Exhibit 10.18

 

LEASE AGREEMENT

 

THIS LEASE AGREEMENT (the “lease”) is entered into and dated this 2nd day of
June, 2003 by and between Canton Crossing LLC (the “landlord”) and 1st Mariner
Bank  (the “Tenant”).

 

RECITALS

 

Landlord agrees to Lease to Tenant and Tenant agrees to lease from Landlord
2,500 sq. ft of office space, herein after referred to as “the Premises”, upon
the terms and conditions herein stated.

 

NOW, therefore, in consideration of the rents, covenants, and agreements herein
contained, the Landlord and Tenant agree as follows:

 

 

Section 1.              Premises, term, and Collection Date

 

a.             Lease.  Landlord hereby leases to the Tenant, and the Tenant
rents form the Landlord, the space comprising of approximately Two Thousand Five
Hundred (2,500) square feet of office space, outlined on the plans attached
hereto as exhibit A (the “Premises”), on the property located at 3301 Boston
Street, Baltimore, Maryland 21224 (the “Building”), subject to such rights,
easements, covenants, conditions, restrictions and other interests of record of
Landlord and persons other than Landlord, and to all zoning rules, restrictions
and governmental regulations now in effect by any governmental authority having
jurisdiction over the Premises and Building.

 

b.             Initial Term.  The term of this lease shall commence on July 1,
2003  (the “Commencement Date”) and shall extend for ten years and three months
(the “Initial Term”) thereafter and end on October 31, 2013.

 

c.             Rental Year - Defined.  The term “Rental Year” shall mean the
period of twelve (12) consecutive months following the Commencement Date, and
each subsequent twelve-month period thereafter.

 

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Section 2.              Rental

 

a.             Annual Base Rent.  Tenant covenants and agrees to pay to
Landlord, as rent for the Premises for the first Rental Year, the sum of Sixty
Two Thousand Five Hundred Dollars ($62,500.00) payable in equal monthly
installments of Five Thousand Two Hundred Nine Dollars ($5,209.00).  Thereafter,
the annual base Rent shall be adjusted as provided in paragraph 2.c.

 

b.             Payment of Rent.   All payments of Rent shall be due and paid in
advance on the first day of each month without any setoff or deduction for any
reason whatsoever.  Tenant shall deliver all Rent payable and all statements
required thereunder to Landlord at 3301 Boston Street, Baltimore, Maryland
21224, or any other address, which Landlord may hereafter designate in writing
to Tenant.  Any payment by Tenant or acceptance by Landlord of a lesser amount
than due shall be treated as a payment on account, and not to be construed to be
an accord and satisfaction or a waiver by Landlord of any sums due hereunder. 
Should Tenant fail to pay such rent by the tenth (10th) day of the month, Tenant
shall pay a late payment charge equal to five percent (5.0%) of the amount due
and unpaid.

 

c.             The annual lease payment shall be increased each year after the
initial year by CPI.

 

d.             Renewal and Extension.  Tenant shall have the option upon
acceptance by Landlord to renew and extend the term for a time and at a cost
mutually agreeable between Landlord and Tenant, provided that the Tenant, at
least ninety (90) days prior to the expiration of the initial term, gives
Landlord written notice of their intention to exercise such option.  Landlord
upon written notice will have thirty (30) days to acknowledge acceptance of
renewal.

 

 

e.             Security Deposit.  Tenant has deposited with Landlord the
Security Deposit, (one months rent) as security for the performance by Tenant of
its obligations under this Lease. If Tenant shall perform all such obligations,
the Security Deposit shall be refunded to Tenant, with interest at the rate of
interest payable by 1st Mariner Bank on its money market accounts, within ten
(10) days after termination of this Lease. If Tenant shall default in any
obligation, Landlord shall be entitled to apply any or all of the Security
Deposit toward Landlord’s damages, and Tenant shall, within ten (10) days after
notice thereof, deposit with Landlord an amount sufficient to restore the
Security Deposit to its original amount, which amount shall constitute
Additional Rent under the Lease.

 

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Section 3.              Utilities and Services

 

Tenant will pay for all water and sewer, gas and electricity, janitorial
services, appropriate repairs and trash removal services to the Premises
together with any taxes thereon, if any such services are not separately metered
to Tenant, Tenant shall pay a reasonable proportion to be determined by Landlord
of all charges jointly metered with other premises.  Landlord shall under no
circumstances be liable to Tenant in damages or otherwise for any interruption
in service of electricity, water, gas, heat, telephone or air-conditioning
caused by the making of any repairs or improvements in the Building unless cause
by Landlord’s negligence.

 

SECTION 4. LANDLORD INSURANCE

 

Landlord shall be responsible for maintaining adequate insurance on the building
known as 3301 Boston Street, Baltimore, Md. 21224.  The cost of this insurance
will be allocated to each tenant on a pro rata basis.

 

Section 5.              Taxes

 

Tenant shall pay prior to delinquency all taxes assessed against and levied upon
trade fixtures, furnishings, equipment and all other personal property of Lessee
contained in the premises or elsewhere.  When possible, Tenant shall cause said
trade fixtures, furnishings, equipment and all other personal property to be
assessed and billed separately from the real property of Landlord.

 

If any of Tenant’s said personal property shall be assessed with Lessor’s real
property, Tenant shall pay Landlord the taxes attributable to Landlord within 10
days after receipt of a written statement setting forth the taxes applicable to
Lessee’s property.

 

Section 6.              Tenant’s Insurance

 

a.             Coverage.  Tenant shall procure and maintain the following
insurance coverage:

(i) Liability Insurance, covering public liability, personal and bodily injury
and death.  Such insurance shall provide, in the aggregate, a minimum coverage
of One Million Dollars ($ 1,000,000) combined single limit per occurrence and

 

(ii) Property damage insurance, written at the cost of replacement, covering the
Premises that Landlord shall have installed, including without limitation, all
contents, fixtures, improvements, floor coverings, wall coverings, furniture,
and other property.

 

Such policies shall  (i) insure against “all risks” and cover losses caused by
fire and all other casualties, specifically including, but not limited to,
falling objects, earthquakes, and flood, and shall contain a replacement cost
endorsement, (ii) be adjusted upward annually for inflation to reflect the
actual replacement cost of such property, and in any case by any amount at least
equal to the increase in the Consumer Price Index, as defined in Section 3. 
Such insurance shall not require the payment of a deductible exceeding One
Thousand Dollars ($ 1,000.00)

 

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Section 7.  Default Clause

 

Following any of these events, Landlord may terminate this lease and enter and
take possession of the premises from Tenant, all without waiving any rights,
which it may have at law hereunder, without further notice or demand (all such
notices and demands being hereby waived).  In addition, at the option of
Landlord, the balance of the rents for the remainder of this Lease as well as
all other charges agreed to be paid by Tenant during such period, will become
due and payable immediately by Tenant to Landlord, in addition to any and all
rents and other charges already due and payable and in arrears.

 

a.             That Tenant shall fail to pay rent due hereunder within ten (10)
days of due date.

 

b.             That Tenant shall fail to commence to cure any other violation of
its covenants within fifteen (15) days after written notice thereof, or, having
commenced to cure the same as aforesaid, should fail to carry the same to
conclusion with due diligence.

 

c.             Upon the adjudication of Tenant as a bankrupt or the appointment
of a receiver of its property.

 

 

Section 8.              Exhibits and Addenda

 

a.             Exhibit “A”, the floor plan, is part of this Lease.

 

b.             Addendum “A”, Inclusions to Lease, is part of this Lease.

 

c.             Addendum “B”, General Terms of Lease, is part of this Lease.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Lease under their
respective seals as of the day and year first above written.

 

 

WITNESS:

 

 

LANDLORD:

 

 

 

 

 

 

 

           CANTON CROSSING LLC

 

 

 

 

 

 

 

 

     /s/ Ken Jones

 

By:

   /s/ Edwin F. Hale

(SEAL)

 

 

 

 

                Edwin F. Hale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   TENANT:

 

 

 

 

 

 

 

 

 

 

 

 

 

                1st Mariner Bank

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     /s/ Ken Jones

 

By:

   /s/ Brett Carter

(SEAL)

 

 

 

 

 

                Brett Carter

 

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ADDENDUM A

Inclusions To the Lease

 

Section 1.              Utilities and Services

 

During the Term of Lease, Tenant shall have the non-exclusive use, of the common
area restroom facilities, elevators, stairways, hallways, driveways, footway and
parking areas servicing the Building.  Landlord shall have the right to
establish reasonable rules for the use of common facilities to accommodate the
needs and interests of all persons using such facilities.

 

Additional charges for electric, water, janitorial in accordance with 3a will be
invoiced monthly.  The tenants pro rata share of real estate taxes will be
invoiced annually.

 

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Addendum B

General Terms of Lease

 

Section 1.              Tenant’s Use

 

a.             Use of Premises.  The Premises shall be used and occupied for
general office use and no other purpose.  Tenant shall have access to the
Premises twenty-four hours per day and seven days per week, provided that Tenant
shall comply with Landlord’s standard security systems and procedures, as in
effect from time-to-time.

 

b.             No Partnership or Joint Venture.  Nothing contained in this Lease
shall be deemed or construed as making any party the agent, employee, joint
venture, partner, or representative of any other party.

 

c.             Quiet Enjoyment.  So long as the Tenant complies with this Lease,
the Tenant shall be entitled to the quiet and peaceful use and enjoyment of the
Premises, and the Landlord shall defend such rights of the Tenant against the
claims the Landlord, subject to the terms of this Lease.

 

Section 2.              Assignment and Subletting

 

Tenant shall not assign Lease or sublet the Premises in whole or in part, permit
other persons to occupy said Premise or any part thereof, or grant a license or
concession for all or any part of said Premises except upon the prior written
approval of Landlord’s sole and absolute discretion which should not be
unreasonably withheld.  Any consent by Landlord to an assignment or subletting
of this lease shall not constitute a waiver of the necessity of such consent as
to any subsequent assignment or subletting.

 

Section 3.

 

a.             Landlord Obligations.  Landlord shall keep and maintain in good
repair all of the structural elements of the Building including all electrical,
plumbing, heating, air-conditioning or other mechanical installations servicing
the Building, all exterior portions of the Premises (inclusive of doors,
windows, and glass) and the routine maintenance of the interior of the Premises
to the same extent that Landlord maintains the other portions of the Building;
provided that any damage thereto shall not have been caused by Tenant, its
agents, servants, licensees, invitees, contractors or employees, in which event
Tenant shall be responsible therefore and shall promptly perform necessary
repairs.

 

Tenant shall pay for its pro rata share (including its pro rata share of common
area space) of expense incurred by the landlord as outlined in section 7(f). 
Such payment is due within 30 days after invoiced by the Landlord.

 

b.             Tenant Obligations.  Landlord shall have no liability or
obligation to repair or maintain any equipment, facilities, fixtures,
installations, or other property placed or

 

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incorporated in the Premises by Tenant, all of which shall be at the expiration
of the Term in as good condition as when received except for ordinary wear and
tear.

 

Section 4.              Tenant’s Operations, Alterations, Signs, Etc

 

a.             Tenant’s Operations.  Tenant shall  (1) use, maintain and occupy
the Premises in a careful, safe, clean, proper and lawful manner, (2) conduct
its business in a respectable, first-class manner as not degrade the Building or
disturb other tenants; (3) comply with all laws and ordinances and all rules and
regulations of governmental authorities and all recommendations of the
Association of Fire Underwriters or other similar bodies establishing standards
for fire insurance ratings with respect to the use or occupancy of the Premises
by Tenant, and (4) comply such other standards of operation and requirements as
the Building Lease requires of Landlord.

 

b.             Tenant’s Alterations.   Tenant shall not make any alterations
whatsoever to the Premises without Landlord’s prior written consent.  All
alterations made by Tenant, whether or not approved by or subject to the
approval of Landlord, and all air-conditioning, heating, lighting, electrical,
plumbing equipment and fixtures and all wiring and other apparatus related to
air-conditioning, heating, lighting, electrical and plumbing equipment installed
by Tenant at the Premises (whether or not such equipment and fixtures are
affixed to the Premises as to be removable without destroying the chattels
themselves or the property to which they re affixed and whether or not such
equipment and fixtures are real property or personality) unless Landlord gives
notice to Tenant to remove the same, shall remain upon the Premises at the
expiration or earlier termination of the Term of this lease and shall become the
property of Landlord immediately upon installation thereof.  Landlord may give
Tenant written notice to remove any or all of the aforesaid alterations or
fixtures, in which event the Tenant shall remove such if the alterations and
fixtures as may be specified in Landlords notice to Tenant and Promptly restore
the Premises to the same good order and conditions as they were in at the
Commencement Date.  Tenant shall not cause or suffer any liens, including but
limited to mechanic’s liens, to attach to the Premise or the building in which
the Premises are located.

 

c.             Signs.  Tenant shall not place, suffer to be placed or maintain
any sign, billboard, marquee, awning, decoration, placard, lettering,
advertising matter, or other thing of any kind (herein collectively “Sign”),
whether permanent or temporary on the exterior of the Premises or on the glass
of any window or door of the Premises without first obtaining Landlord’s written
approval thereof, said approval not to be reasonably withheld.  Tenant further
agrees to maintain any sign approved by Landlord in good condition and repair at
all times.

 

d.             Increase in Insurance.  If anything done, omitted to be done or
suffered to be done by Tenant, or kept, or suffered by cost of fire or other
insurance on the Premises or other property of Landlord in the Building, to be
increased beyond the minimum from time to time applicable to the Premises,
Tenant will pay the amount of such increase within thirty (30) days of the date
of written demand by Landlord.

 

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Section 5.              Subordination and Estoppel Certificate

 

a.             Subordination.  Tenant’s rights under this Lease are and shall
always be subordinate to (i) the terms, conditions, provisions and rights stated
in the Building Lease, (ii) the operation and effect of any mortgage or deed of
trust now or hereafter placed upon the Building or any part thereof by Landlord
or its landlord, or (iii) any renewal, modification, consolidation, replacement
or extension of any such lease, mortgage or deed of trust unless the lessor,
mortgagee or holder of the deed of trust elects in such instrument to have
Tenant’s interest hereunder superior to the interest of the lessor, mortgagee or
holder of such deed of trust.  This sub-section shall be self-operative and no
further instrument or subordination shall be necessary, but Tenant shall execute
promptly any instrument of subordination that Landlord may request.

 

b.             Estoppel Certificate. Tenant shall from time to time, upon not
less than ten (10) days prior written request by Landlord, provide, execute,
acknowledge, and deliver to Landlord written acknowledgments and statement s may
be required of Landlord under the Building Lease.

 

Section 6.              Indemnification

 

a.             Tenant shall indemnify, defend and hold Landlord harmless from
and against any and all claims, actions, damages, liabilities, property damage
arising out of or relating to Tenant’s occupancy or use of the Premises or any
other part of the Building or property or other improvement thereon.  Such
Indemnity shall extend to acts and omissions by Tenant, its employees, agents,
contractors, customers, guests, and any other visitor whomsoever, and include
workers compensation claims.

 

b.             Landlord shall indemnify, defend and hold Tenant harmless from
and against any and all claims, actions, damages, liabilities, and expenses,
including reasonable attorney’s fees for, or in connection with, personal
injury, bodily injury, loss of life and/or property damage arising out of or
relating to Landlord’s occupancy or use of the Building other than the
Premises.  Such indemnity shall extend to acts and omissions by Landlord, its
employees, agents, contractors, customers, guests, and any other visitor
whomsoever, and include workers compensation claims.

 

c.     Neither party shall have any obligation to indemnify the other for or
open account of the illegal acts of any person.

 

Section 7.                              Tenant’s Insurance

 

a.             General.   Tenant shall procure and maintain the insurance
coverage specified in the lease with insurance companies licensed to do business
in Maryland and having a Best rating of at least “A+”.  Tenant shall also
procure and maintain all insurance required by law, for example, workman’s
compensation insurance, in such amounts and in such form as required by the
particular law.  All liability and property damage policies shall contain an
endorsement naming Landlord as a named insured and a loss payee.  Tenant shall
procure the required

 

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coverage promptly, and furnish Landlord with a certificate reflecting the
required coverage and endorsement, and proof of payment of the premiums for such
policies.  Tenant shall provide Landlord promptly with a copy of all policy
renewals and premium notices (within three (3) days of receipt by Tenant
thereof) and with proof of payment of such premiums no later than thirty (30)
days prior to the due date for the payment of such premium.  All such insurance
coverage shall be exclusive of the cost of legal defense and other attorney’s
fees.  Tenant shall ensure that the insurance policies contain an endorsement
requiring the insurance company to provide Landlord with a thirty (30) day
written notice of any change in the coverage described herein that Tenant or
insurance company proposes to make.  Tenant hereby assigns the proceeds of such
insurance as provided in this Agreement, and authorizes Landlord to collect such
sums and to execute and endorse in Tenant’s name all proofs of loss, drafts,
checks, and other documents necessary to accomplish such collections.  Any
persons or entities making payments to Landlord under the terms of this
paragraph hereby are indemnified against and relieved absolutely from any
obligation regarding the payment or application of any sums so paid.

 

b.             Supplemental Coverage.  Landlord reserves the right, should one
or more claims be made against such insurance coverage to demand the Tenant
promptly procure additional insurance coverage in such an amount as in
Landlord’s reasonable is necessary and prudent to protect Landlord’s interest in
the Building and under this agreement.  A demand for additional coverage, in an
amount equal to claims that have been filed and either settled, or are in
litigation and with respect to which Landlord’s counsel has furnished an opinion
that the Claimant has a legal cause of action which may result in the relief
sought being granted, shall be deemed to be reasonable demand.

 

c.             Contractor Insurance.  Tenant shall require any contractor of
Tenant performing work on the Premises to carry and maintain, at no expense to
the Landlord:

 

(i)            comprehensive General Liability Insurance, including contractor’s
liability coverage contractual liability coverage completed operations coverage
broad from property damage endorsement and contractor’s protective liability
coverage to afford protection with limits for each occurrence of not less than
Three Million Dollars ($3,000,000.000) with respect to personal injury, bodily
injury or death, and One Million Dollars ($1,000,000.00) with respect to
property damage; and

 

(ii)           worker’s compensation or similar insurance in form and amounts
required by law.

 

d.             Waiver of Subrogation.  Neither party shall be liable to the
other party or to any insurance company (by way of subrogation or otherwise)
insuring the other party for any loss or damage to any building, structure or
other tangible property, or losses under workmen’s compensation laws and
benefits, even though such loss or damage might have been occasioned by
negligence of such party, its agents or employees if any such loss or damage
covered by insurance benefiting the party suffering such damage or loss was
required to be covered by insurance pursuant to this Lease.  However, if, by
reason of the foregoing waiver, either party shall be unable to obtain any such
insurance, such waiver shall be deemed not to have been made

 

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by such party, and provided further that, if either party is unable to obtain
any such insurance without the payment of an additional premium therefore, then,
unless the party claiming the benefit of such additional premium within thirty
(30) days after notice setting forth such requirement and the amount of the
additional premium, such waiver shall be of no force and effect between such
party and such claiming party.

 

Section 8 Additional Rent

 

a.             Additional Rent.  In addition to Base Rent, Tenant shall pay, as
“Additional Rent” hereunder, (i) Tenant’s Proportionate Share of “Common Area
Costs,” as set forth in Section 8(g) hereof; (ii) Tenant’s Proportionate Share
of premiums for the “Insurance” to be obtained by Landlord for the Property, as
set forth in Section 4 hereof, (iii) Tenant’s Proportionate Share of “Taxes,” as
set forth in Section 9(g) hereof; and (iv) all other sums or charges due or to
become due from Tenant to Landlord hereunder.  Any payment of monies called for
herein to be made by Tenant to Landlord is deemed Additional Rent and shall be
collectible as Additional Rent.

 

b.             Common Area Costs.  Tenant agrees to pay as Additional Rent
during each lease year during the Term, Tenant’s Proportionate Share of the
“Common Area Costs,” as hereafter defined.  For purposes of this Lease, the term
“Common Area Costs” shall mean all costs and expenses incurred by Landlord in
operating, maintaining, repairing, lighting, signing, cleaning, painting,
stripping, insuring, equipping, staffing, heating and cooling, securing, and
policing of the Common Area, including, without limitation, all costs and
expenses associated with the following items or services, which may be incurred
by Landlord in its sole discretion:  (i) maintaining and replacing any and all
alarm and life safety systems and any fire alarm monitoring or testing service
program or fire suppression system installed within the Premises or otherwise
within the improvements which form a part of the Property, including without
limitation any patrol services; (ii) maintenance of irrigation systems serving
the Property; (iii) insurance, including, without limitation, liability
insurance for personal injury, death and property damage, to the extent not
reimbursed by Tenant under Section 13.2 below; (iv) surcharges levied upon or
assessed against parking spaces or areas, payments toward mass transit or car
pooling facilities or otherwise as required by federal, state or local
governmental authorities; (v) all landscaping, including, but not limited to,
lawn maintenance, new plantings and replacement of existing landscaping; (vi)
repairing, cleaning, sweeping, painting, striping, replacing and repaving of
paving, curbs, walkways, guardrails, bumpers, fences, screens, flagpoles,
bicycle racks, signs and other markers, landscaping, drainage pipes, ducts,
conduits, lighting facilities and all other Common Area site amenities; (vii)
maintenance, repair and replacement of utility systems serving the Property,
including, but not limited to, water, sanitary sewer and storm water lines and
drainage systems (whether on-site or off-site), electrical, gas, telephone and
lighting systems (including bulbs, poles, and fixtures) and other utility lines,
pipes and conduits, and all payments of utility charges in connection with any
of the foregoing systems; (viii) maintenance and repair of all portions of the
buildings in the Property including, but not limited to, walls, roofs and roof
flashings, canopies, skylights, signs, planters, benches, fire exits, doors and
hardware, windows, glass and glazing; (ix) inspection, maintenance, repair and
acquisition costs (including depreciation) of any and all machinery and
equipment used in the operation and maintenance of the Common Area, including
personal property taxes and other

 

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charges and taxes incurred in connection with such equipment; (x) cleaning of
any exterior glass; (xi) removal of snow, ice, trash and debris; (xii)
maintenance of and compliance with federal, state or local governmental ambient
air and environmental standards and other laws and regulations; (xiii) all
materials, supplies and services purchased or hired in connection with the
operation of the Common Area; (xiv) compensation and benefits paid to any and
all personnel, including, without limitation, security and maintenance persons,
secretaries, bookkeepers and any other personnel related to the operation of the
Common Area; (xv) management fees charged for management of the Property; and
(xvi) an overhead administrative cost allowance in the amount of fifteen percent
(15%) of the total Common Area Costs.  Tenant’s Proportionate Share of Common
Area Costs shall be paid by Tenant in monthly installments in such amounts as
are estimated and billed by Landlord to Tenant as of the Commencement Date and
then at the beginning of each calendar year during the Term, each such
installment being due on the first day of each calendar month.  Any period of
less than a full calendar year occurring due to the timing of the Commencement
Date shall be proportionately adjusted to reflect such partial year.  If at any
time during such twelve (12) month period it shall appear that Landlord has
underestimated Tenant’s Proportionate Share of Common Area Costs (whether
attributable to a change in Tenant’s Proportionate Share, an increase in the
projected Common Area Costs for such period, mathematical error or otherwise),
Landlord may re-estimate Tenant’s Proportionate Share of Common Area Costs and
may bill Tenant for any deficiency which may have accrued during such twelve
(12) month period and thereafter the monthly installment payable by Tenant shall
also be adjusted.  Within one hundred twenty (120) days after the end of each
such twelve (12) month (or, if applicable, shorter) period, Landlord shall
deliver to Tenant a statement setting forth the actual Common Area Costs for
such period, Tenant’s Proportionate Share thereof, and the total amount paid by
Tenant to Landlord under this Section 6.3 during such period.  In the event the
amounts paid by Tenant during such period are greater or lesser than Tenant’s
Proportionate Share of the Common Area Costs as set forth on such statement,
Tenant shall pay to Landlord or Landlord shall credit Tenant’s account (or, if
such adjustment occurs at the end of the Term, pay to Tenant), as the case may
be, within thirty (30) days of receipt of such statement, the amount of any
excess or deficiency.  Failure of Landlord to provide the statement called for
hereunder shall not relieve Tenant from its obligations under this Section 6.3
or elsewhere in this Lease.

 

SECTION 9  OTHER

 

a.             Limitations. The Premises may be used only for the purpose or
purposes specified in Section 1.1(j) above and for no other purpose or purposes
without the prior written consent of Landlord.  Tenant shall not at any time
leave the Premises vacant, but shall in good faith continuously throughout the
Term conduct and carry on its business in the entire Premises.  Tenant shall
not, without Landlord’s prior written consent, keep anything within the Premises
for any purpose or use the Premises in a manner which causes an increase in the
insurance premium cost or invalidates any insurance policy carried on the
Premises or other part of the Property.  Tenant shall pay as Additional Rent,
upon demand of Landlord; any such increased premium cost due to or associated
with Tenant’s use or occupation of the Premises or its storage of certain
goods.  Anything contained herein to the contrary notwithstanding, all property
kept, stored or maintained within the Premises by Tenant shall be at Tenant’s
sole risk.  Tenant shall not (a) permit any objectionable or unpleasant odors to
emanate from the Premises; (b) place or permit

 

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any radio, television, loudspeaker or amplifier on the roof or outside the
Premises or where the same can be seen or heard from outside the Building or in
the Common Area; (c) place an antenna, awning or other projection on the
exterior of the Premises; (d) solicit business or distribute leaflets or other
advertising material in the Common Area; nor (e) take any other action which in
the exclusive judgment of Landlord would constitute a nuisance or would disturb
or endanger other tenants of the Property or unreasonably interfere with their
use of their respective premises.

 

b.             Environmental. During the Term and any Renewal Term of the Lease,
Tenant warrants, represents and covenants to and with Landlord as follows:  The
Premises will not contain (A) asbestos in any form, (B) urea formaldehyde foam
insulation, (C) transformers or other equipment which contain dielectric fluid
containing polychlorinated biphenyls, or (D) any flammable explosives,
radioactive materials, hazardous materials, hazardous wastes, hazardous,
controlled or toxic substances, or any pollutant or contaminant, or related
materials defined in or controlled pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections
9601 et seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C.
Sections 1801 et seq.), the Resource Conservation and Recovery Act, as amended
(42 U.S.C. Sections 9601 et seq.), the Federal Water Pollution Control Act (33
U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et
seq.), and in the regulations adopted and publications promulgated pursuant
thereto, or any other Federal, state or local environmental law, ordinance, rule
or regulation (collectively, “Environmental Laws”); or which, even if not so
regulated, may or could pose a hazard to the health or safety of the occupants
of the Building (the substances described in (A), (B), (C) or (D) above being
hereinafter collectively referred to as “Hazardous Materials”); (ii) the
Premises will never be used by Tenant for any activities involving, directly or
indirectly, the use, generation, treatment, transportation, storage or disposal
of any Hazardous Materials or to refine, produce, store, handle, transfer,
process or transport “Hazardous Substances”, as such term is defined in any such
Environmental Laws. Tenant (A) shall comply with the Environmental Laws and all
other applicable laws, rules and regulations or orders pertaining to health, the
environment or Hazardous Materials, (B) shall not store, utilize, generate,
treat, transport or dispose of (or permit or acquiesce in the storage,
utilization, generation, transportation, treatment or disposal of) any Hazardous
Materials on or from the Premises, and (C) shall to cause its employees,
licensees and invitees to comply with the representations, warranties and
covenants herein contained.  In the event of any storage, presence, utilization,
generation, transportation, treatment or disposal of Hazardous Materials in, on
or about the Premises, or in the event of any Hazardous Materials Release (as
hereinafter defined) Tenant shall, at the direction of Landlord or any federal,
state, or local authority or other governmental authority, remove or cause the
removal of any such Hazardous Materials and rectify any such Hazardous Materials
Release, and otherwise comply or cause compliance with the laws, rules,
regulations or orders of such authority, all at the expense of Tenant, including
without limitation, the undertaking an completion of all investigations,
studies, sampling and testing and all remedial, removal and other actions
necessary to clean up and remove all Hazardous Materials, on, from or affecting
the Premises.  If Tenant shall fail to proceed with such removal or otherwise
comply with such laws, rules, regulations or orders within the cure period
permitted under the applicable regulation or order, the same shall constitute a
default under Section 19.1 hereof, and Landlord may, but shall not be obligated
to,

 

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do whatever is necessary to eliminate such Hazardous Materials from the Premises
or otherwise comply with the applicable law, rule, regulation or order, acting
either in its own name or in the name of Tenant pursuant to this Section, and
the cost thereof shall be borne by Tenant and thereupon become due and payable
as additional rent hereunder.  Tenant shall give to Landlord and its agents and
employees access to the Premises for such purposes and hereby specifically
grants to Landlord a license to remove the Hazardous Materials and otherwise
comply with such applicable laws, rules, regulations or orders, acting either in
its own name or in the name of the Tenant pursuant to this Section.  Tenant
hereby indemnifies and holds Landlord and each of its shareholders,
subsidiaries, affiliates, officers, directors, partners, employees, agents and
trustees, and any receiver, trustee or other fiduciary appointed for the
Building, harmless from, against, for and in respect of, any and all damages,
losses, settlement payments, obligations, liabilities, claims, actions or causes
of actions, encumbrances, fines, penalties, and costs and expenses suffered,
sustained, incurred or required to be paid by any such indemnified party
(including, without limitation, reasonable fees and disbursements or attorneys,
engineers, laboratories, contractors and consultants) because of, or arising out
of or relating to (A) Tenant’s violation of any of its representations,
warranties and covenants under this Section 7.5, and (B) any Environmental
Liabilities (as herein below defined) in connection with the Premises    For
purposes of this indemnification clause, “Environmental Liabilities” shall
include all costs and liabilities with respect to the future presence, removal,
utilization, generation, storage, transportation, disposal or treatment of any
Hazardous Materials or any release, spill, leak, pumping, pouring, emitting,
emptying, discharge, injection, escaping, leaching, dumping or disposing into
the environment (air, land or water) of any Hazardous Materials (each a
“Hazardous Materials Release”), including without limitation, cleanups, remedial
and response actions, remedial investigations and feasibility studies, permits
and licenses required by, or undertaken in order to comply with the requirements
of, any federal, state or local law, regulation, or agency or court, any damages
for injury to person, property or natural resources, claims of governmental
agencies or third parties for cleanup costs and costs of removal, discharge, and
satisfaction of all liens, encumbrances and restrictions on the Premises
relating to the foregoing.  The foregoing indemnification and the
responsibilities of Tenant under this Section shall survive the termination or
expiration of this Lease.

 

Tenant shall promptly notify Landlord in writing of the occurrence of any
Hazardous Materials Release or any pending or threatened regulatory actions, or
any claims made by any governmental authority or third party, relating to any
Hazardous Materials or Hazardous Materials Release on or from, the Premises and
shall promptly furnish Landlord with copies of any correspondence or legal
pleadings or documents in connection therewith.  Landlord shall have the right,
but shall not be obligated, to notify any governmental authority of any state of
facts, which may come to its attention with respect to any Hazardous Materials
or Hazardous Materials Release on or from the Premises.  Upon expiration of the
Term or any Renewal Term, as applicable, Tenant shall deliver the Premises to
Landlord free of any and all Hazardous Materials and any liens, encumbrances and
restrictions relating to Environmental Liabilities to the extent Tenant was
responsible therefore under the terms of this Section.   Tenant agrees that
Landlord shall have the right to conduct, or to have conducted by its agents or
contractors, such environmental inspections of the Premises, as Landlord shall
reasonably deem necessary or advisable from time to time.  Without limitation of
the foregoing, in the event of the failure of Tenant to comply with any of the
material requirements of any Environmental Laws, and/or any

 

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 related regulations, Landlord shall have the right, at the sole option of
Landlord, to comply with such statutory or regulatory requirements, and/or to
cure any such default at Tenant’s sole expense, and all costs and expenses of
such compliance and/or cure shall be due and payable from Tenant to Landlord
upon demand as additional rent hereunder.   Tenant shall procure, at its sole
expense, all permits and licenses required for its operations and the
transaction of business in the Premises (including without limitation, to the
extent applicable to Tenant’s permitted use, special use permits, business
licenses, health department licenses, and other similar licenses, permits and
approvals), and shall otherwise comply with all applicable laws, ordinances and
governmental regulations, as well as all other covenants and restrictions of
record, affecting the Premises, and the conduct of business therein by Tenant,
including without limitation the Americans with Disabilities Act, as the same
may be amended (“ADA”).

 

c.             Repair by Tenant.  Maintenance of the air conditioning, hot water
and heating equipment shall be solely the responsibility of Tenant throughout
the entire Term.  Landlord will invoice tenant monthly for the maintenance
contract that will protect the air conditioning, hot water and heating equipment
for tenant.  The service contract will include all services suggested by the
equipment manufacturer within the operation/maintenance manual and will become
effective (and a copy thereof delivered to Landlord) within thirty (30) days of
the date Tenant takes possession of the Premises.

 

d.             Non-Liability.  Landlord and Landlord’s partners, agents,
employees, officers and directors shall not be liable to Tenant or any other
person or entity whomsoever for any damage to property caused by the Premises or
other portions of the Property becoming out of repair or damaged, or by defect
in or failure of equipment, pipes or wiring, or broken glass, or by the backing
up of drains or by gas, water, steam, electricity or oil leaking, escaping or
flowing into the Premises irrespective of the cause. To the extent Landlord
would otherwise be required by Maryland law or common law to correct any latent
or patent defects in the Premises or in the Building of which they form a part,
any obligation on the part of Landlord to correct such latent or patent defects
in the Premises or in the Building shall not extend beyond one (1) year from the
date the Premises are deemed Ready for Occupancy, whether or not such defects
are discovered within such one (1) year period; provided that the other terms of
this Lease shall in all events govern Landlord’s and Tenant’s respective
responsibilities and monetary obligations in connection with the construction of
initial leasehold improvements to the Premises, correction of “punch-list”
items,  and any subsequent repairs and maintenance to the Premises and the
Building.  Landlord and Landlord’s partners, agents, employees, officers and
directors shall not be liable to Tenant or to Tenant’s employees, agents or
visitors, or to any person or entity whomsoever, for injury to person or damage
to or loss of property (i) occurring in, on or about the Premises, regardless of
the cause, (ii) occurring within the Common Area, if caused by the negligence or
misconduct of Tenant, its officers, partners, employees, agents, subtenants,
licensees or concessionaires, (iii) arising out of the use of the Premises by
Tenant and the conduct of its business therein, (iv) arising out of any breach
or default by Tenant in the performance of its obligations hereunder, or (v)
occasioned by or through the acts or omissions of other tenants of the Property
or of any other persons or entities whomsoever, excepting only the negligence or
willful misconduct of duly authorized employees and agents of Landlord to the
extent the same is not covered under insurance Tenant is required to carry
pursuant to Section 13.1, above; and, in any of such events, Tenant hereby
agrees to indemnify Landlord and Landlord’s partners, agents, employees,
officers and/or directors and hold each of them harmless from any and all
liability, loss, damage, claim, action or expense (including, without
limitation, all court costs and attorneys’ fees) arising out of such damage or
injury due to any of the causes described above (other than those described in
clause (v), above).  The provisions of this section shall survive the
termination of this Lease with respect to any claims or liability attributable
to acts, omissions, occurrences and/or conditions existing or occurring prior to
such termination.  In no event shall Landlord, or any of Landlord’s partners,
agents, employees, officers and directors, be liable to Tenant or any of its
agents, employees, contractors, officers or directors for any lost profits or
other loss suffered by Tenant, due to any interruption in Tenant’s business
operation from the Premises, whether caused by the acts or omissions of
Landlord, or its agents, employees, contractors, officers and/or directors, or
by any other cause (other than Landlord’s intentional misconduct), it being
acknowledged that Tenant is capable of obtaining business

 

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interruption insurance covering such loss(es) including a waiver of subrogation
endorsement. .  In the event (but solely to the extent) the limitations on
Landlord’s liability set forth in this Lease would be held to be unenforceable
or void under Maryland law in the absence of a modification holding the Landlord
liable to Tenant or to another person for injury, loss, damage or liability
arising from Landlord’s omission, fault, negligence or other misconduct on or
about the Premises, or other areas of the Building appurtenant thereto or used
in connection therewith and not under Tenant’s exclusive control, then such
provision shall be deemed modified as and to the extent (but solely to the
extent) necessary to render such provision enforceable under applicable Maryland
law.  The foregoing shall not affect the application this Lease to limit the
assets available for execution of any claim against Landlord, or otherwise.

 

e.             Substantial Taking.  If more than twenty percent (20%) of the
floor area of the Premises should be taken for any public or quasi-public use
under any governmental law, ordinance or regulation or by right of eminent
domain or by private purchase in lieu thereof, this Lease shall terminate and
the Rent (excluding Rent accruing with respect to the period prior to the date
of such termination) shall be abated during the un-expired portion of this
Lease, effective on the date physical possession is taken by the condemning
authority.    If less than twenty percent (20%) of the floor area of the
Premises should be taken as aforesaid, this Lease shall not terminate; however,
the Base Rent payable hereunder during the un-expired portion of this Lease
shall be reduced in proportion to the area taken, effective on the date physical
possession is taken by the condemning authority.  Following such partial taking,
Landlord shall make all necessary repairs or alterations within the scope of
Landlord’s Work as described in Exhibit C necessary to make the Premises an
architectural whole.  If any part of the Common Area shall be taken as
aforesaid, this Lease shall not terminate, nor shall the Rent payable hereunder
be reduced; provided, however, either Landlord or Tenant may terminate this
Lease if the area of the Common Area remaining following such taking plus any
additional parking area provided by Landlord in reasonable proximity to the
Property shall be less than fifty percent (50%) of the area of the Common Area
immediately prior to the taking. Any election to terminate this Lease in
accordance with this provision shall be evidenced by written notice of
termination delivered to the other party within thirty (30) days after the date
physical possession is taken by the condemning authority.  All compensation
awarded for any taking for public purposes, whether permanent or temporary (or
the proceeds of private sale in lieu thereof), of the Premises or Common Area
shall be the property of Landlord, and Tenant hereby assigns its interest in any
such award to Landlord; provided, however, Landlord shall have no interest in
any award made to Tenant for loss of business, relocation expenses and/or for
the taking of Tenant’s fixtures and other personal property of Tenant if a
separate award for such items is made to Tenant and does not diminish the award
payable to Landlord.  Tenant shall in no event be entitled to any award made for
the value of the unexpired Term of this Lease.

 

f.              Personal Property and Fixtures. Tenant shall be liable for all
taxes levied against personal property and trade fixtures placed by Tenant in
the Premises.  If any such taxes are levied against Landlord or Landlord’s
property and if Landlord elects to pay the same or if the assessed value of
Landlord’s property is increased by inclusion of personal and trade fixtures
placed by Tenant in the Premises and Landlord elects to pay the taxes based on
such increase, Tenant shall pay to Landlord upon demand that part of such taxes
for which Tenant is primarily liable hereunder.

 

g.             Tax Payment.  Tenant agrees to pay its Proportionate Share of all
taxes, assessments and governmental charges of any kind and nature whatsoever
levied or assessed against the Property, any other charges, taxes and/or
impositions now in existence or hereafter imposed by any governmental authority
based upon the privilege of renting the Premises or upon the amount of rent
collected therefore, and any tax, fee, levy, assessment or charge which is
imposed as the result of the transfer of the leasehold interest in the Premises
created by this Lease (all of the foregoing being hereinafter referred to
collectively as “Taxes”).  Taxes shall also be deemed to include any special
taxing district assessment, which is imposed in order to fund public facilities
for the area in which the Property is located.  During each month of the Term,
Tenant shall make a

 

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monthly payment to Landlord equal to one-twelfth (1/12) of its Proportionate
Share of the Taxes on the Property which Landlord reasonably estimates will be
due and payable for the tax year as to which such payments are being made (the
“Tax Payments”).  Tenant acknowledges that, under current practice, Taxes in
Baltimore County, Maryland are assessed (and required to be paid) in advance, so
that it will be required to fund its Proportionate Share of Taxes for the first
Lease Year in advance, and to make estimated monthly Tax Payments pursuant to
this Section during the same Lease Year (such estimated payments being made in
respect of the next tax year’s bill for Taxes).  Tenant authorizes Landlord to
use the funds deposited with Landlord under this Section to pay the Taxes levied
or assessed against the Property.  Each Tax Payment shall be due and payable at
the same time and in the same manner as the time and manner of the payment of
Base Rent as provided herein.  The initial monthly Tax Payment is based upon
Tenant’s Proportionate Share of the Taxes on the Property for the fiscal tax
year in which the Commencement Date is to occur, as estimated by Landlord in
good faith, and the monthly Tax Payment is subject to increase or decrease as
determined by Landlord to reflect accurately Tenant’s Proportionate Share of the
Taxes.  If following Landlord’s receipt of all Tax bills for any fiscal tax year
Landlord determines that Tenant’s total Tax Payments for such period are less
than Tenant’s actual Proportionate Share of the Taxes on the Property, Tenant
shall pay to Landlord the difference upon demand; if the total Tax Payments of
Tenant exceed Tenant’s actual Proportionate Share of the Taxes on the Property,
Landlord shall retain such excess and credit it to Tenant’s future Tax Payments,
except that, upon expiration of the Lease Term, Landlord will refund such excess
to Tenant within thirty (30) days after the exact amount of such refund can be
calculated.

 

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