

 

 

 

 

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 

E-1



 

to be located at designated places in the premises. The cost of repairing any damage to the building caused by taking in or out furniture, safes or any articles or any damage caused while the same be in the premises, shall be paid by Tenant.

 

10.    Without Landlord’s written consent, nothing shall be fastened to, nor shall holes be drilled or nails or screws driven into walls of partitions; nor shall walls or partitions be painted, papered, or otherwise covered or moved in any way, or marked or broken; nor shall any connection be made to electric wires for running fans or motors or other apparatus, devices or equipment; nor shall machinery of any kind other than customary small business machines be allowed on the premises; nor shall Tenant use any other method of heating, air conditioning or air cooling than that provided by Landlord. Telephones, switchboards and telephone wiring and equipment shall be placed only where designated by Landlord. No mechanics, other than those employed by Landlord, shall be allowed to work in or about the building without the written consent of Landlord first have been obtained.

 

11.    Access may be had by Tenant to the premises at any time, Access may be refused at Landlord’s election, unless the person seeking it is known to the watchman in charge, or has a pass issued by Landlord, or is properly identified to the watchman’s satisfaction. Landlord shall in no case be responsible for the admission or exclusion of any person. In case of invasion, hostile attack, insurrection, mob violence, riot, bomb threats, explosion fire or any casualty, Landlord reserves the right to bar or limit access to the building for the safety of occupants or protection of property.

 

12.    Landlord reserves the right to rescind, suspend or modify any rules or regulations, and to make such other rules or regulations as, in Landlord’s judgement, may from time to time be needed for the safety, care, maintenance, operation and cleanliness of the building, or for the preservation of good order therein. Tenant agrees to comply with new or modified regulations of any Federal, State or Municipal authority having appropriate jurisdiction or any regulatory agencies as they may affect the premises or building. Notice of any action by Landlord referred to in this paragraph, when given to Tenant, shall have the same force and effect as if originally made a part of the foregoing lease. But new rules and regulations will not, however, be unreasonably inconsistent with the proper and rightful enjoyment of the premises by Tenant under this lease.

 

13.    The use of rooms as sleeping quarters is prohibited at all times.

 

E-2



 

EXHIBIT “F”

SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT

 

THIS AGREEMENT, made as of the       day of                            , 19    , by and between                                           , a                                corporation, having an office at                                                     (the “Lender”), and                  , a                        corporation having an office at                                                                (the “Tenant”).

 

WITNESSETH:

 

WHEREAS, the Lender has made a loan (together with any present or future amendments or increases thereto, the “Loan”) to                            (“Landlord”) evidenced by a Promissory Note of Landlord (together with any present or future amendments or increases thereto, the “Note”) secured by a mortgage from the Landlord, as amended, increased, renewed, modified, consolidated, replaced, or extended being hereinafter referred to as the “Mortgage”, covering all of the Landlord’s right, title and interest in the land, buildings, improvements and other items of property described therein, located in Baltimore County, Maryland and more particularly described in Exhibit “A” annexed hereto and made a part hereof (said land, buildings, improvements, and such other property being hereinafter collectively referred to as the “Mortgaged Premises”) and further secured by an Assignment of Rents and Other Interest (together with any present or future amendments or increases thereto, the “Assignment Rents”), both recorded in the Office of the Recorder of Deeds of Baltimore County, Maryland:

 

WHEREAS, the Landlord and the Tenant entered into a lease dated as of                                                    , 19     , (said lease, as the same may be amended, renewed, modified, consolidated, replaced or extended being hereinafter referred to as the “Lease”), covering a portion of the Mortgaged Premises (the “Leased Premises”).

 

WHEREAS, the Assignment of Rents assigned to Lender all of Landlord’s right, title, interest in and to the Lease and any other present or future lease of all or any part of the Mortgaged Premises;

 

WHEREAS, the Lender, as a condition to making the loan secured by Mortgage, has required that the Lease be and continue to be subordinate in every respect to the Mortgage; and

 

WHEREAS, the parties hereto desire to effect the subordination of the lease to the Mortgage and to provide for the non-disturbance of the Tenant by the Lender;

 

NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency whereof are hereby acknowledged, Tenant and Lender, intending to be legally bound hereby, covenant and agree as follows:

 

1.         The Lease (and all provisions thereof, including any purchase option) shall at all times be subject and subordinate to the provisions of this Agreement in each and every respect to the Mortgage (and all provisions thereof) subject, nevertheless, to the provisions of this Agreement. The foregoing provision shall be self-operative; however, the Tenant, upon request, shall execute and deliver any certificate which the Landlord or the Lender may request to confirm said subordination by the Tenant.

 

2.         The Tenant certifies that (a) the Lease is presently in full force and effect and unmodified, except as noted in this Agreement, and constitutes the sole agreement between Landlord and Tenant relating to Tenant’s occupancy of the Leased Premises, (b) to the best of its knowledge, no event has occurred which constitutes a default under the Lease by the Landlord or which, with the giving of notice, the passage of time or both, would constitute a default by the Landlord under the Lease; (c) to the best of its knowledge, as of the date hereof Tenant has no charge, lien or claim of offset under the Lease and Landlord does not owe any sums to Tenant under the Lease or any other agreement. The full minimum monthly rental of $                                     is payable                        , and Tenant has been given no rent concessions or free rent other than as specifically set forth in the Lease. The Landlord shall be a third party beneficiary of the certifications as set forth in this paragraph.

 

3.         The Lease and rentals thereunder have been assigned to Lender as security for repayment of the Loan. Lender, as such assignee, hereby directs Tenant to pay to Landlord all rentals and other moneys due and to become due to Landlord under the Lease until receipt of further direction from Lender. Upon receipt by Tenant of subsequent direction from Lender, Tenant shall pay to Lender, or in accordance with such

 

Please Initial:

 

 

 

 

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 

F-1



 

subsequent directions of Lender, all such rentals and other sums due under the Lease, or amounts equal thereto. Tenant shall have no responsibility or ascertain whether such direction by Lender is permitted under the Mortgage or such Assignment of Rents and Other Interests. Landlord, by its execution of consent form attached hereto, consents to the foregoing.

 

4.           Tenant acknowledges that without the prior written consent of the Lender, or except as permitted by the terms of the lease that no modification of the Lease so as to materially reduce the rents and other charges payable thereunder, or shorten or extend or renew the term thereof or adversely affect the rights or increase the obligations of the Landlord thereunder, or prepay rents or other charges under the Lease for more than on month in advance. In the event of any default on the part of the Landlord under the Lease, Tenant will give written notice thereof to the Lender, or its successor or assigns whose name and address previously shall have been furnished to the Tenant in writing. Any right or remedy of Tenant resulting from or dependent upon such notice shall take effect only after notice is go given to the Lender. Performance by the Lender of any of the Landlord’s obligations under the Lease in accordance with the terms of the Lease shall satisfy provisions of the Lease requiring performance by the Landlord, and the Lender, exercising reasonably due diligence, shall have the reasonable additional period of time under the circumstances to complete such performance.

 

5.           If the interest of the Landlord under the Lease Premises shall be transferred by reason of a foreclosure action or other proceedings for enforcement of the Mortgage or pursuant to a transfer in lieu of foreclosure, the Tenant shall be bound to and shall attorn to the person acquiring the interests of the Landlord as a result of any such action or proceeding and such person’s successors and assigns (any of the foregoing being hereafter referred to as the “Successors”) upon the Successor succeeding to the interest of the Landlord in and to the Lease Premises. Said attornment shall be effective and self-operative without the execution of any further instruments. The Tenant, upon request, shall execute and deliver any certificate or other instrument necessary or appropriate which the Lender or the Successor may request to effect or confirm said attornment by the Tenant.

 

6.           If the interest of the Landlord under the Lease shall be transferred by reason of foreclosure or other proceedings for enforcement of the Mortgage or pursuant to a transfer in lieu of foreclosure then, except as provided in this Agreement, the Successor shall be bound to the Tenant under all of the terms, covenants, and conditions of the Lease for the balance of the term thereof remaining, with the same force and effect as if the Successor were the Landlord (but subject to Paragraph 7 below).

 

7.           The Successor shall not and shall not be deemed to (a) adopt or in any other manner be responsible or liable for any representations and warranties made by the Landlord in the Lease (b) be liable for any act, omission or default of Landlord or any prior Landlord and will not be subject to any offsets or defenses which the Tenant might have against Landlord or any prior Landlord, (c) be bound by any amendment or modification of the Lease or by any prepayment of rents or other charges under the Lease for more than one month unless such amendment, modification or prepayment was approved in writing by the Lender, (d) be liable to Tenant for any refund of any security deposit made by the Tenant pursuant to the Lease, except to the extent that the Successor has actually received that security deposit, or (e) be liable to Tenant in any event for any matter relating to the operation, maintenance, or condition of the Mortgaged Premises or Leased Premises prior to the date Successor acquires title to the Lease Premises. Any rights of the Tenant to terminate or cancel the Lease by reason of the failure of Landlord or any prior Landlord under the Lease to perform any of its obligations under the Lease shall be suspended if and while the Successor is exercising reasonably diligent efforts under the circumstances to cause such obligations to be performed. The obligations and liability of the Successor shall be limited to and enforceable only against the Successor’s estate and interest in the Leased Premises and not out of or against any other assets or properties of the Successor.

 

8.           Notwithstanding anything in the Lease to the contrary, if the interest of the Landlord under the Lease shall be transferred to the Successor, then (a) the Successor shall not be obligated to reconstruct the Leased Premises following a casualty or condemnation thereto.

 

9.           If Tenant is not in default hereunder or under the terms of the Lease, the Tenant will not be joined as a party defendant for the purpose of terminating the lease in any foreclosure action or proceeding which may be instituted or taken by the Lender, nor will the Tenant be evicted from the Leased Premises, nor will the Tenant’s leasehold estate under the Lease be terminated or disturbed, nor will any of the Tenant’s rights under the Lease be affected in any way by reason of any default under the Mortgage.

 

10.         This Agreement may not be modified except by an agreement in writing signed by the parties hereto or their respective successors in interest. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their respective heirs, representatives, successors and assigns.

 

F-2



 

11.         Upon a valid expiration or termination of the Lease for any reason, and provided the Lease shall not have been renewed or otherwise extended and Tenant shall have no right to possession of the Leased Premises, Tenant shall execute, acknowledge and deliver to the Landlord, the Lender, and the Successor, a certificate attesting to the expiration or termination of the Lease and waiving all rights to possession of the Leased Premises.

 

12.         All notices, demands or requests made pursuant to, under or by virtue of this Agreement must be in writing and mailed to the party to whom the notice, demand or request is being made by certified or registered mail, return receipt requested, at its address set forth above. Any party may change the place that notices and demands are to be sent by written notice delivered in accordance with this Agreement.

 

13.         This Agreement is fully integrated and not in need of parol evidence in order to reflect the intentions of the parties hereto. The parties hereto intend the literal words of this Agreement to govern the subject matter hereof and all prior negotiations, drafts and other extrinsic communications shall have no significance or evidentiary effect. This Agreement shall be the whole and only agreement between the parties hereto with regard to the subordination of the Lease and the leasehold interest of Tenant thereunder to the lien or charge of the Mortgage in favor of Lender, and shall supersede and control any prior agreements as to such, or any subordination, including, but not limited to, those provisions, if any, contained in the Lease which provide for the subordination of the Lease and the leasehold interest of Tenant thereunder to a deed or deeds of trust or to a mortgage or mortgages to be thereafter executed. In the event any one or more of the provisions of this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

 

14.         This Agreement shall continue in effect until all sums due by Landlord to Lender under the Note, the Mortgage and the Assignment of Rents have been paid in full.

 

15.         Tenant shall neither suffer nor itself manufacture, store, handle, transport, dispose of, spill, leak, dump any toxic or hazardous waste, medical waste or other waste products or substance (as they may be defined in any federal or state statue, rule or regulation pertaining to or governing such wastes, waste products or substances) on the Premises at any time during the term, or extended term, of the Lease, except in compliance with all applicable laws and regulations.

 

F-3



 

IN WITNESS WHEREOF, the parties hereto have hereunto caused this Agreement to be duly executed as of the day and year first above written.

 

 

LENDER:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BY:

 

 

 

 

 

 

 

 

 

 

TENANT:

 

 

 

 

 

 

 

 

BY:

 

 

 

 

 

 

 

 

 

 

CONSENT

 

 

 

 

 

The undersigned consents to the foregoing.

 

 

 

 

 

LANDLORD:

 

 

BEAVER DAM LIMITED LIABILITY COMPANY

 

 

 

 

 

 

 

BY:

 

 

 

 

F-4



 

EXHIBIT “G”

TENANT’S ESTOPPEL CERTIFICATE AND AGREEMENT

 

LANDLORD:

 

TENANT:

 

DATE OF LEASE:

 

PREMISES:

 

The undersigned (“Tenant”) hereby certifies to and agrees with                                                                     , its successors and assigns (“                 ”) that:

 

1.           Tenant has accepted possession of the Premises pursuant to the Lease. The Lease term commenced on                . The termination date of the Lease term, excluding renewals and extensions is                            .

 

2.           Any improvements required by the terms of the Lease to be made by Landlord have been completed to the satisfaction of Tenant in all respects, except for the “punchlist” items, if any, set forth on Schedule 1 attached hereto. Landlord has (as of the date hereof) fulfilled all of its duties under the Lease (except as otherwise set forth on Schedule 1). No sums are due by Landlord to Tenant under the Lease or any other agreement between Landlord and Tenant.

 

3.           The Lease has not been assigned, modified, supplemented or amended in any way. The Lease constitutes the entire agreement between the parties and there are no other agreements between Landlord and Tenant concerning the Premises.

 

4.           The Lease is valid and in full force and effect, and to the best of Tenant’s knowledge, neither Landlord nor Tenant is in default thereunder. Tenant has no defense, setoff or counterclaim against Landlord arising out of the Lease or in anyway relating thereto, or arising out of any other transaction between Tenant and Landlord, and no event has occurred and no condition exists, which with the giving of notice or the passage of time, or both, will constitute a default under the Lease.

 

5.           The monthly rent presently payable under the Lease is $                                  per month payable in advance. All rent and other sums due under the Lease are current and have been paid through                      , 19    .  No rent or other sum payable under the Lease has been paid more than one month in advance.

 

6.           All notices and other communications from Tenant to                     shall be in writing and shall be delivered or mailed by registered mail, postage paid, return receipt requested, addressed to               at:

 

or at such other address as               , a successor, purchaser, or transferee shall furnish to Tenant in writing.

 

7.           This certificate may not be modified, except by an agreement in writing signed by the parties hereto (or their respective successors and assigns) and                  . This Estoppel Certificate shall be binding on the undersigned, it successors and assigns (including future tenants under the Lease) and shall insure to the benefit of                           , it successors and assigns.

 

 

 

TENANT:

 

 

Attest/Witness:

 

 

 

 

 

BY:

 

 

 

 

 

 

 

 

 

DATE:

 

, 19

 

 

 

G-1



AGREEMENT OF LEASE

 

THIS AGREEMENT OF LEASE (“Lease”) is made this 25 day of May, 2000 by and between BEAVER DAM LIMITED LIABILITY COMPANY, a Maryland limited liability company, (“Landlord”) and SINCLAIR BROADCAST GROUP (“Tenant”).

 

Intending to be legally bound, Landlord and Tenant agree as set forth below.

 

1.                                       DEMISED PREMISES.  Landlord, for the term and subject to the provisions and conditions hereof, leases to Tenant, and Tenant rents from Landlord, the space (the “Demised Premises”) containing _ 1,148 rentable square feet, as shown on Exhibit “A” attached hereto and made part of hereof, in the building erected on certain land (the “Land”) located at 10706 Beaver Dam Road, Cockeysville, Maryland 21030, together with rights of ingress and egress thereto, and with the right in common with others to use, to the extent applicable, the elevators and common passageways, stairways, vestibules, and to pass over and park on that portion of land owned by Landlord and designated by the Landlord for Tenant’s parking.  The Building contains 90,000 rentable square feet.

 

2.                                       LEASE TERM.  The lease term (the “Lease Term”) shall commence on the commencement date (the “Commencement Date”) which shall be May 1, 2000, and shall continue until April 30, 2010 and thereafter unless extended or sooner terminated as provided herein.

 

3.                                       FIXED RENT.  Fixed rent (the “Fixed Rent”) is payable by Tenant beginning on the Commencement Date in monthly installations each equal to (See Rent Schedule - Rider#l), representing one-twelfth (1/12) of the annual Fixed Rent (the “Annual Fixed Rent”) equal to (See Rent Schedule - Rider#l), without prior notice or demand, and without any setoff or deduction whatsoever, in advance, on the first day of each month at such place as Landlord may direct.  Annual Fixed Rent shall include the Operating Expense Allowance as set forth in Section I (1) of Exhibit “C” hereto.  Annual Fixed Rent shall be subject to adjustment as provided in Section II of Exhibit “C” hereto.  In addition, if the Lease Term commences on a day other than the first day of a calendar month, Tenant shall pay to Landlord, on or before the Commencement Date of the Lease Term, a pro rata portion of the monthly installment of rent (Including Fixed Rent and any Additional Rent as herein provided), such pro rata portion to be based on the actual number of calendar days remaining in such partial month after the Commencement Date of the Lease Term.  If the Lease Term shall expire on other than the last day of a calendar month, such monthly installment of Fixed Rent and Additional Rent shall be prorated for each calendar day of such partial month.  If any portion of Fixed Rent, Additional Rent, or any other sum payable to Landlord hereunder shall be due and unpaid for more than five (5) days, the balance due shall be subject to and include a 10 percent penalty.  In addition, if any portion of Fixed Rent, Additional Rent or any other sum payable to Landlord hereunder shall be due and unpaid for more than five (5) days after written notice of non-payment by Landlord to Tenant (which written notice shall not be required more than two times in any period of twelve (12) consecutive months), it shall thereafter bear interest at a rate equal to three percent (3%) per annum greater than the highest prime rate of interest announced from time to time by NationsBank (or its successor) (the “Default Rate”), as the same may change from time to time, from the due date until the date of payment thereof by Tenant, provided, however, that nothing herein contained shall be construed or implemented in such a manner as to allow Landlord to charge or receive interest in excess of the maximum legal rate then allowed by law.

 

4.                                       ADDITIONAL RENT.  Tenant shall pay as additional rent (“Additional Rent”) its proportionate share of all operating expenses in the amounts and in the manner set forth in Exhibit “C” hereto and all other sums due hereunder.

 

5.                                       SECURITY DEPOSIT.  Tenant has deposited with Landlord the sum of One Thousand Six Hundred Twenty Six and 33/100 Dollars ($1,626.33) as security for the faithful performance and observance by Tenant of the terms, provisions and conditions of this Lease.  It is agreed that in the event Tenant defaults in respect of any of the terms, provisions and conditions of this Lease, including, but not limited to, the payment of rent and additional rent, Landlord may use, apply or retain the whole or any part of the security so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which Tenant is in default or for any sum which Landlord may expend or may be required to expend by reason of Tenant’s default in respect of any of the terms, covenants and conditions of this Lease, including but not limited to any damages or deficiency in the reletting of the leased premises, whether such damages or deficiency accrued before or after summary proceedings or other re-entry by Landlord.  In the event that Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease, the

 

Please Initial:

 

 

 

 

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 

1



 

security shall be returned to Tenant, without interest, after the date fixed as the end of the Lease and after delivery of entire possession of the leased premises to Landlord.  In the event of a sale of the land and building of which the leased premises form a part, hereinafter referred to as the Building, or leasing of the building, Landlord shall have the right to either transfer the security to the Tenant and Landlord shall thereupon be released by Tenant from all liability for the return of such security or transfer the security to the new Landlord in which case Tenant agrees to look to the new Landlord solely for the return of said security.  Tenant further covenants that it will not assign or encumber or attempt to assign or encumber the monies deposited herein as security and that neither Landlord nor its successors or assigns shall be bound by and such assignment, encumbrance, attempted assignment or attempted encumbrance.

 

In the event of any bankruptcy or other insolvency proceeding against Tenant, it is agreed that all such security deposit held hereunder shall be deemed to be applied by Landlord to rent, sales tax and other charges due to Landlord for the last month of the lease term and each preceding month until such security deposit is fully applied.

 

6.                                       USE OF DEMISED PREMISES.  Tenant covenants and agrees to use and occupy the Demised Premises for general office purposes and other uses incidental to and associated with Class A office buildings and only in conformity with the law.  Tenant shall not use or permit any use of the Demised Premises which creates any safety or environmental hazard, or which would: (i) be dangerous to the Demised Premises, the Building or other tenants, or (ii) be disturbing to other tenants of the Building, or (iii) cause any increase in the premium cost for any insurance which Landlord may then have in effect with respect the Building generally.

 

7.                                       IMPROVEMENTS TO PREMISES.

 

7.1.                              By Landlord.

 

7.1.1.  The Tenant shall cause detailed working drawings to be fully prepared at its expense by a designer of its choice, who shall consult with the Landlord in preparing the same, and shall deliver such working drawings to Landlord, on or before May 1, 2000.  Such working drawings must be in sufficient detail to allow Landlord to (a) calculate the cost of constructing all of Tenant’s improvements, and (b) obtain a building and any other necessary permits for the construction of Tenant’s improvements. Within five (5) days after Landlord provides Tenant with the calculations of the costs of constructing Tenant’s improvements, Tenant shall approve the working drawings and the costs of construction.  Any costs or expenses incurred by Landlord because of changes to the working drawings made by Tenant after final approval of the costs, shall be paid to the Landlord by the Tenant.  If (a)(i) the Tenant defaults in furnishing such working drawings to the Landlord by the time set forth above, (ii) the Tenant fails to give final approval to the working drawings and the costs by the time set forth above, (iii) the Tenant requests any changes to the working drawings after the Tenant has approved the costs of construction, or (iv) the Tenant has requirements in its working drawings that cause unreasonable delays in commencing or completing Tenant’s improvements, (b) as a result thereof, the Landlord is delayed in commencing and/or completing such improvements beyond the dates on which, but for such delay, the Landlord would in its reasonable judgment have commenced or completed them, and (c) such completion occurs after the date which would have been the Commencement Date, then (without altering or impairing the Landlord’s rights under the provisions of this Lease on account of such default, and without altering or impairing any other of Landlord’s rights, including, without limitation, such rights set forth in Section 5.1.2) the Commencement Date shall be the date which would have been the Commencement Date for purposes of the provisions of this Lease, had such delay not occurred.

 

7.1.2.  Allocation of costs.  The cost of such improvements shall be allocated between the Landlord and the Tenant in the following manner:

 

(a)  Except as is otherwise provided herein, the Landlord shall bear the expense of (i) providing and installing as part of such improvements those materials and other items of improvements, of such manufacture, design, capacity, finish and color, which are described in a schedule attached hereto as Exhibit B (hereinafter referred to as “the Standard Improvement Items”), (ii) to such maximum extent or in such maximum quantity (hereinafter referred to as “the Standard Allowance”) as is specified therein.  If the improvements to be made to the Premises pursuant to the provisions of this subparagraph utilize less or fewer than the Standard Allowance of any Standard Improvement Item, the Tenant shall receive no credit against the Rent or otherwise on account thereof.

 

(b)  The Landlord shall submit the working drawings, as provided by the Tenant, to the Landlord’s general contractor for the Building promptly upon their approval by the Landlord and the Tenant, for such contractor’s calculation of the price which it will charge for constructing such improvements.  The

 

2



 

Landlord shall notify the Tenant in writing of such price as calculated by such contractor (and shall in such notice allocate such price between (i) those of such improvements which are included in the Standard Allowance of Standard Improvement Items, and (ii) the remainder of such improvements), and the Tenant shall, at the Landlord’s option, be deemed to have approved such price and allocation for all purposes of the provisions of this Lease unless the Tenant gives the Landlord written notice to the contrary within five (5) days thereafter.  All improvements shall be done by Landlord’s general contractor.

 

(c)  If the improvements to be made to the Premises pursuant to the provisions of this subsection require materials or other items other than the Standard Improvement Items, and/or Standard Improvement Items in excess of the Standard Allowance, and the cost of constructing such improvements shall, if and to the extent that it exceeds the cost which would have been incurred if such improvements consisted only of the Standard Allowance of Standard Improvement Items, be borne by the Tenant. The Tenant shall pay the amount of such excess to the Landlord in two (2) equal installments, the first of which shall be due when such price and allocation are approved by the Tenant, as aforesaid, and the second of which shall be due at the Commencement Date.

 

7.1.3.  The Landlord shall use its reasonable efforts to complete such improvements promptly, but shall have no liability to the Tenant hereunder if prevented from doing so by reason of any (a) strike, lock-out or other labor troubles, (b) governmental restrictions or limitations, (c) failure or shortage of electrical power, gas, water, fuel oil, or other utility or service, (d) riot, war, insurrection or other national or local emergency, (e) accident, flood, fire or other casualty, (f) adverse weather condition, (g) other act of God, (h) inability to obtain a building permit or a certificate of occupancy, or (i) other cause similar or dissimilar to any of the foregoing and beyond the Landlord’s reasonable control.  In such event, (a) the Commencement Date shall (subject to the operation and effect of the provisions of paragraph 5.1.1) be postponed for a period equaling the length of such delay, (b) the Termination Date shall be determined pursuant to the provisions of subsection 1.1 by reference to the Commencement Date as so postponed, and (c) the Tenant shall accept possession of the Premises within ten (10) days after such completion.

 

7.2.                              Acceptance of possession.  Except for (a) latent defects or incomplete work which would not reasonably have been revealed by an inspection of the Premises made for the purpose of discovering the same when the Landlord delivers possession of the Premises to the Tenant, and (b) any other item of incomplete work set forth on a “punch list” prepared by the Tenant and approved in writing by the Landlord before such delivery of possession, by its assumption of possession of the Premises the Tenant shall for all purposes of the provisions of this Lease be deemed to have accepted them and to have acknowledged them to be in the condition called for hereunder.

 

8.                                       ALTERATIONS OR IMPROVEMENTS BY TENANT.

 

8.1                                 During the Lease Term, Tenant shall not make any alterations, additions, improvements, redecorating or other changes to the Demised Premises without the prior written approval (such approval not to be unreasonable withheld or delayed) of Landlord and then only in accordance with plans and specifications previously approved in writing by Landlord and subject to such conditions as Landlord may require, including, without limitations, that Tenant be required to pay for any increased cost to Landlord occasioned thereby or attributed thereto.  Prior to the termination of this Lease and without additional notice to Tenant by Landlord, Tenant shall either: (i) remove any such alterations or additions and repair any damage to the Building or the Demised Premises occasioned by their installation or removal and restore the Demised Premises to substantially the same condition as existed prior to the time when any such alterations or additions were made, or (ii) reimburse Landlord for the cost of removing such alterations or additions and the restoration of the Demised Premises.  Landlord shall determine any such cost as called for in clause (ii) above prior to the termination of this Lease and Tenant shall reimburse Landlord within thirty (30) days of receipt of such notice.

 

8.2                                 After the time of initial occupancy of the Demised Premises by Tenant, Tenant shall have the right to construct and alter the Demised premises, subject to paragraph 8.1, provided, however, that such construction does not include any alterations affecting the exterior or structural components of the Building, or any material alterations to the systems of the Building, including, but not limited to HVAC, electric or plumbing.  Any Tenant construction shall be performed by Tenant’s contractors and shall be solely Tenant’s responsibility.  All of Tenant’s construction shall be at Tenant’s expense.

 

8.3                                 Prior to commencement of construction:

 

(a)  Landlord shall approve in writing (such approval not to be unreasonably withheld or delayed) the plans and specifications for any alterations to the Demised Premises, such approval by Landlord shall not be deemed to be an approval by Landlord of any work performed pursuant thereto or approval or

 

3



 

acceptance by Landlord of any material furnished with respect thereto or a representation by Landlord as to the fitness of such work or materials, and shall not give rise to any liability or responsibility of Landlord.

 

(b)  Landlord shall approve in writing (such approval not to be unreasonably withheld or delayed) each contractor and subcontractor (which shall each be of sound financial status and good reputation in the community and a duly licensed and qualified professional in the state and, to the extent necessary, township in which the Building is located) to perform such alterations.

 

(c)  Tenant shall deliver to Landlord a certificate evidencing each contractor’s liability, completed operations and worker’s compensation insurance and naming Landlord as an additional insured, which insurance shall be with a carrier, in amounts and otherwise on terms satisfactory to Landlord.

 

(d)  Each contractor shall execute and Tenant shall cause to be filed with the appropriate governmental agency in a timely manner such waivers and releases of liens and other documents necessary to insure against imposition of any mechanics’ and material suppliers’ liens for labor furnished and material supplied in connection with the alterations and improvements.  Tenant shall deliver copies of such waivers and releases of liens to Landlord together with evidence of the timely filing thereof.

 

8.4                                 Tenant covenants and agrees:

 

(a)  To secure and pay for all necessary building and other permits and fees in connection with the alterations and improvements.

 

(b)  All construction shall be done in compliance with all applicable laws and ordinances and in a good and workerlike manner in accordance with the approved plans and specifications.

 

(c)  To obtain and deliver to Landlord a Certificate of Occupancy (or its equivalent) issued by the appropriate governmental authority upon completion of the construction of the Demised Premises.

 

(d)  To abide by any collective bargaining agreements or other union contracts applicable to Tenant, the Building or Landlord.

 

(e)  All materials, supplies and workers shall enter the Demised Premises and all work shall be performed at times and by means satisfactory to Landlord.

 

8.5                                 Tenant and any approved contractor, subcontractor or material supplier may, after notice to Landlord, enter the Demised Premises during reasonable times after the execution hereof for the purpose of constructing the improvements as aforesaid and inspecting and measuring the Demised Premises, provided that such entry does not, in Landlord’s reasonable judgment, interfere with the operations of the Building or with Landlord’s work therein, or that of any other tenants in the Building.  Tenant shall be responsible of any and all damage or injury caused by such contractors, subcontractors, material suppliers and Tenant in the course of constructing the improvements, and Tenant’s obligation to indemnify, defend and hold Landlord harmless set forth in Article 14 shall, include without limitation all work done by Tenant pursuant to this paragraph 7 and shall commence on the date of execution hereof.

 

8.6                                 Landlord and its agents or other representatives shall be permitted to enter the Demised Premises to examine and inspect the construction of the alterations and improvements, provided, that no such inspection or examination shall constitute an approval or warranty or give rise to any liability of Landlord with respect to any thereof.

 

9.                                       COVENANTS OF LANDLORD.  Landlord will supply for normal office use during normal business hours (excluding holidays), heat and air conditioning (except that, in the event that such utilities are separately metered and are paid for by Tenant, Landlord shall supply only the equipment for such utilities), elevator service (where applicable), janitorial and cleaning services, electricity, and hot and cold water, all in amounts consistent with services provided in similar buildings in the community, provided that: (i) Landlord shall not be liable for failure to supply or interruption of any such service by reason of any cause beyond Landlord’s reasonable control (ii) if Tenant’s use of electricity in Landlord’s judgement exceeds a normal office use level (which includes only customary office lighting levels and operation of desktop portable office equipment), Landlord may, at Tenant’s expense, install meters to measure the electricity consumed on the Demised Premises and bill Tenant for any cost thereof above normal office use levels; (iii) if Tenant requires janitorial and cleaning services beyond those provided by Landlord, Tenant shall arrange for such additional services through Landlord, and Tenant shall pay Landlord upon receipt of billing therefor; and (iv) if Tenant requires installation a separate or supplementary heating, cooling, ventilating and/or air conditioning system Tenant shall pay all costs in connection with the furnishing, installation and operation thereof.  Landlord shall

 

4



 

be responsible, at its sole cost and expense, for structural repairs and capital improvements (unless otherwise provided for herein) to the Building, unless such repairs are necessitated by damage caused by the negligence or misconduct of Tenant or Tenant’s officers, directors, employees, invitees or agents.

 

10.                                 COVENANTS OF TENANT.  Tenant will (at Tenant’s sole cost and expense):

 

10.1                           Keep the Demised Premises in good order and repair, reasonable wear and tear expected;

 

10.2                           Surrender the Demised Premises at the end of this Lease in the same condition in which Tenant has agreed to keep it during the Lease Term;

 

10.3                           Not place, erect, maintain or display any sign or other marking of any kind whatsoever on the windows, doors or exterior walls of the Demised Premises and not use or place any curtains, blinds, drapes or coverings over any exterior windows or upon the window surfaces which are visible from the outside of the Building; except the Tenant shall be permitted to install its standard signage and logo on Tenant’s entrance door with the approval of Landlord (which approval shall not be unreasonably withheld or delayed), and Tenant shall be listed on the directories on the elevator lobby of Tenant’s floor, the Building lobby and Building exterior in the same manner as other tenants in the Building;

 

10.4                           Be financially responsible for the maintenance of all plumbing and other fixtures in the Demised Premises, whether installed by Landlord or by Tenant and for repairs and replacements to the Demised Premises and the Building made necessary by reason of damage thereto caused by Tenant or its agents, servants, invitees or employees.  In the event Tenant shall fail to perform such maintenance or make such repairs within sixty (60) days of the date such work becomes necessary, Landlord may, but shall not be required to, perform such work and charge the amount of the expense therefor, with interest accruing and payable thereon, all in accordance with Article 18 below;

 

10.5                           Comply with all laws, enactments and regulations of any governmental authority relating or applicable to Tenant’s occupancy of the Demised Premises and any covenants, easements and restrictions governing the Land or Building, and indemnify, defend and hold Landlord harmless from all consequences from its failure to do so;

 

10.6                           Promptly notify Landlord of any damage to or defects in the Demised Premises, any notices of violation received by Tenant and of any injuries to persons or property which occur therein or claims relating thereto;

 

10.7                           Subject to Article 7, pay for any alterations, improvements or additions to the Demised Premises and any light bulbs, tubes and non-standard Building items installed by or for Tenant, and allow no lien to attach to the Building with respect to any of the foregoing;

 

10.8                           Without the prior written consent of Landlord, not place within the Demised Premises or bring into the Building (i) any machinery, equipment or other personalty other than customary office furnishings and small machinery, or any machinery or (ii) other personalty having a weight in excess of the design capacity of the Building;

 

10.9                           Not use the Demised Premises for the generation, manufacture, refining, transportation, treatment, storage or disposal of any hazardous substance or waste or for any purpose which poses a substantial risk of damage to the environment; in this regard Tenant represents that it does not have a Standard Industrial Classification number as designated in the Standard Industrial Classifications Manual prepared by the Office of Management and Budget in the Executive Office of the President of the United States that is any of 22-39 inclusive, 46-49 inclusive, 51 or 76 and will not engage in any activity which would subject Tenant to the provisions of the Federal Comprehensive Environmental Response, Liability and Clean-Up Act (42 U.S.C. Section 9601 et seg.), the Federal Water Pollution Control (33 U.S.C.A. Section 1151 et seg.), the Clean Water Act of 1977 (33 U.S.C.A. Section 1251 et seg.), or any other federal, state or local environmental law, regulation or ordinance;

 

10.10                     Comply with all rules and regulations which may hereafter be promulgated by Landlord and with all reasonable changes and additions thereto upon notice by Landlord to Tenant (such rules and regulations, together with all changes and additions thereto, are part of this Lease); Landlord shall notify Tenant in writing at least fifteen (15) days prior to the promulgation of such rules and regulations or changes thereto.  Landlord agrees to enforce such rules and regulations against all tenants in the Building in a non-discriminating fashion and to take reasonable action to cause a cessation of any violation of all rules that interfere with Tenant’s use and quiet enjoyment of the Premises;

 

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10.11                     Comply with all reasonable recommendations of Landlord’s or Tenant’s insurance carriers relating to layout, use storage of materials and maintenance of the Demised Premises.

 

11.                                 ASSIGNMENT AND SUBLETTING.  Tenant shall not assign, pledge, mortgage or otherwise transfer or encumber this Lease, nor sublet all or any part of the Demised Premises or permit the same to be occupied or used by anyone other than Tenant or its employees without Landlord’s prior written consent (such consent not to be unreasonable withheld or delayed). Notwithstanding the foregoing, Tenant shall have the right to assign this Lease or sublet the Demised Premises or any part thereof, without the consent of Landlord, to any parent, subsidiary or affiliate of Tenant. Any consent by Landlord hereunder (or assignment where such consent is not required) shall not constitute a waiver of strict future compliance by Tenant of the provisions of this Article 11 or a release of Tenant from the full performance by Tenant with any of the terms, covenants, provisions or conditions in this Lease. For purposes of this Article 11, any transfer or change in control of Tenant (or any subtenant, assignee or occupant) by operation of law or otherwise, shall be deemed an assignment hereunder, including, without limitation, any merger, consolidation, dissolution or any change in the controlling equity interests of Tenant or any subtenant, assignee, or occupant (in a single transaction or a series of related transaction).  Any assignment or subletting in contravention of the provisions of this Article 11 shall be void.

 

12.                                 EMINENT DOMAIN.  If the whole or more than fifty percent (50%) of the Demised Premises (or use or occupancy of the Demised Premises) shall be taken or condemned by an governmental or quasi-governmental authority for any public or quasi-public use or purpose (including sale under threat of such a taking), or if the owner elects to convey title to the condemnor by a deed in lieu of condemnation, or if all or any portion of the Land or Building are so taken, condemned or conveyed and as a result thereof, in Landlord’s judgement, the Demised Premises cannot be used for Tenant’s permitted use as set forth herein, then this Lease shall cease and terminate as of the date when title vests in such governmental or quasi-governmental authority and the Fixed Rent and Additional Rent shall be abated on the date when such title vests in such governmental or quasi-governmental authority.  If less than fifty percent (50%) of the Demised Premises is taken or condemned by any governmental or quasi-governmental authority for any public or quasi-public use or purpose (including sale under threat of such a taking), the Fixed Rent and Tenant’s proportionate share shall be equitably adjusted )on the basis of the number of square feet before and after such event) on the date when title vests in such governmental or quasi-governmental authority and the Lease shall otherwise continue in full force and effect.  In any case, Tenant shall have no claim against Landlord for any portion of the amount that may be awarded as damages as a result of any governmental or quasi-governmental taking or condemnation (or sale under threat or such taking or condemnation); and all rights of Tenant to damages therefor are hereby assigned by Tenant to Landlord.  The foregoing shall not, however, deprive Tenant of any separate award for moving expenses, dislocation damages or for any other award which would not reduce the award payable to Landlord.

 

13.                                 CASUALTY DAMAGE.

 

13.1                           In the event of damage to or destruction of the Demised Premises caused by fire or other casualty, or any such damage or destruction to the Building or the facilities necessary to provide services and normal access to the Demised Premises in accordance herewith, Landlord, after receipt of written notice thereof from Tenant, shall undertake to make repairs and restorations with reasonable diligence as hereinafter provided, unless this Lease has been terminated by Landlord or Tenant as hereinafter provided or unless any mortgagee which is entitled to receive casualty insurance proceeds fails to make available to Landlord a sufficient amount of such proceeds to cover the cost of such repairs and restoration.  If (i) the damage is of such nature or extent that, in Landlord’s sole judgement, more than one hundred and twenty (120) days would be required (with normal work crews and hours) to repair and restore the part of the Demised Premises or Building which has been damaged, or (ii) the Demised Premises or Building is so damaged that, in Landlord’s sole judgement, it is uneconomical to restore or repair the Demised Premises or the Building, as the case may be, or (iii) less than two (2) years then remain on the current Lease Term, Landlord shall so advise Tenant promptly, and either party, in the case described in clause (i) above, or Landlord, in the cases described in clauses (ii) or (iii) above, within thirty (30) days after any such damage or destruction shall have the right to terminate this Lease by written notice to the other, as of the date specified in such notice, which termination date shall be no later than thirty (30) days after the date of such notice.

 

13.2                           In the event of fire or other casualty damage, provided this Lease is not terminated pursuant to the terms of this Article 13 and is otherwise in full force and effect, and sufficient casualty insurance proceeds are available for application to such restoration or repair, Landlord shall proceed diligently to restore the Demised Premises to substantially its condition prior to the occurrence of the damage.  Landlord shall not be obligated to repair or restore any alterations, additions, fixtures or equipment which Tenant may have installed (whether or not Tenant has the right or the obligation to remove the same or is required to leave

 

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the same on the Demised Premises as of the expiration or earlier termination of this Lease) unless Tenant, in a manner satisfactory to Landlord, assures payment in full of all costs as may be incurred by Landlord in connection therewith.

 

13.3                           Landlord shall not insure any improvements or alterations to the Demised Premises in excess of Building standard tenant improvements, or any fixtures, equipment or other property of Tenant Tenant shall, at its sole expense, insure the value of its leasehold improvements, fixtures, equipment and personal property located in or on the Demised Premises, for the purpose of providing funds to Landlord to repair and restore the Demised Premises to substantially its condition prior to occurrences of the casualty occurrence.  If there are any such alterations, fixtures or additions and Tenant does not assure or agree to assure payment of the cost of restoration or repair as aforesaid, Landlord shall have the right to restore the Demised Premises to substantially the same condition as existed prior to the damage, excepting such alterations, additions or fixtures.

 

13.4                           The validity and effect of this Lease shall not be impaired in any way by the failure of Landlord to complete repairs and restoration of the Demised Premises or of the Building within one hundred and twenty (120) days after commencement of the work, even if Landlord had in good faith notified Tenant that the repair and restoration could be completed within such period, provided that Landlord proceeds diligently with such repair and restoration.  In the case of damage to the Demised Premises which is of a nature or extent that Tenant’s continued occupancy is in the reasonable judgement of Landlord and Tenant substantially impaired, then the Annual Fixed Rent and Tenant’s Proportionate Share otherwise payable by Tenant hereunder shall be equitably abated or adjusted for the duration of such impairment.  Tenant shall be responsible to repair all of Tenant’s leasehold improvements and all equipment, fixtures and personal property located in or on the Demised Premises subject to Article 8. and to such other conditions as Landlord may require.

 

14.                                 INSURANCE AND INDEMNIFICATION OF LANDLORD; WAIVER OF SUBROGATION.

 

14.1                           Tenant covenants and agrees to exonerate, indemnify, defend, protect and save Landlord, its representatives and Landlord’s managing agent, if any, harmless from and against any and all claims, demands, expenses, losses, suits and damages as may be occasioned by reason of (i) any accident or matter occurring on or about the Demised Premises, causing injury to persons or damage to property (including, without limitation, the Demised Premises), unless such accident or other matter resulted solely from the negligence or otherwise tortious act of Landlord or Landlord’s agents or employees, (ii) the failure of Tenant fully and faithfully to perform the obligations and observe the conditions of this Lease, and (iii) the negligence or otherwise tortious act of Tenant or anyone in or about the Building on behalf of or at the invitation or right of Tenant.  Tenant shall maintain in full force and effect, at its own expense, comprehensive general liability insurance (including a contractual liability and fire legal liability insurance endorsement) naming as an additional insured Landlord and Landlord’s managing agents, if any, against claims for bodily injury, death or property damage in amounts not less than $1,000,000 (or such higher limits as may be determined by Landlord from time to time) and business interruption insurance in an amount equal to Tenant’s gross income for twelve (12) months.  All policies shall be issued by companies having a Best’s financial rating of A or better and a size class rating of XII (12) or larger or otherwise acceptable to Landlord.  At or prior to the Commencement Date, Tenant shall deposit the policy or policies of such insurance, or certificates thereof, with Landlord and shall deposit with Landlord renewals thereof at least fifteen (15) days prior to each expiration.  Said policy or policies of insurance or certificates thereof shall have attached thereto an endorsement that such policy shall not be canceled without at least thirty (30) prior written notice to Landlord and Landlord’s managing agent, if any, that no act or omission of Tenant shall invalidate the interest of Landlord under said insurance and expressly waiving all rights of subrogation as set forth below.  At Landlord’s request, Tenant shall provide Landlord with a letter from an authorized representative of its insurance carrier stating that Tenant’s current and effective insurance coverage complies with the requirements contained herein.

 

14.2                           Landlord and Tenant hereby release the other from any and all liability or responsibility to the other or anyone claiming through or under them by way of subrogation or otherwise for any loss or damage to property covered by insurance then in force, even if any such fire or other casualty occurrence shall have been caused by the fault or negligence of the other party, or anyone for whom such party may be responsible.  This release shall be applicable and in full force and effect, however, only to the extent of and with respect to any loss or damage occurring during such time as the policy or policies of insurance covering said loss shall contain a clause or endorsements to the effect that this release shall not adversely affect or impair said insurance or prejudice the right of the insured to recover thereunder.  To the extent available, Landlord and tenant further agree to provide such endorsements for said insurance policies agreeing to the waiver of subrogation as required herein.

 

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15.                                 INSPECTION; ACCESS; CHANGES IN BUILDING FACILITIES.

 

15.1                           Landlord and its agents or other representatives shall be permitted to enter the Demised Premises at reasonable times (i) to examine, inspect and protect the Demised Premises and the Building and (ii) during the last six (6) months of the original or any renewal term, to show it to prospective tenants and to affix to any suitable part of the exterior of the Building in which the Demised Premises is located a notice for letting the Demised Premises or the Building or (at any time during the original or any renewal term) selling the Building.

 

15.2                           Landlord shall have access to and use of all areas in the Demised Premises (including exterior Building walls, core corridor walls and doors and any core corridor entrances), any roofs adjacent to the Demised Premises, and any space in or adjacent to the Demised Premises used for shafts, stacks, pipes, conduits, fan rooms, ducts, electric or other utilities, sinks or other Building facilities, as well as access to and through the Demised Premises for the purpose of operation, maintenance, decoration and repair, provided, however, that except in emergencies such access shall not be exercised so as to interfere unreasonable with Tenant’s use of the Demised Premises.  Tenant shall permit Landlord to install, use and maintain pipes, ducts and conduits within the demising walls, bearing columns and ceilings of the Demised Premises, provided that the installation work is performed at such times and by such methods as will not materially interfere with Tenant’s use of the Demised Premises, materially reduce the floor area thereof or materially and adversely affect Tenant’s layout, and further provided that Landlord performs all work with due diligence and care so as to not damage Tenant’s property or the Demised Premises.  Landlord and Tenant shall cooperate with each other in the location of Landlord’s and Tenant’s facilities requiring such access.

 

15.3                           Landlord reserves the right at any time, without incurring any liability to Tenant therefor, to make such changes in or to the Building and the fixtures and equipment thereof, as well as in or to the street entrances, halls, foyers, passages, elevators, if any, and stairways thereof, as it may deem necessary or desirable; provided that there shall be no change that materially detracts from the character or quality of the Building.

 

16.                                 DEFAULT.  Any other provisions in this Lease notwithstanding, it shall be an event of default (“Event of Default”) under this Lease if: (i) Tenant fails to pay any installment of Fixed Rent, Additional Rent or other sum payable by Tenant hereunder when due and such failure continues for a period of five (5) days after written notice of such non-payment be Landlord to Tenant (which written notice shall not be required more than two times in any period of twelve (12) consecutive months), or (ii) Tenant fails to observe or perform any other covenant or agreement of Tenant herein contained and such failure continues after written notice given by or on behalf of Landlord to Tenant for more than thirty (30) days, or (iii) Tenant uses or occupies the Demised Premises other than as permitted hereunder, or (iv) Tenant assigns or sublets, or purports to assign or sublet, the Demised Premises or any part thereof other than in the manner and upon the conditions set forth herein, or (v) Tenant abandons or vacates the Demised Premises or, without Landlord’s prior written consent, Tenant removes or attempts to remove or manifests an intention to remove any or all of Tenant’s property from the Demised Premises other than in the ordinary and usual course of business, or (vi) Tenant (which, for purposes of this clause, includes any guarantor hereunder) files a petition commencing a voluntary case, or has filed against it a petition commencing an involuntary case, under the Federal Bankruptcy Code (Title 11 of the Unites States Code), as now or hereafter in effect, or under any similar law, or files or has filed against it a petition or answer in bankruptcy or for reorganization or for an arrangement pursuant to any state bankruptcy law or any similar state law, and, in the case of any such involuntary action, such action shall not be dismissed, discharged or denied within sixty (60) days after the filing thereof, or Tenant consents or acquiesces in the filing thereof, or (vii) if Tenant is a banking organization, Tenant files an application for protection, voluntary liquidation or dissolution applicable to banking organization, or (viii) a custodian, receiver, trustee or liquidator of Tenant or of all or substantially all of Tenant’s property or of the Demised Premises shall be appointed in any proceedings brought by or against Tenant and, in the latter case, such entity shall not be discharged within sixty (60) days after such appointment or Tenant consents to or acquiesces in such appointment, or (ix) Tenant shall generally not pay Tenant’s debts as such debts become due, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or (x) any of the foregoing occurs as to any guarantor or surety of Tenant’s performance under this Lease, or such guarantor or surety defaults on any provision under its guaranty or suretyship agreement.  The notice and grace period provisions in clauses (i) and (ii) above shall have no application to the Events of Default referred to in clauses (iii) through (ix) above or, to the extent applicable (x).

 

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17.                                 LANDLORD’S REMEDIES.

 

17.1                           In the event of any Event of Default, Landlord at any time thereafter may at its option exercise any one or more of the following remedies:

 

(a)  Termination of Leases.  Landlord may terminate this Lease, by written notice to Tenant, without any right by Tenant to reinstate its rights by payment of rent due or other performance of the terms and conditions hereof.  Upon such termination Tenant shall immediately surrender possession of the Demised Premises to Landlord, and Landlord shall immediately become entitled to receive from Tenant an amount equal to the difference between the aggregate of all Fixed Rent and Additional Rent reserved under this Lease for the balance of the Lease Term, and the fair rental value of the Demised Premises for that period, determined as of the date of such termination.

 

(b)  Reletting.  With or without terminating this Lease, as Landlord may elect, Landlord may re-enter and repossess the Demised Premises, or any part thereof, and lease them to any other person upon such terms as Landlord shall deem reasonable, for a term within or beyond the term of this Lease; provided, that any such reletting prior to termination shall be for the account of Tenant, and Tenant shall remain liable for (i) all Annual Fixed Rent, Additional Rent and other sums which would be payable under this Lease by Tenant in the absence of such expiration, termination or repossession, less (ii) the net proceeds, if any, of any reletting effected for the account of Tenant after deducting from such proceeds all of Landlord’s expenses, attorneys’ fees and expenses, employees’ expenses, reasonable alteration costs, expenses of preparation for such reletting and all costs and expenses, direct or indirect, incurred as a result of Tenant’s breach of the Lease.  Landlord shall have no obligation to relet the Demised Premises if Landlord, or any of its affiliates, shall have other comparable space available for rent.  If the Demised Premises are at the time of default sublet or leased by Tenant to others, Landlord may, as Tenant’s agent, collect rents due from any subtenant or other tenant and apply such rents to the rent and other amounts due hereunder without in any way affecting Tenant’s obligation to Landlord hereunder.  Such agency, being given for security, is hereby declared to be irrevocable.

 

(c)  Acceleration of Rent.  Landlord may declare Fixed Rent and all items of Additional Rent (the amount thereof to be based on historical amounts and Landlord’s estimates for future amounts) for the entire balance of the then current Lease Term immediately due and payable, together with all other charges, payments, costs, and expenses payable by Tenant as though such amounts were payable in advance on the date the Event of Default occurred.

 

(d)  Removal of Contents by Landlord.  With respect to any portion of the Demised Premises which is vacant or which is physically occupied by Tenant, Landlord may remove all persons and property therefrom, and store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant, without service of notice or resort to legal process (all of which Tenant expressly waives) and without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby.  Landlord shall have a lien for the payment of all sums agreed to be paid by Tenant herein upon all Tenant’s property, which lien is to be in addition to Landlord’s lien now or hereafter provided by law.

 

(e)  Right of Distress and Lien.  In addition to all other rights and remedies of Landlord, if an Event of Default shall occur, Landlord shall, to the extent permitted by law, have a right of distress for rent and lien on all of Tenant’s fixtures, merchandise and equipment in the Demised Premises, as security for rent and all other charges payable hereunder.

 

(f)  Tenant hereby empowers any Prothonotary or attorney of any Court of Record to appear for Tenant in any and all actions which may be brought for rent and/or the charges, payments, costs, and expenses herein reserved as rent, or herein agreed to be paid by Tenant and/or to sign for Tenant an agreement for entering in any competent Court and action to confess judgment, or actions for the recovery of such rent or other charges or expenses in said suits or in said action or actions to confess judgment against Tenant for all or part of the rent specified in this Lease and then due and unpaid, and other charges, payments, costs, and expenses reserved as rent or agreed to be paid by Tenant and then due and unpaid; and for interest and costs and reasonable attorney’s fees.  Such authority shall not be exhausted by one exercise thereof, but judgment may be confessed as aforesaid from time to time as often as any said rent and/or other charges reserved as rent or agreed to be paid by Tenant shall fall due or be in arrears.

 

(g)  Upon the expiration of the then current term of this lease of the earlier termination or surrender hereof as provided in this lease, it shall be lawful for any attorney to appear as attorney for Tenant as well as for all persons claiming by, through or under Tenant and to sign an agreement for entering in any competent Court an action to confess judgment in ejectment against Tenant and all persons claiming by, through or under Tenant and therein confess judgment for the recovery by Landlord of possession of the

 

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premises, for which this lease (or a copy thereof) shall be its sufficient warrant, whereupon, if Landlord so desires, a writ of possession or the appropriate writ under the Rules of Civil Procedure then in effect may issue forthwith, without any prior writ or proceedings; provided, however, if for any reason after such action shall have commenced, the same shall be determined and possession of the premises remain in or be restored to Tenant, Landlord shall have the right for the same default and upon any subsequent default or defaults, or upon expiration of the term of this lease to bring one more further action to confess judgment or actions as hereinbefore set forth to recover possession of the premises and confess judgment for the recovery of possession of the premises as hereinbefore provided.

 

(h)  In any action to confess judgment in ejectment and/or for rent in arrears, Landlord shall first cause to be filed in such action an affidavit made by him or someone acting for him, setting forth the facts necessary to authorize the entry of judgment, and, if a true copy of this lease (and of the truth of the copy such affidavit shall be sufficient evidence) be filed in such action, it shall not be necessary to file in such action, it shall not be necessary to file the original as a warrant of attorney, and rule of Court, custom or practice to the contrary notwithstanding Tenant hereby releases to Landlord and to any and all attorneys who may appear for Tenant all errors in said proceedings and all liability therefor.  If proceedings shall be commenced by Landlord to recover possession under the Acts of Assembly and Rules of Civil Procedure, either at the end of the term or earlier termination of this lease, or for non-payment of rent or any other reason, Tenant specifically waives the right to the three months’ notice and to the fifteen or thirty days’ notice required by the Landlord and Tenant Act of 1951, and agrees that five days’ notice shall be sufficient in either or any such case.

 

17.2                           Injunction.  In the event of breach or threatened breach by Tenant of any provision of this Lease, Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity in addition to other remedies provided for herein.

 

17.3                           Waiver of Redemption.  Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future law in the event this Lease is terminated, or in the event of Landlord obtaining possession of the Demised Premises, or Tenant is evicted or dispossessed for any cause, by reason of violation by Tenant of any of the provisions of this Lease.

 

17.4                           Not Exclusive Right.  No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy herein or by law provided, but each shall be cumulative and in addition to every other right or remedy given herein or now or hereafter existing at law or in equity by statute.

 

17.5                           Expenses.  In the event that Landlord commences suit for the repossession of the Demised Premises, for the recovery or rent or any other amount due under the provisions of this Lease, or because of the breach of any other covenant herein contained on the part of Tenant to be kept or performed, and a breach shall be established, Tenant shall pay to Landlord all expenses incurred in connection therewith, including reasonable attorneys’ fees.

 

18.                                 LANDLORD’S RIGHT TO CURE TENANT’S DEFAULT.  If Tenant defaults in the making of any payment or in the doing of any act herein required to be made or done by Tenant, then Landlord may, but shall not be required to, make such payment or do such act, and charge the amount of Landlord’s expense to Tenant, with interest accruing and payable thereon at the Default Rate as of the date of the expenditure by Landlord or as of the date of payment thereof by Tenant, whichever is higher, from the date paid or incurred by Landlord to the date of payment hereof by Tenant; provided, however, that nothing herein contained shall be construed or implemented in such a manner as to allow Landlord to charge or receive interest in excess of the maximum legal rate then allowed by law.  Such payment and interest shall constitute Additional Rent hereunder due and payable with the next monthly installment of Fixed Rent; but the making of such payment or the taking of such action by Landlord shall not operate to cure such default by Tenant or to estop Landlord from the pursuit of any remedy to which Landlord would otherwise be entitled.

 

19.                                 ESTOPPEL CERTIFICATE.  Tenant shall immediately prior to occupancy execute Tenant Estoppel Certificate as provided for herein and attached hereto as Exhibit “G”, and from time to time, at the request of Landlord, upon ten (10) business days notice, execute and deliver to Landlord a statement provided by Landlord to Tenant, it being intended that any such statement delivered pursuant hereto may be relied upon by others with whom Landlord may be dealing.  Failure to execute said Estoppel Certificate shall constitute a default under this lease.

 

20.                                 HOLDING OVER.  If Tenant retains possession of the Demised Premises or any part thereof after the termination of this Lease or expiration of the Lease Term or otherwise in the absence of any written

 

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agreement between Landlord and Tenant concerning any such continuance of the term, Tenant shall pay Landlord (1) as liquidated damages for such holding over alone, an amount, calculated on a per diem basis for each day of such unlawful retention, equal to the greater of (a) twice the Annual Fixed Rent, or (b) the established market rental for the Demised Premises, for the time Tenant thus remains in possession, plus, in each case, all Additional Rent and other sums payable hereunder, and (ii) all other damages, costs and expenses sustained by Landlord by reason of Tenant’s holding over.  Without limiting any rights and remedies of Landlord resulting by reason of the wrongful holding over by Tenant, or creating any right in Tenant to continue in possession of the Demised Premises, all Tenant’s obligations with respect to the use, occupancy and maintenance of the Demised Premises shall continue during such period of unlawful retention.

 

21.                                 RELOCATION OF TENANT.  Landlord, at its sole expense, on at least thirty (30) days prior written notice to Tenant, may require Tenant to move from the Premises to another suite of comparable size and decor in the Building or in the Business Park in order to permit Landlord to consolidate the Premises with other adjoining space or to be leased to another tenant in the Building.  In the event of any such relocation, Landlord shall pay all the expenses of preparing and decorating the new premises so that they will be substantially similar to the Premises and shall also pay the expenses of moving Tenant’s furniture and equipment to the new premises.

 

22.                                 SURRENDER OF DEMISED PREMISES.  Tenant shall, at the end of the Lease Term, or any extension thereof, promptly surrender the Demised Premises in good order and condition and in conformity with the applicable provisions of this Lease, excepting only reasonable wear and tear.

 

23.                                 SUBORDINATION AND ATTORNMENT.  This Lease and the estate, interest and rights hereby created are subordinate to any mortgage now or hereafter placed upon the Building or the Land or any estate or interest therein, including, without limitation, any mortgage on any leasehold estate, and to all renewals, modifications, consolidations, replacements and extensions of the same as well as any substitutions therefor, as provided for on the attached Exhibit “F”.  Tenant agrees that in the event any person, firm, corporation or other entity acquires the right to possession of the Building or the Land, including any mortgagee or holder of any estate or interest having priority over this Lease, Tenant shall, if requested by such person, firm, corporation or other entity, attorn to and become the tenant of such person, firm, corporation or other entity, upon the same terms and conditions as are set forth herein for the balance of the Lease Term.  Notwithstanding the foregoing, any mortgagee may, at any time, subordinate its mortgage to this Lease, without Tenant’s consent, by notice in writing to Tenant, and thereupon this Lease shall be deemed prior to such mortgage without regard to their respective dates of execution and delivery, and in that event, such mortgagee shall have the same rights with respect to this Lease as though it had been executed prior to the execution and delivery of the mortgage.  Tenant, if requested by Landlord, shall execute any such instruments in recordable form as may be reasonably required by Landlord in order to confirm or effect the subordination or priority of this Lease, as the case may be, and the attornment of Tenant to future landlords in accordance with the terms of this Article.  Landlord shall furnish to Tenant a non-disturbance agreement from the holder of such mortgage providing that so long as Tenant is not in default of this Lease Tenant’s occupancy shall not be disturbed and the obligations of Landlord will continue to be performed.

 

24.                                 BROKERS.  Each party represents and warrants to the other that it, he, she or they have not made any agreement or taken any action which may cause anyone to become entitled to a commission as a result of the transactions contemplated by this Lease, and each will indemnify and defend the other from any all claims, actual or threatened, for compensation by any such third person by reason of such party’s breach of its, his, her or their representation or warranty contained in the Article 23 except for KLNB, Inc.

 

25.                                 NOTICES.  All notices or other communications hereunder shall be in writing and shall be deemed to have been given (i) if hand delivered or sent by an express mail or delivery service or by courier, then if and when delivered to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby), or (ii) if mailed, then on the next business day following the date on which such communication is deposited in the United States mails, by first class registered or certified mail, return receipt requested, postage prepaid, and addressed to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby).  All notices and communications to Tenant may also be given by leaving the same at the Demised Premises during business hours.

 

25.1                           If to Landlord:

 

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25.2                           If to Tenant:

 

26.                                 MISCELLANEOUS.

 

26.1                           Successors and Assigns.  The obligations of this Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that Landlord and each successive owner of the Building and/or the Land shall be liable only for obligations accruing during the period of its ownership or interest in the Building, and from and after the transfer by Landlord or such successive owner of its ownership or other interest in the Building, Tenant shall look solely to the successors in title for the performance of Landlord’s obligations hereunder arising thereafter.

 

26.2                           Waivers.  No delay or forbearance by Landlord in exercising any right or remedy hereunder or in undertaking or performing any act matter which is not expressly required to be undertaken by Landlord shall be construed, respectively, to be a waiver of Landlord’s rights or to represent any agreement by Landlord to undertake or perform such act or matter thereafter.

 

26.3                           Waiver of Trial by Jury.  Tenant hereby consents to the exclusive jurisdiction of the courts of the state where the Demised Premises are located and in any and all actions or proceedings arising hereunder or pursuant hereto, and irrevocably agrees to service of process in accordance with Article 24 above.  Landlord and Tenant agree to waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant’s use of or occupancy of the Demised Premises and/or any claim of injury or damage and any emergency or any other statutory remedy.

 

26.4                           Limitation of Landlord’s Liabilities.  Tenant shall look solely to the Demised Premises and rents derived therefrom and Landlord’s insurance proceeds for enforcement of any obligation hereunder or by law assumed or enforceable against Landlord, and no other property or other assets of Landlord shall be subjected to levy, execution or other enforcement procedure for the satisfaction of Tenant’s remedies or with respect to this Lease, the relationship of Landlord and tenant hereunder or Tenant’s use and occupancy of the Demised Premises.

 

26.5                           Time of the Essence.  All times, wherever specified herein for the performance by Landlord or Tenant of their respective obligations hereunder, are of the essence of this Lease.

 

26.6                           Severability.  Each covenant and agreement in this Lease shall for all purposes be construed to be a separate and independent covenant or agreement.  If any provision in this Lease or the application thereof shall to any extent be invalid, illegal or otherwise unenforceable, the remainder of this Lease, and the application of such provision other than as invalid, illegal or unenforceable, shall not be affected thereby; and such provisions in this Lease shall be valid and enforceable to the fullest extent permitted by law.

 

26.7                           Amendment and Modification.  This Lease, including all Exhibits hereto, each of which is incorporated in this Lease, contains the entire agreement between the parties hereto, and shall not be amended, modified or supplemented unless by agreement in writing signed by both Landlord and Tenant.

 

26.8                           Headings and Terms.  The title and headings and table of contents of this Lease are for convenience of reference only and shall not in any way be utilized to construe or interpret the agreement of the parties as otherwise set forth herein.  The term “Landlord” and term “Tenant” as used herein shall mean, where appropriate, all persons acting by or on behalf of the respective parties, except as to any required approval, consents or amendments, modifications or supplements hereunder when such terms shall only mean the parties originally named on the first page of this Lease as Landlord and Tenant, respectively, and their agents so authorized in writing.

 

26.9                           Governing Law.  This Lease shall be governed by and construed in accordance with the laws of the State of Maryland.

 

12



 

IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed on the day and year first above written.

 

 

LANDLORD:
BEAVER DAM LLC

 

 

Witness:

By:  Frederick Smith, General Partner

 

 

 

 

/s/ Hyris Feldman

 

By:

/s/ Frederick Smith

 

 

 

 

 

 

TENANT: Sinclair Broadcast Group, Inc.

 

 

 

 

Witness:

By:

/s/ David B. Amy

 

 

 

 

 

/s/ Vicky D. Evans

 

By:

 

 

 

Name:

David B. Amy

 

 

Title:

Executive Vice President

 

 

13



 

 

RENT SCHEDULE
RIDER #1

 

Year

 

Monthly

 

Annually

 

 

1

 

 

1,626.33

 

19,516.00

 

 

2

 

 

1,707.65

 

20,491.80

 

 

3

 

 

1,793.03

 

21,516.39

 

 

4

 

 

1,882.68

 

22,592.21

 

 

5

 

 

1,976.82

 

23,721.82

 

 

6

 

 

2,075.66

 

24,907.91

 

 

7

 

 

2,179.44

 

26,153.31

 

 

8

 

 

2,288.41

 

27,460.97

 

 

9

 

 

2,402.84

 

28,834.02

 

 

10

 

 

2,522.98

 

30,275.72

 

 

14



 

ADDENDA TO SBG/BEAVER DAM LLC LEASE

 

Section 2. Lease Term.  Beaver Dam LLC will grant the option of leasing the 1,148 rentable square feet for $813.16(1/2 month’s rent) for either six months and/or until tenant occupancy(whichever shall occur first).  After six months and/or tenant occupancy, the rent will increase to $1,626.33 per month in accordance with the Rent Schedule-Rider #1.

 

Section 2. Lease Term.  Beaver Dam LLC will grant a 5-year option with the rate not to exceed the fair market value of like space.  However, in no instance will the rate be less than the rent paid for the last year of like space.

 

Section 3. Fixed Rent.  See Exhibit C Addendum.

 

Section 7. Improvements to Premises.  Add to Exhibit B: SBG will be allotted $15 per square foot of the rentable square feet as Tenant improvements.  Beaver Dam LLC will provide a ceiling.  The ceiling will be 2x2 or 2x4 grids which will be provided above and beyond the $15 per sq. ft.  Tenant improvement allowance.  This ceiling will be provided at no cost to SBG.  All other improvements to the space will be at the expense of SBG.  The contractor chosen for improvements to premises shall be approved by Beaver Dam, LLC.

 

Section 9. Covenants to Landlord.  Normal business hours will be 8:00 A.M.-6:00 P.M. Monday-Friday, 9:00 A.M.-1:00 P.M., Saturday, no holidays or Sundays.

 

Section 10. Covenants of Tenant.  If allowed by law, signage will be present on the parking lot as well as first floor lobby directory.  At this time, it is the intent of Beaver Dam LLC to place an external sign fixed to the building which will read “Sinclair”.

 

Section 11. Assignment and Subletting.  The Tenant will have the right to assign their lease to the purchaser of the Tenant’s business.  The purchase of said business will have the identical responsibilities to the Landlord as did the Tenant/seller of the business.  Assignee must have a net worth equal to or greater that that of the Tenant as of the Lease Commencement Date and as of the effective date of the proposed assignment or subletting.

 

Section 21. Allocation of Tenant.  Delete section.

 

Exhibit C. Provision regarding additional rent and adjustment to fix rent.  As a point of clarification, the baseline for operating expenses will be established during the first year of the Tenant’s lease.  This will be covered by the Tenant’s sq. ft. cost.  However, at the beginning of the second year of the lease, any increases in costs above the Year 1 baseline related to items under Exhibit “C” will be paid by the Tenant’s on a pro-rata per sq. ft. share.

 

Please initial: TS

 

 

 

Landlord

Tenant

/s/ F.S.

 

/s/ D.A.

 

 

15



 

EXHIBIT “A”

DEMISED PREMISES

 

Please initial:

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

Tenant

 



 

 

EXHIBIT “B”

SPECIAL STIPULATIONS

 

Please initial:

 

 

 

 

 

Landlord

Tenant

 



 

EXHIBIT “C”

 

PROVISIONS REGARDING ADDITIONAL RENT AND
ADJUSTMENTS TO FIX RENT

 

1.                                       Definitions.

 

A.                                   Essential Capital Improvements” shall mean (a) a labor saving device, energy saving device or other installation, improvement or replacement which is intended to reduce Operating Expenses, whether or not voluntary or required by governmental mandate, or (b) an installation or improvement required by reason of any law, ordinance or regulation which did not exist on the date of the execution of this Lease, or (c) an installation or improvement intended to improve the safety of tenants in the Building generally, whether or not voluntary or required by governmental mandate.

 

B.                                     Operating Expense Allowance” shall mean and equal -Tenant’s Proportionate Share of the amount of Operating Expenses for the calendar year 2000,

 

C.                                     Operating Expenses” shall mean all of Landlord’s operating costs and expenses of whatever kind or nature paid or incurred in the operation and maintenance of the Building and the Land, all computed on the accrual basis and in accordance with the terms of this Lease, including, but not limited to, the following:

 

1.                                       Gas, electricity, steam, fuel, water, sewer and other utility charges (including surcharge’s) of whatever nature (excluding use of utilities by other tenants such as may be submetered or separately metered pursuant to their leases);

 

2.                                       Insurance premiums and the amounts of any deductibles paid by Landlord;

 

3.                                       Building personnel costs, including, but not limited to, salaries, wages, fringe benefits, taxes, insurance and other direct and indirect costs;

 

4.                                       Costs of service and maintenance contracts including, but not limited to, cleaning and security services;

 

5.                                       All  other maintenance  and  repair expenses  (excluding repairs  and  general maintenance paid by proceeds of insurance or by Tenant or other third parties, and alterations solely attributable to tenants of the Building other than Tenant) and the cost of materials and supplies;

 

6.                                       Any other costs and expenses (i.e. items which are not capital improvements) incurred by Landlord in operating the Building, including ground rent, if any;

 

7.                                       The cost of any additional  services  not provided to the  Building on the Commencement Date but thereafter provided by Landlord in the prudent management of the Building;

 

8.                                       The annual amortization of any Essential of Capital Improvement which is made by Landlord after completion of initial construction of the Building, based on the useful life of the improvement plus interest at the Prime Rate on the date of the expenditure on the underappreciated portion thereof;

 

9.                                       Landlord’s central office accounting costs and overhead applicable to the Building;

 

10.                                 Accounting fees for preparing the Operating Expense statement;

 

11.                                 Management fees payable to the managing agent; and

 

12.                                 Taxes, allocated on a per diem basis if the tax year is different than the Operating Year.

 

Please initial:

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

Tenant

 

C-1



 

 

Operating Expenses shall not include:

 

1.                                       Special cleaning or other services, not offered to all tenants of the Building;

 

2.                                       Any charge for depreciation, interest or rents (except, if applicable) (ground rents) paid or incurred by Landlord; or

 

3.                                       Leasing commissions.

 

If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would constitute and Operating Expense) to a tenant who has undertaken to perform such work or service in lieu of performance by Landlord, Operating Expenses shall nevertheless be deemed to include the amount Landlord would reasonably have incurred if Landlord has in fact performed the work or service at its expense.

 

Not withstanding the foregoing, Operating Expenses shall not include interest and amortization, depreciation, ground rents, expenses for work performed for other tenants in Building, expenses for repairs or other work occasioned by fire or other insurable casualty (to the extent covered by insurance), expenses for leasing or processing new tenants, leasing commissions, advertising expenses), legal expenses incurred in enforcing the terms of any tenant leases, salaries for any employees of Landlord above those attributable the management, operation and maintenance of the Building, incurred by Landlord in connection with the operation and maintenance of the Building.

 

D.                                    Operating Year” shall mean each calendar year or such other period of twelve (12) months as hereafter may be adopted by Landlord as its fiscal year, occurring during the Lease Term.

 

E.                                      Taxes” shall mean all taxes, assessments and governmental charges, whether Federal, state, county or municipal, and whether general or special, ordinary or extraordinary, foreseen or unforeseen, imposed upon the Building or the Land or their operation, whether or not directly paid by Landlord.  Taxes shall not include income taxes, excess profit taxes, franchise taxes, or other taxes imposed or measured on or by the income of Landlord from the operation of the Building or the Land; provided, however, that if, due to a future change in the method of taxation or assessment, any income, profit, franchise or other tax, however designated, shall be imposed in substitution, in whole or in part, for (or in lieu of) any tax, assessment or charge which would otherwise be included within the definition of Taxes, such other tax shall be deemed to be included with Taxes as defined herein to the extent of such substitution.  There shall be added to Taxes the expenses of any contests (administrative or otherwise) of Taxes incurred during the Operating Year.  Tenant shall pay to the appropriate governmental authority any use and occupancy tax.  In the event that Landlord is required by law to collect such tax, Tenant shall pay such use and occupancy tax to Landlord as Additional Rent upon demand and Landlord shall remit any amounts so paid to Landlord to the appropriate governmental authority.

 

F.                                      Tenants’s Proportionate Share” shall mean a fraction; the numerator of which shall be the rentable square feet of Demised Premises, and the denominator of which is 74,200 rentable square feet which is the aggregate rentable square feet in the Building.

 

2.                                       Additional Rent for Operating Expenses.

 

2.1                                 Commencing on May 1, 2000, Tenant shall pay during the Lease Term as Additional Rent, the amount by which Tenants’ Proportionate Share of Operating Expenses exceeds the Operating Expense Allowance.

 

2.2                                 As soon as available in each Operating Year during the Lease Term, Landlord shall provide Tenant with a written statement setting forth the Operating Expense Allowance and a projection of Tenant’s Proportionate Share of Operating Expenses for such year commencing on the first day of the first month following receipt of such statement and continuing until receipt by Tenant of Landlord’s statement of the next projected Tenant’s Proportionate Share of Operating Expenses, Tenant shall pay to Landlord with each monthly installment of Fixed Rent an amount equal to one-twelfth (l/12th) of the excess of such projected Tenant’s Proportionate Share of Operating Expenses over the Operating Expense Allowance.  Concurrently with the first payment required hereinabove, Tenant shall pay to Landlord an amount equal to the excess of such projected Tenant’s Proportionate Share of Operating Expenses over the Operating Expense Allowance multiplied by a fraction, the numerator of which is the number of calendar months of the Operating Year in question which have elapsed prior to the due date of such first payment and the denominator of which is twelve (12), less any payments made by Tenant during said period on account of such excess Operating Expenses.

 

C-2



 

2.3                                 Landlord shall, as soon as possible after the close each such Operating Year, provide Tenant with a statement of the actual operating expenses for such period.  Any underpayment by Tenant during such Operating Year due to the fact that projected Operating Expenses were less than actual Operating Expenses shall be paid to Landlord within 30 days after Tenant’s receipt of a statement for such deficiency.  Any overpayment by Tenant due to the fact that projected Operating Expenses were greater than actual Operating Expenses for such year shall be credited to the next Additional Rent payable by Tenant under this Exhibit “C.” If the Operating Expenses are less than the Operating Expense Allowance, a credit or check will not be issued.

 

3.                                       Adjustment for Vacancies.  In determining Operating Expenses for any Operating Year, if the Building was less than fully occupied during such entire year, or was not in operation during such entire year, then Operating Expenses shall be adjusted by Landlord to reflect the amount that such expenses would normally be expected to have been, in the reasonable opinion of Landlord, had the Building been fully occupied and operational throughout such year, except that in no event shall such adjustment result in an amount less than the actual Operating Expenses.  Any such annualization shall be explained in Landlord’s statement under Section 2.3 hereof.

 

4.                                       Pro-Rations.  Should this Lease commence or terminate at any time other than the first day of an Operating Year, the Additional Rent payable by Tenant on account of Operating Expenses shall be first calculated on the basis of the entire Operating Year and then pro-rated on the basis of the number of days of occupancy.

 

5.                                       Audit.  Tenant shall have the right at all reasonable times within thirty (30) days after Landlord has provided Tenant with a statement of the actual Operating Expenses, and at its sole expense, to audit Landlord’s books and records relating to this Lease for that Operating Year.

 

6.                                       Minimums.  Notwithstanding anything contained herein to the contrary, in no event shall Tenant’s Proportionate Share of Operating Expenses for any calendar year be less than the Operating Expense Allowance.

 

7.                                       Personal Property Taxes.  Tenant will be responsible for ad valorem taxes on its personal property and on the value of the leasehold improvements in the Demised Premises to the extent that the same exceed Building Standard allowances (and if the taxing authorities do not separately assess Tenant’s leasehold improvements, Landlord may make a reasonable allocation of impositions to such improvements).

 

8.                                       Survival.  If, upon expiration or termination of this Lease for any cause, the amount of any Additional Rent due hereunder has not yet been determined, an appropriate payment from Tenant to Landlord or refund from Landlord to Tenant, shall be made promptly after such determination.

 

C-3



 

EXHIBIT “D”

 

Please Initial:

 

 

 

 

 

Landlord

Tenant

 



 

EXHIBIT “E”
RULES AND REGULATIONS

 

1.                                       The sidewalks, lobbies, passages, elevators and stairways shall not be obstructed or used by Tenant for any purpose other than ingress and egress from and to Tenant’s offices.  Landlord shall in all cases retain the right to control or prevent access thereto of all persons whose presence, in the judgement of Landlord, shall be prejudicial to the safety, peace, character or reputation of the building or of any of the tenants.

 

2.                                       The toilet rooms, water closets, sinks, faucets, plumbing or other service apparatus of any kind shall not be used by Tenant for any purposes other than those for which they were designed and installed.  No sweeping, rubbish, rags, ashes, chemicals or other refuse or injurious substances (which shall include medical waste) shall be placed therein or used in connection therewith by Tenant or left by Tenant in the lobbies, passages, elevators or stairways.

 

3.                                       Nothing shall be placed by Tenant on the outside of the building or on its window sills or projections.  Skylights, windows, doors and transoms shall not be covered or obstructed by Tenant, and no window shades, blinds, curtains, screens, storm windows, awnings or other materials shall be installed or placed on any of the windows or in any of the window spaces, except as approved in writing by Landlord.

 

4.                                       No sign, lettering, insignia, advertisement, or notices shall be inscribed, painted, installed or placed on any window or in any window spaces or any other part of the outside or inside of the building, unless first approved in writing by Landlord.  Names shall be placed on suite entrance doors for Tenant by Landlord and not otherwise, and at Tenant’s expense.  In all instances the lettering is to be of design and form approved by Landlord.

 

5.                                       Tenant shall not place additional locks upon any doors and shall surrender all keys for all locks at the end of the tenancy.

 

6.                                       Tenant shall not do or commit, or suffer, or permit to be done or committed, any act or thing whereby, or in consequence whereof, the rights of other tenants will be obstructed or interfered with, or other tenants will in any other way be injured or annoyed.  Tenant shall not use nor keep, nor permit to be used or kept in the building any matter having an offensive odor, nor any kerosene, gasoline, benzine, fuel, or other explosive or highly flammable material.  No birds, fish or animals shall be brought into or kept in or about the premises.

 

7.                                       In order that the premises may be kept in good state of preservation and cleanliness, Tenant shall, during the continuance of its possession, permit personnel and contractors approved by Landlord, and no one else, to clean the premises.  Landlord shall be in no way responsible to Tenant for the removal, disposal or cleaning of any medical equipment or waste or for any damage done to furniture or other effects of Tenant or others by any of Tenant’s employees, or any persons, or for any loss of Tenant’s employees, or for any loss of property of any kind in or from the premises, however occurring.  Tenant shall see each day that the windows are closed, the lights turned out, and doors securely locked before leaving the premises.

 

8.                                       If Tenant desires to introduce signaling, telegraphic, telephonic, protective alarm or other wires, apparatus or devices, Landlord shall direct when and how the same are to be placed, and except as so directed, no installation, boring or cutting shall be permitted.  Landlord shall have the right to prevent and to cut off the transmission of excessive or dangerous current of electricity or annoyances into or through the building or premises and to require the changing of wiring connections or layout at Tenant’s expense, to the extent that Landlord may deem necessary, and further to require compliance with such reasonable rules as Lessor may establish relating thereto, and in the event of non-compliance with the requirements or rules, Landlord shall have the right immediately to cut wiring or to do what it considers necessary to remove the danger, annoyance or electrical interference with apparatus in any part of the building.  All wires installed by Tenant must be clearly tagged at the distributing boards and junction boxes, and elsewhere as required by Landlord, with the number of the office to which said wires lead, and for the purpose for which the wires respectively are used, together with the name of the concern, if any, operating same.

 

9.                                       No furniture, packages, equipment, supplies or merchandise of Tenant will be received in the building, or carried up or down in the elevators or stairways, except during such hours as shall be designated by Landlord, and Landlord in all cases shall also have the exclusive right to prescribe the method and manner in which the same shall be brought in or taken out of the building.  Tenant shall in all cases have the right to exclude heavy furniture, safes, and other articles from the building which may be hazardous or to require them

 

Please initial:

 

 

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

Tenant

 

E-1



 

to be located at designated places in the premises.  The cost of repairing any damage to the building caused by taking in or out furniture, safes or any articles or any damage caused while the same be in the premises, shall be paid by Tenant.

 

10.                                 Without Landlord’s written consent, nothing shall be fastened to, nor shall holes be drilled or nails or screws driven into walls of partitions; nor shall walls or partitions be painted, papered, or otherwise covered or moved in any way, or marked or broken; nor shall any connection be made to electric wires for running fans or motors or other apparatus, devices or equipment; nor shall machinery of any kind other than customary small business machines be allowed on the premises; nor shall Tenant use any other method of heating, air conditioning or air cooling than that provided by Landlord.  Telephones, switchboards and telephone wiring and equipment shall be placed only where designated by Landlord.  No mechanics, other than those employed by Landlord, shall be allowed to work in or about the building without the written consent of Landlord first have been obtained.

 

11.                                 Access may be had by Tenant to the premises at any time, Access may be refused at Landlord’s election, unless the person seeking it is known to the watchman in charge, or has a pass issued by Landlord, or is properly identified to the watchman’s satisfaction.  Landlord shall in no case be responsible for the admission or exclusion of any person.  In case of invasion, hostile attack, insurrection, mob violence, riot, bomb threats, explosion fire or any casualty, Landlord reserves the right to bar or limit access to the building for the safety of occupants or protection of property.

 

12.                                 Landlord reserves the right to rescind, suspend or modify any rules or regulations, and to make such other rules or regulations as, in Landlord’s judgement, may from time to time be needed for the safety, care, maintenance, operation and cleanliness of the building, or for the preservation of good order therein.  Tenant agrees to comply with new or modified regulations of any Federal, State or Municipal authority having appropriate jurisdiction or any regulatory agencies as they may affect the premises or building.  Notice of any action by Landlord referred to in this paragraph, when given to Tenant, shall have the same force and effect as if originally made a part of the foregoing lease.  But new rules and regulations will not, however, be unreasonably inconsistent with the proper and rightful enjoyment of the premises by Tenant under this lease.

 

13.                                 The use of rooms as sleeping quarters is prohibited at all times.

 

E-2



 

EXHIBIT “F”
SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT

 

THIS AGREEMENT, made as of the        day of                         , 200  , by and between                                             , a                         corporation, having an office at                                            (the “Lender”), and                                       , a                            corporation having an office at                                  (the “Tenant”).

 

WITNESSETH:

 

WHEREAS, the Lender has made a loan (together with any present or future amendments or increases thereto, the “Loan”) to                                                    (“Landlord”) evidenced by a Promissory Note of Landlord (together with any present or future amendments or increases thereto, the “Note”) secured by a mortgage from the Landlord, as amended, increased, renewed, modified, consolidated, replaced, or extended being hereinafter referred to as the “Mortgage”, covering all of the Landlord’s right, title and interest in the land, buildings, improvements and other items of property described therein, located in Baltimore County, Maryland and more particularly described in Exhibit “A” annexed hereto and made a part hereof (said land, buildings, improvements, and such other property being hereinafter collectively referred to as the “Mortgaged Premises”) and further secured by an Assignment of Rents and Other Interest (together with any present or future amendments or increases thereto, the “Assignment Rents”), both recorded in the Office of the Recorder of Deeds of Baltimore County, Maryland:

 

WHEREAS, the Landlord and the Tenant entered into a lease dated as of                               , 200  , (said lease, as the same may be amended, renewed, modified, consolidated, replaced or extended being hereinafter referred to as the “Lease”), covering a portion of the Mortgaged Premises (the “Leased Premises”).

 

WHEREAS, the Assignment of Rents assigned to Lender all of Landlord’s right, title, interest in and to the Lease and any other present or future lease of all or any part of the Mortgaged Premises;

 

WHEREAS, the Lender, as a condition to making the loan secured by Mortgage, has required that the Lease be and continue to be subordinate in every respect to the Mortgage; and

 

WHEREAS, the parties hereto desire to effect the subordination of the lease to the Mortgage and to provide for the non-disturbance of the Tenant by the Lender;

 

NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency whereof are hereby acknowledged, Tenant and Lender, intending to be legally bound hereby, covenant and agree as follows:

 

1.                                       The Lease (and all provisions thereof, including any purchase option) shall at all times be subject and subordinate to the provisions of this Agreement in each and every respect to the Mortgage (and all provisions thereof) subject, nevertheless, to the provisions of this Agreement.  The foregoing provision shall be self-operative; however, the Tenant, upon request, shall execute and deliver any certificate which the Landlord or the Lender may request to confirm said subordination by the Tenant.

 

2.                                       The Tenant certifies that (a) the Lease is presently in full force and effect and unmodified, except as noted in this Agreement, and constitutes the sole agreement between Landlord and Tenant relating to Tenant’s occupancy of the Leased Premises, (b) to the best of its knowledge, no event has occurred which constitutes a default under the Lease by the Landlord or which, with the giving of notice, the passage of time or both, would constitute a default by the Landlord under the Lease; (c) to the best of its knowledge, as of the date hereof Tenant has no charge, lien or claim of offset under the Lease and Landlord does not owe any sums to Tenant under the Lease or any other agreement.  The full minimum monthly rental of $                 is payable                          , and Tenant has been given no rent concessions or free rent other than as specifically set forth in the Lease.  The Landlord shall be a third party beneficiary of the certifications as set forth in this paragraph.

 

3.                                       The Lease and rentals thereunder have been assigned to Lender as security for repayment of the Loan.  Lender, as such assignee, hereby directs Tenant to pay to Landlord all rentals and other moneys due and to become due to Landlord under the Lease until receipt of further direction from Lender.  Upon receipt by Tenant of subsequent direction from Lender, Tenant shall pay to Lender, or in accordance with such

 

Please Initial:

 

 

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

Tenant

 

F-1



 

subsequent directions of Lender, all such rentals and other sums due under the Lease, or amounts equal thereto.  Tenant shall have no responsibility or ascertain whether such direction by Lender is permitted under the Mortgage or such Assignment of Rents and Other Interests.  Landlord, by its execution of consent form attached hereto, consents to the foregoing.

 

4.                                       Tenant acknowledges that without the prior written consent of the Lender, or except as permitted by the terms of the lease that no modification of the Lease so as to materially reduce the rents and other charges payable thereunder, or shorten or extend or renew the term thereof or adversely affect the rights or increase the obligations of the Landlord thereunder, or prepay rents or other charges under the Lease for more than on month in advance.  In the event of any default on the part of the Landlord under the Lease, Tenant will give written notice thereof to the Lender, or its successor or assigns whose name and address previously shall have been furnished to the Tenant in writing.  Any right or remedy of Tenant resulting from or dependent upon such notice shall take effect only after notice is go given to the Lender.  Performance by the Lender of any of the Landlord’s obligations under the Lease in accordance with the terms of the Lease shall satisfy provisions of the Lease requiring performance by the Landlord, and the Lender, exercising reasonably due diligence, shall have the reasonable additional period of time under the circumstances to complete such performance.

 

5.                                       If the interest of the Landlord under the Lease Premises shall be transferred by reason of a foreclosure action or other proceedings for enforcement of the Mortgage or pursuant to a transfer in lieu of foreclosure, the Tenant shall be bound to and shall attorn to the person acquiring the interests of the Landlord as a result of any such action or proceeding and such person’s successors and assigns (any of the foregoing being hereafter referred to as the “Successors”) upon the Successor succeeding to the interest of the Landlord in and to the Lease Premises.  Said attornment shall be effective and self-operative without the execution of any further instruments.  The Tenant, upon request, shall execute and deliver any certificate or other instrument necessary or appropriate which the Lender or the Successor may request to effect or confirm said attornment by the Tenant.

 

6.                                       If the interest of the Landlord under the Lease shall be transferred by reason of foreclosure or other proceedings for enforcement of the Mortgage or pursuant to a transfer in lieu of foreclosure then, except as provided in this Agreement, the Successor shall be bound to the Tenant under all of the terms, covenants, and conditions of the Lease for the balance of the term thereof remaining, with the same force and effect as if the Successor were the Landlord (but subject to Paragraph 7 below).

 

7.                                       The Successor shall not and shall not be deemed to (a) adopt or in any other manner be responsible or liable for any representations and warranties made by the Landlord in the Lease (b) be liable for any act, omission or default of Landlord or any prior Landlord and will not be subject to any offsets or defenses which the Tenant might have against Landlord or any prior Landlord, (c) be bound by any amendment or modification of the Lease or by any prepayment of rents or other charges under the Lease for more than one month unless such amendment, modification or prepayment was approved in writing by the Lender, (d) be liable to Tenant for any refund of any security deposit made by the Tenant pursuant to the Lease, except to the extent that the Successor has actually received that security deposit, or (e) be liable to Tenant in any event for any matter relating to the operation, maintenance, or condition of the Mortgaged Premises or Leased Premises prior to the date Successor acquires title to the Lease Premises.  Any rights of the Tenant to terminate or cancel the Lease by reason of the failure of Landlord or any prior Landlord under the Lease to perform any of its obligations under the Lease shall be suspended if and while the Successor is exercising reasonably diligent efforts under the circumstances to cause such obligations to be performed.  The obligations and liability of the Successor shall be limited to and enforceable only against the Successor’s estate and interest in the Leased Premises and not out of or against any other assets or properties of the Successor.

 

8.                                       Notwithstanding anything in the Lease to the contrary, if the interest of the Landlord under the Lease shall be transferred to the Successor, then (a) the Successor shall not be obligated to reconstruct the Leased Premises following a casualty or condemnation thereto.

 

9.                                       If Tenant is not in default hereunder or under the terms of the Lease, the Tenant will not be joined as a party defendant for the purpose of terminating the lease in any foreclosure action or proceeding which may be instituted or taken by the Lender, nor will the Tenant be evicted from the Leased Premises, nor will the Tenant’s leasehold estate under the Lease be terminated or disturbed, nor will any of the Tenant’s rights under the Lease be affected in any way by reason of any default under the Mortgage.

 

10.                                 This Agreement may not be modified except by an agreement in writing signed by the parties hereto or their respective successors in interest.  This Agreement shall inure to the benefit of and be binding upon the parties hereto, their respective heirs, representatives, successors and assigns.

 

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11.                                 Upon a valid expiration or termination of the Lease for any reason, and provided the Lease shall not have been renewed or otherwise extended and Tenant shall have no right to possession of the Leased Premises, Tenant shall execute, acknowledge and deliver to the Landlord, the Lender, and the Successor, a certificate attesting to the expiration or termination of the Lease and waiving all rights to possession of the Leased Premises.

 

12.                                 All notices, demands or requests made pursuant to, under or by virtue of this Agreement must be in writing and mailed to the party to whom the notice, demand or request is being made by certified or registered mail, return receipt requested, at its address set forth above.  Any party may change the place that notices and demands are to be sent by written notice delivered in accordance with this Agreement.

 

13.                                 This Agreement is fully integrated and not in need of parol evidence in order to reflect the intentions of the parties hereto.  The parties hereto intend the literal words of this Agreement to govern the subject matter hereof and all prior negotiations, drafts and other extrinsic communications shall have no significance or evidentiary effect.  This Agreement shall be the whole and only agreement between the parties hereto with regard to the subordination of the Lease and the leasehold interest of Tenant thereunder to the lien or charge of the Mortgage in favor of Lender, and shall supersede and control any prior agreements as to such, or any subordination, including, but not limited to, those provisions, if any, contained in the Lease which provide for the subordination of the Lease and the leasehold interest of Tenant thereunder to a deed or deeds of trust or to a mortgage or mortgages to be thereafter executed.  In the event any one or more of the provisions of this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.  This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

 

14.                                 This Agreement shall continue in effect until all sums due by Landlord to Lender under the Note, the Mortgage and the Assignment of Rents have been paid in full.

 

15.                                 Tenant shall neither suffer nor itself manufacture, store, handle, transport, dispose of, spill, leak, dump any toxic or hazardous waste, medical waste or other waste products or substance (as they may be defined in any federal or state statue, rule or regulation pertaining to or governing such wastes, waste products or substances) on the Premises at any time during the term, or extended term, of the Lease, except in compliance with all applicable laws and regulations.

 

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EXHIBIT “G”
TENANT’S ESTOPPEL CERTIFICATE AND AGREEMENT

 

LANDLORD:

 

TENANT:

 

DATE OF LEASE:

 

PREMISES:

 

The undersigned (“Tenant”) hereby certifies to and agrees with                 , its successors and assigns (“                             ”) that:

 

1.                                       Tenant has accepted possession of the Premises pursuant to the Lease.  The Lease term commenced on                                            .  The termination date of the Lease term, excluding renewals and extensions is                                  .

 

2.                                       Any improvements required by the terms of the Lease to be made by Landlord have been completed to the satisfaction of Tenant in all respects, except for the “punchlist” items, if any, set forth on Schedule 1 attached hereto.  Landlord has (as of the date hereof) fulfilled all of its duties under the Lease (except as otherwise set forth on Schedule 1).  No sums are due by Landlord to Tenant under the Lease or any other agreement between Landlord and Tenant.

 

3.                                       The Lease has not been assigned, modified, supplemented or amended in any way.  The Lease constitutes the entire agreement between the parties and there are no other agreements between Landlord and Tenant concerning the Premises.

 

4.                                       The Lease is valid and in full force and effect, and to the best of Tenant’s knowledge, neither Landlord nor Tenant is in default thereunder.  Tenant has no defense, setoff or counterclaim against Landlord arising out of the Lease or in any way relating thereto, or arising out of any other transaction between Tenant and Landlord, and no event has occurred and no condition exists, which with the giving of notice or the passage of time, or both, will constitute a default under the Lease.

 

5.                                       The monthly rent presently payable under the Lease is $                       per month payable in advance.  All rent and other sums due under the Lease are current and have been paid through                         , 200  .  No rent or other sum payable under the Lease has been paid more than one month in advance.

 

6.                                       All notices and other communications from Tenant to                           shall be in writing and shall be delivered or mailed by registered mail, postage paid, return receipt requested, addressed to                             at:

 

or at such other address as                             , a successor, purchaser, or transferee shall furnish to Tenant in writing.

 

7.                                       This certificate may not be modified, except by an agreement in writing signed by the parties hereto (or their respective successors and assigns) and                       .  This Estoppel Certificate shall be binding on the undersigned, it successors and assigns (including future tenants under the Lease) and shall insure to the benefit of                           , it successors and assigns.

 

 

TENANT:

 

 

Attest/Witness:

 

 

 

 

 

BY:

 

 

 

 

 

DATE:                       , 200   

 

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AGREEMENT OF LEASE

 

THIS AGREEMENT OF LEASE (this “Lease”) is made this 14th day of May, 2002, by and between BEAVER DAM LIMITED LIABILITY COMPANY, a Maryland limited liability company (“Landlord”), and SINCLAIR BROADCAST GROUP, INC., a Maryland corporation (“Tenant”).

 

Intending to be legally bound, Landlord and Tenant agree as set forth below.

 

1.                                       DEMISED PREMISES. Landlord, for the term and subject to the provisions and conditions hereof, leases to Tenant, and Tenant rents from Landlord, the space (the “Demised Premises”) containing ten thousand four hundred twelve (10,412) rentable square feet, as shown on Exhibit “A” attached hereto and made part of hereof, in the building erected on certain land (the “Land”) located at 10706 Beaver Dam Road, Cockeysville, Maryland 21030, together with rights of ingress and egress thereto, and with the right in common with others to use, to the extent applicable, the elevators and common passageways, stairways, vestibules, and to pass over and park on that portion of land owned by Landlord and designated by the Landlord for Tenant’s parking.

 

2.                                       LEASE TERM. The lease term (the “Lease Term”) shall commence (the “Commencement Date”) on the date this Lease is signed, and shall continue until April 30, 2010 and thereafter unless extended or sooner terminated as provided herein.

 

3.                                       FIXED RENT.  Fixed rent (the “Fixed Rent”) is payable by Tenant in monthly installments in the amounts set forth in the Rent Schedule attached hereto as Rider No. 1.  Fixed Rent is payable by Tenant beginning on the earlier to occur of September 15, 2002, or the date that Tenant commences its broadcast operation, and is payable without prior notice or demand, and without any setoff or deduction whatsoever, in advance, on the first day of each month at such place as Landlord may direct.  Annual Fixed Rent shall include the Operating Expense Allowance as set forth in Section 1 of Exhibit “C” hereto.  Annual Fixed Rent shall be subject to adjustment as provided in Section 2 of Exhibit “C” hereto.  In addition, if the Lease Term commences on a day other than the first day of a calendar month, Tenant shall pay to Landlord, on or before the Commencement Date of the Lease Term, a pro rata portion of the monthly installment of rent (Including Fixed Rent and any Additional Rent as herein provided), such pro rata portion to be based on the actual number of calendar days remaining in such partial month after the Commencement Date of the Lease Term.  If the Lease Term shall expire on other than the last day of a calendar month, such monthly installment of Fixed Rent and Additional Rent shall be prorated for each calendar day of such partial month.  If any portion of Fixed Rent, Additional Rent, or any other sum payable to Landlord hereunder shall be due and unpaid for more than five (5) days, the balance due shall be subject to and include a ten percent (10%) penalty.  In addition, if any portion of Fixed Rent, Additional Rent or any other sum payable to Landlord hereunder shall be due and unpaid for more than five (5) days after written notice of non-payment by Landlord to Tenant (which written notice shall not be required more than two times in any period of twelve (12) consecutive months), it shall thereafter bear interest at a rate equal to three percent (3%) per annum greater than the highest prime rate of interest announced from time to time by Bank of America (or its successor) (the “Default Rate”), as the same may change from time to time, from the due date until the date of payment thereof by Tenant, provided, however, that nothing herein contained shall be construed or implemented in such a manner as to allow Landlord to charge or receive interest in excess of the maximum legal rate then allowed by law.

 

4.                                       ADDITIONAL RENT.  Tenant shall pay as additional rent (“Additional Rent”) its proportionate share of all Operating Expenses in the amounts and in the manner set forth in Exhibit “C” hereto and all other sums due hereunder.

 

5.                                       SECURITY DEPOSIT.  Intentionally deleted.

 

Please Initial:

 

 

 

 

 

/s/ J.D.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 

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6.                                       USE OF DEMISED PREMISES.  Tenant covenants and agrees to use and occupy the Demised Premises for general office purposes and general broadcast purposes, including without limitation a television broadcast studio, and other uses incidental to and associated with such purposes and only in conformity with the law.  Tenant shall not use or permit any use of the Demised Premises which creates any safety or environmental hazard, or which would: (i) be dangerous to the Demised Premises, the Building, or other tenants, or (ii) be disturbing to other tenants of the Building, or (iii) cause any material increase in the premium cost for any insurance which Landlord may then have in effect with respect the Building generally, unless Tenant shall agree to pay for any such increase.

 

7.                                       IMPROVEMENTS TO PREMISES.

 

7.1.                              Tenant Improvements.  The cost of all improvements to the Demised Premises necessary for the Tenant’s use and occupancy thereof shall be paid for by Tenant.  All such tenant improvements shall be performed in accordance with Section 8 of this Lease.

 

7.2.                              Acceptance of possession.  By its assumption of possession of the Demised Premises the Tenant shall for all purposes of the provisions of this Lease be deemed to have accepted them and to have acknowledged them to be in acceptable condition.

 

8.                                       ALTERATIONS OR IMPROVEMENTS BY TENANT.

 

8.1                                 During the Lease Term, Tenant shall not make any material alterations, additions, improvements, redecorating, or other changes to the Demised Premises without the prior written approval (such approval not to be unreasonably withheld or delayed) of Landlord and then only in accordance with plans and specifications previously approved in writing by Landlord and subject to such reasonable conditions as Landlord may require, including, without limitation, that Tenant be required to pay for any increased cost to Landlord occasioned thereby or attributed thereto.  Landlord acknowledges and agrees that Tenant shall modify the Demised Premises to use at least part of same as a television broadcast studio.  Prior to the termination of this Lease and without additional notice to Tenant by Landlord, Tenant shall either: (i) remove any such alterations or additions and repair any damage to the Building or the Demised Premises occasioned by their installation or removal and restore the Demised Premises to substantially the same condition as existed prior to the time when any such alterations or additions were made, or (ii) reimburse Landlord for the reasonable cost of removing such alterations or additions and the restoration of the Demised Premises.  Landlord shall determine any such reasonable cost as called for in clause (ii) above prior to the termination of this Lease and Tenant shall reimburse Landlord within thirty (30) days of receipt of written notice together with appropriate supporting documentation.

 

8.2                                 After the time of initial occupancy of the Demised Premises by Tenant, Tenant shall have the right to construct and alter the Demised Premises, subject to paragraph 8.1, provided, however, that such construction does not include any alterations affecting the exterior or structural components of the Building, or any material alterations to the systems of the Building, including, but not limited to HVAC, electric, or plumbing.  Any Tenant construction shall be performed by Tenant’s contractors and shall be solely Tenant’s responsibility.  All of Tenant’s construction shall be at Tenant’s expense.

 

8.3                                 Prior to commencement of construction:

 

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(a)                                  Landlord shall approve in writing (such approval not to be unreasonably withheld or delayed) the plans and specifications for any alterations to the Demised Premises, such approval by Landlord shall not be deemed to be an approval by Landlord of any work performed pursuant thereto or approval or acceptance by Landlord of any material furnished with respect thereto or a representation by Landlord as to the fitness of such work or materials, and shall not give rise to any liability or responsibility of Landlord.

 

(b)                                 Landlord shall approve orally or in writing (such approval not to be unreasonably withheld or delayed) each contractor and subcontractor (which shall each be of sound financial status and good reputation in the community and a duly licensed and qualified professional in the state and, to the extent necessary, township in which the Building is located) to perform such alterations.

 

(c)                                  Landlord may require Tenant to provide a certificate evidencing each contractor’s liability, completed operations and worker’s compensation insurance and naming Landlord as an additional insured, which insurance shall be with a carrier, in amounts and otherwise on terms satisfactory to Landlord.

 

(d)                                 Tenant shall deliver to Landlord a payment and performance bond for each contractor and subcontractor as Landlord in its sole discretion shall require.  Such payment and performance bonds shall be issued by companies acceptable to Landlord in its sole discretion, and shall otherwise be acceptable in form and content to Landlord in its sole discretion.

 

(e)                                  Each contractor shall execute and Tenant shall cause to be filed with the appropriate governmental agency in a timely manner such waivers and releases of liens and other documents necessary to insure against imposition of any mechanics’ and material suppliers’ liens for labor furnished and material supplied in connection with the alterations and improvements.  Tenant shall deliver copies of such waivers and releases of liens to Landlord together with evidence of the timely filing thereof.

 

8.4                                 Tenant covenants and agrees:

 

(a)                                  To secure and pay for all necessary building and other permits and fees in connection with the alterations and improvements.

 

(b)                                 All construction shall be done in compliance with all material applicable laws and ordinances and in a good and workerlike manner in accordance with the approved plans and specifications.

 

(c)                                  To obtain and deliver to Landlord a Certificate of Occupancy (or its equivalent) issued by the appropriate governmental authority upon completion of the construction of the Demised Premises.

 

(d)                                 To abide by any collective bargaining agreements or other union contracts applicable to Tenant, the Building or Landlord.

 

(e)                                  All materials, supplies and workers shall enter the Demised Premises and all work shall be performed at times and by means reasonably satisfactory to Landlord.

 

8.5                                 Tenant and any approved contractor, subcontractor or material supplier may, after notice to Landlord, enter the Demised Premises during reasonable times after the execution hereof for the purpose of constructing the improvements as aforesaid and inspecting and measuring the Demised Premises, provided that such entry does not, in Landlord’s reasonable judgment, interfere with the operations of the Building or with Landlord’s work therein, or that of any other tenants in the Building.  Tenant shall be responsible of any and all damage or injury caused by such contractors, subcontractors, material suppliers and Tenant in the course of constructing the improvements, and Tenant’s obligation to indemnify, defend, and hold Landlord harmless set forth in Article 14 shall, include without limitation all work done by Tenant pursuant to this paragraph 8 and shall commence on the date of execution hereof.  Notwithstanding the foregoing, Tenant shall not be responsible for any property damage or personal injury due to the negligence of Landlord or its agents or assigns.

 

8.6                                 Landlord and its agents or other representatives shall be permitted to enter the Demised Premises to examine and inspect the construction of the alterations and improvements, provided, that no such inspection or examination shall constitute an approval or warranty or give rise to any liability of Landlord with respect to any thereof.

 

9.                                       COVENANTS OF LANDLORD.  Landlord will supply for normal office use on business days from 8:00 a.m. to 6:00 p.m. (excluding holidays), heat and air conditioning equipment, elevator service (where applicable), janitorial and cleaning services, electricity, and hot and cold water, all in amounts consistent with

 

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services provided in similar buildings in the community, provided that: (i) Tenant shall, at its expense, install meters to measure the electricity consumed at the Demised Premises; (ii) Landlord shall not be liable for failure to supply or interruption of any such service by reason of any cause beyond Landlord’s reasonable control; (iii) if Tenant requires janitorial and cleaning services beyond those provided by Landlord, Tenant shall arrange for such additional services through Landlord, and Tenant shall pay Landlord upon receipt of billing therefor; and (iv) if Tenant requires installation a separate or supplementary heating, cooling, ventilating and/or air conditioning system Tenant shall pay all costs in connection with the furnishing, installation and operation thereof.  Landlord shall be responsible, at its sole cost and expense, for structural repairs and capital improvements (unless otherwise provided for herein) to the Building, unless such repairs are necessitated by damage caused by the negligence or misconduct of Tenant or Tenant’s officers, directors, employees, invitees or agents.

 

10.                                 COVENANTS OF TENANT.  Tenant will (at Tenant’s sole cost and expense):

 

10.1                           Keep the Demised Premises in good order and repair, reasonable wear and tear expected;

 

10.2                           Surrender the Demised Premises at the end of this Lease in the same condition in which Tenant has agreed to keep it during the Lease Term;

 

10.3                           Not place, erect, maintain or display any sign or other marking of any kind whatsoever on the windows, doors or exterior walls of the Demised Premises and not use or place any curtains, blinds, drapes or coverings over any exterior windows or upon the window surfaces which are visible from the outside of the Building; except the Tenant shall be permitted to install its standard signage and logo on Tenant’s entrance door with the approval of Landlord (which approval shall not be unreasonably withheld or delayed), and Tenant shall be listed on the directories on the elevator lobby of Tenant’s floor, the Building lobby and Building exterior in the same manner as other tenants in the Building;

 

10.4                           Be financially responsible for repairs and replacements to the Demised Premises and the Building made necessary by reason of damage thereto caused by Tenant or its agents, servants, invitees, or employees.  In the event Tenant shall fail to make such repairs within sixty (60) days of the date such work becomes necessary, Landlord may, but shall not be required to, perform such work and charge the amount of the expense therefor, with interest accruing and payable thereon, all in accordance with Article 18 below;

 

10.5                           Comply with all laws, enactments and regulations of any governmental authority relating or applicable to Tenant’s occupancy of the Demised Premises and any covenants, easements and restrictions governing the Land or Building, and indemnify, defend and hold Landlord harmless from all consequences from its failure to do so;

 

10.6                           Promptly notify Landlord of any damage to or defects in the Demised Premises, any notices of violation received by Tenant and of any injuries to persons or property which occur therein or claims relating thereto;

 

10.7                           Subject to Article 8, pay for any alterations, improvements or additions to the Demised Premises and any light bulbs, tubes and non-standard Building items installed by or for Tenant, and allow no lien to attach to the Building with respect to any of the foregoing;

 

10.8                           Without the prior written consent of Landlord, not place within the Demised Premises or bring into the Building any machinery, equipment, or other personalty other than customary office furnishings and machinery and equipment necessary for the operation of a television studio, but in no event shall such machinery and equipment exceed the design capacity of the Building;

 

10.9                           Not use the Demised Premises for the generation, manufacture, refining, transportation, treatment, storage or disposal of any hazardous substance or waste or for any purpose which poses a substantial risk of damage to the environment; in this regard Tenant represents that it does not have a Standard Industrial Classification number as designated in the Standard Industrial Classifications Manual prepared by the Office of Management and Budget in the Executive Office of the President of the United States that is any of 22-39 inclusive, 46-49 inclusive, 51 or 76 and will not engage in any activity which would subject Tenant to the provisions of the Federal Comprehensive Environmental Response, Liability and Clean-Up Act (42 U.S.C. Section 9601 et seg.), the Federal Water Pollution Control (33 U.S.C.A. Section 1151 et seg.), the Clean Water Act of 1977 (33 U.S.C.A. Section 1251 et seg.). or any other federal, state or local environmental law, regulation or ordinance;

 

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10.10                     Comply with all rules and regulations which may hereafter be promulgated by Landlord and with all reasonable changes and additions thereto upon notice by Landlord to Tenant (such rules and regulations, together with all changes and additions thereto, are part of this Lease); Landlord shall notify Tenant in writing at least fifteen (15) days prior to the promulgation of such rules and regulations or changes thereto.  Landlord agrees to enforce such rules and regulations against all tenants in the Building in a non- discriminating fashion and to take reasonable action to cause a cessation of any violation of all rules that interfere with Tenant’s use and quiet enjoyment of the Demised Premises;

 

10.11                     Comply with all reasonable recommendations of Landlord’s or Tenant’s insurance carriers relating to layout, use storage of materials and maintenance of the Demised Premises.

 

11.                                 ASSIGNMENT AND SUBLETTING.  Tenant shall not assign, pledge, mortgage, or otherwise transfer or encumber this Lease, nor sublet all or any part of the Demised Premises or permit the same to be occupied or used by anyone other than Tenant or its employees without Landlord’s prior written consent (such consent not to be unreasonable withheld or delayed).  Notwithstanding the foregoing, Tenant shall have the right to assign this Lease or sublet the Demised Premises or any part thereof, without the consent of Landlord, to any parent, subsidiary, or affiliate of Tenant.  In the event of an assignment by Tenant with Landlord’s written consent, Tenant shall be released from liability under this Lease as of the date Landlord is given notice of such assignment.  Any consent by Landlord hereunder (or assignment where such consent is not required) shall not constitute a waiver of strict future compliance by Tenant of the provisions of this Article 11 or a release of Tenant from the full performance by Tenant with any of the terms, covenants, provisions, or conditions in this Lease.  For purposes of this Article 11, any transfer or change in control of Tenant (or any subtenant, assignee, or occupant) by operation of law or otherwise, shall be deemed an assignment hereunder, including, without limitation, any merger, consolidation, dissolution, or any change in the controlling equity interests of Tenant or any subtenant, assignee, or occupant (in a single transaction or a series of related transaction).  Any assignment or subletting in contravention of the provisions of this Article 11 shall be void.

 

12.                                 EMINENT DOMAIN.  If the whole or more than fifty percent (50%) of the Demised Premises (or use or occupancy of the Demised Premises) shall be taken or condemned by an governmental or quasi-governmental authority for any public or quasi-public use or purpose (including sale under threat of such a taking), or if the owner elects to convey title to the condemnor by a deed in lieu of condemnation, or if all or any portion of the Land or Building are so taken, condemned or conveyed and as a result thereof, in Landlord’s judgement, the Demised Premises cannot be used for Tenant’s permitted use as set forth herein, then this Lease shall cease and terminate as of the date when title vests in such governmental or quasi-governmental authority and the Fixed Rent and Additional Rent shall be abated on the date when such title vests in such governmental or quasi-governmental authority.  If less than fifty percent (50%) of the Demised Premises is taken or condemned by any governmental or quasi-governmental authority for any public or quasi-public use or purpose (including sale under threat of such a taking), the Fixed Rent and Tenant’s proportionate share shall be equitably adjusted )on the basis of the number of square feet before and after such event) on the date when title vests in such governmental or quasi-governmental authority and the Lease shall otherwise continue in full force and effect.  In any case, Tenant shall have no claim against Landlord for any portion of the amount that may be awarded as damages as a result of any governmental or quasi-governmental taking or condemnation (or sale under threat or such taking or condemnation); and all rights of Tenant to damages therefor are hereby assigned by Tenant to Landlord.  The foregoing shall not, however, deprive Tenant of any separate award for moving expenses, dislocation damages or for any other award which would not reduce the award payable to Landlord.

 

13.                                 CASUALTY DAMAGE.

 

13.1                           In the event of damage to or destruction of the Demised Premises caused by fire or other casualty, or any such damage or destruction to the Building or the facilities necessary to provide services and normal access to the Demised Premises in accordance herewith, Landlord, after receipt of written notice thereof from Tenant, shall undertake to make repairs and restorations with reasonable diligence as hereinafter provided, unless this Lease has been terminated by Landlord or Tenant as hereinafter provided or unless any mortgagee which is entitled to receive casualty insurance proceeds fails to make available to Landlord a sufficient amount of such proceeds to cover the cost of such repairs and restoration.  If (i) the damage is of such nature or extent that, in Landlord’s sole judgement, more than one hundred and twenty (120) days would be required (with normal work crews and hours) to repair and restore the part of the Demised Premises or Building which has been damaged, or (ii) the Demised Premises or Building is so damaged that, in Landlord’s sole judgement, it is uneconomical to restore or repair the Demised Premises or the Building, as the case may be, or (iii) less than two (2) years then remain on the current Lease Term, Landlord shall so advise Tenant promptly, and either party, in the case described in clause (i) above, or Landlord, in the cases described in clauses (ii) or (iii) above, within thirty (30) days after any such damage or destruction shall have the right to

 

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terminate this Lease by written notice to the other, as of the date specified in such notice, which termination date shall be no later than thirty (30) days after the date of such notice.

 

13.2                           In the event of fire or other casualty damage, provided this Lease is not terminated pursuant to the terms of this Article 13 and is otherwise in full force and effect, and sufficient casualty insurance proceeds are available for application to such restoration or repair, Landlord shall proceed diligently to restore the Demised Premises to substantially its condition prior to the occurrence of the damage.  Landlord shall not be obligated to repair or restore any alterations, additions, fixtures or equipment which Tenant may have installed (whether or not Tenant has the right or the obligation to remove the same or is required to leave the same on the Demised Premises as of the expiration or earlier termination of this Lease) unless Tenant, in a manner satisfactory to Landlord, assures payment in full of all costs as may be incurred by Landlord in connection therewith.

 

13.3                           Landlord shall not insure any improvements or alterations to the Demised Premises in excess of Building standard tenant improvements, or any fixtures, equipment or other property of Tenant.  Tenant shall, at its sole expense, insure the value of its leasehold improvements, fixtures, equipment and personal property located in or on the Demised Premises, for the purpose of providing funds to Landlord to repair and restore the Demised Premises to substantially its condition prior to occurrences of the casualty occurrence.  If there are any such alterations, fixtures or additions and Tenant does not assure or agree to assure payment of the cost of restoration or repair as aforesaid, Landlord shall have the right to restore the Demised Premises to substantially the same condition as existed prior to the damage, excepting such alterations, additions or fixtures.

 

13.4                           The validity and effect of this Lease shall not be impaired in any way by the failure of Landlord to complete repairs and restoration of the Demised Premises or of the Building within one hundred and twenty (120) days after commencement of the work, even if Landlord had in good faith notified Tenant that the repair and restoration could be completed within such period, provided that Landlord proceeds diligently with such repair and restoration.  In the case of damage to the Demised Premises which is of a nature or extent that Tenant’s continued occupancy is in the reasonable judgement of Landlord and Tenant substantially impaired, then the Annual Fixed Rent and Tenant’s Proportionate Share otherwise payable by Tenant hereunder shall be equitably abated or adjusted for the duration of such impairment.  Tenant shall be responsible to repair all of Tenant’s leasehold improvements and all equipment, fixtures and personal property located in or on the Demised Premises subject to Article 8 and to such other reasonable conditions as Landlord may require.

 

14.                                 INSURANCE AND INDEMNIFICATION OF LANDLORD; WAIVER OF SUBROGATION.

 

14.1                           Tenant covenants and agrees to exonerate, indemnify, defend, protect and save Landlord, its representatives and Landlord’s managing agent, if any, harmless from and against any and all claims, demands, expenses, losses, suits and damages as may be occasioned by reason of (i) any accident or matter occurring on or about the Demised Premises, causing injury to persons or damage to property (including, without limitation, the Demised Premises), unless such accident or other matter resulted solely from the negligence or otherwise tortious act of Landlord or Landlord’s agents or employees, (ii) the failure of Tenant fully and faithfully to perform the obligations and observe the conditions of this Lease, and (iii) the negligence or otherwise tortious act of Tenant or anyone in or about the Building on behalf of or at the invitation or right of Tenant.  Tenant shall maintain in full force and effect, at its own expense, comprehensive general liability insurance (including a contractual liability and fire legal liability insurance endorsement) naming as an additional insured Landlord and Landlord’s managing agents, if any, against claims for bodily injury, death or property damage in amounts not less than $1,000,000 (or such higher limits as may be determined by Landlord from time to time) and reasonable business interruption insurance.  All policies shall be issued by companies having a Best’s financial rating of A or better and a size class rating of XII (12) or larger or otherwise acceptable to Landlord.  At or prior to the Commencement Date, Tenant shall deposit the policy or policies of such insurance, or certificates thereof, with Landlord and shall deposit with Landlord renewals thereof at least fifteen (15) days prior to each expiration.  Said policy or policies of insurance or certificates thereof shall have attached thereto an endorsement that such policy shall not be canceled without at least thirty (30) prior written notice to Landlord and Landlord’s managing agent, if any, that no act or omission of Tenant shall invalidate the interest of Landlord under said insurance and expressly waiving all rights of subrogation as set forth below.  At Landlord’s request, Tenant shall provide Landlord with a letter from an authorized representative of its insurance carrier stating that Tenant’s current and effective insurance coverage complies with the requirements contained herein.

 

6



 

14.2                           Landlord covenants and agrees to exonerate, indemnify, defend, protect, and save Tenant harmless from and against any and all claims, demands, expenses, losses, suits, and damages as may be occasioned by reason of (i) the failure of Landlord fully and faithfully to perform the obligations and observe the conditions of this Lease, and (ii) the negligence or otherwise tortious act of Landlord, its agents, assigns, servants, or employees.

 

14.3                           Landlord and Tenant hereby release the other from any and all liability or responsibility to the other or anyone claiming through or under them by way of subrogation or otherwise for any loss or damage to property covered by insurance then in force, even if any such fire or other casualty occurrence shall have been caused by the fault or negligence of the other party, or anyone for whom such party may be responsible.  This release shall be applicable and in full force and effect, however, only to the extent of and with respect to any loss or damage occurring during such time as the policy or policies of insurance covering said loss shall contain a clause or endorsements to the effect that this release shall not adversely affect or impair said insurance or prejudice the right of the insured to recover thereunder.  To the extent available, Landlord and tenant further agree to provide such endorsements for said insurance policies agreeing to the waiver of subrogation as required herein.

 

15.                                 INSPECTION; ACCESS; CHANGES IN BUILDING FACILITIES.

 

15.1                           Landlord and its agents or other representatives shall be permitted to enter the Demised Premises at reasonable times (i) to examine, inspect and protect the Demised Premises and the Building and (ii) during the last six (6) months of the original or any renewal term, to show it to prospective tenants and to affix to any suitable part of the exterior of the Building in which the Demised Premises is located a notice for letting the Demised Premises or the Building or (at any time during the original or any renewal term) selling the Building.  However, in no event shall any such entry by Landlord or its agents or other representatives unreasonably interfere with Tenant’s use of the Demised Premises as a television studio.

 

15.2                           Landlord shall have access to and use of all areas in the Demised Premises (including exterior Building walls, core corridor walls and doors and any core corridor entrances), any roofs adjacent to the Demised Premises, and any space in or adjacent to the Demised Premises used for shafts, stacks, pipes, conduits, fan rooms, ducts, electric or other utilities, sinks or other Building facilities, as well as access to and through the Demised Premises for the purpose of operation, maintenance, decoration and repair, provided, however, that except in emergencies such access shall not be exercised so as to interfere unreasonable with Tenant’s use of the Demised Premises.  Tenant shall permit Landlord to install, use and maintain pipes, ducts and conduits within the demising walls, bearing columns and ceilings of the Demised Premises, provided that the installation work is performed at such times and by such methods as will not materially interfere with Tenant’s use of the Demised Premises, materially reduce the floor area thereof or materially and adversely affect Tenant’s layout, and further provided that Landlord performs all work with due diligence and care so as to not damage Tenant’s property or the Demised Premises.  Landlord and Tenant shall cooperate with each other in the location of Landlord’s and Tenant’s facilities requiring such access.

 

15.3                           Landlord reserves the right at any time, without incurring any liability to Tenant therefor, to make such changes in or to the Building and the fixtures and equipment thereof, as well as in or to the street entrances, halls, foyers, passages, elevators, if any, and stairways thereof, as it may deem necessary or desirable; provided that there shall be no change that materially detracts from the character or quality of the Building, nor unreasonably interferes with Tenant’s ability to conduct its business, including without limitation its operation of a television studio.

 

16.                                 DEFAULT.  Any other provisions in this Lease notwithstanding, it shall be an event of default (“Event of Default”) under this Lease if: (i) Tenant fails to pay any installment of Fixed Rent, Additional Rent or other sum payable by Tenant hereunder when due and such failure continues for a period of five (5) days after written notice of such non-payment be Landlord to Tenant, or (ii) Tenant fails to observe or perform any other covenant or agreement of Tenant herein contained and such failure continues after written notice given by or on behalf of Landlord to Tenant for more than thirty (30) days, or (iii) Tenant uses or occupies the Demised Premises other than as permitted hereunder, or (iv) Tenant assigns or sublets, or purports to assign or sublet, the Demised Premises or any part thereof other than in the manner and upon the conditions set forth herein, or (v) Tenant abandons or vacates the Demised Premises or, without Landlord’s prior written consent, Tenant removes or attempts to remove or manifests an intention to remove any or all of Tenant’s property from the Demised Premises other than in the ordinary and usual course of business, or (vi) Tenant (which, for purposes of this clause, includes any guarantor hereunder) files a petition commencing a voluntary case, or has filed against it a petition commencing an involuntary case, under the Federal Bankruptcy Code (Title 11 of the Unites States Code), as now or hereafter in effect, or under any similar law, or files or has filed against it a petition or answer in bankruptcy or for reorganization or for an arrangement pursuant to any state bankruptcy

 

7



 

law or any similar state law, and, in the case of any such involuntary action, such action shall not be dismissed, discharged or denied within sixty (60) days after the filing thereof, or Tenant consents or acquiesces in the filing thereof, or (vii) if Tenant is a banking organization, Tenant files an application for protection, voluntary liquidation or dissolution applicable to banking organization, or (viii) a custodian, receiver, trustee or liquidator of Tenant or of all or substantially all of Tenant’s property or of the Demised Premises shall be appointed in any proceedings brought by or against Tenant and, in the latter case, such entity shall not be discharged within sixty (60) days after such appointment or Tenant consents to or acquiesces in such appointment, or (ix) Tenant shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or (x) any of the foregoing occurs as to any guarantor or surety of Tenant’s performance under this Lease, or such guarantor or surety defaults on any provision under its guaranty or suretyship agreement.

 

8



 

17.                                 LANDLORD’S REMEDIES.

 

17.1                           In the event of any Event of Default, Landlord at any time thereafter may at its option exercise any one or more of the following remedies:

 

(a)                                  Termination of Lease.  Landlord may terminate this Lease, by written notice to Tenant, upon ten (10) days’ written notice and opportunity to cure.  Upon such termination Tenant shall immediately surrender possession of the Demised Premises to Landlord, and Landlord shall immediately become entitled to receive from Tenant an amount equal to the difference between the aggregate of all Fixed Rent and Additional Rent reserved under this Lease for the balance of the Lease Term, and the fair rental value of the Demised Premises for that period, determined as of the date of such termination.

 

(b)                                 Reletting.  Upon terminating this Lease, Landlord may re-enter and repossess the Demised Premises, or any part thereof, and lease them to any other person upon such terms as Landlord shall deem reasonable, for a term within or beyond the term of this Lease; provided, that Tenant shall remain liable for all sums specified in this Section 17.

 

(c)                                  Removal of Contents by Landlord.  After giving thirty (30) days’ written notice to Tenant, Landlord may remove all property from the Demised Premises, and store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant, without service of notice or resort to legal process (all of which Tenant expressly waives) and without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby.  Landlord shall have a lien for the payment of all sums agreed to be paid by Tenant herein upon all Tenant’s property, which lien is to be in addition to Landlord’s lien now or hereafter provided by law.

 

(d)                                 Right of Distress and Lien.  In addition to all other rights and remedies of Landlord, if an Event of Default shall occur, Landlord shall, to the extent permitted by law, have a right of distress for rent and lien on all of Tenant’s fixtures, merchandise and equipment in the Demised Premises, as security for rent and all other charges payable hereunder.

 

17.2                           Injunction.  In the event of breach or threatened breach by Tenant of any provision of this Lease, Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity in addition to other remedies provided for herein.

 

17.3                           Waiver of Redemption.  Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future law in the event this Lease is terminated, or in the event of Landlord obtaining possession of the Demised Premises, or Tenant is evicted or dispossessed for any cause, by reason of violation by Tenant of any of the provisions of this Lease.

 

17.4                           Not Exclusive Right.  No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy herein or by law provided, but each shall be cumulative and in addition to every other right or remedy given herein or now or hereafter existing at law or in equity by statute.

 

17.5                           Expenses.  In the event that Landlord commences suit for the repossession of the Demised Premises, for the recovery or rent or any other amount due under the provisions of this Lease, or because of the material breach of any other covenant herein contained on the part of Tenant to be kept or performed, and a breach shall be established, Tenant shall pay to Landlord all reasonable expenses incurred in connection therewith, including reasonable attorneys’ fees.

 

18.                                 LANDLORD’S RIGHT TO CURE TENANT’S DEFAULT.  If Tenant defaults in the making of any payment or in the doing of any act herein required to be made or done by Tenant, after any notice and cure period provided for in this Lease, then Landlord may, but shall not be required to, make such payment or do such act, and charge the amount of Landlord’s expense to Tenant, with interest accruing and payable thereon at the Default Rate as of the date of the expenditure by Landlord or as of the date of payment thereof by Tenant, whichever is higher, from the date paid or incurred by Landlord to the date of payment hereof by Tenant; provided, however, that nothing herein contained shall be construed or implemented in such a manner as to allow Landlord to charge or receive interest in excess of the maximum legal rate then allowed by law.  Such payment and interest shall constitute Additional Rent hereunder due and payable with the next monthly installment of Fixed Rent; but the making of such payment or the taking of such action by Landlord

 

9



 

shall not operate to cure such default by Tenant or to estop Landlord from the pursuit of any remedy to which Landlord would otherwise be entitled.

 

19.                                 ESTOPPEL CERTIFICATE.  Tenant shall immediately prior to occupancy execute Tenant Estoppel Certificate as provided for herein and attached hereto as Exhibit “G”, and from time to time, at the request of Landlord, upon ten (10) business days notice, execute and deliver to Landlord a statement provided by Landlord to Tenant, it being intended that any such statement delivered pursuant hereto may be relied upon by others with whom Landlord may be dealing.  Failure to execute said Estoppel Certificate shall constitute a default under this lease.

 

20.                                 HOLDING OVER.  If Tenant retains possession of the Demised Premises or any part thereof after the termination of this Lease or expiration of the Lease Term or otherwise in the absence of any written agreement between Landlord and Tenant concerning any such continuance of the term, Tenant shall pay Landlord (1) as liquidated damages for such holding over alone, an amount, calculated on a per diem basis for each day of such unlawful retention, equal to the greater of (a) one hundred twenty-five percent (125%) of the Annual Fixed Rent, or (b) the established market rental for the Demised Premises, for the time Tenant thus remains in possession, plus, in each case, all Additional Rent and other sums payable hereunder, and (ii) all other reasonable damages, costs, and expenses sustained by Landlord by reason of Tenant’s holding over.  Without limiting any rights and remedies of Landlord resulting by reason of the wrongful holding over by Tenant, or creating any right in Tenant to continue in possession of the Demised Premises, all Tenant’s obligations with respect to the use, occupancy and maintenance of the Demised Premises shall continue during such period of unlawful retention.

 

21.                                 SURRENDER OF DEMISED PREMISES.  Tenant shall, at the end of the Lease Term, or any extension thereof, promptly surrender the Demised Premises in good order and condition and in conformity with the applicable provisions of this Lease, excepting only reasonable wear and tear.

 

22.                                 SUBORDINATION AND ATTORNMENT.  This Lease and the estate, interest and rights hereby created are subordinate to any mortgage now or hereafter placed upon the Building or the Land or any estate or interest therein, including, without limitation, any mortgage on any leasehold estate, and to all renewals, modifications, consolidations, replacements and extensions of the same as well as any substitutions therefor, as provided for on the attached Exhibit “F”.  Tenant agrees that in the event any person, firm, corporation or other entity acquires the right to possession of the Building or the Land, including any mortgagee or holder of any estate or interest having priority over this Lease, Tenant shall, if requested by such person, firm, corporation or other entity, attorn to and become the tenant of such person, firm, corporation or other entity, upon the same terms and conditions as are set forth herein for the balance of the Lease Term.  Notwithstanding the foregoing, any mortgagee may, at any time, subordinate its mortgage to this Lease, without Tenant’s consent, by notice in writing to Tenant, and thereupon this Lease shall be deemed prior to such mortgage without regard to their respective dates of execution and delivery, and in that event, such mortgagee shall have the same rights with respect to this Lease as though it had been executed prior to the execution and delivery of the mortgage.  Tenant, if requested by Landlord, shall execute any such instruments in recordable form as may be reasonably required by Landlord in order to confirm or effect the subordination or priority of this Lease, as the case may be, and the attornment of Tenant to future landlords in accordance with the terms of this Article.  Landlord shall furnish to Tenant a non-disturbance agreement from the holder of such mortgage providing that so long as Tenant is not in default of this Lease Tenant’s occupancy shall not be disturbed and the obligations of Landlord will continue to be performed.

 

23.                                 BROKERS.  Each party represents and warrants to the other that it, he, she or they have not made any agreement or taken any action which may cause anyone to become entitled to a commission as a result of the transactions contemplated by this Lease, and each will indemnify and defend the other from any all claims, actual or threatened, for compensation by any such third person by reason of such party’s breach of its, his, her or their representation or warranty contained in this Article 23.

 

24.                                 NOTICES.  All notices or other communications hereunder shall be in writing and shall be deemed to have been given (i) if hand delivered or sent by an express mail or delivery service or by courier, then if and when delivered to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby), or (ii) if mailed, then on the next business day following the date on which such communication is deposited in the United States mails, by first class registered or certified mail, return receipt requested, postage prepaid, and addressed to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself

 

10



 

by notice to the other party as required hereby).  All notices and communications to Tenant may also be given by leaving the same at the Demised Premises during business hours.

 

24.1

 

If to Landlord:

 

Beaver Dam Limited Liability Company

 

 

 

 

10706 Beaver Dam Road

 

 

 

 

Cockeysville, Maryland 21030

 

 

 

 

 

24.2

 

If to Tenant:

 

Sinclair Broadcast Group, Inc.

 

 

 

 

10706 Beaver Dam Road

 

 

 

 

Cockeysville, MD 21030

 

 

 

 

Attn: General Counsel

 

 

25.                                 MISCELLANEOUS.

 

25.1                           Successors and Assigns.  The obligations of this Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that Landlord and each successive owner of the Building and/or the Land shall be liable only for obligations accruing during the period of its ownership or interest in the Building, and from and after the transfer by Landlord or such successive owner of its ownership or other interest in the Building, Tenant shall look solely to the successors in title for the performance of Landlord’s obligations hereunder arising thereafter.

 

25.2                           Waivers.  No delay or forbearance by Landlord in exercising any right or remedy hereunder or in undertaking or performing any act matter which is not expressly required to be undertaken by Landlord shall be construed, respectively, to be a waiver of Landlord’s rights or to represent any agreement by Landlord to undertake or perform such act or matter thereafter.

 

25.3                           Waiver of Trial by Jury.  Tenant hereby consents to the exclusive jurisdiction of the courts of the state where the Demised Premises are located and in any and all actions or proceedings arising hereunder or pursuant hereto.  Landlord and Tenant agree to waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant’s use of or occupancy of the Demised Premises and/or any claim of injury or damage and any emergency or any other statutory remedy.

 

25.4                           Time of the Essence.  All times, wherever specified herein for the performance by Landlord or Tenant of their respective obligations hereunder, are of the essence of this Lease.

 

25.5                           Severability.  Each covenant and agreement in this Lease shall for all purposes be construed to be a separate and independent covenant or agreement.  If any provision in this Lease or the application thereof shall to any extent be invalid, illegal or otherwise unenforceable, the remainder of this Lease, and the application of such provision other than as invalid, illegal or unenforceable, shall not be affected thereby; and such provisions in this Lease shall be valid and enforceable to the fullest extent permitted by law.

 

25.6                           Amendment and Modification.  This Lease, including all Exhibits hereto, each of which is incorporated in this Lease, contains the entire agreement between the parties hereto, and shall not be amended, modified or supplemented unless by agreement in writing signed by both Landlord and Tenant.

 

25.7                           Headings and Terms.  The title and headings and table of contents of this Lease are for convenience of reference only and shall not in any way be utilized to construe or interpret the agreement of the parties as otherwise set forth herein.  The term “Landlord” and term “Tenant” as used herein shall mean, where appropriate, all persons acting by or on behalf of the respective parties, except as to any required approval, consents or amendments, modifications or supplements hereunder when such terms shall only mean the parties originally named on the first page of this Lease as Landlord and Tenant, respectively, and their agents so authorized in writing.

 

25.8                           Governing Law.  This Lease shall be governed by and construed in accordance with the laws of the State of Maryland.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed on the day and year first above written.

 

 

LANDLORD:

 

BEAVER DAM LIMITED LIABILITY COMPANY

 

 

Witness:

 

 

 

 

 

/s/ Hyris Feldman

 

By:

/s/ J. Duncan Smith

 

 

Name:

J. Duncan Smith

 

 

Title:

Member

 

 

 

 

 

TENANT:

 

SINCLAIR BROADCAST GROUP, INC.

Witness:

 

 

/s/ Leiloni Reynolds

 

By:

/s/ David B. Amy

 

 

Name:

David B. Amy

 

 

Title:

CFO

 

 

12



 

EXHIBIT “B”
SPECIAL STIPULATIONS

 

1.                                       Landlord shall furnish electricity to the Demised Premises for normal office use on business days from 8:00 a.m. to 6:00 p.m. (excluding holidays).  Tenant shall pay for any electricity consumed at the Demised Premises during any other times.

 

2.                                       The normal working hours for the security guard at the building are from 8:45 a.m. to 5:15 p.m. on business days (excluding holidays).  If Tenant requests the services of the security guard at other times, Landlord will provide one, if available, and Tenant will pay for the guard’s services.

 

3.                                       The parking lot for the Building shall remain lighted until 11:00 p.m. on a daily basis.

 

Please Initial:

 

 

 

 

 

/s/ J.D.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 



 

EXHIBIT “C”

PROVISIONS REGARDING ADDITIONAL RENT AND
ADJUSTMENTS TO FIX RENT

 

1.                                       Definitions.

 

A.                                   Essential Capital Improvements” shall mean (a) a labor saving device, energy saving device or other installation, improvement or replacement which is intended to reduce Operating Expenses, whether or not voluntary or required by governmental mandate, or (b) an installation or improvement required by reason of any law, ordinance or regulation which did not exist on the date of the execution of this Lease, or (c) an installation or improvement intended to improve the safety of tenants in the Building generally, whether or not voluntary or required by governmental mandate.

 

B.                                     Operating Expense Allowance” shall mean the Tenant’s Proportionate Share of the amount of Operating Expenses for the calendar year 2002.

 

C.                                     Operating Expenses” shall mean all of Landlord’s operating costs and expenses of whatever kind or nature paid or incurred in the operation and maintenance of the Building and the Land, all computed on the accrual basis and in accordance with the terms of this Lease, including, but not limited to, the following:

 

1.                                       Gas, electricity, steam, fuel, water, sewer and other utility charges (including surcharge’s) of whatever nature (excluding use of utilities by other tenants such as may be submetered or separately metered pursuant to their leases);

 

2.                                       Insurance premiums and the amounts of any deductibles paid by Landlord;

 

3.                                       Building personnel costs, including, but not limited to, salaries, wages, fringe benefits, taxes, insurance and other direct and indirect costs;

 

4.                                       Costs of service and maintenance contracts including, but not limited to, cleaning and security services;

 

5.                                       All other maintenance  and repair expenses  (excluding repairs  and general maintenance paid by proceeds of insurance or by Tenant or other third parties, and alterations solely attributable to tenants of the Building other than Tenant) and the cost of materials and supplies;

 

6.                                       Any other costs and expenses (i.e. items which are not capital improvements) incurred by Landlord in operating the Building, including ground rent, if any;

 

7.                                       The cost of any additional services not provided to the Building on the Commencement Date but thereafter provided by Landlord in the prudent management of the Building;

 

8.                                       The annual amortization of any Essential of Capital Improvement which is made by Landlord after completion of initial construction of the Building, based on the useful life of the improvement plus interest at the Prime Rate on the date of the expenditure on the underappreciated portion thereof;

 

9.                                       Landlord’s central office accounting costs and overhead applicable to the Building;

 

10.                                 Accounting fees for preparing the Operating Expense statement;

 

11.                                 Management fees payable to the managing agent; and

 

12.                                 Taxes, allocated on a per diem basis if the tax year is different than the Operating Year.

 

Please Initial:

 

 

/s/ J.D.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 

C-1



 

Operating Expenses shall not include:

 

1.                                       Special cleaning or other services, not offered to all tenants of the Building;

 

2.                                       Any charge for depreciation, interest or rents (except, if applicable) (ground rents) paid or incurred by Landlord; or

 

3.                                       Leasing commissions.

 

If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would constitute and Operating Expense) to a tenant who has undertaken to perform such work or service in lieu of performance by Landlord, Operating Expenses shall nevertheless be deemed to include the amount Landlord would reasonably have incurred if Landlord has in fact performed the work or service at its expense.

 

Not withstanding the foregoing, Operating Expenses shall not include interest and amortization, depreciation, ground rents, expenses for work performed for other tenants in Building, expenses for repairs or other work occasioned by fire or other insurable casualty (to the extent covered by insurance), expenses for leasing or processing new tenants, leasing commissions, advertising expenses), legal expenses incurred in enforcing the terms of any tenant leases, salaries for any employees of Landlord above those attributable the management, operation and maintenance of the Building, incurred by Landlord in connection with the operation and maintenance of the Building.

 

D.                                    Operating Year” shall mean each calendar year or such other period of twelve (12) months as hereafter may be adopted by Landlord as its fiscal year, occurring during the Lease Term.

 

E.                                      Taxes” shall mean all taxes, assessments and governmental charges, whether Federal, state, county or municipal, and whether general or special, ordinary or extraordinary, foreseen or unforeseen, imposed upon the Building or the Land or their operation, whether or not directly paid by Landlord.  Taxes shall not include income taxes, excess profit taxes, franchise taxes, or other taxes imposed or measured on or by the income of Landlord from the operation of the Building or the Land; provided, however, that if, due to a future change in the method of taxation or assessment, any income, profit, franchise or other tax, however designated, shall be imposed in substitution, in whole or in part, for (or in lieu of) any tax, assessment or charge which would otherwise be included within the definition of Taxes, such other tax shall be deemed to be included with Taxes as defined herein to the extent of such substitution.  There shall be added to Taxes the expenses of any contests (administrative or otherwise) of Taxes incurred during the Operating Year.  Tenant shall pay to the appropriate governmental authority any use and occupancy tax.  In the event that Landlord is required by law to collect such tax, Tenant shall pay such use and occupancy tax to Landlord as Additional Rent upon demand and Landlord shall remit any amounts so paid to Landlord to the appropriate governmental authority.

 

F.                                      Tenants’s Proportionate Share” shall mean a fraction, the numerator of which shall be the rentable square feet of Demised Premises, and the denominator of which is seventy four thousand two hundred (74,200) net rentable square feet which is the aggregate net rentable square feet in the Building.

 

2.                                       Additional Rent for Operating Expenses.

 

2.1                                 Commencing on January 1, 2003, Tenant shall pay during the Lease Term as Additional Rent, the amount by which Tenants’ Proportionate Share of Operating Expenses exceeds the Operating Expense Allowance.

 

2.2                                 As soon as available in each Operating Year during the Lease Term, Landlord shall provide Tenant with a written statement setting forth the Operating Expense Allowance and a projection of Tenant’s Proportionate Share of Operating Expenses for such year commencing on the first day of the first month following receipt of such statement and continuing until receipt by Tenant of Landlord’s statement of the next projected Tenant’s Proportionate Share of Operating Expenses, Tenant shall pay to Landlord with each monthly installment of Fixed Rent an amount equal to one-twelfth (l/12th) of the excess of such projected Tenant’s Proportionate Share of Operating Expenses over the Operating Expense Allowance.  Concurrently with the first payment required hereinabove, Tenant shall pay to Landlord an amount equal to the excess of such projected Tenant’s Proportionate Share of Operating Expenses over the Operating Expense Allowance multiplied by a fraction, the numerator of which is the number of calendar months of the Operating Year in question which have elapsed prior to the due date of such first payment and the denominator of which is twelve (12), less any payments made by Tenant during said period on account of such excess Operating Expenses.

 

C-2



 

2.3                                 Landlord shall, as soon as possible after the close each such Operating Year, provide Tenant with a statement of the actual operating expenses for such period.  Any underpayment by Tenant during such Operating Year due to the fact that projected Operating Expenses were less than actual Operating Expenses shall be paid to Landlord within 30 days after Tenant’s receipt of a statement for such deficiency.  Any overpayment by Tenant due to the fact that projected Operating Expenses were greater than actual Operating Expenses for such year shall be credited to the next Additional Rent payable by Tenant under this Exhibit C.  If the Operating Expenses are less than the Operating Expense Allowance, a credit or check will not be issued.

 

3.                                       Adjustment for Vacancies.  In determining Operating Expenses for any Operating Year, if the Building was less than fully occupied during such entire year, or was not in operation during such entire year, then Operating Expenses shall be adjusted by Landlord to reflect the amount that such expenses would normally be expected to have been, in the reasonable opinion of Landlord, had the Building been fully occupied and operational throughout such year, except that in no event shall such adjustment result in an amount less than the actual Operating Expenses.  Any such annualization shall be explained in Landlord’s statement under Section 2.3 hereof.

 

4.                                       Pro-Rations.  Should this Lease commence or terminate at any time other than the first day of an Operating Year, the Additional Rent payable by Tenant on account of Operating Expenses shall be first calculated on the basis of the entire Operating Year and then pro-rated on the basis of the number of days of occupancy.

 

5.                                       Audit.  Tenant shall have the right at all reasonable times within thirty (30) days after Landlord has provided Tenant with a statement of the actual Operating Expenses, and at its sole expense, to audit Landlord’s books and records relating to this Lease for that Operating Year.

 

6.                                       Minimums.  Notwithstanding anything contained herein to the contrary, in no event shall Tenant’s Proportionate Share of Operating Expenses for any calendar year be less than the Operating Expense Allowance.

 

7.                                       Personal Property Taxes.  Tenant will be responsible for ad valorem taxes on its personal property and on the value of the leasehold improvements in the Demised Premises to the extent that the same exceed Building Standard allowances (and if the taxing authorities do not separately assess Tenant’s leasehold improvements, Landlord may make a reasonable allocation of impositions to such improvements).

 

8.                                       Survival.  If, upon expiration or termination of this Lease for any cause, the amount of any Additional Rent due hereunder has not yet been determined, an appropriate payment from Tenant to Landlord or refund from Landlord to Tenant, shall be made promptly after such determination.

 

C-3



 

EXHIBIT “D”
RULES AND REGULATIONS

 

1.                                       The sidewalks, lobbies, passages, elevators and stairways shall not be obstructed or used by Tenant for any purpose other than ingress and egress from and to Tenant’s offices.  Landlord shall in all cases retain the right to control or prevent access thereto of all persons whose presence, in the judgement of Landlord, shall be prejudicial to the safety, peace, character or reputation of the building or of any of the tenants.

 

2.                                       The toilet rooms, water closets, sinks, faucets, plumbing or other service apparatus of any kind shall not be used by Tenant for any purposes other than those for which they were designed and installed.  No sweeping, rubbish, rags, ashes, chemicals or other refuse or injurious substances (which shall include medical waste) shall be placed therein or used in connection therewith by Tenant or left by Tenant in the lobbies, passages, elevators or stairways.

 

3.                                       Nothing shall be placed by Tenant on the outside of the building or on its window sills or projections.  Skylights, windows, doors and transoms shall not be covered or obstructed by Tenant, and no window shades, blinds, curtains, screens, storm windows, awnings or other materials shall be installed or placed on any of the windows or in any of the window spaces, except as approved in writing by Landlord.

 

4.                                       No sign, lettering, insignia, advertisement, or notices shall be inscribed, painted, installed or placed on any window or in any window spaces or any other part of the outside or inside of the building, unless first approved in writing by Landlord.  Names shall be placed on suite entrance doors for Tenant by Landlord and not otherwise, and at Tenant’s expense.  In all instances the lettering is to be of design and form approved by Landlord.

 

5.                                       Tenant shall not place additional locks upon any doors and shall surrender all keys for all locks at the end of the tenancy.

 

6.                                       Tenant shall not do or commit, or suffer, or permit to be done or committed, any act or thing whereby, or in consequence whereof, the rights of other tenants will be obstructed or interfered with, or other tenants will in any other way be injured or annoyed.  Tenant shall not use nor keep, nor permit to be used or kept in the building any matter having an offensive odor, nor any kerosene, gasoline, benzine, fuel, or other explosive or highly flammable material.  No birds, fish or animals shall be brought into or kept in or about the premises.

 

7.                                       In order that the premises may be kept in good state of preservation and cleanliness, Tenant shall, during the continuance of its possession, permit personnel and contractors approved by Landlord, and no one else, to clean the premises.  Landlord shall be in no way responsible to Tenant for the removal, disposal or cleaning of any medical equipment or waste or for any damage done to furniture or other effects of Tenant or others by any of Tenant’s employees, or any persons, or for any loss of Tenant’s employees, or for any loss of property of any kind in or from the premises, however occurring.  Tenant shall see each day that the windows are closed, the lights turned out, and doors securely locked before leaving the premises.

 

8.                                       If Tenant desires to introduce signaling, telegraphic, telephonic, protective alarm or other wires, apparatus or devices, Landlord shall direct when and how the same are to be placed, and except as so directed, no installation, boring or cutting shall be permitted.  Landlord shall have the right to prevent and to cut off the transmission of excessive or dangerous current of electricity or annoyances into or through the building or premises and to require the changing of wiring connections or layout at Tenant’s expense, to the extent that Landlord may deem necessary, and further to require compliance with such reasonable rules as Lessor may establish relating thereto, and in the event of non-compliance with the requirements or rules, Landlord shall have the right immediately to cut wiring or to do what it considers necessary to remove the danger, annoyance or electrical interference with apparatus in any part of the building.  All wires installed by Tenant must be clearly tagged at the distributing boards and junction boxes, and elsewhere as required by Landlord, with the number of the office to which said wires lead, and for the purpose for which the wires respectively are used, together with the name of the concern, if any, operating same.

 

9.                                       No furniture, packages, equipment, supplies or merchandise of Tenant will be received in the building, or carried up or down in the elevators or stairways, except during such hours as shall be designated by Landlord, and Landlord in all cases shall also have the exclusive right to prescribe the method and manner in which the same shall be brought in or taken out of the building. Tenant shall in all cases have the right to exclude heavy furniture, safes, and other articles from the building which may be hazardous or to require them

 

Please Initial:

 

 

/s/ J.D.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 

D-1



 

to be located at designated places in the premises.  The cost of repairing any damage to the building caused by taking in or out furniture, safes or any articles or any damage caused while the same be in the premises, shall be paid by Tenant.

 

10.                                 Without Landlord’s written consent, nothing shall be fastened to, nor shall holes be drilled or nails or screws driven into walls of partitions; nor shall walls or partitions be painted, papered, or otherwise covered or moved in any way, or marked or broken; nor shall any connection be made to electric wires for running fans or motors or other apparatus, devices or equipment; nor shall machinery of any kind other than customary small business machines be allowed on the premises; nor shall Tenant use any other method of heating, air conditioning or air cooling than that provided by Landlord.  Telephones, switchboards and telephone wiring and equipment shall be placed only where designated by Landlord.  No mechanics, other than those employed by Landlord, shall be allowed to work in or about the building without the written consent of Landlord first have been obtained.

 

11.                                 Access may be had by Tenant to the premises at any time, Access may be refused at Landlord’s election, unless the person seeking it is known to the watchman in charge, or has a pass issued by Landlord, or is properly identified to the watchman’s satisfaction.  Landlord shall in no case be responsible for the admission or exclusion of any person.  In case of invasion, hostile attack, insurrection, mob violence, riot, bomb threats, explosion fire or any casualty, Landlord reserves the right to bar or limit access to the building for the safety of occupants or protection of property.

 

12.                                 Landlord reserves the right to rescind, suspend or modify any rules or regulations, and to make such other rules or regulations as, in Landlord’s judgement, may from time to time be needed for the safety, care, maintenance, operation and cleanliness of the building, or for the preservation of good order therein.  Tenant agrees to comply with new or modified regulations of any Federal, State or Municipal authority having appropriate jurisdiction or any regulatory agencies as they may affect the premises or building.  Notice of any action by Landlord referred to in this paragraph, when given to Tenant, shall have the same force and effect as if originally made a part of the foregoing lease.  But new rules and regulations will not, however, be unreasonably inconsistent with the proper and rightful enjoyment of the premises by Tenant under this lease.

 

13.                                 The use of rooms as sleeping quarters is prohibited at all times.

 

D-2



 

EXHIBIT “E”
SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT

 

THIS AGREEMENT, made as of the               day of                        , 200  , by and between                                           , a                                        corporation, having an office at                                                 (the “Lender”), and                                      , a                                          corporation having an office at                                        (the “Tenant”).

 

WITNESSETH:

 

WHEREAS, the Lender has made a loan (together with any present or future amendments or increases thereto, the “Loan”) to                            (“Landlord”) evidenced by a Promissory Note of Landlord (together with any present or future amendments or increases thereto, the “Note”) secured by a mortgage from the Landlord, as amended, increased, renewed, modified, consolidated, replaced, or extended being hereinafter referred to as the “Mortgage”, covering all of the Landlord’s right, title and interest in the land, buildings, improvements and other items of property described therein, located in Baltimore County, Maryland and more particularly described in Exhibit “A” annexed hereto and made a part hereof (said land, buildings, improvements, and such other property being hereinafter collectively referred to as the “Mortgaged Premises”) and further secured by an Assignment of Rents and Other Interest (together with any present or future amendments or increases thereto, the “Assignment Rents”), both recorded in the Office of the Recorder of Deeds of Baltimore County, Maryland:

 

WHEREAS, the Landlord and the Tenant entered into a lease dated as of                     , 200  , (said lease, as the same may be amended, renewed, modified, consolidated, replaced or extended being hereinafter referred to as the “Lease”), covering a portion of the Mortgaged Premises (the “Leased Premises”).

 

WHEREAS, the Assignment of Rents assigned to Lender all of Landlord’s right, title, interest in and to the Lease and any other present or future lease of all or any part of the Mortgaged Premises;

 

WHEREAS, the Lender, as a condition to making the loan secured by Mortgage, has required that the Lease be and continue to be subordinate in every respect to the Mortgage; and

 

WHEREAS, the parties hereto desire to effect the subordination of the lease to the Mortgage and to provide for the non-disturbance of the Tenant by the Lender;

 

NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency whereof are hereby acknowledged, Tenant and Lender, intending to be legally bound hereby, covenant and agree as follows:

 

1.                                       The Lease (and all provisions thereof, including any purchase option) shall at all times be subject and subordinate to the provisions of this Agreement in each and every respect to the Mortgage (and all provisions thereof) subject, nevertheless, to the provisions of this Agreement.  The foregoing provision shall be self-operative; however, the Tenant, upon request, shall execute and deliver any certificate which the Landlord or the Lender may request to confirm said subordination by the Tenant.

 

2.                                       The Tenant certifies that (a) the Lease is presently in full force and effect and unmodified, except as noted in this Agreement, and constitutes the sole agreement between Landlord and Tenant relating to Tenant’s occupancy of the Leased Premises, (b) to the best of its knowledge, no event has occurred which constitutes a default under the Lease by the Landlord or which, with the giving of notice, the passage of time or both, would constitute a default by the Landlord under the Lease; (c) to the best of its knowledge, as of the date hereof Tenant has no charge, lien or claim of offset under the Lease and Landlord does not owe any sums to Tenant under the Lease or any other agreement.  The full minimum monthly rental of $                        is payable                       , and Tenant has been given no rent concessions or free rent other than as specifically set forth in the Lease.  The Landlord shall be a third party beneficiary of the certifications as set forth in this paragraph.

 

3.                                       The Lease and rentals thereunder have been assigned to Lender as security for repayment of the Loan.  Lender, as such assignee, hereby directs Tenant to pay to Landlord all rentals and other moneys due and to become due to Landlord under the Lease until receipt of further direction from Lender.  Upon receipt by Tenant of subsequent direction from Lender, Tenant shall pay to Lender, or in accordance with such

 

Please Initial:

 

 

/s/ J.D.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 

E-1



 

subsequent directions of Lender, all such rentals and other sums due under the Lease, or amounts equal thereto.  Tenant shall have no responsibility or ascertain whether such direction by Lender is permitted under the Mortgage or such Assignment of Rents and Other Interests.  Landlord, by its execution of consent form attached hereto, consents to the foregoing.

 

4.                                       Tenant acknowledges that without the prior written consent of the Lender, or except as permitted by the terms of the lease that no modification of the Lease so as to materially reduce the rents and other charges payable thereunder, or shorten or extend or renew the term thereof or adversely affect the rights or increase the obligations of the Landlord thereunder, or prepay rents or other charges under the Lease for more than on month in advance.  In the event of any default on the part of the Landlord under the Lease, Tenant will give written notice thereof to the Lender, or its successor or assigns whose name and address previously shall have been furnished to the Tenant in writing.  Any right or remedy of Tenant resulting from or dependent upon such notice shall take effect only after notice is go given to the Lender.  Performance by the Lender of any of the Landlord’s obligations under the Lease in accordance with the terms of the Lease shall satisfy provisions of the Lease requiring performance by the Landlord, and the Lender, exercising reasonably due diligence, shall have the reasonable additional period of time under the circumstances to complete such performance.

 

5.                                       If the interest of the Landlord under the Lease Premises shall be transferred by reason of a foreclosure action or other proceedings for enforcement of the Mortgage or pursuant to a transfer in lieu of foreclosure, the Tenant shall be bound to and shall attorn to the person acquiring the interests of the Landlord as a result of any such action or proceeding and such person’s successors and assigns (any of the foregoing being hereafter referred to as the “Successors”) upon the Successor succeeding to the interest of the Landlord in and to the Lease Premises.  Said attornment shall be effective and self-operative without the execution of any further instruments.  The Tenant, upon request, shall execute and deliver any certificate or other instrument necessary or appropriate which the Lender or the Successor may request to effect or confirm said attornment by the Tenant.

 

6.                                       If the interest of the Landlord under the Lease shall be transferred by reason of foreclosure or other proceedings for enforcement of the Mortgage or pursuant to a transfer in lieu of foreclosure then, except as provided in this Agreement, the Successor shall be bound to the Tenant under all of the terms, covenants, and conditions of the Lease for the balance of the term thereof remaining, with the same force and effect as if the Successor were the Landlord (but subject to Paragraph 7 below).

 

7.                                       The Successor shall not and shall not be deemed to (a) adopt or in any other manner be responsible or liable for any representations and warranties made by the Landlord in the Lease (b) be liable for any act, omission or default of Landlord or any prior Landlord and will not be subject to any offsets or defenses which the Tenant might have against Landlord or any prior Landlord, (c) be bound by any amendment or modification of the Lease or by any prepayment of rents or other charges under the Lease for more than one month unless such amendment, modification or prepayment was approved in writing by the Lender, (d) be liable to Tenant for any refund of any security deposit made by the Tenant pursuant to the Lease, except to the extent that the Successor has actually received that security deposit, or (e) be liable to Tenant in any event for any matter relating to the operation, maintenance, or condition of the Mortgaged Premises or Leased Premises prior to the date Successor acquires title to the Lease Premises.  Any rights of the Tenant to terminate or cancel the Lease by reason of the failure of Landlord or any prior Landlord under the Lease to perform any of its obligations under the Lease shall be suspended if and while the Successor is exercising reasonably diligent efforts under the circumstances to cause such obligations to be performed.  The obligations and liability of the Successor shall be limited to and enforceable only against the Successor’s estate and interest in the Leased Premises and not out of or against any other assets or properties of the Successor.

 

8.                                       Notwithstanding anything in the Lease to the contrary, if the interest of the Landlord under the Lease shall be transferred to the Successor, then (a) the Successor shall not be obligated to reconstruct the Leased Premises following a casualty or condemnation thereto.

 

9.                                       If Tenant is not in default hereunder or under the terms of the Lease, the Tenant will not be joined as a party defendant for the purpose of terminating the lease in any foreclosure action or proceeding which may be instituted or taken by the Lender, nor will the Tenant be evicted from the Leased Premises, nor will the Tenant’s leasehold estate under the Lease be terminated or disturbed, nor will any of the Tenant’s rights under the Lease be affected in any way by reason of any default under the Mortgage.

 

10.                                 This Agreement may not be modified except by an agreement in writing signed by the parties hereto or their respective successors in interest.  This Agreement shall inure to the benefit of and be binding upon the parties hereto, their respective heirs, representatives, successors and assigns.

 

E-2



 

11.                                 Upon a valid expiration or termination of the Lease for any reason, and provided the Lease shall not have been renewed or otherwise extended and Tenant shall have no right to possession of the Leased Premises, Tenant shall execute, acknowledge and deliver to the Landlord, the Lender, and the Successor, a certificate attesting to the expiration or termination of the Lease and waiving all rights to possession of the Leased Premises.

 

12.                                 All notices, demands or requests made pursuant to, under or by virtue of this Agreement must be in writing and mailed to the party to whom the notice, demand or request is being made by certified or registered mail, return receipt requested, at its address set forth above.  Any party may change the place that notices and demands are to be sent by written notice delivered in accordance with this Agreement.

 

13.                                 This Agreement is fully integrated and not in need of parol evidence in order to reflect the intentions of the parties hereto.  The parties hereto intend the literal words of this Agreement to govern the subject matter hereof and all prior negotiations, drafts and other extrinsic communications shall have no significance or evidentiary effect.  This Agreement shall be the whole and only agreement between the parties hereto with regard to the subordination of the Lease and the leasehold interest of Tenant thereunder to the lien or charge of the Mortgage in favor of Lender, and shall supersede and control any prior agreements as to such, or any subordination, including, but not limited to, those provisions, if any, contained in the Lease which provide for the subordination of the Lease and the leasehold interest of Tenant thereunder to a deed or deeds of trust or to a mortgage or mortgages to be thereafter executed.  In the event any one or more of the provisions of this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.  This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

 

14.                                 This Agreement shall continue in effect until all sums due by Landlord to Lender under the Note, the Mortgage and the Assignment of Rents have been paid in full.

 

15.                                 Tenant shall neither suffer nor itself manufacture, store, handle, transport, dispose of, spill, leak, dump any toxic or hazardous waste, medical waste or other waste products or substance (as they may be defined in any federal or state statue, rule or regulation pertaining to or governing such wastes, waste products or substances) on the Premises at any time during the term, or extended term, of the Lease, except in compliance with all applicable laws and regulations.

 

E-3



 

IN WITNESS WHEREOF, the parties hereto have hereunto caused this Agreement to be duly executed as of the day and year first above written.

 

 

LENDER:

 

 

 

 

 

 

 

 

 

BY:

 

 

 

 

 

 

 

TENANT:

 

 

 

 

 

 

 

 

 

 

 

BY:

 

 

 

 

 

 

 

CONSENT

 

The undersigned consents to the foregoing.

 

 

LANDLORD:
BEAVER DAM LIMITED/LIABILITY COMPANY

 

 

 

 

 

BY:

/s/ J. Duncan Smith

 

 

Name:

  J. Duncan Smith

 

 

Title:

  Member

 

 

E-4



 

EXHIBIT “F”
TENANT’S ESTOPPEL CERTIFICATE AND AGREEMENT

 

LANDLORD:

 

TENANT:

 

DATE OF LEASE:

 

PREMISES:

 

The undersigned (“Tenant”) hereby certifies to and agrees with                           , its successors and assigns (“                        ”) that:

 

1.                                       Tenant has accepted possession of the Premises pursuant to the Lease.  The Lease term commenced on                                      .  The termination date of the Lease term, excluding renewals and extensions is                               .

 

2.                                       Any improvements required by the terms of the Lease to be made by Landlord have been completed to the satisfaction of Tenant in all respects, except for the “punchlist” items, if any, set forth on Schedule 1 attached hereto.  Landlord has (as of the date hereof) fulfilled all of its duties under the Lease (except as otherwise set forth on Schedule 1).  No sums are due by Landlord to Tenant under the Lease or any other agreement between Landlord and Tenant.

 

3.                                       The Lease has not been assigned, modified, supplemented or amended in any way.  The Lease constitutes the entire agreement between the parties and there are no other agreements between Landlord and Tenant concerning the Premises.

 

4.                                       The Lease is valid and in full force and effect, and to the best of Tenant’s knowledge, neither Landlord nor Tenant is in default thereunder.  Tenant has no defense, setoff or counterclaim against Landlord arising out of the Lease or in any way relating thereto, or arising out of any other transaction between Tenant and Landlord, and no event has occurred and no condition exists, which with the giving of notice or the passage of time, or both, will constitute a default under the Lease.

 

5.                                       The monthly rent presently payable under the Lease is $                        per month payable in advance.  All rent and other sums due under the Lease are current and have been paid through                      , 200  .  No rent or other sum payable under the Lease has been paid more than one month in advance.

 

6.                                       All notices and other communications from Tenant to                      shall be in writing and shall be delivered or mailed by registered mail, postage paid, return receipt requested, addressed to                      at:

 

or at such other address as                           , a successor, purchaser, or transferee shall furnish to Tenant in writing.

 

7.                                       This certificate may not be modified, except by an agreement in writing signed by the parties hereto (or their respective successors and assigns) and                             .  This Estoppel Certificate shall be binding on the undersigned, it successors and assigns (including future tenants under the Lease) and shall insure to the benefit of                , it successors and assigns.

 

 

TENANT:

 

 

Attest/Witness:

 

 

 

 

 

BY:

 

 

 

 

 

DATE:                       , 200   

 

F-1



 

RENT SCHEDULE
RIDER #1

 

Lease
Year

 

Exp.
Date

 

Monthly

 

Annually

 

1

 

04/30/03

 

14,316.50

 

171,798.00

 

2

 

04/30/04

 

14,746.00

 

176,951.94

 

3

 

04/30/05

 

15,188.37

 

182,260.50

 

4

 

04/30/06

 

15,644.03

 

187,728.31

 

5

 

04/30/07

 

16,113.35

 

193,360.16

 

6

 

04/30/08

 

16,596.75

 

199,160.97

 

7

 

04/30/09

 

17,094.65

 

205,135.80

 

8

 

04/30/10

 

17,607.49

 

211,289.87

 

 



AGREEMENT OF LEASE

 

THIS AGREEMENT OF LEASE (“Lease”) is made this 25 day of May, 2000 by and between BEAVER DAM LIMITED LIABILITY COMPANY, a Maryland limited liability company, (“Landlord”) and SINCLAIR BROADCAST GROUP (“Tenant”).

 

Intending to be legally bound, Landlord and Tenant agree as set forth below.

 

1.                                       DEMISED PREMISES. Landlord, for the term and subject to the provisions and conditions hereof, leases to Tenant, and Tenant rents from Landlord, the space (the “Demised Premises”) containing 3,757 rentable square feet, as shown on Exhibit “A” attached hereto and made part of hereof, in the building erected on certain land (the “Land”) located at 10706 Beaver Dam Road, Cockeysville, Maryland 21030, together with rights of ingress and egress thereto, and with the right in common with others to use, to the extent applicable, the elevators and common passageways, stairways, vestibules, and to pass over and park on that portion of land owned by Landlord and designated by the Landlord for Tenant’s parking.  The Building contains 90,000 rentable square feet.

 

2.                                       LEASE TERM. The lease term (the “Lease Term”) shall commence on the commencement date (the “Commencement Date”) which shall be May 1, 2000, and shall continue until April 30, 2010 and thereafter unless extended or sooner terminated as provided herein.

 

3.                                       FIXED RENT. Fixed rent (the “Fixed Rent”) is payable by Tenant beginning on the Commencement Date in monthly installations each equal to (See Rent Schedule - Rider#l), representing one- twelfth (1/12) of the annual Fixed Rent (the “Annual Fixed Rent”) equal to (See Rent Schedule - Rider#l), without prior notice or demand, and without any setoff or deduction whatsoever, in advance, on the first day of each month at such place as Landlord may direct. Annual Fixed Rent shall include the Operating Expense Allowance as set forth in Section I(1) of Exhibit “C” hereto. Annual Fixed Rent shall be subject to adjustment as provided in Section II of Exhibit “C” hereto. In addition, if the Lease Term commences on a day other than the first day of a calendar month, Tenant shall pay to Landlord, on or before the Commencement Date of the Lease Term, a pro rata portion of the monthly installment of rent (Including Fixed Rent and any Additional Rent as herein provided), such pro rata portion to be based on the actual number of calendar days remaining in such partial month after the Commencement Date of the Lease Term. If the Lease Term shall expire on other than the last day of a calendar month, such monthly installment of Fixed Rent and Additional Rent shall be prorated for each calendar day of such partial month. If any portion of Fixed Rent, Additional Rent, or any other sum payable to Landlord hereunder shall be due and unpaid for more than five (5) days, the balance due shall be subject to and include a 10 percent penalty. In addition, if any portion of Fixed Rent, Additional Rent or any other sum payable to Landlord hereunder shall be due and unpaid for more than five (5) days after written notice of non-payment by Landlord to Tenant (which written notice shall not be required more than two times in any period of twelve (12) consecutive months), it shall thereafter bear interest at a rate equal to three percent (3%) per annum greater than the highest prime rate of interest announced from time to time by NationsBank (or its successor) (the “Default Rate”), as the same may change from time to time, from the due date until the date of payment thereof by Tenant, provided, however, that nothing herein contained shall be construed or implemented in such a manner as to allow Landlord to charge or receive interest in excess of the maximum legal rate then allowed by law.

 

4.                                       ADDITIONAL RENT. Tenant shall pay as additional rent (“Additional Rent”) its proportionate share of all operating expenses in the amounts and in the manner set forth in Exhibit “C” hereto and all other sums due hereunder.

 

5.                                      SECURITY DEPOSIT. Tenant has deposited with Landlord the sum of Six Thousand eight Hundred Eighteen and 95/100 ($6,818.95) as security for the faithful performance and observance by Tenant of the terms, provisions and conditions of this Lease. It is agreed that in the event Tenant defaults in respect of any of the terms, provisions and conditions of this Lease, including, but not limited to, the payment of rent and additional rent, Landlord may use, apply or retain the whole or any part of the security so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which Tenant is in default or for any sum which Landlord may expend or may be required to expend by reason of Tenant’s default in respect of any of the terms, covenants and conditions of this Lease, including but not limited to any damages or deficiency in the reletting of the leased premises, whether such damages or deficiency accrued before or after summary proceedings or other re-entry by Landlord. In the event that Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease, the security shall be returned

 

Please Initial:

 

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 

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fixed as the end of the Lease and after delivery of entire possession of the leased premises to Landlord. In the event of a sale of the land and building of which the leased premises form a part, hereinafter referred to as the Building, or leasing of the building, Landlord shall have the right to either transfer the security to the Tenant and Landlord shall thereupon be released by Tenant from all liability for the return of such security or transfer the security to the new Landlord in which case Tenant agrees to look to the new Landlord solely for the return of said security. Tenant further covenants that it will not assign or encumber or attempt to assign or encumber the monies deposited herein as security and that neither Landlord nor its successors or assigns shall be bound by and such assignment, encumbrance, attempted assignment or attempted encumbrance.

 

In the event of any bankruptcy or other insolvency proceeding against Tenant, it is agreed that all such security deposit held hereunder shall be deemed to be applied by Landlord to rent, sales tax and other charges due to Landlord for the last month of the lease term and each preceding month until such security deposit is fully applied.

 

6.                                       USE OF DEMISED PREMISES. Tenant covenants and agrees to use and occupy the Demised Premises for general office purposes and other uses incidental to and associated with Class A office buildings and only in conformity with the law. Tenant shall not use or permit any use of the Demised Premises which creates any safety or environmental hazard, or which would: (i) be dangerous to the Demised Premises, the Building or other tenants, or (ii) be disturbing to other tenants of the Building, or (iii) cause any increase in the premium cost for any insurance which Landlord may then have in effect with respect the Building generally.

 

7.                                       IMPROVEMENTS TO PREMISES.

 

7.1.                              By Landlord.

 

7.1.1.                     The Tenant shall cause detailed working drawings to be fully prepared at its expense by a designer of its choice, who shall consult with the Landlord in preparing the same, and shall deliver such working drawings to Landlord, on or before May 1, 2000. Such working drawings must be in sufficient detail to allow Landlord to (a) calculate the cost of constructing all of Tenant’s improvements, and (b) obtain a building and any other necessary permits for the construction of Tenant’s improvements. Within five (5) days after Landlord provides Tenant with the calculations of the costs of constructing Tenant’s improvements, Tenant shall approve the working drawings and the costs of construction. Any costs or expenses incurred by Landlord because of changes to the working drawings made by Tenant after final approval of the costs, shall be paid to the Landlord by the Tenant. If (a)(i) the Tenant defaults in furnishing such working drawings to the Landlord by the time set forth above, (ii) the Tenant fails to give final approval to the working drawings and the costs by the time set forth above, (iii) the Tenant requests any changes to the working drawings after the Tenant has approved the costs of construction, or (iv) the Tenant has requirements in its working drawings that cause unreasonable delays in commencing or completing Tenant’s improvements, (b) as a result thereof, the Landlord is delayed in commencing and/or completing such improvements beyond the dates on which, but for such delay, the Landlord would in its reasonable judgment have commenced or completed them, and (c) such completion occurs after the date which would have been the Commencement Date, then (without altering or impairing the Landlord’s rights under the provisions of this Lease on account of such default, and without altering or impairing any other of Landlord’s rights, including, without limitation, such rights set forth in Section 5.1.2) the Commencement Date shall be the date which would have been the Commencement Date for purposes of the provisions of this Lease, had such delay not occurred.

 

7.1.2.                     Allocation of costs. The cost of such improvements shall be allocated between the Landlord and the Tenant in the following manner:

 

(a)                                  Except as is otherwise provided herein, the Landlord shall bear the expense of (i) providing and installing as part of such improvements those materials and other items of improvements, of such manufacture, design, capacity, finish and color, which are described in a schedule attached hereto as Exhibit B (hereinafter referred to as “the Standard Improvement Items”), (ii) to such maximum extent or in such maximum quantity (hereinafter referred to as “the Standard Allowance”) as is specified therein. If the improvements to be made to the Premises pursuant to the provisions of this subparagraph utilize less or fewer than the Standard Allowance of any Standard Improvement Item, the Tenant shall receive no credit against the Rent or otherwise on account thereof.

 

(b)                                 The Landlord shall submit the working drawings, as provided by the Tenant, to the Landlord’s general contractor for the Building promptly upon their approval by the Landlord and the Tenant, for such contractor’s calculation of the price which it will charge for constructing such improvements. The Landlord shall notify the Tenant in writing of such price as calculated by such contractor (and shall in such

 

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notice allocate such price between (i) those of such improvements which are included in the Standard Allowance of Standard Improvement Items, and (ii) the remainder of such improvements), and the Tenant shall, at the Landlord’s option, be deemed to have approved such price and allocation for all purposes of the provisions of this Lease unless the Tenant gives the Landlord written notice to the contrary within five (5) days thereafter. All improvements shall be done by Landlord’s general contractor.

 

(c)                                  If the improvements to be made to the Premises pursuant to the provisions of this subsection require materials or other items other than the Standard Improvement Items, and/or Standard Improvement Items in excess of the Standard Allowance, and the cost of constructing such improvements shall, if and to the extent that it exceeds the cost which would have been incurred if such improvements consisted only of the Standard Allowance of Standard Improvement Items, be borne by the Tenant. The Tenant shall pay the amount of such excess to the Landlord in two (2) equal installments, the first of which shall be due when such price and allocation are approved by the Tenant, as aforesaid, and the second of which shall be due at the Commencement Date.

 

7.1.3.                     The Landlord shall use its reasonable efforts to complete such improvements promptly, but shall have no liability to the Tenant hereunder if prevented from doing so by reason of any (a) strike, lock-out or other labor troubles, (b) governmental restrictions or limitations, (c) failure or shortage of electrical power, gas, water, fuel oil, or other utility or service, (d) riot, war, insurrection or other national or local emergency, (e) accident, flood, fire or other casualty, (f) adverse weather condition, (g) other act of God, (h) inability to obtain a building permit or a certificate of occupancy, or (i) other cause similar or dissimilar to any of the foregoing and beyond the Landlord’s reasonable control. In such event, (a) the Commencement Date shall (subject to the operation and effect of the provisions of paragraph 5.1.1) be postponed for a period equaling the length of such delay, (b) the Termination Date shall be determined pursuant to the provisions of subsection 1.1 by reference to the Commencement Date as so postponed, and (c) the Tenant shall accept possession of the Premises within ten (10) days after such completion.

 

7.2.                              Acceptance of possession. Except for (a) latent defects or incomplete work which would not reasonably have been revealed by an inspection of the Premises made for the purpose of discovering the same when the Landlord delivers possession of the Premises to the Tenant, and (b) any other item of incomplete work set forth on a “punch list” prepared by the Tenant and approved in writing by the Landlord before such delivery of possession, by its assumption of possession of the Premises the Tenant shall for all purposes of the provisions of this Lease be deemed to have accepted them and to have acknowledged them to be in the condition called for hereunder.

 

8.                                      ALTERATIONS OR IMPROVEMENTS BY TENANT.

 

8.1                                 During the Lease Term, Tenant shall not make any alterations, additions, improvements, redecorating or other changes to the Demised Premises without the prior written approval (such approval not to be unreasonable withheld or delayed) of Landlord and then only in accordance with plans and specifications previously approved in writing by Landlord and subject to such conditions as Landlord may require, including, without limitations, that Tenant be required to pay for any increased cost to Landlord occasioned thereby or attributed thereto. Prior to the termination of this Lease and without additional notice to Tenant by Landlord, Tenant shall either: (i) remove any such alterations or additions and repair any damage to the Building or the Demised Premises occasioned by their installation or removal and restore the Demised Premises to substantially the same condition as existed prior to the time when any such alterations or additions were made, or (ii) reimburse Landlord for the cost of removing such alterations or additions and the restoration of the Demised Premises.  Landlord shall determine any such cost as called for in clause (ii) above prior to the termination of this Lease and Tenant shall reimburse Landlord within thirty (30) days of receipt of such notice.

 

8.2                                 After the time of initial occupancy of the Demised Premises by Tenant, Tenant shall have the right to construct and alter the Demised premises, subject to paragraph 8.1, provided, however, that such construction does not include any alterations affecting the exterior or structural components of the Building, or any material alterations to the systems of the Building, including, but not limited to HVAC, electric or plumbing. Any Tenant construction shall be performed by Tenant’s contractors and shall be solely Tenant’s responsibility. All of Tenant’s construction shall be at Tenant’s expense.

 

8.3                                 Prior to commencement of construction:

 

(a)                                  Landlord shall approve in writing (such approval not to be unreasonably withheld or delayed) the plans and specifications for any alterations to the Demised Premises, such approval by Landlord shall not be deemed to be an approval by Landlord of any work performed pursuant thereto or approval or

 

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acceptance by Landlord of any material furnished with respect thereto or a representation by Landlord as to the fitness of such work or materials, and shall not give rise to any liability or responsibility of Landlord.

 

(b)                                 Landlord shall approve in writing (such approval not to be unreasonably withheld or delayed) each contractor and subcontractor (which shall each be of sound financial status and good reputation in the community and a duly licensed and qualified professional in the state and, to the extent necessary, township in which the Building is located) to perform such alterations.

 

(c)                                  Tenant shall deliver to Landlord a certificate evidencing each contractor’s liability, completed operations and worker’s compensation insurance and naming Landlord as an additional insured, which insurance shall be with a carrier, in amounts and otherwise on terms satisfactory to Landlord.

 

(d)                                 Each contractor shall execute and Tenant shall cause to be filed with the appropriate governmental agency in a timely manner such waivers and releases of liens and other documents necessary to insure against imposition of any mechanics’ and material suppliers’ liens for labor furnished and material supplied in connection with the alterations and improvements. Tenant shall deliver copies of such waivers and releases of liens to Landlord together with evidence of the timely filing thereof.

 

8.4                                 Tenant covenants and agrees:

 

(a)                                  To secure and pay for all necessary building and other permits and fees in connection with the alterations and improvements.

 

(b)                                 All construction shall be done in compliance with all applicable laws and ordinances and in a good and workerlike manner in accordance with the approved plans and specifications.

 

(c)                                  To obtain and deliver to Landlord a Certificate of Occupancy (or its equivalent) issued by the appropriate governmental authority upon completion of the construction of the Demised Premises.

 

(d)                                 To abide by any collective bargaining agreements or other union contracts applicable to Tenant, the Building or Landlord.

 

(e)                                  All materials, supplies and workers shall enter the Demised Premises and all work shall be performed at times and by means satisfactory to Landlord.

 

8.5                                 Tenant and any approved contractor, subcontractor or material supplier may, after notice to Landlord, enter the Demised Premises during reasonable times after the execution hereof for the purpose of constructing the improvements as aforesaid and inspecting and measuring the Demised Premises, provided that such entry does not, in Landlord’s reasonable judgment, interfere with the operations of the Building or with Landlord’s work therein, or that of any other tenants in the Building. Tenant shall be responsible of any and all damage or injury caused by such contractors, subcontractors, material suppliers and Tenant in the course of constructing the improvements, and Tenant’s obligation to indemnify, defend and hold Landlord harmless set forth in Article 14 shall, include without limitation all work done by Tenant pursuant to this paragraph 7 and shall commence on the date of execution hereof.

 

8.6                                 Landlord and its agents or other representatives shall be permitted to enter the Demised Premises to examine and inspect the construction of the alterations and improvements, provided, that no such inspection or examination shall constitute an approval or warranty or give rise to any liability of Landlord with respect to any thereof.

 

9.                                       COVENANTS OF LANDLORD. Landlord will supply for normal office use during normal business hours (excluding holidays), heat and air conditioning (except that, in the event that such utilities are separately metered and are paid for by Tenant, Landlord shall supply only the equipment for such utilities), elevator service (where applicable), janitorial and cleaning services, electricity, and hot and cold water, all in amounts consistent with services provided in similar buildings in the community, provided that: (i) Landlord shall not be liable for failure to supply or interruption of any such service by reason of any cause beyond Landlord’s reasonable control (ii) if Tenant’s use of electricity in Landlord’s judgement exceeds a normal office use level (which includes only customary office lighting levels and operation of desktop portable office equipment), Landlord may, at Tenant’s expense, install meters to measure the electricity consumed on the Demised Premises and bill Tenant for any cost thereof above normal office use levels; (iii) if Tenant requires janitorial and cleaning services beyond those provided by Landlord, Tenant shall arrange for such additional services through Landlord, and Tenant shall pay Landlord upon receipt of billing therefor; and (iv) if Tenant requires installation a separate or supplementary heating, cooling, ventilating and/or air conditioning system Tenant shall pay all costs in connection with the furnishing, installation and operation thereof. Landlord shall

 

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be responsible, at its sole cost and expense, for structural repairs and capital improvements (unless otherwise provided for herein) to the Building, unless such repairs are necessitated by damage caused by the negligence or misconduct of Tenant or Tenant’s officers, directors, employees, invitees or agents.

 

10.                                 COVENANTS OF TENANT. Tenant will (at Tenant’s sole cost and expense):

 

10.1                           Keep the Demised Premises in good order and repair, reasonable wear and tear expected;

 

10.2                           Surrender the Demised Premises at the end of this Lease in the same condition in which Tenant has agreed to keep it during the Lease Term;

 

10.3                           Not place, erect, maintain or display any sign or other marking of any kind whatsoever on the windows, doors or exterior walls of the Demised Premises and not use or place any curtains, blinds, drapes or coverings over any exterior windows or upon the window surfaces which are visible from the outside of the Building; except the Tenant shall be permitted to install its standard signage and logo on Tenant’s entrance door with the approval of Landlord (which approval shall not be unreasonably withheld or delayed), and Tenant shall be listed on the directories on the elevator lobby of Tenant’s floor, the Building lobby and Building exterior in the same manner as other tenants in the Building;

 

10.4                           Be financially responsible for the maintenance of all plumbing and other fixtures in the Demised Premises, whether installed by Landlord or by Tenant and for repairs and replacements to the Demised Premises and the Building made necessary by reason of damage thereto caused by Tenant or its agents, servants, invitees or employees. In the event Tenant shall fail to perform such maintenance or make such repairs within sixty (60) days of the date such work becomes necessary, Landlord may, but shall not be required to, perform such work and charge the amount of the expense therefor, with interest accruing and payable thereon, all in accordance with Article 18 below;

 

10.5                           Comply with all laws, enactments and regulations of any governmental authority relating or applicable to Tenant’s occupancy of the Demised Premises and any covenants, easements and restrictions governing the Land or Building, and indemnify, defend and hold Landlord harmless from all consequences from its failure to do so;

 

10.6                           Promptly notify Landlord of any damage to or defects in the Demised Premises, any notices of violation received by Tenant and of any injuries to persons or property which occur therein or claims relating thereto;

 

10.7                           Subject to Article 7, pay for any alterations, improvements or additions to the Demised Premises and any light bulbs, tubes and non-standard Building items installed by or for Tenant, and allow no lien to attach to the Building with respect to any of the foregoing;

 

10.8                           Without the prior written consent of Landlord, not place within the Demised Premises or bring into the Building (i) any machinery, equipment or other personalty other than customary office furnishings and small machinery, or any machinery or (ii) other personalty having a weight in excess of the design capacity of the Building;

 

10.9                           Not use the Demised Premises for the generation, manufacture, refining, transportation, treatment, storage or disposal of any hazardous substance or waste or for any purpose which poses a substantial risk of damage to the environment; in this regard Tenant represents that it does not have a Standard Industrial Classification number as designated in the Standard Industrial Classifications Manual prepared by the Office of Management and Budget in the Executive Office of the President of the United States that is any of 22-39 inclusive, 46-49 inclusive, 51 or 76 and will not engage in any activity which would subject Tenant to the provisions of the Federal Comprehensive Environmental Response, Liability and Clean-Up Act (42 U.S.C. Section 9601 et seg.), the Federal Water Pollution Control (33 U.S.C.A. Section 1151 et seg.), the Clean Water Act of 1977 (33 U.S.C.A. Section 1251 et seg.), or any other federal, state or local environmental law, regulation or ordinance;

 

10.10                     Comply with all rules and regulations which may hereafter be promulgated by Landlord and with all reasonable changes and additions thereto upon notice by Landlord to Tenant (such rules and regulations, together with all changes and additions thereto, are part of this Lease); Landlord shall notify Tenant in writing at least fifteen (15) days prior to the promulgation of such rules and regulations or changes thereto. Landlord agrees to enforce such rules and regulations against all tenants in the Building in a non- discriminating fashion and to take reasonable action to cause a cessation of any violation of all rules that interfere with Tenant’s use and quiet enjoyment of the Premises;

 

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10.11                     Comply with all reasonable recommendations of Landlord’s or Tenant’s insurance carriers relating to layout, use storage of materials and maintenance of the Demised Premises.

 

11.                                 ASSIGNMENT AND SUBLETTING. Tenant shall not assign, pledge, mortgage or otherwise transfer or encumber this Lease, nor sublet all or any part of the Demised Premises or permit the same to be occupied or used by anyone other than Tenant or its employees without Landlord’s prior written consent (such consent not to be unreasonable withheld or delayed). Notwithstanding the foregoing, Tenant shall have the right to assign this Lease or sublet the Demised Premises or any part thereof, without the consent of Landlord, to any parent, subsidiary or affiliate of Tenant. Any consent by Landlord hereunder (or assignment where such consent is not required) shall not constitute a waiver of strict future compliance by Tenant of the provisions of this Article 11 or a release of Tenant from the full performance by Tenant with any of the terms, covenants, provisions or conditions in this Lease. For purposes of this Article 11, any transfer or change in control of Tenant (or any subtenant, assignee or occupant) by operation of law or otherwise, shall be deemed an assignment hereunder, including, without limitation, any merger, consolidation, dissolution or any change in the controlling equity interests of Tenant or any subtenant, assignee, or occupant (in a single transaction or a series of related transaction). Any assignment or subletting in contravention of the provisions of this Article 11 shall be void.

 

12.                                 EMINENT DOMAIN.  If the whole or more than fifty percent (50%) of the Demised Premises (or use or occupancy of the Demised Premises) shall be taken or condemned by an governmental or quasi-governmental authority for any public or quasi-public use or purpose (including sale under threat of such a taking), or if the owner elects to convey title to the condemnor by a deed in lieu of condemnation, or if all or any portion of the Land or Building are so taken, condemned or conveyed and as a result thereof, in Landlord’s judgement, the Demised Premises cannot be used for Tenant’s permitted use as set forth herein, then this Lease shall cease and terminate as of the date when title vests in such governmental or quasi-governmental authority and the Fixed Rent and Additional Rent shall be abated on the date when such title vests in such governmental or quasi-governmental authority.  If less than fifty percent (50%) of the Demised Premises is taken or condemned by any governmental or quasi-governmental authority for any public or quasi-public use or purpose (including sale under threat of such a taking), the Fixed Rent and Tenant’s proportionate share shall be equitably adjusted )on the basis of the number of square feet before and after such event) on the date when title vests in such governmental or quasi-governmental authority and the Lease shall otherwise continue in full force and effect. In any case, Tenant shall have no claim against Landlord for any portion of the amount that may be awarded as damages as a result of any governmental or quasi-governmental taking or condemnation (or sale under threat or such taking or condemnation); and all rights of Tenant to damages therefor are hereby assigned by Tenant to Landlord. The foregoing shall not, however, deprive Tenant of any separate award for moving expenses, dislocation damages or for any other award which would not reduce the award payable to Landlord.

 

13.                                 CASUALTY DAMAGE.

 

13.1                           In the event of damage to or destruction of the Demised Premises caused by fire or other casualty, or any such damage or destruction to the Building or the facilities necessary to provide services and normal access to the Demised Premises in accordance herewith, Landlord, after receipt of written notice thereof from Tenant, shall undertake to make repairs and restorations with reasonable diligence as hereinafter provided, unless this Lease has been terminated by Landlord or Tenant as hereinafter provided or unless any mortgagee which is entitled to receive casualty insurance proceeds fails to make available to Landlord a sufficient amount of such proceeds to cover the cost of such repairs and restoration. If (i) the damage is of such nature or extent that, in Landlord’s sole judgement, more than one hundred and twenty (120) days would be required (with normal work crews and hours) to repair and restore the part of the Demised Premises or Building which has been damaged, or (ii) the Demised Premises or Building is so damaged that, in Landlord’s sole judgement, it is uneconomical to restore or repair the Demised Premises or the Building, as the case may be, or (iii) less than two (2) years then remain on the current Lease Term, Landlord shall so advise Tenant promptly, and either party, in the case described in clause (i) above, or Landlord, in the cases described in clauses (ii) or (iii) above, within thirty (30) days after any such damage or destruction shall have the right to terminate this Lease by written notice to the other, as of the date specified in such notice, which termination date shall be no later than thirty (30) days after the date of such notice.

 

13.2                           In the event of fire or other casualty damage, provided this Lease is not terminated pursuant to the terms of this Article 13 and is otherwise in full force and effect, and sufficient casualty insurance proceeds are available for application to such restoration or repair, Landlord shall proceed diligently to restore the Demised Premises to substantially its condition prior to the occurrence of the damage. Landlord shall not be obligated to repair or restore any alterations, additions, fixtures or equipment which Tenant may have installed (whether or not Tenant has the right or the obligation to remove the same or is required to leave

 

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the same on the Demised Premises as of the expiration or earlier termination of this Lease) unless Tenant, in a manner satisfactory to Landlord, assures payment in full of all costs as may be incurred by Landlord in connection therewith.

 

13.3                           Landlord shall not insure any improvements or alterations to the Demised Premises in excess of Building standard tenant improvements, or any fixtures, equipment or other property of Tenant. Tenant shall, at its sole expense, insure the value of its leasehold improvements, fixtures, equipment and personal property located in or on the Demised Premises, for the purpose of providing funds to Landlord to repair and restore the Demised Premises to substantially its condition prior to occurrences of the casualty occurrence. If there are any such alterations, fixtures or additions and Tenant does not assure or agree to assure payment of the cost of restoration or repair as aforesaid, Landlord shall have the right to restore the Demised Premises to substantially the same condition as existed prior to the damage, excepting such alterations, additions or fixtures.

 

13.4                           The validity and effect of this Lease shall not be impaired in any way by the failure of Landlord to complete repairs and restoration of the Demised Premises or of the Building within one hundred and twenty (120) days after commencement of the work, even if Landlord had in good faith notified Tenant that the repair and restoration could be completed within such period, provided that Landlord proceeds diligently with such repair and restoration. In the case of damage to the Demised Premises which is of a nature or extent that Tenant’s continued occupancy is in the reasonable judgement of Landlord and Tenant substantially impaired, then the Annual Fixed Rent and Tenant’s Proportionate Share otherwise payable by Tenant hereunder shall be equitably abated or adjusted for the duration of such impairment. Tenant shall be responsible to repair all of Tenant’s leasehold improvements and all equipment, fixtures and personal property located in or on the Demised Premises subject to Article 8. and to such other conditions as Landlord may require.

 

14.                                 INSURANCE AND INDEMNIFICATION OF LANDLORD; WAIVER OF SUBROGATION.

 

14.1                           Tenant covenants and agrees to exonerate, indemnify, defend, protect and save Landlord, its representatives and Landlord’s managing agent, if any, harmless from and against any and all claims, demands, expenses, losses, suits and damages as may be occasioned by reason of (i) any accident or matter occurring on or about the Demised Premises, causing injury to persons or damage to property (including, without limitation, the Demised Premises), unless such accident or other matter resulted solely from the negligence or otherwise tortious act of Landlord or Landlord’s agents or employees, (ii) the failure of Tenant fully and faithfully to perform the obligations and observe the conditions of this Lease, and (iii) the negligence or otherwise tortious act of Tenant or anyone in or about the Building on behalf of or at the invitation or right of Tenant. Tenant shall maintain in full force and effect, at its own expense, comprehensive general liability insurance (including a contractual liability and fire legal liability insurance endorsement) naming as an additional insured Landlord and Landlord’s managing agents, if any, against claims for bodily injury, death or property damage in amounts not less than $1,000,000 (or such higher limits as may be determined by Landlord from time to time) and business interruption insurance in an amount equal to Tenant’s gross income for twelve (12) months. All policies shall be issued by companies having a Best’s financial rating of A or better and a size class rating of XII (12) or larger or otherwise acceptable to Landlord.  At or prior to the Commencement Date, Tenant shall deposit the policy or policies of such insurance, or certificates thereof, with Landlord and shall deposit with Landlord renewals thereof at least fifteen (15) days prior to each expiration.  Said policy or policies of insurance or certificates thereof shall have attached thereto an endorsement that such policy shall not be canceled without at least thirty (30) prior written notice to Landlord and Landlord’s managing agent, if any, that no act or omission of Tenant shall invalidate the interest of Landlord under said insurance and expressly waiving all rights of subrogation as set forth below. At Landlord’s request, Tenant shall provide Landlord with a letter from an authorized representative of its. insurance carrier stating that Tenant’s current and effective insurance coverage complies with the requirements contained herein.

 

14.2                           Landlord and Tenant hereby release the other from any and all liability or responsibility to the other or anyone claiming through or under them by way of subrogation or otherwise for any loss or damage to property covered by insurance then in force, even if any such fire or other casualty occurrence shall have been caused by the fault or negligence of the other party, or anyone for whom such party may be responsible. This release shall be applicable and in full force and effect, however, only to the extent of and with respect to any loss or damage occurring during such time as the policy or policies of insurance covering said loss shall contain a clause or endorsements to the effect that this release shall not adversely affect or impair said insurance or prejudice the right of the insured to recover thereunder. To the extent available, Landlord and tenant further agree to provide such endorsements for said insurance policies agreeing to the waiver of subrogation as required herein.

 

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15.                                 INSPECTION; ACCESS; CHANGES IN BUILDING FACILITIES.

 

15.1                           Landlord and its agents or other representatives shall be permitted to enter the Demised Premises at reasonable times (i) to examine, inspect and protect the Demised Premises and the Building and (ii) during the last six (6) months of the original or any renewal term, to show it to prospective tenants and to affix to any suitable part of the exterior of the Building in which the Demised Premises is located a notice for letting the Demised Premises or the Building or (at any time during the original or any renewal term) selling the Building.

 

15.2                           Landlord shall have access to and use of all areas in the Demised Premises (including exterior Building walls, core corridor walls and doors and any core corridor entrances), any roofs adjacent to the Demised Premises, and any space in or adjacent to the Demised Premises used for shafts, stacks, pipes, conduits, fan rooms, ducts, electric or other utilities, sinks or other Building facilities, as well as access to and through the Demised Premises for the purpose of operation, maintenance, decoration and repair, provided, however, that except in emergencies such access shall not be exercised so as to interfere unreasonable with Tenant’s use of the Demised Premises. Tenant shall permit Landlord to install, use and maintain pipes, ducts and conduits within the demising walls, bearing columns and ceilings of the Demised Premises, provided that the installation work is performed at such times and by such methods as will not materially interfere with Tenant’s use of the Demised Premises, materially reduce the floor area thereof or materially and adversely affect Tenant’s layout, and further provided that Landlord performs all work with due diligence and care so as to not damage Tenant’s property or the Demised Premises. Landlord and Tenant shall cooperate with each other in the location of Landlord’s and Tenant’s facilities requiring such access.

 

15.3                           Landlord reserves the right at any time, without incurring any liability to Tenant therefor, to make such changes in or to the Building and the fixtures and equipment thereof, as well as in or to the street entrances, halls, foyers, passages, elevators, if any, and stairways thereof, as it may deem necessary or desirable; provided that there shall be no change that materially detracts from the character or quality of the Building.

 

16.                               DEFAULT.  Any other provisions in this Lease notwithstanding, it shall be an event of default (“Event of Default”) under this Lease if: (i) Tenant fails to pay any installment of Fixed Rent, Additional Rent or other sum payable by Tenant hereunder when due and such failure continues for a period of five (5) days after written notice of such non-payment be Landlord to Tenant (which written notice shall not be required more than two times in any period of twelve (12) consecutive months), or (ii) Tenant fails to observe or perform any other covenant or agreement of Tenant herein contained and such failure continues after written notice given by or on behalf of Landlord to Tenant for more than thirty (30) days, or (iii) Tenant uses or occupies the Demised Premises other than as permitted hereunder, or (iv) Tenant assigns or sublets, or purports to assign or sublet, the Demised Premises or any part thereof other than in the manner and upon the conditions set forth herein, or (v) Tenant abandons or vacates the Demised Premises or, without Landlord’s prior written consent, Tenant removes or attempts to remove or manifests an intention to remove any or all of Tenant’s property from the Demised Premises other than in the ordinary and usual course of business, or (vi) Tenant (which, for purposes of this clause, includes any guarantor hereunder) files a petition commencing a voluntary case, or has filed against it a petition commencing an involuntary case, under the Federal Bankruptcy Code (Title 11 of the Unites States Code), as now or hereafter in effect, or under any similar law, or files or has filed against it a petition or answer in bankruptcy or for reorganization or for an arrangement pursuant to any state bankruptcy law or any similar state law, and, in the case of any such involuntary action, such action shall not be dismissed, discharged or denied within sixty (60) days after the filing thereof, or Tenant consents or acquiesces in the filing thereof, or (vii) if Tenant is a banking organization, Tenant files an application for protection, voluntary liquidation or dissolution applicable to banking organization, or (viii) a custodian, receiver, trustee or liquidator of Tenant or of all or substantially all of Tenant’s property or of the Demised Premises shall be appointed in any proceedings brought by or against Tenant and, in the latter case, such entity shall not be discharged within sixty (60) days after such appointment or Tenant consents to or acquiesces in such appointment, or (ix) Tenant shall generally not pay Tenant’s debts as such debts become due, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or (x) any of the foregoing occurs as to any guarantor or surety of Tenant’s performance under this Lease, or such guarantor or surety defaults on any provision under its guaranty or suretyship agreement. The notice and grace period provisions in clauses (i) and (ii) above shall have no application to the Events of Default referred to in clauses (iii) through (ix) above or, to the extent applicable (x).

 

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17.                                 LANDLORD’S REMEDIES.

 

17.1                           In the event of any Event of Default, Landlord at any time thereafter may at its option exercise any one or more of the following remedies:

 

(a)                                  Termination of Leases. Landlord may terminate this Lease, by written notice to Tenant, without any right by Tenant to reinstate its rights by payment of rent due or other performance of the terms and conditions hereof. Upon such termination Tenant shall immediately surrender possession of the Demised Premises to Landlord, and Landlord shall immediately become entitled to receive from Tenant an amount equal to the difference between the aggregate of all Fixed Rent and Additional Rent reserved under this Lease for the balance of the Lease Term, and the fair rental value of the Demised Premises for that period, determined as of the date of such termination.

 

(b)                                 Reletting. With or without terminating this Lease, as Landlord may elect, Landlord may re-enter and repossess the Demised Premises, or any part thereof, and lease them to any other person upon such terms as Landlord shall deem reasonable, for a term within or beyond the term of this Lease; provided, that any such reletting prior to termination shall be for the account of Tenant, and Tenant shall remain liable for (i) all Annual Fixed Rent, Additional Rent and other sums which would be payable under this Lease by Tenant in the absence of such expiration, termination or repossession, less (ii) the net proceeds, if any, of any reletting effected for the account of Tenant after deducting from such proceeds all of Landlord’s expenses, attorneys’ fees and expenses, employees’ expenses, reasonable alteration costs, expenses of preparation for such reletting and all costs and expenses, direct or indirect, incurred as a result of Tenant’s breach of the Lease. Landlord shall have no obligation to relet the Demised Premises if Landlord, or any of its affiliates, shall have other comparable space available for rent. If the Demised Premises are at the time of default sublet or leased by Tenant to others, Landlord may, as Tenant’s agent, collect rents due from any subtenant or other tenant and apply such rents to the rent and other amounts due hereunder without in any way affecting Tenant’s obligation to Landlord hereunder. Such agency, being given for security, is hereby declared to be irrevocable.

 

(c)                                  Acceleration of Rent.  Landlord may declare Fixed Rent and all items of Additional Rent (the amount thereof to be based on historical amounts and Landlord’s estimates for future amounts) for the entire balance of the then current Lease Term immediately due and payable, together with all other charges, payments, costs, and expenses payable by Tenant as though such amounts were payable in advance on the date the Event of Default occurred.

 

(d)                                 Removal of Contents by Landlord.  With respect to any portion of the Demised Premises which is vacant or which is physically occupied by Tenant, Landlord may remove all persons and property therefrom, and store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant, without service of notice or resort to legal process (all of which Tenant expressly waives) and without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby. Landlord shall have a lien for the payment of all sums agreed to be paid by Tenant herein upon all Tenant’s property, which lien is to be in addition to Landlord’s lien now or hereafter provided by law.

 

(e)                                  Right of Distress and Lien. In addition to all other rights and remedies of Landlord, if an Event of Default shall occur, Landlord shall, to the extent permitted by law, have a right of distress for rent and lien on all of Tenant’s fixtures, merchandise and equipment in the Demised Premises, as security for rent and all other charges payable hereunder.

 

(f)                                    Tenant hereby empowers any Prothonotary or attorney of any Court of Record to appear for Tenant in any and all actions which may be brought for rent and/or the charges, payments, costs, and expenses herein reserved as rent, or herein agreed to be paid by Tenant and/or to sign for Tenant an agreement for entering in any competent Court and action to confess judgment, or actions for the recovery of such rent or other charges or expenses in said suits or in said action or actions to confess judgment against Tenant for all or part of the rent specified in this Lease and then due and unpaid, and other charges, payments, costs, and expenses reserved as rent or agreed to be paid by Tenant and then due and unpaid; and for interest and costs and reasonable attorney’s fees. Such authority shall not be exhausted by one exercise thereof, but judgment may be confessed as aforesaid from time to time as often as any said rent and/or other charges reserved as rent or agreed to be paid by Tenant shall fall due or be in arrears.

 

(g)                                 Upon the expiration of the then current term of this lease of the earlier termination or surrender hereof as provided in this lease, it shall be lawful for any attorney to appear as attorney for Tenant as well as for all persons claiming by, through or under Tenant and to sign an agreement for entering in any competent Court an action to confess judgment in ejectment against Tenant and all persons claiming by, through or under Tenant and therein confess judgment for the recovery by Landlord of possession of the

 

9



 

premises, for which this lease (or a copy thereof) shall be its sufficient warrant, whereupon, if Landlord so desires, a writ of possession or the appropriate writ under the Rules of Civil Procedure then in effect may issue forthwith, without any prior writ or proceedings; provided, however, if for any reason after such action shall have commenced, the same shall be determined and possession of the premises remain in or be restored to Tenant, Landlord shall have the right for the same default and upon any subsequent default or defaults, or upon expiration of the term of this lease to bring one more further action to confess judgment or actions as hereinbefore set forth to recover possession of the premises and confess judgment for the recovery of possession of the premises as hereinbefore provided.

 

(h)                                 In any action to confess judgment in ejectment and/or for rent in arrears, Landlord shall first cause to be filed in such action an affidavit made by him or someone acting for him, setting forth the facts necessary to authorize the entry of judgment, and, if a true copy of this lease (and of the truth of the copy such affidavit shall be sufficient evidence) be filed in such action, it shall not be necessary to file in such action, it shall not be necessary to file the original as a warrant of attorney, and rule of Court, custom or practice to the contrary notwithstanding Tenant hereby releases to Landlord and to any and all attorneys who may appear for Tenant all errors in said proceedings and all liability therefor. If proceedings shall be commenced by Landlord to recover possession under the Acts of Assembly and Rules of Civil Procedure, either at the end of the term or earlier termination of this lease, or for non-payment of rent or any other reason, Tenant specifically waives the right to the three months’ notice and to the fifteen or thirty days’ notice required by the Landlord and Tenant Act of 1951, and agrees that five days’ notice shall be sufficient in either or any such case.

 

17.2                           Injunction. In the event of breach or threatened breach by Tenant of any provision of this Lease, Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity in addition to other remedies provided for herein.

 

17.3                           Waiver of Redemption. Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future law in the event this Lease is terminated, or in the event of Landlord obtaining possession of the Demised Premises, or Tenant is evicted or dispossessed for any cause, by reason of violation by Tenant of any of the provisions of this Lease.

 

17.4                           Not Exclusive Right. No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy herein or by law provided, but each shall be cumulative and in addition to every other right or remedy given herein or now or hereafter existing at law or in equity by statute.

 

17.5                           Expenses. In the event that Landlord commences suit for the repossession of the Demised Premises, for the recovery or rent or any other amount due under the provisions of this Lease, or because of the breach of any other covenant herein contained on the part of Tenant to be kept or performed, and a breach shall be established, Tenant shall pay to Landlord all expenses incurred in connection therewith, including reasonable attorneys’ fees.

 

18.                                 LANDLORD’S RIGHT TO CURE TENANT’S DEFAULT.  If Tenant defaults in the making of any payment or in the doing of any act herein required to be made or done by Tenant, then Landlord may, but shall not be required to, make such payment or do such act, and charge the amount of Landlord’s expense to Tenant, with interest accruing and payable thereon at the Default Rate as of the date of the expenditure by Landlord or as of the date of payment thereof by Tenant, whichever is higher, from the date paid or incurred by Landlord to the date of payment hereof by Tenant; provided, however, that nothing herein contained shall be construed or implemented in such a manner as to allow Landlord to charge or receive interest in excess of the maximum legal rate then allowed by law. Such payment and interest shall constitute Additional Rent hereunder due and payable with the next monthly installment of Fixed Rent; but the making of such payment or the taking of such action by Landlord shall not operate to cure such default by Tenant or to estop Landlord from the pursuit of any remedy to which Landlord would otherwise be entitled.

 

19.                                 ESTOPPEL CERTIFICATE.  Tenant shall immediately prior to occupancy execute Tenant Estoppel Certificate as provided for herein and attached hereto as Exhibit “G”, and from time to time, at the request of Landlord, upon ten (10) business days notice, execute and deliver to Landlord a statement provided by Landlord to Tenant, it being intended that any such statement delivered pursuant hereto may be relied upon by others with whom Landlord may be dealing. Failure to execute said Estoppel Certificate shall constitute a default under this lease.

 

20.                                 HOLDING OVER.  If Tenant retains possession of the Demised Premises or any part thereof after the termination of this Lease or expiration of the Lease Term or otherwise in the absence of any written

 

10



 

agreement between Landlord and Tenant concerning any such continuance of the term, Tenant shall pay Landlord (1) as liquidated damages for such holding over alone, an amount, calculated on a per diem basis for each day of such unlawful retention, equal to the greater of (a) twice the Annual Fixed Rent, or (b) the established market rental for the Demised Premises, for the time Tenant thus remains in possession, plus, in each case, all Additional Rent and other sums payable hereunder, and (ii) all other damages, costs and expenses sustained by Landlord by reason of Tenant’s holding over. Without limiting any rights and remedies of Landlord resulting by reason of the wrongful holding over by Tenant, or creating any right in Tenant to continue in possession of the Demised Premises, all Tenant’s obligations with respect to the use, occupancy and maintenance of the Demised Premises shall continue during such period of unlawful retention.

 

21.                                 RELOCATION OF TENANT.  Landlord, at its sole expense, on at least thirty (30) days prior written notice to Tenant, may require Tenant to move from the Premises to another suite of comparable size and decor in the Building or in the Business Park in order to permit Landlord to consolidate the Premises with other adjoining space or to be leased to another tenant in the Building. In the event of any such relocation, Landlord shall pay all the expenses of preparing and decorating the new premises so that they will be substantially similar to the Premises and shall also pay the expenses of moving Tenant’s furniture and equipment to the new premises.

 

22.                                 SURRENDER OF DEMISED PREMISES.  Tenant shall, at the end of the Lease Term, or any extension thereof, promptly surrender the Demised Premises in good order and condition and in conformity with the applicable provisions of this Lease, excepting only reasonable wear and tear.

 

23.                                 SUBORDINATION AND ATTORNMENT. This Lease and the estate, interest and rights hereby created are subordinate to any mortgage now or hereafter placed upon the Building or the Land or any estate or interest therein, including, without limitation, any mortgage on any leasehold estate, and to all renewals, modifications, consolidations, replacements and extensions of the same as well as any substitutions therefor, as provided for on the attached Exhibit “F”.  Tenant agrees that in the event any person, firm, corporation or other entity acquires the right to possession of the Building or the Land, including any mortgagee or holder of any estate or interest having priority over this Lease, Tenant shall, if requested by such person, firm, corporation or other entity, attorn to and become the tenant of such person, firm, corporation or other entity, upon the same terms and conditions as are set forth herein for the balance of the Lease Term. Notwithstanding the foregoing, any mortgagee may, at any time, subordinate its mortgage to this Lease, without Tenant’s consent, by notice in writing to Tenant, and thereupon this Lease shall be deemed prior to such mortgage without regard to their respective dates of execution and delivery, and in that event, such mortgagee shall have the same rights with respect to this Lease as though it had been executed prior to the execution and delivery of the mortgage. Tenant, if requested by Landlord, shall execute any such instruments in recordable form as may be reasonably required by Landlord in order to confirm or effect the subordination or priority of this Lease, as the case may be, and the attornment of Tenant to future landlords in accordance with the terms of this Article. Landlord shall furnish to Tenant a non-disturbance agreement from the holder of such mortgage providing that so long as Tenant is not in default of this Lease Tenant’s occupancy shall not be disturbed and the obligations of Landlord will continue to be performed.

 

24.                                 BROKERS. Each party represents and warrants to the other that it, he, she or they have not made any agreement or taken any action which may cause anyone to become entitled to a commission as a result of the transactions contemplated by this Lease, and each will indemnify and defend the other from any all claims, actual or threatened, for compensation by any such third person by reason of such party’s breach of its, his, her or their representation or warranty contained in the Article 23 except for KLNB, Inc.

 

25.                                 NOTICES.  All notices or other communications hereunder shall be in writing and shall be deemed to have been given (i) if hand delivered or sent by an express mail or delivery service or by courier, then if and when delivered to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby), or (ii) if mailed, then on the next business day following the date on which such communication is deposited in the United States mails, by first class registered or certified mail, return receipt requested, postage prepaid, and addressed to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby). All notices and communications to Tenant may also be given by leaving the same at the Demised Premises during business hours.

 

25.1                           If to Landlord:

 

11



 

25.2                           If to Tenant:

 

26.                                 MISCELLANEOUS.

 

26.1                           Successors and Assigns. The obligations of this Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that Landlord and each successive owner of the Building and/or the Land shall be liable only for obligations accruing during the period of its ownership or interest in the Building, and from and after the transfer by Landlord or such successive owner of its ownership or other interest in the Building, Tenant shall look solely to the successors in title for the performance of Landlord’s obligations hereunder arising thereafter.

 

26.2                           Waivers.  No delay or forbearance by Landlord in exercising any right or remedy hereunder or in undertaking or performing any act matter which is not expressly required to be undertaken by Landlord shall be construed, respectively, to be a waiver of Landlord’s rights or to represent any agreement by Landlord to undertake or perform such act or matter thereafter.

 

26.3                           Waiver of Trial by Jury. Tenant hereby consents to the exclusive jurisdiction of the courts of the state where the Demised Premises are located and in any and all actions or proceedings arising hereunder or pursuant hereto, and irrevocably agrees to service of process in accordance with Article 24 above. Landlord and Tenant agree to waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant’s use of or occupancy of the Demised Premises and/or any claim of injury or damage and any emergency or any other statutory remedy.

 

26.4                           Limitation of Landlord’s Liabilities. Tenant shall look solely to the Demised Premises and rents derived therefrom and Landlord’s insurance proceeds for enforcement of any obligation hereunder or by law assumed or enforceable against Landlord, and no other property or other assets of Landlord shall be subjected to levy, execution or other enforcement procedure for the satisfaction of Tenant’s remedies or with respect to this Lease, the relationship of Landlord and tenant hereunder or Tenant’s use and occupancy of the Demised Premises.

 

26.5                           Time of the Essence. All times, wherever specified herein for the performance by Landlord or Tenant of their respective obligations hereunder, are of the essence of this Lease.

 

26.6                           Severability. Each covenant and agreement in this Lease shall for all purposes be construed to be a separate and independent covenant or agreement.  If any provision in this Lease or the application thereof shall to any extent be invalid, illegal or otherwise unenforceable, the remainder of this Lease, and the application of such provision other than as invalid, illegal or unenforceable, shall not be affected thereby; and such provisions in this Lease shall be valid and enforceable to the fullest extent permitted by law.

 

26.7                           Amendment and Modification. This Lease, including all Exhibits hereto, each of which is incorporated in this Lease, contains the entire agreement between the parties hereto, and shall not be amended, modified or supplemented unless by agreement in writing signed by both Landlord and Tenant.

 

26.8                           Headings and Terms.  The title and headings and table of contents of this Lease are for convenience of reference only and shall not in any way be utilized to construe or interpret the agreement of the parties as otherwise set forth herein. The term “Landlord” and term “Tenant” as used herein shall mean, where appropriate, all persons acting by or on behalf of the respective parties, except as to any required approval, consents or amendments, modifications or supplements hereunder when such terms shall only mean the parties originally named on the first page of this Lease as Landlord and Tenant, respectively, and their agents so authorized in writing.

 

26.9                           Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State of Maryland.

 

12



 

IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed on the day and year first above written.

 

 

LANDLORD:

 

BEAVER DAM LLC

 

 

Witness:

By:      Frederick Smith, General Partner

 

 

 

 

/s/ Hyris Feldman

 

By:

/s/ Frederick Smith

 

 

 

 

 

 

TENANT: Sinclair Broadcast Group, Inc.

 

 

 

 

Witness:

By:

/s/ David B. Amy

 

 

 

 

 

 

/s/ Vicky D. Evans

 

By:

David B. Amy

 

 

 

Name:

 

 

 

Executive Vice President

 

 

 

Title:

 

 

13



 

RENT SCHEDULE
RIDER #1

 

Year

 

Monthly

 

Annually

 

 

1

 

 

6,818.96

 

81,827.46

 

 

2

 

 

7,159.90

 

85,918.83

 

 

3

 

 

7,517.90

 

90,214.77

 

 

4

 

 

7,893.79

 

94,725.51

 

 

5

 

 

8,288.48

 

99,461.79

 

 

6

 

 

8,702.91

 

104,434.88

 

 

7

 

 

9,138.05

 

109,656.62

 

 

8

 

 

9,594.95

 

115,139.45

 

 

9

 

 

10,074.70

 

120,896.43

 

 

10

 

 

10,578.44

 

126,941.25

 

 

14



 

ADDENDA TO SBG/BEAVER DAM LLC LEASE

 

Section 2. Lease Term. Beaver Dam LLC will grant the option of leasing the 3,757 rentable square feet for $3,409.48(1/2 month’s rent) for either six months and/or until tenant occupancy(whichever shall occur first). After six months and/or tenant occupancy, the rent will increase to $6,818.96 per month in accordance with the Rent Schedule-Rider #1.

 

Section 2. Lease Term. Beaver Dam LLC will grant a 5-year option with the rate not to exceed the fair market value of like space. However, in no instance will the rate be less than the rent paid for the last year of like space.

 

Section 3. Fixed Rent.  See Exhibit C Addendum.

 

Section 7. Improvements to Premises. Add to Exhibit B: SBG will be allotted $15 per square foot of the rentable square feet as Tenant improvements. Beaver Dam LLC will provide a ceiling. The ceiling will be 2x2 or 2x4 grids which will be provided above and beyond the $15 per sq. ft. Tenant improvement allowance. This ceiling will be provided at no cost to SBG. All other improvements to the space will be at the expense of SBG. The contractor chosen for improvements to premises shall be approved by Beaver Dam, LLC.

 

Section 9. Covenants to Landlord. Normal business hours will be 8:00 A.M.–6:00 P.M. Monday-Friday, 9:00 A.M.-1:00 P.M., Saturday, no holidays or Sundays.

 

Section 10. Covenants of Tenant. If allowed by law, signage will be present on the parking lot as well as first floor lobby directory. At this time, it is the intent of Beaver Dam LLC to place an external sign fixed to the building which will read “Sinclair”.

 

Section 11. Assignment and Subletting. The Tenant will have the right to assign their lease to the purchaser of the Tenant’s business. The purchase of said business will have the identical responsibilities to the Landlord as did the Tenant/seller of the business. Assignee must have a net worth equal to or greater that that of the Tenant as of the Lease Commencement Date and as of the effective date of the proposed assignment or subletting.

 

Section 21. Allocation of Tenant. Delete section.

 

Exhibit C. Provision regarding additional rent and adjustment to fix rent. As a point of clarification, the baseline for operating expenses will be established during the first year of the Tenant’s lease. This will be covered by the Tenant’s sq. ft. cost. However, at the beginning of the second year of the lease, any increases in costs above the Year 1 baseline related to items under Exhibit “C” will be paid by the Tenant’s on a pro-rata per sq. ft. share.

 

Please Initial:

 

 

 

 

 

 

 

/s/ D.A.

 

Landlord

 

Tenant

 

15



 

EXHIBIT “A”

 

DEMISED PREMISES

 

Please Initial:

 

 

 

 

/s/ D.A.

 

Landlord

 

Tenant

 



 

EXHIBIT “B”

 

SPECIAL STIPULATIONS

 

Please Initial:

 

 

 

 

 

 

 

/s/ D.A.

 

Landlord

 

Tenant

 



 

EXHIBIT “C”

 

PROVISIONS REGARDING ADDITIONAL RENT AND ADJUSTMENTS TO FIX RENT

 

1.                                       Definitions.

 

A.                                   Essential Capital Improvements” shall mean (a) a labor saving device, energy saving device or other installation, improvement or replacement which is intended to reduce Operating Expenses, whether or not voluntary or required by governmental mandate, or (b) an installation or improvement required by reason of any law, ordinance or regulation which did not exist on the date of the execution of this Lease, or (c) an installation or improvement intended to improve the safety of tenants in the Building generally, whether or not voluntary or required by governmental mandate.

 

B.                                     Operating Expense Allowance” shall mean and equal -Tenant’s Proportionate Share of the amount of Operating Expenses for the calendar year 2000.

 

C.                                     Operating Expenses” shall mean all of Landlord’s operating costs and expenses of whatever kind or nature paid or incurred in the operation and maintenance of the Building and the Land, all computed on the accrual basis and in accordance with the terms of this Lease, including, but not limited to, the following:

 

1.                                       Gas, electricity, steam, fuel, water, sewer and other utility charges (including surcharge’s) of whatever nature (excluding use of utilities by other tenants such as may be submetered or separately metered pursuant to their leases);

 

2.                                       Insurance premiums and the amounts of any deductibles paid by Landlord;

 

3.                                       Building personnel costs, including, but not limited to, salaries, wages, fringe benefits, taxes, insurance and other direct and indirect costs;

 

4.                                       Costs of service and maintenance contracts including, but not limited to, cleaning and security services;

 

5.                                       All other maintenance and repair expenses  (excluding repairs  and  general maintenance paid by proceeds of insurance or by Tenant or other third parties, and alterations solely attributable to tenants of the Building other than Tenant) and the cost of materials and supplies;

 

6.                                       Any other costs and expenses (i.e. items which are not capital improvements) incurred by Landlord in operating the Building, including ground rent, if any;

 

7.                                       The cost of any additional  services  not provided to the Building on the Commencement Date but thereafter provided by Landlord in the prudent management of the Building;

 

8.                                       The annual amortization of any Essential of Capital Improvement which is made by Landlord after completion of initial construction of the Building, based on the useful life of the improvement plus interest at the Prime Rate on the date of the expenditure on the underappreciated portion thereof;

 

9.                                       Landlord’s central office accounting costs and overhead applicable to the Building;

 

10.                                 Accounting fees for preparing the Operating Expense statement;

 

11.                                 Management fees payable to the managing agent; and

 

12.                                 Taxes, allocated on a per diem basis if the tax year is different than the Operating Year.

 

Please Initial:

 

 

 

 

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 

C-1



 

Operating Expenses shall not include:

 

1.                                       Special cleaning or other services, not offered to all tenants of the Building;

 

2.                                       Any charge for depreciation, interest or rents (except, if applicable) (ground rents) paid or incurred by Landlord; or

 

3.                                       Leasing commissions.

 

If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would constitute and Operating Expense) to a tenant who has undertaken to perform such work or service in lieu of performance by Landlord, Operating Expenses shall nevertheless be deemed to include the amount Landlord would reasonably have incurred if Landlord has in fact performed the work or service at its expense.

 

Not withstanding the foregoing, Operating Expenses shall not include interest and amortization, depreciation, ground rents, expenses for work performed for other tenants in Building, expenses for repairs or other work occasioned by fire or other insurable casualty (to the extent covered by insurance), expenses for leasing or processing new tenants, leasing commissions, advertising expenses), legal expenses incurred in enforcing the terms of any tenant leases, salaries for any employees of Landlord above those attributable the management, operation and maintenance of the Building, incurred by Landlord in connection with the operation and maintenance of the Building.

 

D.                                    Operating Year” shall mean each calendar year or such other period of twelve (12) months as hereafter may be adopted by Landlord as its fiscal year, occurring during the Lease Term.

 

E.                                      Taxes” shall mean all taxes, assessments and governmental charges, whether Federal, state, county or municipal, and whether general or special, ordinary or extraordinary, foreseen or unforeseen, imposed upon the Building or the Land or their operation, whether or not directly paid by Landlord. Taxes shall not include income taxes, excess profit taxes, franchise taxes, or other taxes imposed or measured on or by the income of Landlord from the operation of the Building or the Land; provided, however, that if, due to a future change in the method of taxation or assessment, any income, profit, franchise or other tax, however designated, shall be imposed in substitution, in whole or in part, for (or in lieu of) any tax, assessment or charge which would otherwise be included within the definition of Taxes, such other tax shall be deemed to be included with Taxes as defined herein to the extent of such substitution. There shall be added to Taxes the expenses of any contests (administrative or otherwise) of Taxes incurred during the Operating Year. Tenant shall pay to the appropriate governmental authority any use and occupancy tax. In the event that Landlord is required by law to collect such tax, Tenant shall pay such use and occupancy tax to Landlord as Additional Rent upon demand and Landlord shall remit any amounts so paid to Landlord to the appropriate governmental authority.

 

F.                                      Tenants’s Proportionate Share” shall mean a fraction; the numerator of which shall be the rentable square feet of Demised Premises, and the denominator of which is 74,200 rentable square feet which is the aggregate rentable square feet in the Building.

 

2.                                       Additional Rent for Operating Expenses.

 

2.1                                 Commencing on May 1, 2000, Tenant shall pay during the Lease Term as Additional Rent, the amount by which Tenants’ Proportionate Share of Operating Expenses exceeds the Operating Expense Allowance.

 

2.2                                 As soon as available in each Operating Year during the Lease Term, Landlord shall provide Tenant with a written statement setting forth the Operating Expense Allowance and a projection of Tenant’s Proportionate Share of Operating Expenses for such year commencing on the first day of the first month following receipt of such statement and continuing until receipt by Tenant of Landlord’s statement of the next projected Tenant’s Proportionate Share of Operating Expenses, Tenant shall pay to Landlord with each monthly installment of Fixed Rent an amount equal to one-twelfth (l/12th) of the excess of such projected Tenant’s Proportionate Share of Operating Expenses over the Operating Expense Allowance. Concurrently with the first payment required hereinabove, Tenant shall pay to Landlord an amount equal to the excess of such projected Tenant’s Proportionate Share of Operating Expenses over the Operating Expense Allowance multiplied by a fraction, the numerator of which is the number of calendar months of the Operating Year in question which have elapsed prior to the due date of such first payment and the denominator of which is twelve (12), less any payments made by Tenant during said period on account of such excess Operating Expenses.

 

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2.3                                 Landlord shall, as soon as possible after the close each such Operating Year, provide Tenant with a statement of the actual operating expenses for such period. Any underpayment by Tenant during such Operating Year due to the fact that projected Operating Expenses were less than actual Operating Expenses shall be paid to Landlord within 30 days after Tenant’s receipt of a statement for such deficiency. Any overpayment by Tenant due to the fact that projected Operating Expenses were greater than actual Operating Expenses for such year shall be credited to the next Additional Rent payable by Tenant under this Exhibit “C.” If the Operating Expenses are less than the Operating Expense Allowance, a credit or check will not be issued.

 

3.                                       Adjustment for Vacancies. In determining Operating Expenses for any Operating Year, if the Building was less than fully occupied during such entire year, or was not in operation during such entire year, then Operating Expenses shall be adjusted by Landlord to reflect the amount that such expenses would normally be expected to have been, in the reasonable opinion of Landlord, had the Building been fully occupied and operational throughout such year, except that in no event shall such adjustment result in an amount less than the actual Operating Expenses. Any such annualization shall be explained in Landlord’s statement under Section 2.3 hereof.

 

4.                                       Pro-Rations. Should this Lease commence or terminate at any time other than the first day of an Operating Year, the Additional Rent payable by Tenant on account of Operating Expenses shall be first calculated on the basis of the entire Operating Year and then pro-rated on the basis of the number of days of occupancy.

 

5.                                       Audit. Tenant shall have the right at all reasonable times within thirty (30) days after Landlord has provided Tenant with a statement of the actual Operating Expenses, and at its sole expense, to audit Landlord’s books and records relating to this Lease for that Operating Year.

 

6.                                       Minimums.  Notwithstanding anything contained herein to the contrary, in no event shall Tenant’s Proportionate Share of Operating Expenses for any calendar year be less than the Operating Expense Allowance.

 

7.                                       Personal Property Taxes.  Tenant will be responsible for ad valorem taxes on its personal property and on the value of the leasehold improvements in the Demised Premises to the extent that the same exceed Building Standard allowances (and if the taxing authorities do not separately assess Tenant’s leasehold improvements, Landlord may make a reasonable allocation of impositions to such improvements).

 

8.                                       Survival.  If, upon expiration or termination of this Lease for any cause, the amount of any Additional Rent due hereunder has not yet been determined, an appropriate payment from Tenant to Landlord or refund from Landlord to Tenant, shall be made promptly after such determination.

 

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EXHIBIT “D”

 

Please Initial:

 

 

 

 

 

 

Landlord

 

Tenant

 



 

EXHIBIT “E”
RULES AND REGULATIONS

 

1.                                       The sidewalks, lobbies, passages, elevators and stairways shall not be obstructed or used by Tenant for any purpose other than ingress and egress from and to Tenant’s offices. Landlord shall in all cases retain the right to control or prevent access thereto of all persons whose presence, in the judgement of Landlord, shall be prejudicial to the safety, peace, character or reputation of the building or of any of the tenants.

 

2.                                       The toilet rooms, water closets, sinks, faucets, plumbing or other service apparatus of any kind shall not be used by Tenant for any purposes other than those for which they were designed and installed. No sweeping, rubbish, rags, ashes, chemicals or other refuse or injurious substances (which shall include medical waste) shall be placed therein or used in connection therewith by Tenant or left by Tenant in the lobbies, passages, elevators or stairways.

 

3.                                       Nothing shall be placed by Tenant on the outside of the building or on its window sills or projections. Skylights, windows, doors and transoms shall not be covered or obstructed by Tenant, and no window shades, blinds, curtains, screens, storm windows, awnings or other materials shall be installed or placed on any of the windows or in any of the window spaces, except as approved in writing by Landlord.

 

4.                                       No sign, lettering, insignia, advertisement, or notices shall be inscribed, painted, installed or placed on any window or in any window spaces or any other part of the outside or inside of the building, unless first approved in writing by Landlord. Names shall be placed on suite entrance doors for Tenant by Landlord and not otherwise, and at Tenant’s expense. In all instances the lettering is to be of design and form approved by Landlord.

 

5.                                       Tenant shall not place additional locks upon any doors and shall surrender all keys for all locks at the end of the tenancy.

 

6.                                       Tenant shall not do or commit, or suffer, or permit to be done or committed, any act or thing whereby, or in consequence whereof, the rights of other tenants will be obstructed or interfered with, or other tenants will in any other way be injured or annoyed. Tenant shall not use nor keep, nor permit to be used or kept in the building any matter having an offensive odor, nor any kerosene, gasoline, benzine, fuel, or other explosive or highly flammable material. No birds, fish or animals shall be brought into or kept in or about the premises.

 

7.                                       In order that the premises may be kept in good state of preservation and cleanliness, Tenant shall, during the continuance of its possession, permit personnel and contractors approved by Landlord, and no one else, to clean the premises. Landlord shall be in no way responsible to Tenant for the removal, disposal or cleaning of any medical equipment or waste or for any damage done to furniture or other effects of Tenant or others by any of Tenant’s employees, or any persons, or for any loss of Tenant’s employees, or for any loss of property of any kind in or from the premises, however occurring. Tenant shall see each day that the windows are closed, the lights turned out, and doors securely locked before leaving the premises.

 

8.                                       If Tenant desires to introduce signaling, telegraphic, telephonic, protective alarm or other wires, apparatus or devices, Landlord shall direct when and how the same are to be placed, and except as so directed, no installation, boring or cutting shall be permitted. Landlord shall have the right to prevent and to cut off the transmission of excessive or dangerous current of electricity or annoyances into or through the building or premises and to require the changing of wiring connections or layout at Tenant’s expense, to the extent that Landlord may deem necessary, and further to require compliance with such reasonable rules as Lessor may establish relating thereto, and in the event of non-compliance with the requirements or rules, Landlord shall have the right immediately to cut wiring or to do what it considers necessary to remove the danger, annoyance or electrical interference with apparatus in any part of the building.  All wires installed by Tenant must be clearly tagged at the distributing boards and junction boxes, and elsewhere as required by Landlord, with the number of the office to which said wires lead, and for the purpose for which the wires respectively are used, together with the name of the concern, if any, operating same.

 

9.                                       No furniture, packages, equipment, supplies or merchandise of Tenant will be received in the building, or carried up or down in the elevators or stairways, except during such hours as shall be designated by Landlord, and Landlord in all cases shall also have the exclusive right to prescribe the method and manner in which the same shall be brought in or taken out of the building. Tenant shall in all cases have the right to exclude heavy furniture, safes, and other articles from the building which may be hazardous or to require them

 

Please Initial:

 

 

 

 

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 

E-1



 

to be located at designated places in the premises. The cost of repairing any damage to the building caused by taking in or out furniture, safes or any articles or any damage caused while the same be in the premises, shall be paid by Tenant.

 

10.                                 Without Landlord’s written consent, nothing shall be fastened to, nor shall holes be drilled or nails or screws driven into walls of partitions; nor shall walls or partitions be painted, papered, or otherwise covered or moved in any way, or marked or broken; nor shall any connection be made to electric wires for running fans or motors or other apparatus, devices or equipment; nor shall machinery of any kind other than customary small business machines be allowed on the premises; nor shall Tenant use any other method of heating, air conditioning or air cooling than that provided by Landlord.  Telephones, switchboards and telephone wiring and equipment shall be placed only where designated by Landlord. No mechanics, other than those employed by Landlord, shall be allowed to work in or about the building without the written consent of Landlord first have been obtained.

 

11.                             Access may be had by Tenant to the premises at any time, Access may be refused at Landlord’s election, unless the person seeking it is known to the watchman in charge, or has a pass issued by Landlord, or is properly identified to the watchman’s satisfaction.  Landlord shall in no case be responsible for the admission or exclusion of any person. In case of invasion, hostile attack, insurrection, mob violence, riot, bomb threats, explosion fire or any casualty, Landlord reserves the right to bar or limit access to the building for the safety of occupants or protection of property.

 

12.                             Landlord reserves the right to rescind, suspend or modify any rules or regulations, and to make such other rules or regulations as, in Landlord’s judgement, may from time to time be needed for the safety, care, maintenance, operation and cleanliness of the building, or for the preservation of good order therein. Tenant agrees to comply with new or modified regulations of any Federal, State or Municipal authority having appropriate jurisdiction or any regulatory agencies as they may affect the premises or building. Notice of any action by Landlord referred to in this paragraph, when given to Tenant, shall have the same force and effect as if originally made a part of the foregoing lease.  But new rules and regulations will not, however, be unreasonably inconsistent with the proper and rightful enjoyment of the premises by Tenant under this lease.

 

13.                             The use of rooms as sleeping quarters is prohibited at all times.

 

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EXHIBIT “F”
SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT

 

THIS AGREEMENT, made as of the                      day of                         , 200  , by and between                           , a                                corporation, having an office at                                   (the “Lender”), and                              , a                           corporation having an office at                                                                                                           (the “Tenant”).

 

WITNESSETH:

 

WHEREAS, the Lender has made a loan (together with any present or future amendments or increases thereto, the “Loan”) to                                              (“Landlord”) evidenced by a Promissory Note of Landlord (together with any present or future amendments or increases thereto, the “Note”) secured by a mortgage from the Landlord, as amended, increased, renewed, modified, consolidated, replaced, or extended being hereinafter referred to as the “Mortgage”, covering all of the Landlord’s right, title and interest in the land, buildings, improvements and other items of property described therein, located in Baltimore County, Maryland and more particularly described in Exhibit “A” annexed hereto and made a part hereof (said land, buildings, improvements, and such other property being hereinafter collectively referred to as the “Mortgaged Premises”) and further secured by an Assignment of Rents and Other Interest (together with any present or future amendments or increases thereto, the “Assignment Rents”), both recorded in the Office of the Recorder of Deeds of Baltimore County, Maryland:

 

WHEREAS, the Landlord and the Tenant entered into a lease dated as of                          , 200  , (said lease, as the same may be amended, renewed, modified, consolidated, replaced or extended being hereinafter referred to as the “Lease”), covering a portion of the Mortgaged Premises (the “Leased Premises”).

 

WHEREAS, the Assignment of Rents assigned to Lender all of Landlord’s right, title, interest in and to the Lease and any other present or future lease of all or any part of the Mortgaged Premises;

 

WHEREAS, the Lender, as a condition to making the loan secured by Mortgage, has required that the Lease be and continue to be subordinate in every respect to the Mortgage; and

 

WHEREAS, the parties hereto desire to effect the subordination of the lease to the Mortgage and to provide for the non-disturbance of the Tenant by the Lender;

 

NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency whereof are hereby acknowledged, Tenant and Lender, intending to be legally bound hereby, covenant and agree as follows:

 

1.                                       The Lease (and all provisions thereof, including any purchase option) shall at all times be subject and subordinate to the provisions of this Agreement in each and every respect to the Mortgage (and all provisions thereof) subject, nevertheless, to the provisions of this Agreement. The foregoing provision shall be self-operative; however, the Tenant, upon request, shall execute and deliver any certificate which the Landlord or the Lender may request to confirm said subordination by the Tenant.

 

2.                                       The Tenant certifies that (a) the Lease is presently in full force and effect and unmodified, except as noted in this Agreement, and constitutes the sole agreement between Landlord and Tenant relating to Tenant’s occupancy of the Leased Premises, (b) to the best of its knowledge, no event has occurred which constitutes a default under the Lease by the Landlord or which, with the giving of notice, the passage of time or both, would constitute a default by the Landlord under the Lease; (c) to the best of its knowledge, as of the date hereof Tenant has no charge, lien or claim of offset under the Lease and Landlord does not owe any sums to Tenant under the Lease or any other agreement. The full minimum monthly rental of $                   is payable                               , and Tenant has been given no rent concessions or free rent other than as specifically set forth in the Lease. The Landlord shall be a third party beneficiary of the certifications as set forth in this paragraph.

 

3.                                       The Lease and rentals thereunder have been assigned to Lender as security for repayment of the Loan. Lender, as such assignee, hereby directs Tenant to pay to Landlord all rentals and other moneys due and to become due to Landlord under the Lease until receipt of further direction from Lender.  Upon receipt by Tenant of subsequent direction from Lender, Tenant shall pay to Lender, or in accordance with such

 

Please Initial:

 

 

 

 

 

/s/ F.S.

 

/s/ D.A.

 

Landlord

 

Tenant

 

F-1



 

subsequent directions of Lender, all such rentals and other sums due under the Lease, or amounts equal thereto. Tenant shall have no responsibility or ascertain whether such direction by Lender is permitted under the Mortgage or such Assignment of Rents and Other Interests. Landlord, by its execution of consent form attached hereto, consents to the foregoing.

 

4.                                       Tenant acknowledges that without the prior written consent of the Lender, or except as permitted by the terms of the lease that no modification of the Lease so as to materially reduce the rents and other charges payable thereunder, or shorten or extend or renew the term thereof or adversely affect the rights or increase the obligations of the Landlord thereunder, or prepay rents or other charges under the Lease for more than on month in advance.  In the event of any default on the part of the Landlord under the Lease, Tenant will give written notice thereof to the Lender, or its successor or assigns whose name and address previously shall have been furnished to the Tenant in writing. Any right or remedy of Tenant resulting from or dependent upon such notice shall take effect only after notice is go given to the Lender. Performance by the Lender of any of the Landlord’s obligations under the Lease in accordance with the terms of the Lease shall satisfy provisions of the Lease requiring performance by the Landlord, and the Lender, exercising reasonably due diligence, shall have the reasonable additional period of time under the circumstances to complete such performance.

 

5.                                       If the interest of the Landlord under the Lease Premises shall be transferred by reason of a foreclosure action or other proceedings for enforcement of the Mortgage or pursuant to a transfer in lieu of foreclosure, the Tenant shall be bound to and shall attorn to the person acquiring the interests of the Landlord as a result of any such action or proceeding and such person’s successors and assigns (any of the foregoing being hereafter referred to as the “Successors”) upon the Successor succeeding to the interest of the Landlord in and to the Lease Premises. Said attornment shall be effective and self-operative without the execution of any further instruments. The Tenant, upon request, shall execute and deliver any certificate or other instrument necessary or appropriate which the Lender or the Successor may request to effect or confirm said attornment by the Tenant.

 

6.                                       If the interest of the Landlord under the Lease shall be transferred by reason of foreclosure or other proceedings for enforcement of the Mortgage or pursuant to a transfer in lieu of foreclosure then, except as provided in this Agreement, the Successor shall be bound to the Tenant under all of the terms, covenants, and conditions of the Lease for the balance of the term thereof remaining, with the same force and effect as if the Successor were the Landlord (but subject to Paragraph 7 below).

 

7.                                       The Successor shall not and shall not be deemed to (a) adopt or in any other manner be responsible or liable for any representations and warranties made by the Landlord in the Lease (b) be liable for any act, omission or default of Landlord or any prior Landlord and will not be subject to any offsets or defenses which the Tenant might have against Landlord or any prior Landlord, (c) be bound by any amendment or modification of the Lease or by any prepayment of rents or other charges under the Lease for more than one month unless such amendment, modification or prepayment was approved in writing by the Lender, (d) be liable to Tenant for any refund of any security deposit made by the Tenant pursuant to the Lease, except to the extent that the Successor has actually received that security deposit, or (e) be liable to Tenant in any event for any matter relating to the operation, maintenance, or condition of the Mortgaged Premises or Leased Premises prior to the date Successor acquires title to the Lease Premises. Any rights of the Tenant to terminate or cancel the Lease by reason of the failure of Landlord or any prior Landlord under the Lease to perform any of its obligations under the Lease shall be suspended if and while the Successor is exercising reasonably diligent efforts under the circumstances to cause such obligations to be performed. The obligations and liability of the Successor shall be limited to and enforceable only against the Successor’s estate and interest in the Leased Premises and not out of or against any other assets or properties of the Successor.

 

8.                                       Notwithstanding anything in the Lease to the contrary, if the interest of the Landlord under the Lease shall be transferred to the Successor, then (a) the Successor shall not be obligated to reconstruct the Leased Premises following a casualty or condemnation thereto.

 

9.                                       If Tenant is not in default hereunder or under the terms of the Lease, the Tenant will not be joined as a party defendant for the purpose of terminating the lease in any foreclosure action or proceeding which may be instituted or taken by the Lender, nor will the Tenant be evicted from the Leased Premises, nor will the Tenant’s leasehold estate under the Lease be terminated or disturbed, nor will any of the Tenant’s rights under the Lease be affected in any way by reason of any default under the Mortgage.

 

10.                                 This Agreement may not be modified except by an agreement in writing signed by the parties hereto or their respective successors in interest. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their respective heirs, representatives, successors and assigns.

 

F-2



 

11.                                 Upon a valid expiration or termination of the Lease for any reason, and provided the Lease shall not have been renewed or otherwise extended and Tenant shall have no right to possession of the Leased Premises, Tenant shall execute, acknowledge and deliver to the Landlord, the Lender, and the Successor, a certificate attesting to the expiration or termination of the Lease and waiving all rights to possession of the Leased Premises.

 

12.                                 All notices, demands or requests made pursuant to, under or by virtue of this Agreement must be in writing and mailed to the party to whom the notice, demand or request is being made by certified or registered mail, return receipt requested, at its address set forth above. Any party may change the place that notices and demands are to be sent by written notice delivered in accordance with this Agreement.

 

13.                                 This Agreement is fully integrated and not in need of parol evidence in order to reflect the intentions of the parties hereto. The parties hereto intend the literal words of this Agreement to govern the subject matter hereof and all prior negotiations, drafts and other extrinsic communications shall have no significance or evidentiary effect. This Agreement shall be the whole and only agreement between the parties hereto with regard to the subordination of the Lease and the leasehold interest of Tenant thereunder to the lien or charge of the Mortgage in favor of Lender, and shall supersede and control any prior agreements as to such, or any subordination, including, but not limited to, those provisions, if any, contained in the Lease which provide for the subordination of the Lease and the leasehold interest of Tenant thereunder to a deed or deeds of trust or to a mortgage or mortgages to be thereafter executed. In the event any one or more of the provisions of this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

 

14.                                 This Agreement shall continue in effect until all sums due by Landlord to Lender under the Note, the Mortgage and the Assignment of Rents have been paid in full.

 

15.                                 Tenant shall neither suffer nor itself manufacture, store, handle, transport, dispose of, spill, leak, dump any toxic or hazardous waste, medical waste or other waste products or substance (as they may be defined in any federal or state statue, rule or regulation pertaining to or governing such wastes, waste products or substances) on the Premises at any time during the term, or extended term, of the Lease, except in compliance with all applicable laws and regulations.

 

F-3



 

IN WITNESS WHEREOF, the parties hereto have hereunto caused this Agreement to be duly executed as of the day and year first above written.

 

 

 

LENDER:

 

 

 

 

 

 

 

 

 

BY:

 

 

 

 

 

 

 

TENANT: Sinclair Broadcast Group, Inc.

 

 

 

 

 

/s/ David B. Amy

 

 

 

 

 

BY:

David B. Amy

 

 

 

 

 

 

CONSENT

 

The undersigned consents to the foregoing.

 

 

 

LANDLORD:
BEAVER DAM LLC

 

 

 

 

 

BY:

/s/ Frederick Smith

 

 

F-4



 

EXHIBIT “G”
TENANT’S ESTOPPEL CERTIFICATE AND AGREEMENT

 

LANDLORD:

 

TENANT:

 

DATE OF LEASE:

 

PREMISES:

 

The undersigned (“Tenant”) hereby certifies to and agrees with                    , its successors and assigns (“                       ”) that:

 

1.                                       Tenant has accepted possession of the Premises pursuant to the Lease. The Lease term commenced on                            . The termination date of the Lease term, excluding renewals and extensions is                          .

 

2.                                       Any improvements required by the terms of the Lease to be made by Landlord have been completed to the satisfaction of Tenant in all respects, except for the “punchlist” items, if any, set forth on Schedule 1 attached hereto. Landlord has (as of the date hereof) fulfilled all of its duties under the Lease (except as otherwise set forth on Schedule 1). No sums are due by Landlord to Tenant under the Lease or any other agreement between Landlord and Tenant.

 

3.                                       The Lease has not been assigned, modified, supplemented or amended in any way. The Lease constitutes the entire agreement between the parties and there are no other agreements between Landlord and Tenant concerning the Premises.

 

4.                                       The Lease is valid and in full force and effect, and to the best of Tenant’s knowledge, neither Landlord nor Tenant is in default thereunder. Tenant has no defense, setoff or counterclaim against Landlord arising out of the Lease or in any way relating thereto, or arising out of any other transaction between Tenant and Landlord, and no event has occurred and no condition exists, which with the giving of notice or the passage of time, or both, will constitute a default under the Lease.

 

5.                                       The monthly rent presently payable under the Lease is $               per month payable in advance. All rent and other sums due under the Lease are current and have been paid through               , 200  .  No rent or other sum payable under the Lease has been paid more than one month in advance.

 

6.                                       All notices and other communications from Tenant to              shall be in writing and shall be delivered or mailed by registered mail, postage paid, return receipt requested, addressed to                         at:

 

 

 

or at such other address as                    , a successor, purchaser, or transferee shall furnish to Tenant in writing.

 

7.                                       This certificate may not be modified, except by an agreement in writing signed by the parties hereto (or their respective successors and assigns) and                         . This Estoppel Certificate shall be binding on the undersigned, it successors and assigns (including future tenants under the Lease) and shall insure to the benefit of                      , it successors and assigns.

 

 

 

TENANT:

 

 

Attest/Witness:

 

 

 

 

 

BY:

 

 

 

 

 

DATE:

 

,

200

 

 

 

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