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EXHIBIT 10.4
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DEED OF LEASE BY AND BETWEEN
HIGH SPEED ACCESS
AND
THE REALTY ASSOCIATES FUND III, L.P.
of
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DATED
August 20, 1999
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TABLE OF CONTENTS
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1. BASIC LEASE PROVISIONS..........................................................................1
2. PREMISES........................................................................................2
2.1 LEASE OF PREMISES AND DEFINITION OF PROJECT. ................................2
2.2 CALCULATION OF SIZE OF BUILDING AND PREMISES. ...............................2
2.3 COMMON AREAS-DEFINED. .......................................................2
3. TERM............................................................................................3
3.1 TERM AND COMMENCEMENT DATE. .................................................3
3.2 DELAY IN POSSESSION. ........................................................3
3.3 DELAYS CAUSED BY TENANT. ....................................................3
3.4 TENDER OF POSSESSION. .......................................................3
3.5 EARLY POSSESSION. ...........................................................4
4. RENT............................................................................................4
4.1 BASE RENT. ..................................................................4
4.2 OPERATING EXPENSE INCREASES. ................................................4
4.3. BASE RENT INCREASE............................................................7
5. SECURITY DEPOSIT. .............................................................................8
6. USE.............................................................................................8
6.1 USE. ........................................................................8
6.2 COMPLIANCE WITH LAW...........................................................8
6.3 CONDITION OF PREMISES. ......................................................9
7. MAINTENANCE, REPAIRS AND ALTERATIONS............................................................9
7.1 LANDLORD'S OBLIGATIONS. .....................................................9
7.2 TENANT'S OBLIGATIONS..........................................................9
7.3 ALTERATIONS AND ADDITIONS....................................................10
7.4 FAILURE OF TENANT TO REMOVE PROPERTY. ......................................11
8. INSURANCE......................................................................................11
8.1 INSURANCE-TENANT.............................................................11
8.2 INSURANCE-LANDLORD...........................................................12
8.3 INSURANCE POLICIES. ........................................................12
8.4 WAIVER OF SUBROGATION. .....................................................12
8.5 COVERAGE. ..................................................................13
9. DAMAGE OR DESTRUCTION..........................................................................13
9.1 EFFECT OF DAMAGE OR DESTRUCTION. ...........................................13
9.2 DEFINITION OF MATERIAL DAMAGE. .............................................14
9.3 ABATEMENT OF RENT. .........................................................14
9.4 TENANT'S ACTS. .............................................................14
9.5 TENANT'S PROPERTY. .........................................................14
9.6 WAIVER. ....................................................................14
10. REAL AND PERSONAL PROPERTY TAXES...............................................................14
10.1 PAYMENT OF TAXES. ..........................................................15
10.2 DEFINITION OF "REAL PROPERTY TAX." .........................................15
10.3 PERSONAL PROPERTY TAXES. ...................................................15
10.4 REASSESSMENTS. .............................................................15
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11. UTILITIES......................................................................................15
11.1 SERVICES PROVIDED BY LANDLORD. .............................................15
11.2 OCCUPANT DENSITY. ..........................................................16
11.3 HOURS OF SERVICE. ..........................................................16
11.4 EXCESS USAGE BY TENANT. ....................................................16
11.5 INTERRUPTIONS. .............................................................17
12. ASSIGNMENT AND SUBLETTING......................................................................17
12.1 LANDLORD'S CONSENT REQUIRED. ...............................................17
12.2 LEVERAGED BUY-OUT. .........................................................18
12.3 STANDARD FOR APPROVAL. .....................................................18
12.4 ADDITIONAL TERMS AND CONDITIONS. ...........................................19
12.5 ADDITIONAL TERMS AND CONDITIONS APPLICABLE
TO SUBLETTING. .............................................................20
12.6 TRANSFER PREMIUM FROM ASSIGNMENT OR SUBLETTING. ............................20
12.7 LANDLORD'S OPTION TO RECAPTURE SPACE. ......................................21
12.8 LANDLORD'S EXPENSES. .......................................................21
13. DEFAULT; REMEDIES..............................................................................21
13.1 DEFAULT BY TENANT. .........................................................21
13.2 REMEDIES.....................................................................22
13.3 DEFAULT BY LANDLORD. .......................................................23
13.4 LATE CHARGES. ..............................................................24
13.5 INTEREST ON PAST-DUE OBLIGATIONS. ..........................................24
13.6 PAYMENT OF RENT AND SECURITY DEPOSIT AFTER DEFAULT. ........................24
14. LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT. .........................................24
15. CONDEMNATION. .................................................................................24
16. VEHICLE PARKING................................................................................25
16.1 USE OF PARKING FACILITIES. .................................................25
16.2 PARKING CHARGES. ...........................................................25
17. BROKER'S FEE...................................................................................26
18. ESTOPPEL CERTIFICATE...........................................................................26
18.1 DELIVERY OF CERTIFICATE. ...................................................26
18.2 FAILURE TO DELIVER CERTIFICATE. ............................................26
19. LANDLORD'S LIABILITY. .........................................................................26
20. INDEMNITY......................................................................................27
21. EXEMPTION OF LANDLORD FROM LIABILITY...........................................................27
22. HAZARDOUS MATERIAL.............................................................................28
22.1 DEFINITION AND CONSENT. ....................................................28
22.2 DUTY TO INFORM LANDLORD. ...................................................28
22.3 INSPECTION; COMPLIANCE. ....................................................28
23. MEDICAL WASTE..................................................................................28
23.1 DISPOSAL OF MEDICAL WASTE. .................................................28
23.2 DUTY TO INFORM LANDLORD. ...................................................29
23.3 INSPECTION; COMPLIANCE. ....................................................29
24. TENANT IMPROVEMENTS............................................................................29
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25. SUBORDINATION..................................................................................29
25.1 EFFECT OF SUBORDINATION. ...................................................29
25.2 EXECUTION OF DOCUMENTS. ....................................................30
26. OPTIONS........................................................................................30
26.1 DEFINITION. ................................................................30
26.2 OPTIONS PERSONAL. ..........................................................30
26.3 MULTIPLE OPTIONS. ..........................................................30
26.4 EFFECT OF DEFAULT ON OPTIONS. ..............................................30
26.5 LIMITATIONS ON OPTIONS. ....................................................30
26.6 NOTICE OF EXERCISE OF OPTION. ..............................................31
27. LANDLORD RESERVATIONS..........................................................................31
28. CHANGES TO PROJECT.............................................................................31
29. SUBSTITUTION OF OTHER PREMISES. ...............................................................31
30. HOLDING OVER...................................................................................32
31. LANDLORD'S ACCESS..............................................................................32
31.1 ACCESS. ....................................................................32
31.2 KEYS. .....................................................................32
32. SECURITY MEASURES..............................................................................32
33. EASEMENTS......................................................................................33
34. TRANSPORTATION MANAGEMENT......................................................................33
35. SEVERABILITY...................................................................................33
36. TIME OF ESSENCE................................................................................33
37. DEFINITION OF ADDITIONAL RENT..................................................................33
38. INCORPORATION OF PRIOR AGREEMENTS..............................................................33
39. AMENDMENTS.....................................................................................33
40. NOTICES. ......................................................................................33
41. WAIVERS........................................................................................34
42. COVENANTS......................................................................................34
43. BINDING EFFECT, CHOICE OF LAW..................................................................34
44. ATTORNEYS' FEES................................................................................34
45. AUCTIONS.......................................................................................34
46. SIGNS..........................................................................................34
47. MERGER.........................................................................................35
48. QUIET POSSESSION...............................................................................35
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49. AUTHORITY......................................................................................35
50. CONFLICT.......................................................................................35
51. MULTIPLE PARTIES...............................................................................35
52. INTERPRETATION. ...............................................................................35
53. PROHIBITION AGAINST RECORDING..................................................................35
54. RELATIONSHIP OF PARTIES........................................................................35
55. RULES AND REGULATIONS..........................................................................35
56. RIGHT TO LEASE. ..............................................................................35
57. SECURITY INTEREST..............................................................................36
58. SECURITY FOR PERFORMANCE OF TENANT'S OBLIGATIONS...............................................36
59. FINANCIAL STATEMENTS...........................................................................36
60. ATTACHMENTS....................................................................................36
61. CONFIDENTIALITY................................................................................36
62. WAIVER OF JURY TRIAL...........................................................................37
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STANDARD OFFICE DEED OF LEASE
1. BASIC LEASE PROVISIONS.
(1) PARTIES: This Deed of Lease, dated for reference purposes only
August 20, 1999, is made by and between THE REALTY ASSOCIATES FUND
III, L.P., a Delaware limited partnership ("Landlord") and HIGH SPEED
ACCESS, a __________ corporation ("Tenant").
(2) PREMISES: Suite Number as shown on Exhibit "A" attached hereto (the
"Premises").
(3) RENTABLE AREA OF PREMISES: 12,000 rentable square feet.
(4) BUILDING ADDRESS: ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(5) USE: General office and data center use, Subject to the requirements
and limitations contained in Section 6.
(6) TERM: Five (5) years.
(7) COMMENCEMENT DATE: November 1, 1999, Subject to adjustment in
accordance with Section 3 herein below.
(8) BASE RENT: $25,000.00 for the first full month's Base Rent due under
the Lease.
(9) BASE RENT PAID UPON EXECUTION: $25,000.00.
(10) SECURITY DEPOSIT: $25,000.00.
(11) TENANT'S SHARE: 9.28%.
(12) BASE YEAR: The calendar year 1999.
(13) NUMBER OF PARKING SPACES: Reserved: None. Unreserved: 42.
(14) INITIAL MONTHLY PARKING RATES PER SPACE: Reserved: N/A.
Unreserved: $0.00
(15) REAL ESTATE BROKER:
LANDLORD: Insignia/ESG, Inc.
TENANT: The Staubach Company-Northeast, Inc.
(16) ATTACHMENTS TO LEASE: Addendum; Exhibit A - "Premises", Exhibit B -
"Verification Letter", Exhibit C Rules and Regulations", Schedule 1 -
"Work Letter Agreement".
(17) ADDRESS FOR NOTICES:
LANDLORD: The Realty Associates Fund III, L.P.
c/o Insignia/ ESG, Inc.
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WITH COPY TO: TA Associates Realty
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Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
TENANT: High Speed Access
Prior to Occupancy:
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After Occupancy: High Speed Access
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Attention: ___________________
(18) AGENT FOR SERVICE OF PROCESS: If Tenant is a corporation, the name
and address of Tenant's registered agent for service of process is:
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(19) INTERPRETATION: The Basic Lease Provisions shall be interpreted in
conjunction with all of the other terms and conditions of this Lease.
Other terms and conditions of this Lease modify and expand on the
Basic Lease Provisions. If there is a conflict between the Basic
Lease Provisions and the other terms and conditions of this Lease,
the other terms and conditions shall control.
2. PREMISES.
(1) LEASE OF PREMISES AND DEFINITION OF PROJECT. The Premises shall mean
the area shown on Exhibit A to this Lease. Landlord hereby leases to
Tenant, and Tenant hereby leases from Landlord, upon all of the
conditions set forth herein the Premises, together with certain
rights to the Common Areas (as defined in Section 2.3 below) as
hereinafter specified. The Premises shall not include an easement for
light, air or view. The building of which the Premises is a part (the
"Building"), the Common Areas, the land upon which the same are
located, along with all other buildings and improvements thereon or
thereunder, including all parking facilities, are herein collectively
referred to as the "Project."
(2) CALCULATION OF SIZE OF BUILDING AND PREMISES. The number of rentable
square feet in the Premises has been calculated in accordance with
the methods of measuring rentable square feet, as that method is
described by the Washington D.C. Association of Realtors, Inc. (the
"WDCAR Method"). If the rentable square feet in the Premises changes
after this Lease is executed by Landlord and Tenant, the Base Rent
and any advance rent shall be adjusted by multiplying the actual
number of rentable square feet in the Premises AS MEASURED IN
ACCORDANCE WITH THE WDCAR METHOD by the per square foot rental
obtained by dividing the Base Rent initially set forth In Section 1.8
by the number of rentable square feet initially set forth in Section
1.3. If the number of rentable square feet in the Premises is
changed, Tenant's Share shall be adjusted as provided in Section
4.2(a).
(3) COMMON AREAS-DEFINED. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior
boundary line of the Project that are designated by Landlord from
time to time for the general non-exclusive use of Landlord, Tenant
and the other tenants of the Project and their respective employees,
suppliers, customers and invitees, including, but not limited to,
common entrances, lobbies, corridors, stairwells, public restrooms,
elevators, parking areas,
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loading and unloading areas, roadways and sidewalks. Landlord may
also designate other land and improvements outside the boundaries of
the Project to be a part of the Common Areas, provided that such
other land and improvements have a reasonable and functional
relationship to the Project.
3. TERM.
(1) TERM AND COMMENCEMENT DATE. The Term and Commencement Date of this
Lease are as specified in Sections 1.6 and 1.7. The Commencement Date
set forth in Section 1.7 is an estimated Commencement Date. Subject
to the limitations contained in Section 3.3 below, the actual
Commencement Date shall be the date possession of the Premises is
tendered to Tenant in accordance with Section 3.4 below; provided,
however, that the Term of this Lease shall be computed from the first
day of the calendar month following the Commencement Date. When the
actual Commencement Date is established by Landlord, Tenant shall,
within TWENTY (20) days after Landlord's request, complete and
execute the letter attached hereto as Exhibit "B" and deliver it to
Landlord. Tenant's failure to execute the letter attached hereto as
Exhibit "B" within said TWENTY (20) day period shall be a material
default hereunder and shall constitute Tenant's acknowledgment of the
truth of the facts contained in the letter delivered by Landlord to
Tenant.
(2) DELAY IN POSSESSION. Notwithstanding the estimated Commencement Date
specified in Section 1.7, if for any reason Landlord cannot deliver
possession of the Premises to Tenant on said date, Landlord shall not
be Subject to any liability therefor, nor shall such failure affect
the validity of this Lease or the obligations of Tenant hereunder;
provided, however, in such a case, Tenant shall not be obligated to
pay rent or perform any other obligation of Tenant under this Lease,
except as may be otherwise provided in this Lease, until possession
of the Premises is tendered to Tenant, as defined in Section 3.4. If
Landlord shall not have tendered possession of the Premises to Tenant
within one hundred twenty (120) days following the estimated
Commencement Date specified in Section 1.7, as the same may be
adjusted in accordance with Section 3.3 or in accordance with the
terms of any work letter agreement entered into by Landlord and
Tenant, Tenant may, at Tenant's option, by notice in writing to
Landlord within ten (10) days after the expiration of the one hundred
twenty (120) day period, terminate this Lease. If Tenant terminates
this Lease as provided in the preceding sentence, the parties shall
be discharged from all obligations hereunder, except that Landlord
shall return any money previously deposited with Landlord by Tenant;
and provided further, that if such written notice by Tenant is not
received by Landlord within said ten (10) day period, Tenant shall
not have the right to terminate this Lease as provided above unless
Landlord fails to tender possession of the Premises to Tenant within
two hundred forty (240) days following the estimated Commencement
Date specified in Section 1.7, as the same may be adjusted in
accordance with Section 3.3 or in accordance with the terms of any
work letter agreement entered into by Landlord and Tenant. If
Landlord is unable to deliver possession of the Premises to Tenant on
the Commencement Date due to a "Force Majeure Event," the
Commencement Date shall be extended by the period of the delay caused
by the Force Majeure Event. A Force Majeure Event shall mean fire,
earthquake, weather delays or other acts of God, strikes, boycotts,
war, riot, insurrection, embargoes, shortages of equipment, labor or
materials, delays in issuance of governmental permits or approvals,
or any other cause beyond the reasonable control of Landlord.
(3) DELAYS CAUSED BY TENANT. There shall be no abatement of rent, and
the one hundred twenty (120) day period and the two hundred forty
(240) day period specified in Section 3.2 shall be deemed extended,
to the extent of any delays caused by acts or omissions of Tenant,
Tenant's agents, employees and contractors, or for Tenant delays as
defined in the work letter agreement attached to this Lease, if any
(hereinafter "Tenant Delays"). Tenant shall pay to Landlord an amount
equal to one thirtieth (1/30th) of the Base Rent due for the first
full calendar month of the Term
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for each day of Tenant Delay. For purposes of the foregoing
calculation, the Base Rent payable for the first full calendar month
of the Term shall not be reduced by any abated rent, conditionally
waived rent, free rent or similar rental concessions, if any.
Landlord and Tenant agree that the foregoing payment constitutes a
fair and reasonable estimate of the damages Landlord will incur as
the result of a Tenant Delay. Within thirty (30) days after Landlord
tenders possession of the Premises to Tenant, Landlord shall notify
Tenant of Landlord's reasonable estimate of the date Landlord could
have delivered possession of tho Premises to Tenant but for the
Tenant Delays. After delivery of said notice, Tenant shall
immediately pay to Landlord the amount described above for the period
of Tenant Delay.
(4) TENDER OF POSSESSION. Possession of the Premises shall be deemed
tendered to Tenant when Landlord's architect or agent has determined
that (a) the improvements to be provided by Landlord pursuant to a
work letter agreement, if any, are substantially completed and, if
necessary have been approved by the appropriate governmental entity,
(b) the Project utilities are ready for use in the Premises, (c)
Tenant has reasonable access to the Premises, and (d) three (3) days
shall have expired following advance written notice to Tenant of the
occurrence of the matters described in (a), (b) and (c) above of this
Section 3.4. If improvements to the Premises are constructed by
Landlord, the improvements shall be deemed "substantially" completed
when the improvements have been completed except for minor items or
defects which can be completed or remedied after Tenant occupies the
Premises without causing substantial interference with Tenant's use
OR OCCUPANCY of the Premises.
(5) EARLY POSSESSION. If Tenant occupies the Premises prior to the
Commencement Date, such occupancy shall be subject to all provisions
of this Lease, such occupancy shall not change the termination date,
and Tenant shall pay Base Rent and all other charges provided for in
this Lease during the period of such occupancy. Provided that Tenant
does not interfere with or delay the completion by Landlord or its
agents or contractors of the construction of any tenant improvements,
Tenant shall have the right to enter the Premises up to fourteen (14)
days prior to the anticipated Commencement Date for the purpose of
installing furniture, trade fixtures, equipment, and similar items.
Tenant shall be liable for any damages or delays caused by Tenant's
activities at the Premises. Provided that Tenant has not begun
operating its business from the Premises, and Subject to all of the
terms and conditions of the Lease, the foregoing activity shall not
constitute the delivery of possession of the Premises to Tenant and
the Term of the Lease shall not commence as a result of said
activities. Prior to entering the Premises, Tenant shall obtain all
insurance it is required to obtain by the Lease and shall provide
certificates of said insurance to Landlord. Tenant shall coordinate
such entry with Landlord's building manager, and such entry shall be
made in compliance with all terms and conditions of this Lease and
the Rules and Regulations attached hereto.
4. RENT.
(1) BASE RENT. Subject to adjustment as hereinafter provided in
Section 4.3, Tenant shall pay to Landlord the Base Rent for the
Premises set forth in Section 1.8, without offset or deduction on the
first day of each calendar month during the Term of this Lease. At
the time Tenant executes this Lease it shall pay to Landlord the
advance Base Rent described in Section 1.9. Base Rent for any period
during the Term hereof which is for less than one month shall be
prorated based upon the actual number of days of tho calendar month
involved. Base Rent and all other amounts payable to Landlord
hereunder shall be payable to Landlord in lawful money of the United
States and Tenant shall be responsible for delivering said amounts to
Landlord at the address stated herein or to such other persons or to
such other places as Landlord may designate in writing.
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(2) OPERATING EXPENSE INCREASES. Tenant shall pay to Landlord during the
Term hereof, in addition to the Base Rent, Tenant's Share of the
amount by which all Operating Expenses for each Comparison Year (as
defined in Section 4.2(b) below) exceeds the amount of all Operating
Expenses (as defined in Section 4.2(c) below) for the Base Year. If
less than 95% of the rentable square feet in the Project is occupied
by tenants or Landlord is not supplying services to 95% of the
rentable square feet of the Project at any time during any calendar
year (including the Base Year), Operating Expenses for such calendar
year shall be an amount equal to the Operating Expenses which would
normally be expected to be incurred had 95% of the Project's rentable
square feet been occupied and had Landlord been supplying services to
95% of the Project's rentable square feet throughout such calendar
year (hereinafter the "Grossed Up Operating Expenses"). Landlord's
good faith estimate of Grossed Up Operating Expenses shall not be
Subject to challenge or recalculation by Tenant. Tenant's Share of
Operating Expense Increases shall be determined in accordance with
the following provisions:
(1) "Tenant's Share" is defined as the percentage set forth in
Section 1.11, which percentage has been determined by
dividing the number bf rentable square feet in the Premises
by the total number of rentable square feet in the Project
and multiplying the resulting quotient by one hundred (100).
In the event that the number of rentable square feet in the
Project or the Premises changes, Tenant's Share shall be
adjusted in the year the change occurs, and Tenant's Share
for such year shall be determined on the basis of the days
during such year that each Tenant's Share was in effect.
(2) "Comparison Year" is defined as each calendar year during
the, Term of this Lease after the Base Year. Tenant's Share
of the Operating Expense increases for the last Comparison
Year of the Term of this Lease shall be prorated according
to that portion of such Comparison Year as to which Tenant
is responsible for a share of such increase.
(3) "Operating Expenses" shall include all costs, expenses and
fees incurred by Landlord in connection with or attributable
to the Project, including but not limited to, the following
items: (i) all costs, expenses and fees associated with or
attributable to the ownership, management, operation,
repair, maintenance, improvement, alteration and replacement
of the Project, or any part thereof, including but not
limited to, the following: (A) all surfaces, coverings,
decorative items, carpets, drapes, window coverings, parking
areas, loading and unloading areas, trash areas, roadways,
sidewalks, stairways, walls, structural elements, landscaped
areas, striping, bumpers, irrigation systems, lighting
facilities, building exteriors and roofs, fences and gates;
(B) all heating, ventilating and air conditioning equipment
("HVAC") (including, but not limited to, the cost of
replacing or retrofitting HVAC equipment to comply with laws
regulating or prohibiting the use or release of
chlorofluorocarbons or hydro chlorofluorocarbons), plumbing,
mechanical, electrical systems, life safety systems and
equipment, telecommunication equipment, elevators,
escalators, tenant directories, fire detection systems
including sprinkler system maintenance and repair; (ii) the
cost of trash disposal, janitorial services and security
services and systems; (iii) the cost of all insurance
purchased by Landlord and enumerated in Section 8 of this
Lease, including any deductibles; (iv) the cost of water,
sewer, gas, electricity, and other utilities available at
the Project and paid by Landlord; (v) the cost of labor,
salaries and applicable fringe benefits incurred by
Landlord; (vi) the cost of materials, supplies and tools
used in managing, maintaining and/or cleaning the Project:
(vii) the cost of accounting fees, management fees (NOT TO
EXCEED FOUR PERCENT (4%) OF GROSS ANNUAL RENTS), legal fees
and consulting fees attributable to the ownership,
operation, management, maintenance and repair of the Project
plus the cost of any space occupied by the property manager
WHICH SUCH COST
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PERTAINING TO SPACE OCCUPIED BY THE PROPERTY MANAGER SHALL
BE APPORTIONED AMONG ALL BUILDINGS FOR WHICH THE PROPERTY
MANAGER IS RESPONSIBLE (if Landlord is the property manager,
Landlord shall be entitled to receive a fair market
management fee); (viii) the cost of operating, replacing,
modifying and/or adding improvements or equipment mandated
by any law, statute, regulation or directive of any
governmental agency and any repairs or removals necessitated
thereby (including, but not limited to, the cost of
complying with the Americans With Disabilities Act and
regulations of the Occupational Safety and Health
Administration); (ix) payments made by Landlord under any
easement, license, operating agreement, declaration,
restrictive covenant, or instrument pertaining to the
payment or sharing of costs among property owners; (x) any
business property taxes or personal property taxes imposed
upon the fixtures, machinery, equipment, furniture and
personal property used in connection with the operation of
the Project; (xi) the cost of all business licenses,
including Business Professional and Occupational License
Taxes and Business Improvements Districts Taxes, any gross
receipt taxes based on rental income or other payments
received by Landlord, commercial rental taxes or any similar
taxes or fees (xii) transportation taxes, tees or
assessments, including but not limited to, mass
transportation fees, metrorail fees, trip fees, regional and
transportation district fees; (xiii) all costs and expenses
associated with or related to the implementation by Landlord
of any transportation demand management program or similar
program; (xiv) fees assessed by any air quality management
district or other governmental or quasi-governmental entity
regulating pollution; and (xvi) the cost of any other
service provided by Landlord or any cost that is elsewhere
stated in this Lease to be an "Operating Expense". Real
Property Taxes (as defined in Section 10 hereof) shall be
paid in accordance with Section 10 below and shall not be
included in Operating Expenses. Landlord shall have the
right but not the obligation, from time to time, to
equitably allocate some or all of the Operating Expenses
among different tenants of the Project or among the
different buildings which comprise the project (the "Cost
Pools"). Such Cost Pools may include, but shall not be
limited to, the office space tenants of the Project and the
retail space tenants of the Project.
(4) Operating Expenses shall not include any expenses paid by
any tenant directly to third parties, or as to which
Landlord is otherwise reimbursed by any third party or by
insurance proceeds.
SEE ADDENDUM PARAGRAPH 1
(5) If the cost incurred in making an improvement or replacing
any equipment is not fully deductible as an expense in the
year incurred in accordance with generally accepted
accounting principles, the cost shall be amortized over the
useful life of the improvement or equipment, as reasonably
determined by Landlord, together with an interest factor on
the unamortized cost of such item equal to the lesser of (i)
twelve percent (12%) per annum, or (ii) the maximum rate of
interest permitted by applicable law.
(6) Tenant's Share of Operating Expense increases shall be
payable by Tenant within TWENTY (20) days after a reasonably
detailed statement of actual expenses is presented to Tenant
by Landlord, at Landlord's option, however, Landlord may,
from time to time, estimate IN GOOD FAITH what Tenant's
Share of Operating Expense increases will be, and the same
shall be payable by Tenant monthly during each Comparison
Year of the Term of the Lease, on the same day as the Base
Rent is due hereunder. In the event that Tenant pays
Landlord's estimate of Tenant's Share of Operating Expense
increases, Landlord shall use its best efforts to deliver to
Tenant within one
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hundred eighty (180) days after the expiration of each
Comparison Year a reasonably detailed statement (the
"Statement") showing Tenant's Share of the actual Operating
Expense increases incurred during such year. Landlord's
failure to deliver the Statement to Tenant within said
period shall not constitute Landlord's waiver of its right
to collect said amounts or otherwise prejudice Landlord's
rights hereunder, HOWEVER, LANDLORD SHALL BE DEEMED TO HAVE
WAIVED ITS RIGHT TO COLLECT SAID AMOUNTS IF LANDLORD FALLS
TO DELIVER A STATEMENT WITHIN EIGHTEEN (18) MONTHS FOLLOWING
THE EXPIRATION OF THE APPLICABLE COMPARISON Year. If
Tenant's payments under this Section 4.2(f) during said
Comparison Year exceed Tenant's Share as indicated on the
Statement, Tenant shall be entitled to credit tho amount of
such overpayment against Tenant's Share of Operating Expense
increases next falling due. If Tenant's payments under this
Section 4.2(f) during said Comparison Year were less than
Tenant's Share as indicated on the Statement, Tenant shall
pay to Landlord the amount of the deficiency within thirty
(30) days after delivery by Landlord to Tenant of the
Statement. Landlord and Tenant shall forthwith adjust
between them by cash payment any balance determined to exist
with respect to that portion of the last Comparison Year for
which Tenant is responsible for Operating Expense increases,
notwithstanding that the Term of the Lease may have
terminated before the end of such Comparison Year; and this
provision shall survive the expiration or earlier
termination of the Lease.
(7) The computation of Tenant's Share of Operating Expense
increases is intended to provide a formula for the sharing
of costs by Landlord and Tenant and will not necessarily
result in the reimbursement to Landlord of the exact costs
it has incurred.
(8) If Tenant disputes the amount set forth in the Statement,
Tenant shall have the right, at Tenant's sole expense, not
later than ONE HUNDRED TWENTY (120) days following receipt
of such Statement, to cause Landlord's books and records in
respect to the calendar year which is the Subject of the
Statement to be audited by a certified public accountant
mutually acceptable to Landlord and Tenant. The audit shall
take place at the LOCAL offices of Landlord where its books
and records are located at a mutually convenient time during
Landlord's regular business hours. Tenant's Share of
Operating Expenses shall be appropriately adjusted based
upon the results of such audit, and the results of such
audit shall be final and binding upon Landlord and Tenant.
Tenant shall have no right to conduct an audit or to give
Landlord notice that it desires to conduct an audit at any
time Tenant is in default under the Lease AFTER EXPIRATION
OF ANY APPLICABLE NOTICE AND CURE PERIODS. The accountant
conducting the audit shall be compensated on an hourly basis
and shall not be compensated based upon a percentage of
overcharges it discovers. No subtenant shall have any right
to conduct an audit, and no assignee shall conduct an audit
for any period during which such assignee was not in
possession of the Premises. Tenant's right to undertake an
audit with respect to any calendar year shall expire ONE
HUNDRED TWENTY (120) days after Tenant's receipt of the
Statement for such calendar year, and such Statement shall
be final and binding upon Tenant and shall, as between the
parties, be conclusively deemed correct, at the end of such
ONE HUNDRED TWENTY (120) day period, unless prior thereto
Tenant shall have given Landlord written notice of its
intention to audit Operating Expenses for the calendar year
which is the Subject of the Statement. If Tenant gives
Landlord notice of its intention to audit Operating
Expenses, it must commence such audit within sixty (60) days
after such notice is delivered to Landlord, and the audit
must be completed within one hundred twenty (120) days after
such notice is delivered to Landlord. If Tenant does not
commence and complete the audit within such periods, the
Statement which Tenant elected to audit shall be deemed
final and binding upon Tenant and
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shall, as between the parties, be conclusively deemed
correct. LANDLORD SHALL USE REASONABLE EFFORTS TO COOPERATE
WITH TENANT'S AUDIT. Tenant agrees that IT SHALL USE ITS
BEST EFFORTS TO KEEP the results of any Operating Expenses
audit confidential and not TO disclose SUCH RESULTS to any
other person or entity. IF SUCH AUDIT DETERMINES THAT AN
ERROR HAS BEEN MADE IN LANDLORD'S DETERMINATION AND
CALCULATION WHICH RESULTS IN AN ADJUSTMENT TO THE AMOUNTS
DETERMINED AND CALCULATED BY LANDLORD IN THE AMOUNT OF SEVEN
PERCENT (7%) OR MORE, LANDLORD SHALL PAY FOR THE FEES AND
EXPENSES OF SUCH FIRM, BUT IF SUCH ADJUSTMENTS IS LESS THAN
SEVEN PERCENT (7%), TENANT SHALL PAY FOR SUCH FEES.
SEE ADDENDUM PARAGRAPH 2
5. SECURITY DEPOSIT. Tenant shall deliver to Landlord at the time it executes
this Lease the Security Deposit set forth in Section 1.10 as security for
Tenant's faithful performance of Tenant's obligations hereunder. If Tenant
fails to pay Base Rent or other charges due hereunder, or otherwise defaults
with respect to any provision of this Lease, Landlord may use all or any
portion of said deposit for the payment of any Base Rent or other charge due
hereunder, to pay any other sum to which Landlord may become obligated by
reason of
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Tenant's default, or to compensate Landlord for any loss or damage which
Landlord may suffer thereby. If Landlord so uses or applies all or any
portion of said deposit, Tenant shall within ten (10) days after written
demand therefor deposit cash with Landlord in an amount sufficient to restore
said deposit to its full amount. Landlord shall not be required to keep said
Security Deposit separate from its general accounts. If Tenant performs all
of Tenant's obligations hereunder, said deposit, or so much thereof as has
not heretofore been applied by Landlord, shall be returned, without payment
of interest or other amount for its use, to Tenant (or, at Landlord's option,
to the last assignee, if any, of Tenant's interest hereunder) at the
expiration of the Term hereof, and after Tenant has vacated the Premises. No
trust relationship is created herein between Landlord and Tenant with respect
to said Security Deposit. Tenant acknowledges that the Security Deposit is
not an advance payment of any kind or a measure of Landlord's damages in the
event of Tenant's default. Tenant hereby waives the provisions of any law
which is inconsistent with this Section 5.
6. USE.
(1) USE. The Premises shall be used and occupied only for the purpose set
forth in Section 1.5 and for no other purpose. If Section 1.5 gives
Tenant the right to use the Premises for general office use, by way
of example and not limitation, general office use shall not include
medical office use or any similar use, laboratory use, classroom use,
any use not characterized by applicable zoning and land use
restrictions as general office use, or any use which would require
Landlord or Tenant to obtain a conditional use permit or variance
from any federal, state or local authority, or any use not
compatible, in Landlord's sole BUT REASONABLE judgment, with a first
class office building. Notwithstanding any permitted use inserted in
Section 1.5, Tenant shall not use the Premises for any purpose which
would violate the Project's certificate of occupancy, any conditional
use permit or variance applicable to tho Project or violate any
covenants, conditions or other restrictions applicable to the Project
OF WHICH TENANT HAS notice. No exclusive use has been granted to
Tenant hereunder.
(2) COMPLIANCE WITH LAW.
(1) Landlord warrants to Tenant that, to the best of Landlord's
knowledge, the Premises, in the state existing on the date
this Lease is executed by Landlord and Tenant, but without
regard to alterations or improvements to be made by the
Tenant or the use for which Tenant will occupy the Premises,
does not violate any covenants or restrictions of record, or
any applicable building code, regulation or ordinance in
effect on such date. If Tenant occupies the Premises at the
time this Lease is executed, this warranty shall be of no
force or effect.
(2) Tenant shall, at Tenant's sole expense, promptly comply with
all applicable laws, ordinances, rules, regulations, orders,
certificates of occupancy, conditional use or other permits,
variances, covenants and restrictions of record, the
recommendations of Landlord's engineers or other
consultants, and requirements of any fire insurance
underwriters, rating bureaus or government agencies, now in
effect or which may hereafter come into effect, whether or
not they reflect a change in policy from that now existing,
during the Term or any part of the Term hereof, relating in
any manner to the Premises or the occupation and use by
Tenant of the Premises. Tenant shall, at Tenant's sole
expense, comply with all requirements of the Americans With
Disabilities Act that relate to the Premises, and all
federal, state and local laws and regulations governing
occupational safety and health. Tenant shall conduct its
business and use the Premises in a lawful manner and shall
not use or permit the use of the Premises or the Common
Areas in any manner that will tend to create waste or a
nuisance or shall tend to disturb other occupants of the
Project. Tenant shall obtain, at Its sole expense, any
permit or other governmental authorization required to
operate its business
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from the Premises. Landlord shall not be liable for the
failure of any other tenant or person to abide by the
requirements of this Section or to otherwise comply with
applicable laws and regulations, and Tenant shall not be
excused from the performance of its obligations under this
Lease due to such a failure.
(3) CONDITION OF PREMISES. Except as otherwise provided in this Lease,
Tenant hereby accepts the Premises and the Project in their condition
existing as of the date this Lease is executed by Landlord and
Tenant, Subject to all applicable federal, state and local laws,
ordinances, regulations and permits governing the use of the
Premises, the Project's certificate of occupancy, any applicable
conditional use permits or variances, and any easements, covenants or
restrictions affecting the use of the Premises or the Project. Tenant
acknowledges that it has satisfied itself by its own independent
investigation that the Premises and the Project are suitable for its
intended use, and that neither Landlord nor Landlord's agents has
made any representation or warranty as to the present or future
suitability of the Premises, or the Project for the conduct of
Tenant's business.
SEE ADDENDUM PARAGRAPH 3
7. MAINTENANCE, REPAIRS AND ALTERATIONS.
(1) LANDLORD'S OBLIGATIONS. Landlord shall keep the Project (excluding
the interior of the Premises and space leased to other occupants of
the Project) in good condition and repair COMPARABLE TO OTHER SIMILAR
OFFICE BUILDINGS IN THE RESTON/HERNDON, VIRGINIA AREA. If plumbing
pipes, electrical wiring, HVAC ducts or vents within the Premises are
in need of repaid, Tenant shall PROMPTLY notify Landlord, and
Landlord shall cause the repairs to be completed within a reasonable
time, and Tenant shall PROMPTLY pay the entire cost of the repairs to
Landlord WITHIN TWENTY (20) DAYS OF RECEIPT OF AN INVOICE. Except as
provided in Section 9.3, there shall be no abatement of rent or
liability to Tenant on account of any injury or interference with
Tenant's business with respect to any improvements, alterations or
repairs made by Landlord to the Project or any part thereof. Tenant
expressly waives the benefits of any statute now or hereafter in
effect which would otherwise afford Tenant the right to make repairs
and Landlord's expense or to terminate this Lease because of
Landlord's failure to keep the Project in good order, condition and
repair. THE FOREGOING WAIVER SHALL NOT INCLUDE A WAIVER OF TENANT'S
RIGHT, IF ANY, TO BRING AN ACTION FOR CONSTRUCTIVE EVICTION OR BREACH
OF ITS COVENANT OF QUIET ENJOYMENT.
(2) TENANT'S OBLIGATIONS.
(1) Subject to the requirements of Section 7.3, Tenant shall be
responsible for keeping the Premises in good condition and
repair, ORDINARY WEAR AND TEAR EXCEPTED, at Tenant's sole
expense. By way of example, and not limitation, Tenant shall
be responsible, at Tenant's sole expense, for repairing
and/or replacing, carpet, marble, tile or other flooring,
paint, wall coverings, corridor and interior doors and door
hardware, telephone and computer equipment, Interior glass,
window treatments, ceiling tiles, shelving, cabinets,
millwork and other tenant Improvements. In addition, Tenant
shall bo responsible for tho installation, maintenance and
repair of all telephone, computer and related cabling from
the telephone terminal room on the floor on which the
Premises is located to and throughout the Premises, and
Tenant shall be responsible for any loss, cost, damage,
liability and expense (including attorneys' fees) arising
out of or related to the installation, maintenance, repair
and replacement of such cabling. If Tenant fails to keep the
Premises in good condition and repair, Landlord may, but
shall not be obligated to, make any necessary repairs UPON
REASONABLE PRIOR NOTICE TO TENANT, EXCEPT IN AN EMERGENCY
WHERE NO SUCH NOTICE SHALL BE REQUIRED. If Landlord makes
such repairs, Landlord shall ▇▇▇▇ Tenant for the cost of the
repairs as additional
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rent, and said additional rent shall be payable by Tenant
within THIRTY (30) days.
(2) On the last day of the Term hereof, or on any sooner
termination, Tenant shall surrender the Premises to Landlord
in the same condition as received, ordinary wear and tear
and casualty damage excepted, clean and free of debris and
Tenant's personal property. Tenant shall repair any damage
to tho Premises occasioned by the installation or removal of
Tenant's trade fixtures, furnishings and equipment. Tenant
shall leave the electrical distribution systems, plumbing
systems, lighting fixtures, HVAC ducts and vents, window
treatments, wall coverings, carpets and other floor
coverings, doors and door hardware, millwork, ceilings and
other tenant improvements at the Premises and in good
condition, ordinary wear and tear excepted.
(3) ALTERATIONS AND ADDITIONS.
(1) Tenant shall not, without Landlord's prior written consent,
which may be given or withheld in Landlord's sole
discretion, make any alterations, improvements, additions,
utility installations or repairs (hereinafter collectively
referred to as "Alteration(s)") in, on or about the Premises
or the Project. Alterations shall include, but shall not be
limited to, the installation or alteration of security or
fire protection systems, communication systems, millwork,
shelving, file retrieval or storage systems, carpeting or
other floor covering, window and wall coverings, electrical
distribution systems, lighting fixtures, telephone or
computer system wiring, HVAC and plumbing. At the expiration
of the Term, Landlord may require the removal of any
Alterations installed by Tenant and the restoration of the
Premises and the Project to their prior condition, at
Tenant's expense. If a work letter agreement is entered into
by Landlord and Tenant, Tenant shall not be obligated to
remove the tenant improvements constructed in accordance
with the work letter agreement. If, as a result of any
Alteration made by Tenant, Landlord is obligated to comply
with the Americans With Disabilities Act or any other law or
regulation and such compliance requires Landlord to make any
improvement or Alteration to any portion of the Project, as
a condition to Landlord's consent, Landlord shall have the
right to require Tenant to pay to Landlord prior to the
construction of any Alteration by Tenant, the entire cost of
any improvement or Alteration Landlord is obligated to
complete by such law or regulation. Should Landlord permit
Tenant to make its own Alterations, Tenant shall use only
such contractor as has been REASONABLY approved by Landlord,
and Landlord may require Tenant to provide to Landlord, at
Tenant's sole cost and expense, a lien and completion bond
in an amount equal to one and one-half times the estimated
cost of such Alterations, to insure Landlord against any
liability for mechanic's and materialmen's liens and to
insure completion of the work. In addition, Tenant shall pay
to Landlord a fee equal to THREE PERCENT (3%) of the cost of
the Alterations to compensate Landlord for the overhead and
other costs it incurs in reviewing the plans for the
Alterations and in monitoring the construction of the
Alterations. TENANT SHALL NOT BE REQUIRED TO PAY A THREE
PERCENT (3%) FEE IN CONNECT/ON WITH COSMETIC NONSTRUCTURAL
ALTERATIONS CONSISTING OF PAINTING, WALLPAPERING AND
CARPETING. Should Tenant make any Alterations without the
prior approval of Landlord, or use a contractor not
expressly approved by Landlord, Landlord may, at any time
during the Term of this Lease, require that Tenant remove
all or part of the Alterations and return the Premises to
the condition it was in prior to the making of the
Alterations. In the event Tenant makes any Alterations,
Tenant agrees to obtain or cause its contractor to obtain,
prior to the commencement of any work, "builders all risk"
insurance in an amount approved by Landlord and workers
compensation insurance.
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SEE ADDENDUM PARAGRAPH 4
(2) Any Alterations in or about the Premises that Tenant shall
desire to make shall be presented to Landlord in written
form, with plans and specifications which are sufficiently
detailed to obtain a building permit, TO THE EXTENT REQUIRED
BY LAW. If Landlord consents to an Alteration, the consent
shall be deemed conditioned upon Tenant acquiring a building
permit from the applicable governmental agencies, furnishing
a copy thereof to Landlord prior to the commencement of the
work, and compliance by Tenant with all conditions of said
permit in a prompt and expeditious manner. Tenant shall
provide Landlord with as-built plans and specifications for
any Alterations made to the Premises.
(3) Tenant shall pay, when due, all claims for labor or
materials furnished to or for Tenant at or for use in the
Premises, which claims are or may be secured by any
mechanic's or materialmen's lien against the Premises or the
Project, or any interest therein. If Tenant shall, in good
faith, contest the validity of any such lien, Tenant shall
furnish to Landlord a surety bond satisfactory to Landlord
in an amount equal to not less than one and one half times
the amount of such contested lien or claim indemnifying
Landlord against liability arising out of such lien or
claim. Such bond shall be sufficient in form and amount to
free the Project from the effect of such lien. In addition,
Landlord may require Tenant to pay Landlord's reasonable
attorneys' fees and costs in participating in such action.
(4) Tenant shall give Landlord not less than ten (10) days'
advance written notice prior to the commencement of any work
in the Premises by Tenant, and Landlord shall have the right
to post notices of non-responsibility in or on the Premises
or the Project.
(5) All Alterations (whether or not such Alterations constitute
trade fixtures or Tenant) which may be made to the Premises
by Tenant shall be paid for by Tenant, at Tenant's sole
expense, and shall be made and done in a good and
workmanlike manner and with new materials REASONABLY
satisfactory to Landlord and such Alterations shall be the
property of Landlord and remain upon and be surrendered with
the Premises at the expiration of the Term of the Lease.
Provided Tenant is not in default BEYOND THE EXPIRATION OF
ANY NOTICE AND CURE PERIOD, Tenant's personal property and
equipment, other than that which is affixed to the Premises
so that it cannot be removed without material damage to the
Premises or the Project, shall remain the property of Tenant
and may be removed by Tenant subject to the provisions of
Section 7.2(b).
(4) FAILURE OF TENANT TO REMOVE PROPERTY. If this Lease is terminated due
to the expiration of its Term or otherwise, and Tenant fails to
remove its property as required by Section 7.2(b), in addition to any
other remedies available to Landlord under this Lease, and Subject to
any other right or remedy Landlord may have under applicable law,
Landlord may remove any property of Tenant from the Premises and
store the same elsewhere at the expense and risk of Tenant.
8. INSURANCE.
(1) INSURANCE-TENANT.
(1) Tenant shall obtain and keep in force during the Term of
this Lease a commercial general liability policy of
insurance with coverages acceptable to Landlord, in
Landlord's sole discretion, which by way of example and not
limitation, protects Tenant and Landlord (as an additional
insured) against claims for bodily injury, personal injury
and property damage based upon,
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involving or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant
thereto. Such insurance shall be on an occurrence basis
providing single limit coverage in an amount of not less
than Two Million Dollars ($2,000,000) per occurrence with an
"Additional Insured-Managers and Landlords of Premises
Endorsement" and contain the "Amendment of the Pollution
Exclusion" for damage caused by heat, smoke or fumes from a
hostile fire. The policy shall not contain any intra-insured
exclusions as between insured persons or organizations, but
shall include coverage for liability assumed under this
Lease as an "insured contract" for the performance of
Tenant's indemnity obligations under this Lease.
(2) Tenant shall obtain and keep in force during the Term of
this Lease "all risk" extended coverage property insurance
with coverages acceptable to Landlord, in Landlord's sole
discretion. Said insurance shall be written on a one hundred
percent (100%) replacement cost basis on Tenant's personal
property, all tenant improvements Installed at the Premises
by Landlord or Tenant, Tenant's trade fixtures and other
property. By way of example and not limitation, such
policies shall provide protection against any peril included
within the classification "fire and extended coverage,"
against vandalism and malicious mischief, theft, sprinkler
leakage, earthquake damage and flood damage. If this Lease
is terminated as the result of a casualty in accordance with
Section 9, the proceeds of said insurance attributable to
the replacement of all tenant improvements at the Premises
PAID FOR BY LANDLORD, shall be paid to Landlord. If
insurance proceeds are available to repair the tenant
improvements, at Landlord's option, all insurance proceeds
Tenant is entitled to receive to repair the tenant
improvements shall be paid by the insurance company directly
to Landlord. Landlord shall select the contractor to repair
and/or replace the tenant improvements, and Landlord shall
cause the tenant improvements to be repaired and/or replaced
to the extent insurance proceeds are available.
(3) Tenant shall, at all times during the Term hereof, maintain
in effect workers' compensation insurance as required by
applicable law and business interruption and extra expense
insurance satisfactory to Landlord.
(2) INSURANCE-LANDLORD.
(1) Landlord shall obtain and keep in force a policy of general
liability insurance with coverage against such risks and in
such amounts as Landlord deems advisable insuring Landlord
against liability arising out of the ownership, operation
and management of the Project.
(2) Landlord shall also obtain and keep in force during the Term
of this Lease a policy or policies of insurance covering
loss or damage to the Project in the amount of not less than
NINETY PERCENT (90%) of the full replacement cost thereof,
as determined by Landlord from time to time. The terms and
conditions of said policies and the perils and risks covered
thereby shall be determined by Landlord, from time to time,
in Landlord's sole discretion. In addition, at Landlord's
option, Landlord shall obtain and keep in force, during the
Term of this Lease, a policy of rental interruption
insurance, with loss payable to Landlord, which insurance
shall, at Landlord's option, also cover all Operating
Expenses. At Landlord's option, Landlord may obtain
insurance coverages and/or bonds related to the operation of
the parking areas. At Landlord's option, Landlord may obtain
coverage for flood damages. In addition, Landlord shall have
the right to obtain such additional insurance as is
customarily carried by owners or operators of other
comparable office buildings in the geographical area of the
Project. Tenant will not be named as an additional insured
in any insurance policies carried by Landlord and shall have
no right to any proceeds therefrom. The
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policies purchased by Landlord shall contain such
deductibles as Landlord may determine. In addition to
amounts payable by Tenant in accordance with Section 4.2,
Tenant shall pay any increase in the property insurance
premiums for the Project over what was payable immediately
prior to the increase to the extent the increase is
specified by Landlord's insurance carrier as being caused by
the nature of Tenant's occupancy or any act or omission of
Tenant.
(3) INSURANCE POLICIES. Tenant shall deliver to Landlord copies of the
insurance policies required under Section 8.1 within fifteen (15)
days prior to the Commencement Date of this Lease, and Landlord shall
have the right to approve the terms and conditions of said policies.
Tenant's insurance policies shall not be cancelable or Subject to
reduction of coverage or other modification except after thirty (30)
days prior written notice to Landlord. Tenant shall, at least thirty
(30) days prior to the expiration of such policies, furnish Landlord
with renewals thereof. Tenant's insurance policies shall be issued by
insurance companies authorized to do business in the state in which
the Project is located, and said companies shall maintain during the
policy term a "General Policyholders' Rating" of at least "A" and a
financial rating of at least "Class X" (or such other rating as may
be required by any lender having a lien on the Project), as set forth
in the most recent edition of "Best Insurance Reports." All insurance
obtained by Tenant shall be primary to and not contributory with any
similar insurance carried by Landlord, whose insurance shall be
considered excess insurance only. Landlord, and at Landlord's option,
the holder of any mortgage or deed of trust encumbering the Project
and any person or entity managing the Project on behalf of Landlord,
shall be named as an additional insured on all insurance policies
Tenant is obligated to obtain by-Section 8.1 above. Tenant's
insurance policies shall not include deductibles in excess of Five
Thousand Dollars ($5,000).
(4) WAIVER OF SUBROGATION. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
THIS LEASE, TENANT AND LANDLORD EACH HEREBY RELEASE AND RELIEVE THE
OTHER, AND WAIVE THEIR ENTIRE RIGHT OF RECOVERY AGAINST THE OTHER,
AND THE OTHER'S AGENTS AND EMPLOYEES, FOR DIRECT OR CONSEQUENTIAL
LOSS OR DAMAGE ARISING OUT OF OR INCIDENT TO THE PERILS COVERED BY
INSURANCE CARRIED BY SUCH PARTY (OR REQUIRED TO BE CARRIED BY SUCH
PARTY BY THIS LEASE) TO THE EXTENT OF THE INSURANCE PROCEEDS ACTUALLY
RECEIVED (OR WOULD HAVE BEEN RECEIVED HAD SUCH PARTY CARRIED THE TYPE
AND AMOUNT OF INSURANCE REQUIRED UNDER THIS LEASE), WHETHER DUE TO
THE NEGLIGENCE OF LANDLORD OR TENANT OR THEIR AGENTS, EMPLOYEES,
CONTRACTORS AND/OR INVITEES. LANDLORD AND TENANT SHALL EACH CAUSE THE
INSURANCE POLICIES THEY OBTAIN IN ACCORDANCE WITH THIS SECTION 8 TO
PROVIDE THAT THE INSURANCE COMPANY WAIVES ALL RIGHT OF RECOVERY BY
SUBROGATION AGAINST EITHER PARTY IN CONNECTION WITH ANY DAMAGE
COVERED BY ANY POLICY.
(5) COVERAGE. Landlord makes no representation to Tenant that the limits
or forms of coverage specified above or approved by Landlord are
adequate to insure Tenants
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property or Tenants obligations under this Lease and the limits of
any insurance carried by Tenant shall not limit Tenant s obligations
or liability under any indemnity provision included in this Lease or
under any other provision of this Lease.
9. DAMAGE OR DESTRUCTION.
(1) EFFECT OF DAMAGE OR DESTRUCTION. If all or part of the Project is
damaged by fire earthquake flood explosion the elements riot the
release or existence of Hazardous Substances (as defined in Section
22 below) or by any other cause whatsoever (hereinafter collectively
referred to as Damages ) but the Damages are not Material (as defined
in Section 9.2 below) Landlord shall repair the Damages to the
Project as soon as is reasonably possible and this Lease shall remain
in full force and effect. If all or part of the Project is destroyed
or Materially Damaged Landlord shall have the right in its sole and
complete discretion to repair or to rebuild the Project or to
terminate this Lease, PROVIDED LANDLORD TERMINATES ALL OTHER LEASES
IN THE Project. Landlord shall within one hundred twenty (120) days
after the discovery of such Material Damage or destruction notify
Tenant in writing of Landlord's intention to repair or to rebuild or
to terminate this Lease. Tenant shall in no event be entitled to
compensation or damages on account of annoyance or inconvenience in
making any repair or on account of construction or on account of
Landlord s election to terminate this Lease. Notwithstanding the
foregoing if Landlord shall elect to rebuild or repair the Project
after Material Damage or destruction but in good faith determines
that the Premises cannot be substantially repaired within TWO HUNDRED
SEVENTY (270) days after the date of the discovery of the Material
Damage or destruction without payment of overtime or other premiums
and the Damage to the Project will render the entire Premises
unusable during said TWO HUNDRED SEVENTY (270) day period. Landlord
shall notify Tenant thereof in writing at the time of Landlord's
election to rebuild or repair and Tenant shall thereafter have a
period of fifteen (15) BUSINESS days within which Tenant may elect to
terminate this Lease upon thirty (30) days advance written notice to
Landlord. TENANT SHALL HAVE A FURTHER RIGHT TO TERMINATE THIS LEASE
IF THE PREMISES ARE DAMAGED DURING THE LAST TWELVE (12) MONTHS OF THE
TERM OF THE LEASE AND SUCH DAMAGE CANNOT, IN LANDLORD'S REASONABLE
JUDGMENT, BE REPAIRED WITHIN NINETY (90) DAYS. Tenant s termination
right described in the preceding sentence shall not apply if the
Damage was caused by the negligent or intentional acts of Tenant or
its employees agents contractors or invitees. Failure of Tenant to
exercise said election within said fifteen (15) BUSINESS day period
shall constitute Tenants agreement to accept delivery of the Premises
under this Lease whenever tendered by Landlord provided Landlord
thereafter pursues reconstruction or restoration diligently to
completion Subject to delays caused by Force Majeure Events. If
Landlord is unable to repair the Damage to the Premises or the
Project during such TWO HUNDRED SEVENTY (270) day period due to Force
Majeure Events the TWO HUNDRED SEVENTY (270) day period shall be
extended by the period of delay caused by the Force Majeure Events.
Subject to Section 9.3 below if Landlord or Tenant terminates this
Lease in accordance with this Section 9.1, Tenant shall continue to
pay ail Base Rent Operating Expense increases Real Property Tax
increases and other amounts due hereunder which arise prior to the
date of termination.
(2) DEFINITION OF MATERIAL DAMAGE. Material Damage to the Project shall
occur if in Landlord s reasonable judgment the uninsured cost of
repairing the Damage will exceed FIFTY THOUSAND DOLLARS ($50,000). If
Insurance proceeds are available to Landlord in an amount which is
sufficient to pay the entire cost of repairing ail of the Damage to
the Project the Damage shall be deemed material if the cost of
repairing the Damage exceeds TWO HUNDRED FIFTY THOUSAND DOLLARS
($250,000). Damage to the Project shall be deemed Material if (a) the
Project cannot be rebuilt or repaired to substantially the same
condition it was in prior to the Damage due to laws or regulations in
effect at the time the repairs will be made (b) the holder of any
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mortgage or deed of trust encumbering the Project requires that
insurance proceeds available to repair the Damage in excess of FIFTY
THOUSAND DOLLARS ($50,000) be applied to the repayment of the
indebtedness secured by the mortgage or the deed of trust or (c) the
Damage occurs during the last twelve (12) months of the Term of the
Lease.
(3) ABATEMENT OF RENT. If Landlord elects to repair Damage to the Project
and ail or part of the Premises will be unusable or inaccessible to
Tenant in the ordinary conduct of its business until the Damage is
repaired and the Damage was not caused by the GROSS negligence or
intentional acts of Tenant or its employees agents contractors or
invitees Tenants Base Rent Tenant's Share of Operating Expense
increases and Tenant's Share of Real Property Taxes shall be abated
FROM THE DATE THE PREMISES ARE DAMAGED OR DESTROYED until the repairs
are completed in proportion to the amount of the Premises which is
unusable or inaccessible to Tenant in the ordinary conduct of its
Business. EXCEPT AS OTHERWISE PROVIDED IN PARAGRAPH 5 OF THE ADDENDUM
ATTACHED HERETO, NOTWITHSTANDING the foregoing there shall be no
abatement of Base Rent Tenant s Share of Operating Expense increases
and Tenant s Share of Real Property Taxes by reason of any portion of
the Premises being unusable or inaccessible for a period equal to
five (5) consecutive business days or less. If the cause of the
Damage or destruction is an earthquake or a flood Tenant shall only
be entitled to an abatement of rent when and if Landlord receives
reimbursement for such rent from insurance proceeds if any.
(4) TENANT'S ACTS. If such Damage or destruction occurs as a result of
the GROSS negligence or the intention acts of Tenant or Tenant's
employees, agents, contractors or invitees, and the proceeds of
insurance which are actually received by Landlord are not sufficient
to pay for the repair of all of the Damage, Tenant shall pay, at
Tenant's sole cost and expense, to Landlord upon demand, the
difference between the cost of repairing the Damage and the insurance
proceeds received by Landlord.
(5) TENANT'S PROPERTY. As more fully set forth in Section 21, EXCEPT
WHERE CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
LANDLORD, ITS EMPLOYEES, AGENTS OR CONTRACTORS, Landlord shall not be
liable to Tenant or its employees, agents, contractors, invitees or
customers for loss or Damage to merchandise, tenant improvements,
fixtures, automobiles, furniture, equipment, computers, files or
other property (hereinafter collectively "Tenant's property") located
at the Project. Tenant shall repair or replace all of Tenant's
property at Tenant's sole cost and expense. Tenant acknowledges that
it is Tenant's sole responsibility to obtain adequate insurance
coverage to compensate Tenant for Damage to Tenant's property.
(6) WAIVER. Landlord and Tenant hereby waive the provisions of any
statutes which relate to the termination of leases when leased
property is damaged or destroyed and agree that such event shall be
governed by the terms of this Lease.
10. REAL AND PERSONAL PROPERTY TAXES.
(1) PAYMENT OF TAXES. Tenant shall pay to Landlord during the Term
hereof, in addition to Base Rent and Tenant s Share of Operating
Expense Increases, Tenant s Share of the amount by which all Real
Property Taxes (as defined in Section 10.2 below) for each Comparison
Year exceeds the amount of ail Real Property Taxes for the Base Year.
Tenant s Share of Real Property Tax increases shall be payable by
Tenant at the same time, in the same manner and under the same terms
and conditions as Tenant pays Tenant s Share of Operating Expense
increases as provided in Section 4.2(f) of this Lease. Except as
expressly provided in Section 10.4 below, if the Real Property Taxes
incurred during any Comparison Year are less that the Real Property
Taxes incurred during the Base Year, Tenant shall not be entitled to
receive any credit, offset, reduction or benefit as a result of said
occurrence.
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(2) DEFINITION OF "REAL PROPERTY TAX." As used herein, the term Real
Property Tax shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, improvement bond or
bonds imposed on the Project or any portion thereof by any authority
having the direct or indirect power to tax, including any city,
county, state or federal government, or any school, agricultural,
sanitary, fire, street, drainage or other improvement district
thereof, as against any legal or equitable interest of Landlord in
the Project or in any portion thereof, unless such tax is defined as
an Operating Expense by Section 4.2(c). Real Property Taxes shall not
include income, inheritance, FRANCHISE, ESTATE, EXCISE, EXCESS
PROFITS TAXES, TRANSFER, RECORDATION OR gift taxes. UPON TENANT'S
REQUEST, LANDLORD SHALL FORWARD TO TENANT A COPY OF THE APPLICABLE
TAX STATEMENTS SETTING FORTH THE APPLICABLE TAXES ADDRESSED IN THIS
SECTION 10.2.
(3) PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures, furnishings,
equipment and ail other personal property of Tenant contained in the
Premises or related to Tenant's use of the Premises, if any of
Tenants personal property shall be assessed with Landlord s real or
personal property, Tenant shall pay to Landlord the taxes
attributable to Tenant within ten (10) days after receipt of a
written statement from Landlord setting forth the taxes applicable to
Tenant s property.
(4) REASSESSMENTS. From time to time Landlord may challenge the assessed
value of the Project as determined by applicable taxing authorities
and/or Landlord may attempt to cause the Real Property Taxes to be
reduced on other grounds. If Landlord is successful in causing the
Real Property Taxes to be reduced or in obtaining a refund, rebate,
credit or similar benefit (hereinafter collectively referred to as a
"reduction"), Landlord shall, credit the reduction(s) to Real
Property Taxes for the calendar year to which a reduction applies and
to recalculate the Real Property Taxes owed by Tenant for years after
the year in which the reduction applies based on the reduced Real
Property Taxes (if a reduction applies to Tenants Base Year, the Base
Year Real Property Taxes shall be reduced by the amount of the
reduction and Tenant s Share of Real Property Tax increases shall be
recalculated for all Comparison Years following the year of the
reduction based on the lower Base Year amount). ALL costs incurred by
Landlord in obtaining the Real Property Tax reductions shall be
considered an Operating Expense and Landlord shall determine, in its
sole discretion to which years any reductions will be applied. In
addition, all accounting and related costs incurred by Landlord in
calculating new Base Years for tenants and in making all other
adjustments shall be an Operating Expense.
11. UTILITIES.
(1) SERVICES PROVIDED BY LANDLORD. Subject to all governmental rules,
regulations and guidelines applicable thereto, Landlord shall provide
HVAC to the Premises for normal office use during the times described
in Section 11.4, reasonable amounts of electricity for normal office
lighting and fractional horsepower office machines, water in the
Premises or in the Common Areas for reasonable and normal drinking
and lavatory use, replacement light bulbs and/or fluorescent tubes
and ballasts for standard overhead fixtures, and building standard
janitorial services.
(2) OCCUPANT DENSITY. Tenant shall maintain a ratio of not more than one
Occupant (as defined below) for each two hundred (200) square feet of
rentable area in the Premises, PROVIDED LANDLORD ENFORCES THE DENSITY
REQUIREMENT UNIFORMLY
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AMONG ALL TENANTS IN THE PROJECT TO THE EXTENT POSSIBLE. Landlord
shall have the right to periodically visit the Premises without
advance notice to Tenant in order to track the number of Occupants
arriving at the Premises. FOR PURPOSES OF THIS SECTION, "OCCUPANTS"
SHALL REFER COLLECTIVELY TO EMPLOYEES, VISITORS, CONTRACTORS AND
OTHER PEOPLE THAT VISIT THE PREMISES. For purposes of this Section,
"Occupants" shall not include people not employed by Tenant that
deliver or pick up mail or other packages at the Premises, employees
of Landlord or employees of Landlord's agents or contractors. Tenant
acknowledges that increased numbers of Occupants causes additional
wear and tear on the Premises and the Common Areas, additional use of
electricity, water and other utilities, and additional demand for
other Building services. Tenant's failure to comply with the
requirements of this Section shall constitute a default under Section
13.1 and Landlord shall have the right, in addition to any other
remedies it may have at law or equity, to specifically enforce Tenant
s obligations under this Section.
(3) HOURS OF SERVICE. Building services and utilities shall be provided
Monday through Friday from 8:00 a.m. to 6:00 p.m. and Saturdays from
9:00 a.m. to 1:00 p.m. Janitorial services shall be provided Monday
through Friday. HVAC and other Building services shall not be
provided at other times or on nationally recognized holidays. Tenant
acknowledges that there will be no air circulation or temperature
control within the Premises when the HVAC is not operating and,
consequently during such times the Premises may not be suitable for
human occupation or for the operation of computers and other heat
sensitive equipment. Nationally recognized holidays shall include,
but shall not necessarily be limited to, New Year's Day, ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇. Day, Presidents' Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. Landlord shall use its
best efforts to provide HVAC to Tenant at times other than those set
forth above subject to (a) the payment by Tenant of Landlord's
standard charge, as determined by Landlord from time to time, in
Landlord's sole discretion, for after hours HVAC and (b) Tenant
providing to Landlord at least one (1) business day's advance written
notice of Tenant's need for after hours HVAC. As of the date of this
Lease, and subject to future increases EQUAL TO THE ACTUAL INCREASE
IN UTILITY CHARGES, the standard charge for after hours HVC is Forty
Dollars ($40.00) per hour. Tenant shall pay all after hours HVAC
charges to Landlord within TWENTY (20) days after Landlord bills
Tenant for said charges.
(4) EXCESS USAGE BY TENANT. Notwithstanding the use set forth in
Section 1.5, Tenant shall not use Building utilities or services in
excess of those used by the average office building tenant using its
premises for ordinary office use. Tenant shall not install at the
Premises office machines, lighting fixtures or other equipment which
will generate above average heat, noise or vibration at the Premises
or which will adversely effect the temperature maintained by the HVAC
system. If Tenant does use Building utilities or services in excess
of those used by the average office building tenant, Landlord shall
have the right, in addition to any other rights or remedies it may
have under this Lease, to (a) at Tenant's expense, install separate
metering devices at the Premises, and to charge Tenant for its usage,
(b) require Tenant to pay to Landlord all costs, expenses and damages
incurred by Landlord as a result of such usage, and (c) require
Tenant to stop using excess utilities or services. IN THE EVENT
TENANT OPERATES AS A DATA CENTER, LANDLORD AGREES TO PERMIT TENANT TO
INSTALL, OPERATE, MAINTAIN AND REPLACE AN UNINTERRUPTED POWER SOURCE
(UPS), STATIONARY BATTERIES, CHARGERS, AND/OR GENERATORS PROVIDED
TENANT OBTAINS ALL NECESSARY APPROVALS, PERMITS AND LICENSES FROM ALL
GOVERNMENTAL AUTHORITIES HAVING JURISDICTION OVER SUCH MATTERS.
LANDLORD ALSO AGREES TO PERMIT TENANT, SUBJECT TO THE TERMS AND
CONDITIONS OF THIS LEASE, TO UTILIZE A PORTABLE GENERATOR DURING
EMERGENCIES, OR ON AN AS-NEEDED BASIS. IN THE EVENT THAT LANDLORD
INSTALLS SEPARATE METERING DEVICES AT THE PREMISES AS PROVIDED IN (b)
ABOVE, TENANT SHALL
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PAY TO LANDLORD, WITHIN THIRTY (30) DAYS FROM RECEIPT OF AN INVOICE
FROM LANDLORD, ALL CHARGES FOR ELECTRICITY SUPPLIED TO THE PREMISES.
AT LANDLORD'S OPTION, HOWEVER, LANDLORD MAY, FROM TIME TO TIME,
REASONABLY ESTIMATE WHAT TENANTS CHARGES FOR ELECTRICITY FOR THE
PREMISES SHALL BE, AND THE SAME SHALL BE PAYABLE BY TENANT MONTHLY
DURING THE TERM ON THE SAME DAY AS BASE RENT IS DUE HEREUNDER
PROVIDED LANDLORD AFFORDS TENANT THIRTY (30) DAYS NOTICE OF THE
AMOUNT OF SUCH ESTIMATE. LANDLORD SHALL PERIODICALLY DELIVER TO
TENANT INVOICES FOR ACTUAL ELECTRICITY SUPPLIED TO THE PREMISES. IF
TENANT'S PAYMENTS FOR ESTIMATED ELECTRICITY CHARGES EXCEED THE ACTUAL
ELECTRICITY CHARGES, THEN TENANT SHALL RECEIVE A CREDIT AGAINST THE
ESTIMATED PAYMENT FOR ELECTRICITY NEXT FALLING DUE. IF TENANT'S
PAYMENTS FOR ESTIMATED ELECTRICITY CHARGES WERE LESS THAN THE ACTUAL
ELECTRICITY CHARGES, THEN TENANT SHALL PAY TO LANDLORD THE AMOUNT OF
THE DEFICIENCY WITHIN THIRTY (30) DAYS AFTER DELIVERY BY LANDLORD TO
TENANT OF SAID INVOICE. INVOICES FOR ELECTRICITY CHARGES SHALL NOT
INCLUDE ANY ▇▇▇▇-UP BY LANDLORD FOR SAID ELECTRICITY. IN ADDITION,
ELECTRICITY SUPPLIED TO THE COMMON AREAS SHALL BE A COMPONENT OF
OPERATING EXPENSES FOR WHICH TENANT IS LIABLE IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 4.2 OF THE LEASE.
(5) INTERRUPTIONS. Tenant agrees that Landlord shall not be liable to
Tenant for its failure to furnish gas, electricity, telephone
service, water, HVAC or any other utility services or building
services when such failure is occasioned, in whole or in part, by
repairs, replacements, or improvements, by any strike, lockout or
other labor trouble, by inability to secure electricity, gas, water,
telephone service or other utility at the Project, by any accident,
casualty or event arising from any cause whatsoever, including the
negligence of Landlord, its employees, agents and contractors, by
act, negligence or default of Tenant or any other person or entity,
or by an other cause, and such failures shall never be deemed to
constitute an eviction or disturbance of Tenant's use and possession
of the Premises or relieve Tenant from the obligation of paying rent
or performing any of its obligations under this Lease. Furthermore,
Landlord shall not be liable under any circumstances for loss of
property or for injury to, or interference with, Tenant's business,
including, without limitation, loss of profits, however occurring,
through or in connection with or incidental to a failure to furnish
any such services or utilities. Landlord may comply with voluntary
controls or guidelines promulgated by any governmental entity
relating to the use or conservation of energy, water, gas, light or
electricity or the reduction of automobile or other emissions without
creating any liability of Landlord to Tenant under this Lease.
SEE ADDENDUM PARAGRAPH 5
1. ASSIGNMENT AND SUBLETTING.
(a LANDLORD'S CONSENT REQUIRED. Tenant shall not voluntarily or by
operation of law assign, transfer, hypothecate, mortgage, sublet, or otherwise
transfer or encumber all or any part of Tenant's interest in this Lease or in
the Premises (hereinafter collectively a "Transfer"), without Landlord's prior
written consent, which shall not be unreasonably withheld, DELAYED OR
CONDITIONED. Landlord shall respond to Tenant's written request for consent
hereunder within thirty (30) days after Landlord's receipt of the written
request from Tenant. Any attempted Transfer without such consent shall be void
and shall constitute a material default and breach of this Lease. Tenant's
written request for Landlord's consent shall include, and Landlord's thirty (30)
day response period referred to above shall not commence, unless and until
Landlord has received from Tenant, all of the following information: (a)
financial statements for the proposed assignee for the past three (3) years, TO
THE EXTENT AVAILABLE, prepared in accordance with generally accepted accounting
principles, (b) federal tax returns for the proposed assignee for the past three
(3) years OR FOR THE PROPOSED SUBTENANT FOR THE PAST YEAR, TO THE EXTENT
AVAILABLE, (d) a detailed description of the business the assignee or subtenant
intends to operate at the Premises, (e) the proposed effective date of the
assignment or sublease, (f) a copy of the proposed sublease or assignment
agreement which includes all of the terms and conditions of the proposed
assignment or sublease, (g) a detailed
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description of any ownership or commercial relationship between Tenant and the
proposed assignee or subtenant, and (h) a detailed description of any
Alterations the proposed assignee or subtenant desires to make to the Premises.
If the obligations of the proposed assignee or subtenant will be guaranteed by
any person or entity, Tenant's written request shall not be considered complete
until the information described in (a), (b) and (c) of the previous sentence has
been provided with respect to each proposed guarantor. "Transfer" shall also
include the transfer (a) if Tenant is a corporation, and Tenant's stock is not
publicly traded over a recognized securities exchange, of more than FORTY-NINE
PERCENT (49%) of the voting stock of such corporation during the Term of this
Lease (whether or not in one or more transfers) or the dissolution, merger or
liquidation of the corporation, or (b) if Tenant is a partnership or other
entity, of more than FORTY-NINE PERCENT (49%) of the profit and loss
participation in such partnership or entity during the Term of this Lease
(whether or not in one or more transfers) or the dissolution, merger or
liquidation of the partnership or entity. If Tenant is a limited or general
partnership (or is comprised of two or more persons, individually or as
co-partners). Tenant shall not be entitled to change or convert to (i) a limited
liability company, (ii) a limited liability partnership or (iii) any other
entity which possesses the characteristics of limited liability without the
prior written consent of Landlord, which consent may be given or withheld in
Landlord's sole discretion. Tenant's sole remedy in the event that Landlord
shall wrongfully withhold consent to or disapprove any assignment or sublease
shall be to obtain an order by a court of competent jurisdiction that Landlord
grant such consent; in no event shall Landlord be liable for damages with
respect to its granting or withholding consent to any proposed assignment or
sublease. If Landlord shall exercise any option to recapture the Premises, or
shall deny a request for consent to a proposed assignment or sublease, Tenant
shall indemnify, defend and hold Landlord harmless from and against any and all
losses, liabilities, damages, costs and claims that may be made against Landlord
by the proposed assignee or subtenant, or by any brokers or other persons
claiming a commission or similar compensation in connection with the proposed
assignment or sublease.
SEE ADDENDUM PARAGRAPH 6
(b LEVERAGED BUY-OUT. The involvement by Tenant or its assets in any
transaction, or series of transactions (by way of merger, sale, acquisition,
financing, refinancing, transfer, leveraged buy-out or otherwise) whether or not
a formal assignment or hypothecation of this Lease or Tenant's assets occurs,
which results or will result in a reduction of the "Net Worth" of Tenant as
hereinafter defined, by an amount equal to or greater than twenty-five percent
(25%)of such Net Worth of Tenant as it is represented to Landlord at the time of
the execution by Landlord of this Lease, or as it exists immediately prior to
said transaction or transactions constituting such reduction, at whichever time
said Net Worth of Tenant was or is greater, shall be considered to be an
assignment of this Lease by Tenant to which Landlord may reasonably withhold its
consent. "Net Worth" of Tenant for purposes of this Section 12.2 shall be the
net worth of Tenant (excluding any guarantors) established under generally
accepted accounting principles consistently applied.
(c STANDARD FOR APPROVAL. Landlord shall not unreasonably withhold, DELAY
OR CONDITION its consent to a Transfer provided that Tenant has complied with
each and every requirement, term and condition of this Section 12. Tenant
acknowledges and agrees that each requirement, term and condition in this
Section 12 is a reasonable requirement, term or condition. It shall be deemed
reasonable for Landlord to withhold its consent to a Transfer if any
requirement, term or condition of this Section 12 is not complied with or: (a)
the Transfer would cause Landlord to be in violation of its obligations under
another lease or agreement to which Landlord is a party; (b) in Landlord's
reasonable judgment, a proposed assignee has a smaller net worth than Tenant had
on the date this Lease was entered into with Tenant or is less able financially
to pay the rents due under this Lease as and when they are due and payable; (c)
a proposed assignee's or subtenant's business will impose a burden on the
Project's parking facilities, elevators, Common Areas or utilities that is
greater than the burden imposed by Tenant, in Landlord's reasonable judgment;
(d) the terms of a proposed assignment or subletting will allow the proposed
assignee or subtenant to exercise a right of renewal, right of expansion, right
of first offer, right of first refusal or similar right held by Tenant; (e) a
proposed assignee or subtenant refuses to enter into a written assignment
agreement or sublease, reasonably satisfactory to Landlord, which provides that
it will abide by and assume all of the terms and conditions of this Lease for
the term of any assignment or sublease and containing such other terms and
conditions as Landlord reasonably deems necessary;
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(f) the use of the Premises by the proposed assignee or subtenant will not be
FOR A use permitted by this Lease; (g) any guarantor of this Lease refuses to
consent to the Transfer or to execute a written agreement reaffirming the
guaranty; (h) Tenant is in default, BEYOND THE EXPIRATION OF ANY APPLICABLE
NOTICE AND CURE PERIOD as defined in Section 13.1 at the time of the request;
(i) if requested by Landlord, the assignee or subtenant refuses to sign a
COMMERCIALLY REASONABLE non-disturbance and attornment agreement in favor of
Landlord's lender; (j) Landlord has sued or been sued by the proposed assignee
or subtenant or has otherwise been DIRECTLY involved in a legal dispute with the
proposed assignee or subtenant; (k) the assignee or subtenant is involved in a
business which is not in keeping with the then current standards of the Project;
(l) the proposed assignee or subtenant is a person or entity then negotiating
with Landlord for the lease of space in the Project; (m) the assignment or
sublease will result in the Premises BEING USED as an executive suite); (n) the
assignee or subtenant is a governmental or quasi governmental entity or an
agency, department or instrumentality of a governmental or quasi-governmental
agency; or (o) the terms of a proposed assignment or subletting will allow the
proposed assignee or subtenant to pay a base rent less than the advertised base
rent being charged new tenants in the Building at the time of such Transfer.
(d ADDITIONAL TERMS AND CONDITIONS. The following terms and conditions
shall be applicable to any Transfer:
(i) Regardless of Landlord's consent, no Transfer shall release Tenant
from Tenant's obligations hereunder or alter the primary liability of Tenant
to pay the rent and other sums due Landlord hereunder and to perform all
other obligations to be performed by Tenant hereunder or release any
guarantor from its obligations under its guaranty.
(ii) Landlord may accept rent from any person other than Tenant pending
approval or disapproval of an assignment or subletting.
(iii) Neither a delay in the approval or disapproval of a Transfer, nor
the acceptance of rent, shall constitute a waiver or estoppel of Landlord's
right to exercise its rights and remedies for the breach of any of the terms
or conditions of this Section 12.
(iv) The consent by Landlord to any Transfer shall not constitute a
consent to any subsequent Transfer by Tenant or to any subsequent or
successive Transfer by an assignee or subtenant. However, Landlord may
consent to subsequent Transfers or any amendments or modifications thereto
without notifying Tenant or anyone else liable on the Lease and without
obtaining their consent, and such action shall not relieve such persons from
liability under this Lease.
(v) In the event of any default under this Lease, Landlord may proceed
directly against Tenant, any guarantors or anyone else responsible for the
performance of this Lease, including any subtenant or assignee, without first
exhausting Landlord's remedies against any other person or entity responsible
therefor to Landlord, or any security held by Landlord.
(vi) Landlord's written consent to any Transfer by Tenant shall not
constitute an acknowledgment that no default then exists under this Lease nor
shall such consent be deemed a waiver of any then existing default. (1)
(vii) The discovery of the fact that any financial statement relied
upon by Landlord in giving its consent to an assignment or subletting was
materially false shall, at Landlord's election, render Landlord's consent
null and void.
(viii) Landlord shall not liable under this Lease or under any sublease
to any subtenant.
(ix) No assignment or sublease may be modified or amended IN ANY WAY
WHICH EFFECTS LANDLORD'S RIGHTS without Landlord's prior written consent.
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(x) The occurrence of a transaction described in Section 12.2 shall
give Landlord the right (but not the obligation) to require that Tenant
immediately provide Landlord with an additional Security Deposit equal to SIX
(6) times the monthly Base Rent payable under the Lease, and Landlord may
make its receipt of such amount a condition to Landlord's consent to such
transaction.
(xi) Any assignee of, or subtenant under, this Lease shall, by reason
of accepting such assignment or entering into such sublease, be deemed, for
the benefit of Landlord, to have assumed and agreed to conform and comply
with each and every term, covenant, condition and obligation herein to be
observed or performed by Tenant during the term of said assignment or
sublease, other than such obligations as are contrary or inconsistent with
provisions of an assignment or sublease to which Landlord has specifically
consented in writing.
(e ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Tenant of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(i) Tenant hereby absolutely and unconditionally assigns and transfers
to Landlord all of Tenant's interest in all rentals and income arising from
any sublease entered into by Tenant, and Landlord may collect such rent and
income and apply same toward Tenant's obligations under this Lease; provided,
however, that until a default shall occur in the performance of Tenant's
obligations under this Lease THAT IS NOT CURED WITHIN ANY APPLICABLE NOTICE
AND CURE PERIOD, Tenant may receive, collect and enjoy the rents accruing
under such sublease. Landlord shall not, by reason of this or any other
assignment of such rents to Landlord nor by reason of the collection of the
rents from a subtenant, be deemed to have assumed or recognized any sublease
or to be liable to the subtenant for any failure of Tenant to perform and
comply with any of Tenant's obligations to such subtenant under such
sublease, including, but not limited to, Tenant's obligation to return any
Security Deposit. Tenant hereby irrevocably authorizes and directs any such
subtenant, upon receipt of a written notice from Landlord stating that a
default exists in the performance of Tenant's obligations under this Lease,
to pay to Landlord the rents due as they become due under the sublease.
Tenant agrees that such subtenant shall have the right to rely upon any such
statement and request from Landlord, and that such subtenant shall pay such
rents to Landlord without any obligation or right to inquire as to whether
such default exists and notwithstanding any notice from or claim from Tenant
to the contrary.
(ii) In the event Tenant shall default in the performance of its
obligations under this Lease, Landlord at its option and without any
obligation to do so, may require any subtenant to attorn to Landlord, in
which event Landlord shall undertake the obligations of Tenant under such
sublease from the time of the exercise of said option to the termination of
such sublease; provided, however, Landlord shall not be liable for any
prepaid rents or Security Deposit paid by such subtenant to Tenant or for any
other prior defaults of Tenant under such sublease.
(f TRANSFER PREMIUM FROM ASSIGNMENT OR SUBLETTING. Landlord shall be
entitled to receive from Tenant (as and when received by Tenant) as an item of
additional rent ONE-HALF (1/2) OF all amounts received by Tenant from the
subtenant or assignee in excess of the amounts payable by Tenant to Landlord
hereunder (HEREINAFTER THE "TRANSFER PREMIUM"). The Transfer Premium shall be
reduced by the reasonable brokerage commissions, legal fees, TENANT IMPROVEMENT
COSTS, AND OTHER REASONABLE AND DOCUMENTED THIRD PARTY TRANSACTION COSTs
actually paid by Tenant in order to assign the Lease or to sublet a portion of
the Premises, PROVIDED THAT TENANT PROVIDES LANDLORD WITH A BREAKDOWN OF ALL
THIRD PARTY TRANSACTION COSTS ASSOCIATED WITH SUCH TRANSFER AT THE TIME TENANT
OBTAINS LANDLORD'S CONSENT AND LANDLORD CONSENTS TO SUCH
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COSTS. "Transfer Premium" shall mean all Base Rent, additional rent or other
consideration of any type whatsoever payable by the assignee or subtenant in
excess of the Base Rent and additional rent payable by Tenant under this Lease.
If less than all of the Premises is transferred, the Base Rent and the
additional rent shall be determined on a per rentable square foot basis.
Transfer Premium shall also include, but not be limited to, key money and bonus
money paid by the assignee or subtenant to Tenant in connection with such
Transfer, and any payment in excess of fair market value for services rendered
by Tenant to the assignee or subtenant or for assets, fixtures, inventory,
equipment, or furniture transferred by Tenant to the assignee or subtenant in
connection with such Transfer.
(g LANDLORD'S OPTION TO RECAPTURE SPACE. Notwithstanding anything to the
contrary contained in this Section 12, Landlord shall have the option, by giving
written notice to Tenant within thirty (30) days after receipt of any request by
Tenant to assign this Lease or to sublease space in the Premises, to terminate
this Lease with respect to said space as of the date thirty (30) days after
Landlord's election. In the event of a recapture by Landlord, if this Lease
shall be canceled with respect to less than the entire Premises, the Base Rent,
Tenant's Share of Operating Expense increases, Tenant's Share of Real Property
Tax increases and the number of parking spaces Tenant may use shall be adjusted
on the basis of the number of rentable square feet retained by Tenant in
proportion to the number of rentable square feet contained in the original
Premises, and this Lease as so amended shall continue thereafter in full force
and effect, and upon request of either party, the parties shall execute written
confirmation of same. If Landlord recaptures only a portion of the Premises, it
shall construct and erect at its sole cost such partitions as may be required to
sever the space to be retained by Tenant from the space recaptured by Landlord.
Landlord may, at its option, lease any recaptured portion of the Premises to the
proposed subtenant or assignee or to any other person or entity without
liability to Tenant. Tenant shall not be entitled to any portion of the profit,
if any, Landlord may realize on account of such termination and reletting.
Tenant acknowledges that the purpose of this Section 12.7 is to enable Landlord
to receive profit in the form of higher rent or other consideration to be
received from an assignee or sublessee, to give Landlord the ability to meet
additional space requirements of other tenants of the Project and to permit
Landlord to control the leasing of space in the Project. Tenant acknowledges and
agrees that the requirements of this Section 12.7 are commercially reasonable
and are consistent with the intentions of Landlord and Tenant.
(h LANDLORD'S EXPENSES. In the event Tenant shall assign this Lease or
sublet the Premises or request the consent of Landlord to any Transfer, then
Tenant shall pay Landlord's reasonable costs and expenses incurred in connection
therewith, including, but not limited to, attorneys', architects', accountants',
engineers' or other consultants' fees; SUCH COSTS NOT TO EXCEED ONE THOUSAND
FIVE HUNDRED DOLLARS ($1,500.00) FOR ANY TRANSFER OR ATTEMPTED TRANSFER.
2. DEFAULT; REMEDIES.
(a DEFAULT BY TENANT. Landlord and Tenant hereby agree that the occurrence
of any one or more of the following events is a material default by Tenant under
this Lease and that said default shall give Landlord the rights described in
Section 13.2. Landlord or Landlord's authorized agent shall have the right to
execute and deliver any notice of default, notice to pay rent or quit or any
other notice Landlord gives Tenant.
(i) Tenant's failure to make any payment of Base Rent, Tenant's Share
of Operating Expense increases, Tenant's Share of Real Property Tax
increases, parking charges, charges for after hours HVAC, late charges, or
any other payment required to be made by Tenant hereunder, as and when due,
where such failure shall continue for a period of FIVE (5) BUSINESS days
after written notice thereof from Landlord to Tenant. In the event that
Landlord serves Tenant with a notice to pay rent or quit pursuant to
applicable unlawful detainer statutes, such notice shall also constitute the
notice required by this Section 13.1(a).
(ii) The abandonment of the Premises by Tenant FOR THIRTY (30)
CONSECUTIVE DAYS in which event Landlord shall not be obligated to give any
notice of default to Tenant.
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(iii) The failure of Tenant to comply with any of its obligations under
Sections 6.1, 6.2(b), 7.2, 7.3, 8, 12, 18, 20, 22, 23, 25, 33, 34, and 55 and
59 where Tenant fails to comply with its obligations or fails to cure any
earlier breach of such obligation within TWENTY (20) days following written
notice from Landlord to Tenant; PROVIDED, HOWEVER, THAT IF THE NATURE OF
TENANT'S NON-PERFORMANCE IS SUCH THAT MORE THAN TWENTY (20) DAYS ARE
REASONABLY REQUIRED FOR ITS CURE, THEN TENANT SHALL NOT BE DEEMED TO BE IN
DEFAULT IF TENANT COMMENCES SUCH CURE WITHIN SAID TWENTY (20) DAY PERIOD AND
THEREAFTER DILIGENTLY PURSUES SUCH CURE TO COMPLETION. In the event Landlord
serves Tenant with a notice to quit or any other notice pursuant to
applicable unlawful detainer statutes, said notice shall also constitute the
notice required by this Section 13.1(c).
(iv) The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Tenant
(other than those referenced in Sections 13.1(a), (b) and (c), above), where
such failure shall continue for a period of THIRTY (30) days after written
notice thereof from Landlord to Tenant; provided, however, that if the nature
of Tenant's non-performance is such that more than THIRTY (30)days are
reasonably required for its cure, then Tenant shall not be deemed to be in
default if Tenant commences such cure within said THIRTY (30) day period and
thereafter diligently pursues such cure to completion. In the event that
Landlord serves Tenant with a notice to quit pursuant to applicable unlawful
detainer statutes, said notice shall also constitute the notice required by
this Section 13.1(d).
(v) (i) The making by Tenant or any guarantor of Tenant's obligations
hereunder of any general arrangement or general assignment for the benefit of
creditors; (ii) Tenant or any guarantor becoming a "debtor" as defined in 11
U.S.C. 101 or any successor statute thereto (unless, in the case of a
petition filed against Tenant or guarantor, the same is dismissed within
sixty (60) days); (iii) the appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at the Premises or
of Tenant's interest in this Lease, where possession is not restored to
Tenant within thirty (30) days; (iv) the attachment, execution or other
judicial seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where such seizure is not
discharged within thirty (30) days; or (v) the insolvency of Tenant. In the
event that any provision of this Section 13.1 (e) is contrary to any
applicable law, such provision shall be of no force or effect.
(vi) The discovery by Landlord that any financial statement,
representation or warranty given to Landlord by Tenant, or by any guarantor
of Tenant's obligations hereunder was materially false at the time given.
Tenant acknowledges that Landlord has entered into this Lease in material
reliance on such information.
(vii) If Tenant is a corporation, a partnership, or a limited liability
company, the dissolution or liquidation of Tenant.
(viii) If Tenant's obligations under this Lease are guaranteed;
(i) the death of a guarantor, (ii) the termination of a guarantor's liability
with respect to this Lease other than in accordance with the terms of such
guaranty, (iii) a guarantor becoming insolvent or the subject of a bankruptcy
filing, (iv) a guarantor's refusal to honor the guaranty, or (v) a
guarantor's breach of its guaranty obligation on an anticipatory breach
basis.
(b) REMEDIES.
(i) In the event of any material default or breach of this Lease by
Tenant, Landlord may, at any time thereafter, with or without notice or
demand, and without limiting Landlord in the exercise of any right or remedy
which Landlord may have by reason of such default:
(1) terminate Tenant's right to possession of the Premises by any
lawful means, in which case this Lease and the Term hereof shall terminate
and Tenant shall immediately surrender possession of the Premises to
Landlord. If
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Landlord terminates this Lease, Landlord may recover from Tenant (A) the
worth at the time of award of the unpaid rent which had been earned at the
time of termination; (B) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until
the time of award exceeds the amount of such rental loss that Tenant
proves could have been reasonably avoided; (C) the worth at the time of
award of the amount by which the unpaid rent for the balance of the Term
after the time of award exceeds the amount of such rental loss that Tenant
proves could be reasonably avoided; and (D) any other amount necessary to
compensate Landlord for all detriment proximately caused by Tenant's
failure to perform its obligations under the Lease or which in the
ordinary course of things would be likely to result therefrom, including,
but not limited to, the cost of recovering possession of the Premises,
expenses of releasing, including necessary renovation and alteration of
the Premises, reasonable attorneys' fees, any real estate commissions
actually paid by Landlord and the unamortized value of any free rent,
reduced rent, tenant improvement allowance or other economic concessions
provided by Landlord. The "worth at time of award" of the amounts referred
to in Section 13.2(a)(i)(A) and (B) shall be computed by allowing interest
at the lesser of ten percent (10%) per annum or the maximum interest rate
permitted by applicable law. The worth at the time of award of the amount
referred to in Section 1 3.2(a)(i)(C) shall be computed by discounting
such amount at the discount rate of the Federal Reserve Bank of Baltimore
at the time of award plus one percent (1%). For purposes of this Section
13.2(a)(1), "rent" shall be deemed to be all monetary obligations required
to be paid by Tenant pursuant to the terms of this Lease.
(2) maintain Tenant's right of possession in which event Landlord
shall have the remedy which permits Landlord to continue this Lease in
effect after Tenant's breach and abandonment and recover rent as it
becomes due.
(3) collect sublease rents (or appoint a receiver to collect such
rent) and otherwise perform Tenant's obligations at the Premises, it being
agreed, however, that the appointment of a receiver for Tenant shall not
constitute an election by Landlord to terminate this Lease.
(4) pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the state in which the Premises
are located.
(ii) No remedy or election hereunder shall be deemed exclusive, but
shall, wherever possible, be cumulative with all other remedies at law or in
equity. The expiration or termination of this Lease and/or the termination of
Tenant's right to possession of the Premises shall not relieve Tenant of
liability under any indemnify provisions of this Lease as to matters
occurring or accruing during the Term hereof or by reason of Tenant's
occupancy of the Premises.
(iii) If Tenant abandons or vacates the Premises, Landlord may re-enter
the Premises and such re-entry shall not be deemed to constitute Landlord's
election to accept a surrender of the Premises or to otherwise relieve Tenant
from liability for its breach of this Lease. No surrender of the Premiss
shall be effective against Landlord unless Landlord has entered into a
written agreement with Tenant in which Landlord expressly agrees to (i)
accept a surrender of the Premises and (ii) relieve Tenant of liability under
the Lease. The delivery by Tenant to Landlord of possession of the Premises
shall not constitute the termination of the Lease or the surrender of the
Premises.
(c) DEFAULT BY LANDLORD. Landlord shall not be in default under this Lease
unless Landlord fails to perform obligations required of Landlord within thirty
(30) days after written notice by Tenant to Landlord and to the holder of any
mortgage or deed of trust encumbering the Project whose name and address shall
have theretofore been furnished to Tenant in writing, specifying wherein
Landlord has failed to perform such obligation; provided, however, that if the
nature of Landlord's obligation is such that more than thirty (30) days are
required for its cure, then
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Landlord shall not be in default if Landlord commences performance within such
thirty (30) day period and thereafter diligently pursues the same to completion.
In no event shall Tenant have the right to terminate this Lease as a result of
Landlord's default, and Tenant's remedies shall be limited to damages and/or an
injunction. This Lease and the obligations of Tenant hereunder shall not be
affected or impaired because Landlord is unable to fulfill any of its
obligations hereunder or is delayed in doing so, if such inability or delay is
caused by reason of a Force Majeure Event, and the time for Landlord's
performance shall be extended for the period of any such delay. Any claim,
demand, right or defense by Tenant that arises out of this Lease or the
negotiations which preceded this Lease shall be barred unless Tenant commences
an action thereon, or interposes a defense by reason thereof, within ONE (1)
YEAR after the date of the inaction, omission, event or action that gave rise to
such claim, demand, right or defense.
(d) LATE CHARGES. Tenant hereby acknowledges that late payment by Tenant to
Landlord of Base Rent, Tenant's Share of Operating Expense increases, Tenant's
Share of Real Property Tax increases, parking charges, after hours HVAC charges,
or other sums due hereunder will cause Landlord to incur costs not contemplated
by this Lease, the exact amount of which will be extremely difficult to
ascertain. Such costs include, but are not limited to, processing and accounting
charges and late charges which may be imposed on Landlord by the terms of any
mortgage or trust deed encumbering the Project. Accordingly, if any installment
of Base Rent, Tenant's Share of Operating Expense increases, Tenant's Share of
Real Property Tax increases, parking charges, after hours HVAC charges or any
other sum due from Tenant shall not be received by Landlord WITHIN FIVE (5) DAYS
OF when such amount shall be due, then, without any requirement for notice or
demand to Tenant, Tenant shall immediately pay to Landlord a late charge equal
to FIVE PERCENT (5%) of such overdue amount. The parties hereby agree that such
late charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder including the assessment of interest under
Section 13.5. NOTWITHSTANDING THE FOREGOING, LANDLORD AGREES TO WAIVE IMPOSITION
OF SUCH LATE CHARGES ON ONE (1) OCCASION IN ANY TWELVE (12) MONTH PERIOD
PROVIDED THE OVERDUE PAYMENT IS MADE WITHIN SEVEN (7) BUSINESS DAYS AFTER
LANDLORD GIVES TENANT WRITTEN NOTICE THAT PAYMENT WAS NOT MADE WHEN DUE.
(e) INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein provided,
any amount due to Landlord that is not paid when due shall bear interest at the
lesser of ten percent (10%) per annum, or the maximum rate permitted by
applicable law. Payment of such interest shall not excuse or cure any default by
Tenant under this Lease; provided, however, that interest shall not be payable
on late charges incurred by Tenant nor on any amounts upon which late charges
are paid by Tenant.
(f) PAYMENT OF RENT AND SECURITY DEPOSIT AFTER DEFAULT. If Tenant fails to
pay Base Rent, Tenant's Share of Operating Expense increases, Tenant's Share of
Real Property Tax increases, parking charges or any other monetary obligation
due hereunder on the date it is due, after Tenant's SECOND failure to pay any
monetary obligation on the date it is due IN ANY TWELVE (12) MONTH PERIOD, at
Landlord's option, all monetary obligations of Tenant hereunder shall thereafter
be paid by cashiers check, and Tenant shall, upon demand, provide Landlord with
an additional Security Deposit equal to three (3) months' Base Rent. If Landlord
has required Tenant to make said payments by cashiers check or to provide an
additional Security Deposit, Tenant's failure to make a payment by cashiers
check or to provide an additional Security Deposit, shall be a material default
hereunder.
3. LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT. All covenants and
agreements to be kept or performed by Tenant under this Lease shall be performed
by Tenant at Tenant's sole cost and expense and without any reduction of rent.
If Tenant shall fail to perform any of its obligations under this Lease, within
a reasonable time after such performance is required by the terms of this Lease,
Landlord may, but shall not be obligated to, after three (3) BUSINESS days'
prior written notice to Tenant, make any such payment or perform any such act on
Tenant's behalf without waiving its rights based upon any default of Tenant and
without releasing Tenant from any obligations hereunder. Tenant shall pay to
Landlord, within TWENTY (20) days after delivery
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by Landlord to Tenant of statements therefor, an amount equal to the
expenditures reasonably made by Landlord in connection with the remedying by
Landlord of Tenant's defaults pursuant to the provisions of this Section 14.
4. CONDEMNATION. If any portion of the Premises or the Project are taken
under the power of eminent domain, or sold under the threat of the exercise of
said power (all of which are herein called "Condemnation"), this Lease shall
terminate as to the part so taken as of the date the condemning authority takes
title or possession, whichever first occurs provided that if so much of the
Premises or Project are taken by such Condemnation as would substantially and
adversely affect the operation and profitability of Tenant's business conducted
from the Premises, and said taking lasts for ninety (90) days or more, Tenant
shall have the option to be exercised only in writing within thirty (30) days
after Landlord shall have given Tenant written notice of such taking (or in the
absence of such notice, within thirty (30) days after the condemning authority
shall have taken possession), to terminate this Lease as of the date the
condemning authority takes such possession. If a taking lasts for less than
ninety (90) days, Tenant's rent shall be equitably abated during said period but
Tenant shall not have the right to terminate this Lease. If Tenant does not
terminate this Lease in accordance with the foregoing, this Lease shall remain
in full force and effect as to the portion of the Premises remaining, except
that the rent, Tenant's Share of Operating Expenses and Tenant's Share of Real
Property Tax increases shall be reduced in the proportion that the usable floor
area of the Premises taken bears to the total usable floor area of the Premises.
Common Areas taken shall be excluded from the Common Areas usable by Tenant and
no reduction of rent shall occur with respect thereto or by reason thereof.
Landlord shall have the option in its sole discretion to terminate this Lease as
of the taking of possession by the condemning authority, by giving written
notice to Tenant of such election within thirty (30) days after receipt of
notice of a taking by Condemnation of any part of the Premises or the Project.
Any award for the taking of all or any part of the Premises or the project under
the power of eminent domain or any payment made under threat of the exercise of
such power shall be the property of Landlord, whether such award shall be made
as compensation for diminution in value of the leasehold, for good will, for the
taking of the fee, as severance damages, or as damages for tenant improvements;
provided, however, that Tenant shall be entitled to any separate award for loss
of or damage to Tenant's removable personal property and for moving expenses. In
the event that this Lease is not terminated by reason of such Condemnation, and
subject to the requirements of any lender that has made a loan to Landlord
encumbering the Project, Landlord shall to the extent of severance damages
received by Landlord in connection with such Condemnation, repair any damage to
the Project caused by such Condemnation except to the extent that Tenant has
been reimbursed therefor by the condemning authority. Tenant shall pay any
amount in excess of such severance damages required to complete such repair.
This Section, not general principles of law or the Commonwealth of Virginia Code
of Civil Procedure shall govern the rights and obligations of Landlord and
Tenant with respect to the Condemnation of all or any portion of the Project.
5. VEHICLE PARKING.
(a) USE OF PARKING FACILITIES. During the Term and subject to the rules
and regulations attached hereto as Exhibit "C", as modified by Landlord from
time to time (the "Rules"), Tenant shall be entitled to use the number of
parking spaces set forth in Section 1.13 in the parking facility of the Project
at the monthly rate applicable from time to time for monthly parking as set by
Landlord and/or its licensee. Landlord may, in its sole discretion, assign
tandem parking spaces to Tenant and designate the location of any reserved
parking spaces. For purposes of this Lease, a "parking space" refers to the
space in which one (1) motor vehicle is intended to park (e.g., a tandem parking
stall includes two tandem parking spaces). Landlord reserves the right at any
time to relocate Tenant's reserved and unreserved parking spaces. If Tenant
commits or allows in the parking facility any of the activities prohibited by
the Lease or the Rules, then Landlord shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove or tow
away the vehicle involved and charge the cost to Tenant, which cost shall be
immediately payable by Tenant upon demand by Landlord. Tenant's parking rights
are the personal rights of Tenant and Tenant shall not transfer, assign, or
otherwise convey its parking rights separate and apart from this Lease.
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(b) PARKING CHARGES. The initial monthly parking rate per parking space is
set forth in Section 1.14 and is subject to change by Landlord, in Landlord 's
sole discretion, upon five (5) days' prior written notice to Tenant. Monthly
parking fees shall be payable in advance prior to the first day of each calendar
month. Visitor parking rates shall be determined by Landlord from time to time
in Landlord's sole discretion. The parking rates charged to Tenant or Tenant's
visitors may not be the lowest parking rates charged by Landlord for the use of
the parking facility. Notwithstanding anything to the contrary contained herein,
any tax imposed on the privilege of occupying space in the parking facility,
upon the revenues received by Landlord from the parking facility or upon the
charges paid for the privilege of using the parking facility by any governmental
or quasi-governmental entity may be added by Landlord to the monthly parking
charges paid by Tenant at any time, or Landlord may require Tenant and other
persons using the parking facility to pay said amounts directly to the taxing
authority. IN NO EVENT SHALL TENANT OR TENANT'S VISITORS BE OBLIGATED TO PAY
PARKING CHARGES DURING THE INITIAL TERM OF THIS LEASE.
6. BROKER'S FEE. Tenant and Landlord each represent and warrant to the other
that neither has had any dealings or entered into any agreements with any
person, entity, broker or finder other than the persons, if any, listed in
Section 1.15, in connection with the negotiation of this Lease, and no other
broker, person, or entity is entitled to any commission or finder's fee in
connection with the negotiation of this Lease, and Tenant and Landlord each
agree to indemnify, defend and hold the other harmless from and against any
claims, damages, costs, expenses, attorneys' fees or liability for compensation
or charges which may be claimed by any such unnamed broker, finder or other
similar party by reason of any dealings, actions or agreements of the
indemnifying party.
7. ESTOPPEL CERTIFICATE.
(a) DELIVERY OF CERTIFICATE. Tenant shall at any time upon not less than
ten (10) BUSINESS days' prior written notice from Landlord execute, acknowledge
and deliver to Landlord a statement in writing certifying such information as
Landlord may reasonably request including, but not limited to, the following:
(a) that this Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect) (b) the date to which the Base Rent and
other charges are paid in advance and the amounts so payable, (c) that there are
not, to Tenant's knowledge, any uncured defaults or unfulfilled obligations on
the part of Landlord, or specifying such defaults or unfulfilled obligations, if
any are claimed, (d) that all tenant improvements to be constructed by Landlord,
if any, have been completed in accordance with Landlord's obligations and (e)
that Tenant has taken possession of the Premises. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Project.
(b) FAILURE TO DELIVER CERTIFICATE. IF TENANT SHALL FALL TO EXECUTE AND
DELIVER SUCH STATEMENT WITHIN SUCH TEN (10) BUSINESS DAYS, THEN LANDLORD SHALL
SEND TENANT A SECOND WRITTEN REQUEST FOR SUCH STATEMENT. IF TENANT SHALL FAIL TO
SO EXECUTE AND DELIVER SUCH WRITTEN STATEMENT WITHIN FIVE (5) BUSINESS DAYS
AFTER THIS SECOND REQUEST THEN, AT Landlord's option, the failure of Tenant to
deliver such statement within such time FRAMES shall constitute a material
default of Tenant hereunder, or it shall be conclusive upon Tenant that (a) this
Lease is in full force and effect, without modification except as may be
represented by Landlord, (b) there are no uncured defaults in Landlord's
performance, (c) not more than one month's Base Rent has been paid in advance,
(d) all tenant improvements to be constructed by Landlord, if any, have been
completed in accordance with Landlord's obligations and (e) Tenant has taken
possession of the Premises.
8. LANDLORD'S LIABILITY. Tenant acknowledges that Landlord shall have the
right to transfer all or any portion of its interest in the Project and to
assign this Lease to the transferee. Tenant agrees that in the event of such a
transfer Landlord shall automatically be released from all liability under this
Lease ARISING AFTER SUCH TRANSFER; and Tenant hereby agrees to look solely to
Landlord's transferee for the performance of Landlord's obligations hereunder
after the date of the transfer. Upon such a transfer, Landlord shall, at its
option, return Tenant's Security Deposit to Tenant or transfer Tenant's Security
Deposit to Landlord's transferee and, in either event, Landlord shall have no
further liability to Tenant for the return of its Security Deposit. Subject to
the rights of any lender holding a mortgage or deed of trust encumbering all or
part of the Project, Tenant agrees to look solely to Landlord's equity interest
in the Project (WHICH FOR PURPOSES HEREIN SHALL
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INCLUDE ANY APPLICABLE INSURANCE OR CONDEMNATION PROCEEDS) for the collection of
any judgment requiring the payment of money by Landlord arising out of (a)
Landlord's failure to perform its obligations under this Lease or (b) the
negligence or willful misconduct of Landlord its partners, employees and agents.
No other property or assets of Landlord shall be subject to levy, execution or
other enforcement procedure for the satisfaction of any judgment or writ
obtained by Tenant against Landlord. No partner, employee or agent of Landlord
shall be personally liable for the performance of Landlord's obligations
hereunder or be named as a party in any lawsuit arising out of or related to,
directly or indirectly, this Lease and the obligations of Landlord hereunder.
The obligations under this Lease do not constitute personal obligations of the
individual partners of Landlord and Tenant shall not seek recourse against the
individual partners of Landlord or their assets.
9. INDEMNITY. Tenant hereby agrees to indemnify, defend and hold harmless
Landlord, and its employees, partners, agents, contractors, lenders and ground
lessors (said persons and entities are hereinafter collectively referred to as
the "Indemnified Parties") from and against any and all liability, loss, cost,
damage, claims, loss of rents, liens, judgments, penalties, fines, settlement
costs, investigation costs, the cost of consultants and experts, attorneys fees,
court costs and other legal expenses, the effects of environmental
contamination, the cost of environmental testing, the removal, remediation
and/or abatement of the effects of Hazardous Substances or Medical Waste (as
those terms are defined below), insurance policy deductibles and other expenses
(hereinafter collectively referred to as "Losses") arising out of or related to
an "Indemnified Matter" (as defined below). For purposes of this Section 20, an
"Indemnified Matter" shall mean any matter for which one or more of the
Indemnified Parties incurs liability or Losses if the Losses arise out of or
involve, directly or indirectly, (a) Tenant's or its employees agents,
contractors or invitees (all of said persons or entities are hereinafter
collectively referred to as "Tenant Parties") use or occupancy of the Premises
or the Project, (b) any act, omission or neglect of a Tenant Party, (c) Tenant's
failure to perform any of its obligations under the Lease, (d) the existence,
use or disposal of any Hazardous Substance (as defined in Section 22 below)
brought on to the Project by a Tenant Party, (e) the existence, use or disposal
of any Medical Waste (as described in Section 23 below) brought on to the
Project by a Tenant Party or (f) any other matters for which Tenant has agreed
to indemnify Landlord pursuant to any other provisions of this Lease. Tenant's
obligations hereunder shall include, but shall not be limited to (a)
compensating the Indemnified Parties for Losses arising out of Indemnified
Matters within ten (10) days after written demand from an Indemnified Party and
(b) providing a defense, with counsel reasonably satisfactory to the Indemnified
Party, at Tenant's sole expense, within ten (10) days after written demand from
the Indemnified Party, of any claims, action or proceeding arising out of or
relating to an Indemnified Matter whether or not litigated or reduced to
Judgment and whether or not well founded. If Tenant is obligated to compensate
an Indemnified Party for Losses arising out of an Indemnified Matter, Landlord
shall have the immediate and unconditional right, but not the obligation,
without notice or demand to Tenant, to pay the Losses to the Common Areas,
another tenant's premises or to any other part of the Project to be repaired and
to compensate other tenants of the Project or other persons or entities for
Losses arising out of an Indemnified Matter. The Indemnified Parties need not
first pay any Losses to be indemnified hereunder. Tenant's obligations under
this Section shall not be released, reduced or otherwise limited because one or
more of the Indemnified Parties are or may be actively or passively negligent
with respect to an Indemnified Matter or because an Indemnified Party is or was
partially responsible for the Losses incurred. This indemnity is intended to
apply to the fullest extent permitted by applicable law. Tenant's obligations
under this Section shall survive the expiration or termination of this Lease
unless specifically waived in writing by Landlord after said expiration or
termination.
10. EXEMPTION OF LANDLORD FROM LIABILITY. EXCEPT WHERE CAUSED BY THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT BY LANDLORD, ITS EMPLOYEES, AGENTS OR
CONTRACTORS, Tenant hereby agrees that Landlord shall not be liable for Injury
to Tenant's business or any loss of income therefrom or for loss of or damage to
the merchandise, tenant improvements, fixtures, furniture, equipment, computers,
files, automobiles, or other property of Tenant, Tenant's employees, agents,
contractors or invitees, or any other person in or about the Project, nor shall
Landlord be liable for injury to the person of Tenant, Tenant's employees,
agents, contractors or invitees, whether such damage or injury is caused by or
results from any cause whatsoever including, but not limited to, theft, criminal
activity at the Project, negligent security measures, bombings or bomb scares,
Hazardous Substances or Medical Waste, fire, steam, electricity, gas, water or
rain, flooding,
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breakage of pipes, sprinklers, plumbing, air conditioning or lighting fixtures,
or from any other cause, whether said damage or injury results from conditions
arising upon the Premises or upon other portions of the Project, or from other
sources or places, or from new construction or the repair, alteration or
improvement of any part of the Project, and UNLESS the cause of the damage or
injury arises out of Landlord's or its employees, agents or contractors gross
NEGLIGENCE or intentional acts. Landlord shall not be liable for any damages
arising from any act or neglect of any employees, agents, contractors or
invitees of any other tenant, occupant or user of the Project, nor from the
failure of Landlord to enforce the provisions of the lease of any other tenant
of the Project. Tenant, as a material part of the consideration to Landlord
hereunder, hereby assumes all risk of damage to Tenant's property or business or
injury to persons, in, upon or about the Project arising from any cause,
EXCLUDING Landlord's GROSS negligence or the GROSS negligence of its employees,
agents or contractors, and Tenant hereby waives all claims in respect thereof
against Landlord, its employees, agents and contractors.
SEE ADDENDUM PARAGRAPH 7
11. HAZARDOUS MATERIAL.
(a) DEFINITION AND CONSENT. The term "Hazardous Substance" as used in
this Lease shall mean any product, substance, chemical, material or waste whose
presence, nature, quantity and/or intensity of existence, use, manufacture,
disposal, transportation, spill, release or affect, either by itself or in
combination with other materials expected to be on the Premises, is either: (a)
potentially injurious to the public health, safety or welfare, the environment
or the Premises, (b) regulated or monitored by any governmental entity, (c) a
basis for liability of Landlord to any governmental entity or third party under
any federal, state or local statute or common law theory or (d) defined as a
hazardous material or substance by any federal, state or local law or
regulation. Except for small quantities of ordinary office supplies such as
copier toner, liquid paper, glue, ink and common household cleaning materials,
Tenant shall not cause or permit any Hazardous Substance to be brought, kept, or
used in or about the Premises or the Project by Tenant, its agents, employees,
contractors or invitees.
(b) DUTY TO INFORM LANDLORD. If Tenant knows, or has reasonable cause to
believe, that a Hazardous Substance, or a condition involving or resulting from
same, has come to be located in, on or under or about the Premises or the
Project, Tenant shall immediately give written notice of such fact to Landlord.
Tenant shall also immediately give Landlord (without demand by Landlord) a copy
of any statement, report, notice, registration, application, permit, license,
given to or received from, any governmental authority or private party, or
persons entering or occupying the Premises, concerning the presence, spill,
release, discharge of or exposure to, any Hazardous Substance or contamination
in, on or about the Premises or the Project.
(c) INSPECTION; COMPLIANCE. Landlord and Landlord's employees, agent,
contractors and lenders shall have the right to enter the Premises at any time
in the case of an emergency, and otherwise at reasonable times, for the purpose
of inspecting the condition of the Premises and for verifying compliance by
Tenant with this Section 22. Landlord shall have the right to employ experts
and/or consultants in connection with its examination of the Premises and with
respect to the Installation, operation, use monitoring, maintenance, or removal
of any Hazardous Substance on or from the Premises. The costs and expenses of
any such inspections shall be paid by the party requesting same, unless a
contamination, caused or materially contributed to by Tenant, is found to exist
or be imminent, or unless the inspection is requested or ordered by governmental
authority as the result of any such existing or imminent violation or
contamination. In any such case, Tenant shall upon request reimburse Landlord
for the cost and expenses of such inspection.
12. MEDICAL WASTE.
(a) DISPOSAL OF MEDICAL WASTE. Tenant hereby agrees, at Tenant's sole
expense, to dispose of its medical waste in compliance with all federal. state
and local laws, rules and regulations relating to the disposal of medical waste
and to dispose of the medical waste in a prudent and reasonable manner. Tenant
shall not place any medical waste in refuse containers emptied by Landlord's
janitorial staff or in the Project's refuse containers. At Landlord's option, in
Landlord's
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sole discretion, Landlord shall have the right, upon sixty (60) days' advance
written notice to Tenant, at any time and from time to time, to elect to provide
medical waste disposal services to Tenant. If Landlord elects to provide medical
waste disposal services to Tenant, all costs incurred by Landlord in providing
such services shall be paid by Tenant to Landlord as additional rent. Landlord
may ▇▇▇▇ Tenant for said costs based upon the actual cost of providing said
services to Tenant, as determined by Landlord, in Landlord's sole discretion, or
Landlord may ▇▇▇▇ said expenses based upon Tenant's Share of the total cost of
providing said services.
(b) DUTY TO INFORM LANDLORD. Within ten (10) days following Landlord's
written request, Tenant shall provide Landlord with any information requested by
Landlord concerning the existence, generation or disposal of medical waste at
the Premises, including, but not limited to, the following information: (a) the
name, address and telephone number of the person or entity employed by Tenant to
dispose of its medical waste, including a copy of any contract with said person
or entity, (b) a list of each type of medical waste generated by Tenant at the
Premises and a description of how Tenant disposes of said medical waste, (c) a
copy of any laws, rules or regulations in Tenant's possession relating to the
disposal of the medical waste generated by Tenant, and (d) copies of any
licenses or permits obtained by Tenant in order to generate or dispose of said
medical waste. Tenant shall also immediately provide to Landlord (without demand
by Landlord) a copy of any notice, registration, application, permit, or license
given to or received from any governmental authority or private party, or
persons entering or occupying the Premises, concerning the presence, release,
exposure or disposal of any medical waste in or about the Premises or the
Project.
(c) INSPECTION; COMPLIANCE. Landlord and Landlord's employees, agents,
contractors and lenders shall have the right to enter the Premises at any time
in the case of an emergency, and otherwise at reasonable times, for the purpose
of verifying compliance by Tenant with this Section 23. Landlord shall have the
right to employ experts and/or consultants in connection with its examination of
the Premises and with respect to the generation and disposal of medical waste on
or from the Premises. The cost and expenses of any such inspection shall be paid
by Landlord, unless it is determined that Tenant is not disposing of its medical
waste in a manner permitted by applicable law, in which case Tenant shall
immediately reimburse Landlord for the cost of such inspection.
13. TENANT IMPROVEMENTS. Tenant acknowledges and agrees that Landlord shall
not be obligated to construct any tenant improvements on behalf of Tenant unless
a work letter agreement (the 'Work Letter") is attached to this Lease as
Schedule 1. If a space plan is attached to the Work Letter, the space plan shall
not be binding on Landlord unless the space plan has been approved by Landlord
In writing. Except as set forth in a Work Letter, it is specifically understood
and agreed that Landlord has no obligation and has made no promises to alter,
remodel, improve, renovate, repair or decorate the Premises, the Project, or any
part thereof, or to provide any allowance for such purposes, and that no
representations respecting the condition of the Premises or the Project have
been made by Landlord to Tenant.
SEE ADDENDUM PARAGRAPH 8
14. SUBORDINATION.
(a) EFFECT OF SUBORDINATION. This Lease, and any Option (as defined in
Section 26 below) granted hereby, upon Landlord's written election, shall be
Subject and subordinate to any ground lease, mortgage, deed of trust, or any
other hypothecation or security now or hereafter placed upon the Project and to
any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed if Tenant is not in default BEYOND THE
EXPIRATION OF ANY APPLICABLE NOTICE AND CURE PERIOD and so long as Tenant shall
pay the rent and observe and perform all of the provisions of this Lease, unless
this Lease is otherwise terminated pursuant to its terms. At the request of any
mortgagee, trustee or ground lessor, Tenant shall attorn to such person or
entity. If any mortgagee, trustee or ground lessor shall elect to have this
Lease and any Options granted hereby prior to the lien of its mortgage, deed of
trust or ground lease, and shall give written notice thereof to Tenant, this
Lease and such Options shall be deemed prior to such mortgage, deed of trust or
ground lease, whether this Lease or such Options
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are dated prior or subsequent to the date of said mortgage, deed of trust or
ground lease or the date of recording thereof. In the event of the foreclosure
of a security device, the new owner shall not (a) be liable for any act or
omission of any prior landlord or with respect to events occurring prior to its
acquisition of title, (b) be liable for the breach of this Lease by any prior
landlord, (c) be subject to any offsets or defenses which Tenant may have
against the prior landlord or (d) be liable to Tenant for the return of its
Security Deposit. IN THE EVENT THAT THE PROJECT SHALL BECOME SUBJECT TO ANY LIEN
OF ANY GROUND LEASE, MORTGAGE, DEED OF TRUST OR ANY OTHER HYPOTHECATION OR
SECURITY AFTER THE COMMENCEMENT DATE, LANDLORD SHALL USE REASONABLE EFFORTS TO
OBTAIN A SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT ON BEHALF OF
TENANT.
(b) EXECUTION OF DOCUMENTS. Tenant agrees to execute and acknowledge any
documents Landlord reasonably requests that Tenant execute to effectuate an
attornment, a subordination, or to make this Lease or any Option granted herein
prior to the lien of any mortgage, deed of trust or ground lease, as the case
may be. Tenant acknowledges that the subordination agreement may give the lender
the right, in the lender's sole discretion, to continue this Lease in effect or
to terminate this Lease in the event of a foreclosure sale. Tenant's failure to
execute such documents within ten (10) days after written demand shall
constitute a material default by Tenant hereunder
15. OPTIONS.
(a) DEFINITION. As used in this Lease, the word "Option" has the
following meaning: (1) the right or option to extend the Term of this Lease or
to renew this Lease, and (2) the option or right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease other space within the Project or the right of first offer to
lease other space within the Project, and (3) the right or option to terminate
this Lease prior to its expiration date or to reduce the size of the Premises.
Any Option granted to Tenant by Landlord must be evidenced by a written option
agreement attached to this Lease as a rider or addendum or said option shall be
of no force or effect.
(b) OPTIONS PERSONAL. Each Option granted to Tenant in this Lease, if
any, is personal to the original Tenant and ANY PERMITTED TRANSFEREE AS DEFINED
IN PARAGRAPH 6 OF THE ADDENDUM AND may be exercised only by the original Tenant
OR PERMITTED TRANSFEREE while occupying the entire Premises and may not be
exercised or be assigned, voluntarily or involuntarily, by or to any person or
entity other than Tenant. The Options, if any, herein granted to Tenant are not
assignable separate and apart from this Lease, nor may any Option be separated
from this Lease in any manner, either by reservation or otherwise. If at any
time an Option is exercisable by Tenant, the Lease has been assigned, or a
sublease exists as to MORE THAN TWENTY FIVE PERCENT (25%) of the Premises IN THE
AGGREGATE, the Option shall be deemed null and void and neither Tenant nor any
assignee or subtenant shall have the right to exercise the Option.
(c) MULTIPLE OPTIONS. In the event that Tenant has multiple Options to
extend or renew this Lease a later Option cannot be exercised unless the prior
Option to extend or renew this Lease has been so exercised.
(d) EFFECT OF DEFAULT ON OPTIONS. Tenant shall have no right to exercise
an Option if Tenant is in default BEYOND ANY APPLICABLE NOTICE AND CURE PERIOD
of any of the terms, covenants or conditions of this Lease. The period of time
within which an Option may be exercised shall not be extended or enlarged by
reason of Tenant's inability to exercise an Option because of the provisions of
this Section 26.4.
(e) LIMITATIONS ON OPTIONS. Notwithstanding anything to the contrary
contained in any rider or addendum to this Lease, any options, rights of first
refusal or rights of first offer
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granted hereunder shall be Subject and secondary to Landlord's right to first
offer and lease any such space to any tenant who is then occupying or leasing
such space at the time the space becomes available for leasing and shall be
Subject and subordinated to any other options, rights of first refusal or rights
of first offer previously given to any other person or entity.
(f) NOTICE OF EXERCISE OF OPTION. Notwithstanding anything to the
contrary contained in Section 40, Tenant may only exercise an option by
delivering its written notice of exercise to Landlord by certified mail, return
receipt and date of delivery requested. It shall be Tenant's obligation to prove
that such notice was so sent in a timely manner and was delivered to Landlord by
the U.S. Postal Service.
SEE ADDENDUM PARAGRAPH 9
16. LANDLORD RESERVATIONS. Landlord shall have the right: (a) to change the
name and address of the Project or Building upon not less than ninety (90) days
prior written notice; (b) to, at Tenant's expense, provide and install Building
standard graphics on or near the door of the Premises and such portions of the
Common Areas as Landlord shall determine, in Landlord's sole discretion; (c) to
permit any tenant the exclusive right to conduct any business as long as such
exclusive right does not conflict with any rights expressly given herein; and
(d) to place signs, notices or displays upon the roof, interior, exterior or
Common Areas of the Project. Tenant shall not use a representation (photographic
or otherwise) of the Building or the Project or their name(s) in connection with
Tenant's business or suffer or permit anyone, except in an emergency, to go upon
the roof of the Building. Landlord reserves the right to use the exterior walls
of the Premises, and the area beneath, adjacent to and above the Premises,
together with the right to install, use, maintain and replace equipment,
machinery, pipes, conduits and wiring through the Premises, which serve other
parts of the Project, provided that Landlord's use does not unreasonably
interfere with Tenant's use of the Premises.
17. CHANGES TO PROJECT. Landlord shall have the right, in Landlord's sole
discretion, from time to time, to make changes to the size, shape, location,
number and extent of the improvements comprising the Project (hereinafter
referred to as "Changes") including, but not limited to, the Project interior
and exterior, the Common Areas, elevators, escalators, restrooms, HVAC,
electrical systems, communication systems, fire protection and detection
systems, plumbing systems, security systems, parking control systems, driveways,
entrances, parking spaces, parking areas and landscaped areas. In connection
with the Changes, Landlord may, among other things, erect scaffolding or other
necessary structures at the Project, limit or eliminate access to portions of
the Project, including portions of the Common Areas, or perform work in the
Building, which work may create noise, dust or leave debris in the Building.
Tenant hereby agrees that such Changes and Landlord's actions in connection with
such Changes shall in no way constitute a constructive eviction of Tenant or
entitle Tenant to any abatement of rent. Landlord shall have no responsibility
or for any reason be liable to Tenant for any direct or indirect injury to or
interference with Tenant's business arising from the Changes, nor shall Tenant
be entitled to any compensation or damages from Landlord for any inconvenience
or annoyance occasioned by such Changes or Landlord's actions in connection with
such Changes. LANDLORD SHALL USE COMMERCIALLY REASONABLE EFFORTS TO MINIMIZE
UNREASONABLE INTERFERENCE WITH TENANT'S USE AND OCCUPANCY OF THE PREMISES DURING
ANY SUCH CHANGES.
18. SUBSTITUTION OF OTHER PREMISES.
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19. HOLDING OVER. If Tenant remains in possession of the Premises or any
part thereof after the expiration or earlier termination of tho term hereof with
Landlord's consent, such occupancy shall bo a tenancy from month to month upon
all the terms and conditions of this Lease pertaining to tho obligations of
Tenant, except that tho Base Rent payable shall be ONE HUNDRED FIFTY PERCENT
(150%) of the Base Rent payable immediately preceding the termination date of
this lease or and all Options, if any, shall be deemed terminated and be of no
further effect. If Tenant remains in possession of the Premises or any part
thereof after the expiration of the Term hereof without Landlord's consent,
Tenant shall, at Landlord's option, be treated as a tenant at sufferance or a
trespasser. Nothing contained herein shall be construed to constitute Landlord's
consent to Tenant holding over at the expiration or earlier termination of the
Term. Tenant hereby agrees to indemnify, hold harmless and defend Landlord from
any cost, loss, claim or liability (including attorneys' fees) Landlord may
incur as a result of Tenant's failure to surrender possession of the Premises to
Landlord upon the termination of this Lease.
20. LANDLORD'S ACCESS.
(a) ACCESS. UPON REASONABLE ADVANCE WRITTEN NOTICE, EXCEPT IN THE EVENT
OF AN EMERGENCY, WHERE NO NOTICE SHALL BE REQUIRED, Landlord and Landlord's
agent's contractors and employees shall have the right to enter the Premises at
reasonable times for the purpose of inspecting the Premises, performing any
services required of Landlord, showing the Premises to prospective purchasers,
lenders, or tenants, undertaking safety measures and making alterations,
repairs, improvements or additions to the Premises or to the Project. In the
event of an emergency, Landlord may gain access to the Premises by any
reasonable means, and Landlord shall not be liable to Tenant for damage to the
Premises or to Tenant's property resulting from such access. Landlord may at any
time place on or about the Building for sale or for lease signs and Landlord may
at any time during the last one hundred twenty (120) days of the Term hereof
place on or about the Premises for lease signs.
(b) KEYS. Landlord shall have the right to retain keys to the locks on
the entry doors to the Premises and all interior doors at the Premises. At
Landlord's option, Landlord may require Tenant to obtain all keys to door locks
at the Premises from Landlord's engineering staff or Landlord's locksmith and to
only use Landlord's engineering staff or Landlord's locksmith to change locks at
the Premises. Tenant shall pay Landlord's or its locksmith's standard charge for
all keys and other services obtained from Landlord's engineering staff or
locksmith.
21. SECURITY MEASURES. Tenant hereby acknowledges that Landlord shall have
no obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises or the Project, and Landlord shall have no liability
to Tenant due to its failure to provide such services. Tenant assumes all
responsibility for the protection of Tenant, its agents, employees, contractors
and invitees and the property of Tenant and of Tenant's agents, employees,
contractors and invitees from acts of third parties. Nothing herein contained
shall prevent Landlord, at Landlord's
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sole option, from implementing security measures for the Project or any part
thereof, in which event Tenant shall participate in such security measures and
the cost thereof shall be included within the definition of Operating Expenses,
and Landlord shall have no liability to Tenant and its agents, employees,
contractors and invitees arising out of Landlord's negligent provision of
security measures. Landlord shall have the right, but not the obligation, to
require all persons entering or leaving the Project to identify themselves to a
security guard and to reasonably establish that such person should be permitted
access to the Project. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED FN
THIS SECTION 32, LANDLORD SHALL, THROUGHOUT THE TERM OF THIS LEASE AND ANY
EXTENSIONS THEREOF, PROVIDE ACCESS CONTROL MEASURES COMMENSURATE WITH THOSE
SERVICES BEING PROVIDED AT THE TIME OF EXECUTION OF THIS LEASE.
22. EASEMENTS. Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Landlord deems necessary or
desirable, and to cause the recordation of parcel maps and restrictions, so long
as such easements, rights, dedications, maps and restrictions do not
unreasonably interfere with the use of the Premises by Tenant. Tenant shall sign
any of the aforementioned documents within ten (10) days after Landlord's
request and Tenant's failure to do so shall constitute a material default by
Tenant. The obstruction of Tenant's view, air, or light by any structure erected
in the vicinity of the Project, whether by Landlord or third parties, shall in
no way affect this Lease or impose any liability upon Landlord.
23. TRANSPORTATION MANAGEMENT. Tenant shall fully comply at its sole expense
with all present or future programs implemented or required by any governmental
or quasi-governmental entity or Landlord to manage parking, transportation, air
pollution, or traffic in and around the Project or the metropolitan area in
which the Project is located.
24. SEVERABILITY. The invalidity of any provision of this Lease as determined
by a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof.
25. TIME OF ESSENCE. Time is of the essence with respect to each of the
obligations to be performed by Tenant and Landlord under this Lease.
26. DEFINITION OF ADDITIONAL RENT. All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, but not limited to, Base
Rent, Tenant's Share of Operating Expenses, Tenant's Share of Real Property
Taxes, parking charges, late charges and charges for after hours HVAC shall be
deemed to be rent.
27. INCORPORATION OF PRIOR AGREEMENTS. This Lease and the attachments listed
in Section 1.16 contain all agreements of the parties with respect to the lease
of the Premises and any other matter mentioned herein. No prior or
contemporaneous agreement or understanding pertaining to any such matter shall
be effective. Except as otherwise stated in this Lease, Tenant hereby
acknowledges that no real estate broker nor Landlord or any employee or agents
of any of said persons has made any oral or written warranties or
representations to Tenant concerning the condition or use by Tenant of the
Premises or the Project or concerning any other matter addressed by this Lease.
28. AMENDMENTS. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification.
29. NOTICES. Subject to the requirements of Section 26.6 of this Lease, all
notices required or permitted by this Lease shall be in writing and may be
delivered (a) in person (by hand, by messenger or by courier service), (b) by
U.S. Postal Service regular mail, (c) by U.S. Postal Service certified mail,
return receipt requested, OR (d) by U.S. Postal Service Express Mail, Federal
Express or other overnight courier, or and shall be deemed sufficiently given if
served in a manner specified in this Section 40. Any notice permitted or
required hereunder, and any notice to pay rent or quit or similar notice, shall
be deemed personally delivered to Tenant on the date the notice is personally
delivered to any employee of Tenant at the Premises. The addresses set forth in
Section 1.17 of this Lease shall be the address of each party for notice
purposes. Landlord or Tenant may by written notice to the other specify a
different address for notices purposes, except that upon Tenant's taking
possession of the Premises, the Premises shall
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constitute Tenant's address for the purpose of mailing or delivering notices to
Tenant. A copy of all notices required or permitted to be given to Landlord
hereunder shall be concurrently transmitted to such party or parties at such
addresses as Landlord may from time to time hereinafter designate by written
notice to Tenant. Any notice sent by regular mail or by certified mail, return
receipt requested, shall be deemed given ON THE DATE RECEIVED BY THE APPROPRIATE
PARTY. Notices delivered by U.S. Express Mail, Federal Express or other courier
shall be deemed given on the date delivered by the carrier to the appropriate
party's address for notice purposes. A copy of all notices delivered to a party
by facsimile transmission shall also be mailed to the party on the date the
facsimile transmission is completed. If notice is received on Saturday, Sunday
or a legal holiday, it shall be deemed received on the next business day.
Nothing contained herein shall be construed to limit Landlord's right to serve
any notice to pay rent or quit or similar notice by any method permitted by
applicable law, and any such notice shall be effective if served in accordance
with any method permitted by applicable law whether or not the requirements of
this Section have been met.
30. WAIVERS. No waiver by Landlord or Tenant of any provisions hereof shall
be deemed a waiver of any other provision hereof or of any subsequent breach by
Landlord or Tenant of the same or any other provision. Landlord's consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act by Tenant. The
acceptance of rent hereunder by Landlord shall not be a waiver of any preceding
breach by Tenant of any provision hereof, other than the failure of Tenant to
pay the particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent. No acceptance by
Landlord of partial payment of any sum due from Tenant shall be deemed a waiver
by Landlord of its right to receive the full amount due, nor shall any
endorsement or statement on any check or accompanying letter from Tenant be
deemed an accord and satisfaction. Tenant hereby waives for Tenant and all those
claiming under Tenant all rights now or hereafter existing to redeem by order or
judgment of any court or by legal process or writ, Tenant's right of occupancy
of the Premises after termination of this Lease.
31. COVENANTS. This Lease shall be construed as though the covenants
contained herein are independent and not dependent and Tenant hereby waives the
benefit of any statute to the contrary. All provisions of this Lease to be
observed or performed by Tenant are both covenants and conditions.
32. BINDING EFFECT, CHOICE OF LAW. Subject to any provision hereof
restricting assignment or subletting by Tenant, this Lease shall bind the
parties, their heirs, personal representatives, successors and assigns. This
Lease shall be governed by the laws of the state in which the Project is located
and any litigation concerning this Lease between the parties hereto shall be
initiated in the county in which the Project is located.
33. ATTORNEYS' FEES. If Landlord or Tenant brings an action to enforce the
terms hereof or declare rights hereunder, the prevailing party in any such
action, or appeal thereon, shall be entitled to its reasonable attorneys' fees
and court costs to be paid by the losing party as fixed by the court in the same
or separate suit, and whether or not such action is pursued to decision or
judgment. The attorneys' fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
and court costs reasonably incurred in good faith. Landlord shall be entitled to
reasonable attorneys' fees and all other costs and expenses incurred in the
preparation and service of notices of default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in connection
with such default. Landlord and Tenant agree that attorneys' fees incurred with
respect to defaults and bankruptcy are actual pecuniary losses within the
meaning of Section 365(b)(1)(B) of the Bankruptcy Code or any successor statute.
34. AUCTIONS. Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas.
The holding of any auction on the Premises or Common Areas in violation of this
Section 45 shall constitute a material default hereunder.
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35. SIGNS. Tenant shall not place any sign upon the Premises (including on
the inside or the outside of the doors or windows of the Premises) or the
Project without Landlord's prior written consent, which may be given or withheld
in Landlord's sole discretion. Landlord shall have the right to place any sign
it deems appropriate on any portion of the Project except the interior of the
Premises. Any sign Landlord permits Tenant to place upon the Premises shall be
maintained by Tenant, at Tenant's sole expense. If Landlord permits Tenant to
include its name in the Building's directory, the cost of placing Tenant's name
in the directory and the cost of any subsequent modifications thereto shall be
paid by Tenant, at Tenant's sole expense.
36. MERGER. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, or a termination by Landlord, shall not result in
the merger of Landlord's and Tenant's estates, and shall, at the option of
Landlord, terminate all or any existing subtenancies or may, at the option of
Landlord, operate as an assignment to Landlord of any or all of such
subtenancies.
37. QUIET POSSESSION. Subject to the other terms and conditions of this
Lease, and the rights of any lender, and provided Tenant is not in default
hereunder, Tenant shall have quiet possession of the Premises for the entire
term hereof, Subject to all of the provisions of this Lease.
38. AUTHORITY. If Tenant is a corporation, trust, general or limited
partnership, or other entity, Tenant, and each individual executing this Lease
on behalf of such entity, represents and warrants that such individual is duly
authorized to execute and deliver this Lease on behalf of said entity, that said
entity is duly authorized to enter into this Lease, and that this Lease is
enforceable against said entity in accordance with its terms. If Tenant is a
corporation, trust or partnership, Tenant shall deliver to Landlord upon demand
evidence of such authority satisfactory to Landlord.
39. CONFLICT. Except as otherwise provided herein to the contrary, any
conflict between the printed provisions, exhibits, addenda or riders of this
Lease and the typewritten or handwritten provisions, if any, shall be controlled
by the typewritten or handwritten
40. MULTIPLE PARTIES. If more than one person or entity is named as Tenant
herein, the obligations of Tenant shall be the joint and several responsibility
of all persons or entities named herein as Tenant. Service of a notice in
accordance with Section 40 on one Tenant shall be deemed service of notice on
all Tenants.
41. INTERPRETATION. This Lease shall be interpreted as if it was prepared by
both parties and ambiguities shall not be resolved in favor of Tenant because
all or a portion of this Lease was prepared by Landlord. The captions contained
in this Lease are for convenience only and shall not be deemed to limit or alter
the meaning of this Lease. As used in this Lease the words tenant and landlord
include the plural as well as the singular. Words used in the neuter gender
include the masculine and feminine gender.
42. PROHIBITION AGAINST RECORDING. Neither this Lease, nor any memorandum,
affidavit or other writing with respect thereto, shall be recorded by Tenant or
by anyone acting through, under or on behalf of Tenant. Landlord shall have the
right to record a memorandum of this Lease, and Tenant shall execute,
acknowledge and deliver to Landlord for recording any memorandum prepared by
Landlord.
43. RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall be deemed
or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, Joint venturer or any
association between Landlord and Tenant.
44. RULES AND REGULATIONS. Tenant agrees to abide by and conform to the Rules
and to cause its employees, suppliers, customers and invitees to so abide and
conform. Landlord shall have the right, from time to time, to modify, amend and
enforce the Rules. Landlord shall not be responsible to Tenant for the failure
of other persons including, but not limited to, other tenants, their agents,
employees and invitees to comply with the Rules. LANDLORD AGREES TO ENFORCE THE
RULES IN
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A UNIFORM AND NONDISCRIMINATORY MANNER. IF ANY CONFLICT EXISTS BETWEEN THE RULES
AND THE PROVISIONS OF THIS LEASE, THE LATER SHALL CONTROL.
45. RIGHT TO LEASE. Landlord reserves the absolute right to effect such other
tenancies in the Project as Landlord in its sole discretion shall determine, and
Tenant is not relying on any representation that any specific tenant or number
of tenants will occupy the Project.
46. SECURITY INTEREST. In consideration of the covenants and agreements
contained herein, and as a material consideration to Landlord for entering into
this Lease, Tenant hereby unconditionally grants to Landlord a continuing
security interest in and to all personal property of Tenant located or left at
the Premises and the Security Deposit, if any, and any advance rent payment or
other deposit, nor in or hereafter delivered to or coming into the possession,
custody or control of Landlord, by or for the account of Tenant, together with
any increase in profits or proceeds from such property. The security interest
granted to landlord hereunder secures payment and performance of all obligations
of Tenant under this Lease now or hereafter arising or existing, whether direct
or indirect, absolute or contingent, or due or to become due. In the event of a
default under this Lease which is not cured within the applicable grace period,
if any, Landlord is and shall be entitled to all the rights, powers and remedies
granted a secured party under the Commonwealth of Virginia Commercial Code and
otherwise available at law or in equity, including, but not limited to, the
right to retain as damages the personal property, Security Deposit and other
funds held by Landlord, without additional notice or demand regarding this
security interest. Tenant agrees that it will execute such other documents or
Instruments as may be reasonably necessary to carry out and effectuate the
purpose and terms of this Section, or as otherwise reasonably requested by
Landlord, including without limitation, execution of a UCC-1 financing
statement. Tenant's failure to execute such documents within ten (10) days after
written demand shall constitute a material default by Tenant hereunder and, at
Landlord's option, Landlord shall have the right to execute such documents on
behalf of Tenant as Tenant's attorney-in-fact. Tenant does hereby make,
constitute and irrevocably appoint Landlord as Tenant's attorney-in-fact, and
Landlord shall have the right to execute such documents in Tenant's name. Tenant
hereby waives any rights it may have under the Commonwealth of Virginia Civil
Code which are inconsistent with Landlord's rights under this Section.
Landlord's rights under this Section are in addition to Landlord's rights under
Sections 5 and 13. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SECTION
57 OF THIS LEASE, THE SECURITY INTEREST GRANTED BY TENANT TO LANDLORD SHALL BE
AUTOMATICALLY SUBORDINATED TO THE SECURITY INTEREST, IF ANY, GRANTED TO TENANT'S
LENDERS IN THE ORDINARY COURSE OF TENANT'S BUSINESS. AT TENANT'S REQUEST,
LANDLORD SHALL EXECUTE A LIEN WAIVER, THE FORM OF WHICH SHALL BE REASONABLY
SATISFACTORY TO LANDLORD, WAIVING LANDLORD'S SECURITY INTEREST IN THE COLLATERAL
DESCRIBED IN ANY SUCH LIEN WAIVER (WHICH COLLATERAL SHALL EXCLUDE THE
IMPROVEMENTS AND ANY FIXTURES INSTALLED IN THE PREMISES).
47. SECURITY FOR PERFORMANCE OF TENANT'S OBLIGATIONS. Notwithstanding any
Security Deposit held by Landlord pursuant to Section 5 and any security
interest held by Landlord pursuant to Section 57, Tenant hereby agrees that in
the event of a default by Tenant, Landlord shall be entitled to seek and obtain
a writ of attachment and/or a temporary protective order and Tenant hereby
waives any rights or defenses to contest such a writ of attachment and/or
temporary protective order on the basis of the Commonwealth of Virginia Code of
Civil Procedure or any other related statute or rule.
48. FINANCIAL STATEMENTS. From time to time, at Landlord's request, BUT NOT
MORE THAN TWO (2) TIMES IN ANY TWELVE (12) MONTH PERIOD, Tenant shall cause the
following financial information to be delivered to Landlord, at Tenant's sole
cost and expense, upon not less than ten (10) BUSINESS days' advance written
notice from Landlord: (a) a current financial statement for Tenant , (b) a
current financial statement for any guarantor(s) of this Lease and the
guarantor's financial statements for the previous two accounting years and (c)
such other financial information pertaining to Tenant or any guarantor as
Landlord or any lender or purchaser of Landlord may reasonably request. All
financial statements shall be prepared in accordance with generally accepted
accounting principals consistently applied and, if such is the normal practice
of Tenant, shall be audited by an independent certified public accountant.
Tenant hereby authorizes Landlord, from time to time, without notice to Tenant,
to obtain a credit report or credit history on Tenant form any credit reporting
company.
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49. ATTACHMENTS. The items listed in Section 1.16 are a part of this Lease
and are incorporated herein by this reference.
50. CONFIDENTIALITY. Tenant acknowledges and agrees that the terms of this
Lease are confidential and constitute propriety information of Landlord.
Disclosure of the terms hereof could adversely affect the ability of Landlord to
negotiate other leases with respect to the Project and may impair Landlord's
relationship with other tenants of the Project. Tenant agrees that it and its
partners, officers, directors, employees, brokers, and attorneys, if any, shall
not disclose the terms and conditions of this Lease to any other person or
entity without the prior written consent of Landlord which may be given or
withheld by Landlord, in Landlord's sole discretion. It is understood and agreed
that damages alone would be an inadequate remedy for the breach of this
provision by Tenant, and Landlord shall also have the right to seek specific
performance of this provision and to seek injunctive relief to prevent its
breach or continued breach.
51. WAIVER OF JURY TRIAL. LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE
RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR
CROSS-COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER
LANDLORD AGAINST TENANT OR TENANT AGAINST LANDLORD ON ANY MATTER WHATSOEVER
ARISING OUT OF, OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF INJURY
OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, OR
REGULATION, EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT.
LANDLORD AND TENANT ACKNOWLEDGE THAT THEY HAVE CAREFULLY READ AND REVIEWED THIS
LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS
LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY
AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND
TENANT WITH RESPECT TO THE PREMISES. TENANT ACKNOWLEDGES THAT IT HAS BEEN GIVEN
THE OPPORTUNITY TO HAVE THIS LEASE REVIEWED BY ITS LEGAL COUNSEL PRIOR TO ITS
EXECUTION. PREPARATION OF THIS LEASE BY LANDLORD OR LANDLORD'S AGENT AND
SUBMISSION OF SAME TO TENANT SHALL NOT BE DEEMED AN OFFER BY LANDLORD TO LEASE
THE PREMISES TO TENANT OR THE GRANT OF AN OPTION TO TENANT TO LEASE THE
PREMISES. THIS LEASE SHALL BECOME BINDING UPON LANDLORD AND TENANT ONLY WHEN
FULLY EXECUTED BY BOTH PARTIES AND WHEN LANDLORD HAS DELIVERED A FULLY EXECUTED
ORIGINAL OF THIS LEASE TO TENANT.
THE REALTY ASSOCIATES FUND HIGH SPEED ACCESS,
III, L.P., a Delaware limited partnership a _______________ corporation
By: Realty Associates Fund III GP Limited Partnership, By: /s/ High Speed Access Corp.
General Partner -----------------------------------
-----------------------------------
By: Realty Fund III GP, Inc., (print name)
General Partner
Its:
----------------------------------
(print title)
By: /s/ Realty Fund III GP, Inc.
------------------------------------
------------------------------------
(print name)
Its:
-----------------------------------
(print title)
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ADDENDUM
THIS ADDENDUM (the "Addendum") is attached to the Lease dated as of August
20, 1999 by and between THE REALTY ASSOCIATES FUND III, L.P., a Delaware limited
partnership ("Landlord") and HIGH SPEED ACCESS, a __________ ("Tenant") and
incorporated herein by reference thereto. To the extent that there are any
conflicts between the provisions of the Lease and the provisions of this
Addendum, the provisions of this Addendum shall supersede the conflicting
provisions of the Lease.
1. OPERATING EXPENSE INCREASES. Notwithstanding anything to the contrary
contained in the definitions of Operating Expenses set forth in Section 4.2(c)
of the Lease, Operating Expenses shall not include the following:
(a) costs incurred by Landlord for capital improvements, unless made with the
reasonable expectation to reduce Operating Expenses or required by law;
(b) landlord's general corporate overhead and general administrative
expenses;
(c) advertising and promotional expenditures;
(d) costs incurred to provide services or other benefits to other tenants or
occupants of a type that are not provided or available to Tenant hereunder;
(e) rental payments to any ground lessor or Landlord;
(f) payments in respect of overhead or profit to subsidiaries or affiliates
of Landlord, or to any party as a result of a non-competitive selection process,
for management or other services on or to the Building, or for supplies or other
materials to the extent that the costs of such services, supplies, or materials
exceed the costs that would have bene paid had the services, supplies, or
materials been provided by parties unaffiliated with the Landlord on a
competitive basis;
(g) expenses for which Landlord is reimbursed (either by an insurer,
condemnor, tenant, warrantor or otherwise);
(h) the cost of acquiring sculptures, paintings and other art work;
(i) costs of correcting any violations under The Americans with Disabilities
Act or any applicable environmental law existing as of the Commencement Date;
(j) costs relating to maintaining Landlord's existence, either as a
corporation, partnership, trust or other entity or changing Landlord's form of
ownership;
(k) costs directly resulting from the gross negligence of willful misconduct
of Landlord, its employees, agents or contractors;
(l) costs incurred to contain, ▇▇▇▇▇, remove or otherwise clean up the
Building or the Land required as a result of the presence of Hazardous Materials
in, about or below the Building or the Land to the extent caused by landlord or
another tenant;
(m) expenses for the correction of defects in Landlord's initial construction
of the Building or Project;
(n) salaries, wages and benefits of any employee above the level of senior
property manager;
(o) expenses incurred in leasing or procuring tenants for the Building
(including lease commissions, advertising expenses);
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(p) Landlord's net income and franchise taxes; and
(q) costs associated with trade shows that occur in the Building.
2. BASE RENT INCREASE. Section 4.3 of the Lease is hereby deleted in its
entirety and the following Section 4.3 is substituted in its place: "The Base
Rent set forth in Section 1.8 hereinabove shall be adjusted annually on each
anniversary of the Commencement Date (unless the Commencement Date is other than
the first day of a month, in which event the Base Rent shall be adjusted
annually commencing on the first anniversary of the first day of the calendar
month following the Commencement Date) during the Term of the Lease as follows:
Lease Period in Months Annual Base Rent Monthly Base Rent
---------------------- ---------------- -----------------
01-12 $300,000.00 $25,000.00
13-36 $309,000.00 $25,750.00
37-48 $318,270.00 $26,522.50
49-60 $327,828.84 $27,319.07
61-72 $337,663.68 $28,138.64
3. CONDITION OF PREMISES. Section 6.3 of the Lease is hereby amended by
adding the following to the end of Section 6.3: "Landlord warrants to Tenant
that, to the best of Landlord's knowledge, the Building, in the state existing
on the date this Lease is executed by Landlord and Tenant, but without regard to
alterations or improvements to be made by Tenant or the use for which Tenant
will occupy the Premises, does not violate any covenants or restrictions of
record, or any applicable building code, regulation or ordinance in effect on
such date. To the extent that the Landlord receives any notice from a
governmental entity that the Building is not in compliance with the Americans
with Disabilities Act ("ADA") and the Landlord is obligated pursuant to a final
determination to undertake action in order to comply with ADA, then in such
event Landlord agrees to undertake such remedial action at Landlord's sold cost
and expense. To the extent that such notice requires action with regard to
Tenant's particular use of the Premises, Tenant shall be obligated to undertake
such action at Tenant's sole cost and expense."
4. ALTERATIONS AND ADDITIONS. Section 7.3(a) of the Lease is hereby modified
by inserting the following at the end of such Section 7.3(a): "Notwithstanding
anything to the contrary in Section 7.3(a), Tenant shall have the right to make
cosmetic, non-structural Alterations to the Premises without obtaining
Landlord's prior written consent and without obtaining Landlord's approval of
Tenant's contractor, provided that (i) such Alterations do not exceed Ten
Thousand Dollars ($10,000.00) in cost in any one instance; (ii) such Alterations
do not exceed Fifty Thousand Dollars ($50,000.00) in cost over the term of the
Lease; and (iii) Tenant provides Landlord with prior written notice of its
intention to make such Alterations together with the plans and specifications
for the same. To the extent Landlord's consent is required pursuant to
Subsection (a) herein, Landlord agrees to notify Tenant concurrently with
Landlord's decision concerning such Alteration whether Landlord will require
Tenant to remove such Alteration at the end of the Term. For purposes of the
Lease, it shall be deemed reasonable for Landlord to require Tenant to perform
Alterations during non-business hours if such Alterations will create
unreasonable noise, noxious fumes or otherwise interfere with the quiet
enjoyment of the other tenants in the Building."
5. INTERRUPTION IN SERVICES. Notwithstanding anything contained in Section 11
or Section 28 of the Lease to the contrary, if any interruption of utilities or
services or the making of any Changes under Section 28 of the Lease shall
continue for more than five (5) consecutive business days and shall render any
portion of the Premises unusable for the normal conduct of Tenant's business,
and if Tenant does not in fact use or occupy such portion of the Premises, then
all Base Rent and additional rent payable hereunder with respect to such portion
of the Premises which Tenant does not occupy shall be abated retroactively to
the first (1st) business day of such interruption or the making of such Changes
and such abatement shall continue until full use of such portion of the Premises
is restored to Tenant. Except in the case of emergency, the Landlord will give
Tenant at least one (1) business day prior notice if Landlord intends to
interrupt any services
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required to be furnished by the Landlord or make any Changes that may
unreasonably interfere with Tenant's occupancy of the Premises.
6. ASSIGNMENT. "Notwithstanding anything to the contrary contained in Section
12 of the Lease, Tenant shall have the right, without Landlord's consent, upon
thirty (30) days advance written notice to Landlord, to assign the Lease or
sublet the whole or any part of the Premises (i) to any entity or entities which
are owned by Tenant, or which owns Tenant, (ii) in connection with the sale or
transfer of substantially all of the assets of the Tenant or the sale or
transfer of substantially all of the outstanding ownership interests in Tenant,
or (iii) in connection with a merger, consolidation or other corporate
reorganization of Tenant (each of the transactions reference din the above
subparagraphs (i), (ii), and (iii) are hereinafter referred to as a "Permitted
Transfer," and each surviving entity shall hereinafter be referred to as a
"Permitted Transferee"); provided, that such assignment or sublease is subject
to the following conditions:
(i) Tenant shall remain fully liable under the terms of the Lease;
(ii) such Permitted Transfer shall be subject to all of the terms, covenants
and conditions of the Lease;
(iii) such Permitted Transferee has a net worth at least equal to the net
worth of Tenant as of the date of this Lease; and
(iv) such Permitted Transferee shall expressly assume the obligations of
Tenant under the Lease by a document reasonably satisfactory to Landlord.
7. INDEMNITY BY LANDLORD. Notwithstanding the provisions of Sections 20 and
21 of the Lease to the contrary, Tenant shall not be required to indemnify and
hold Landlord harmless from any loss, cost, liability, damage or expense
(collectively, "Claims"), to any person, property or entity resulting from the
gross negligence or willful misconduct of Landlord or its agents, contractors or
employees, in connection with Landlord's activities at the Project, and Landlord
hereby indemnifies and saves Tenant harmless from any such Claims. Each party's
agreement to indemnify and hold the other harmless set forth above are not
intended to, and shall not relive any insurance carrier of its obligations under
policies required to be carried by landlord or Tenant pursuant to the provisions
of the Lease to the extent that such policies cover the results of such acts or
conduct. Landlord's and Tenant's obligations under this Paragraph 7 shall
survive the expiration or termination of this Lease unless specifically waived
in writing by either party after said expiration or termination.
8. TENANT IMPROVEMENTS. Landlord shall construct improvements
("Improvements") for the Premiss in accordance with the Work Letter Agreement
attached hereto as Schedule 1. In connection thereto, Landlord hereby grants to
Tenant an "Improvement Allowance" of up to Ten and 00/100 Dollars ($10.00) per
rentable square foot of space in the Premises (i.e., 12,000 rentable square feet
multiplied by $10.00 = $120,000.00), which Improvement Allowance shall be used
only for the items specified in the Cost Breakdown, as that term is defined in
the Work Letter Agreement and must be sued prior to the expiration of the first
(1st) Lease Year.
9. OPTION TO RENEW. Subject to the provisions of Section 26 of the Lease, and
provided that Tenant is not in default beyond any applicable cure period, at the
time of Tenant's exercise of the Option, Tenant shall have one (1) five (5) year
option to renew this Lease. Tenant shall provide to Landlord on a date which is
prior to the date that the option period would commence (if exercised) by at
least one hundred eighty (180) days and not more than two hundred seventy (270)
days, a written notice of the exercise of the option to extend the Lease for the
additional option term, time being of the essence. Such notice shall be given in
accordance with Section 40 of the Lease as modified by Section 26.6 hereof. If
notification os the exercise of this Option is not so given and received, all
options granted hereunder shall automatically expire. Base Rent applicable to
the Premises for the Option Term shall be equal to the Fair Market Rental as
defined below. All other terms and conditions of the Lease shall remain the
same.
(b) If the Tenant exercises the Option, the Landlord shall determine the Fair
Market Rental by using its good faith judgment. Landlord shall provide Tenant
with written notice of such
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amount within fifteen (15) days after Tenant exercises its Option. Tenant shall
have thirty (30) days ("Tenant's Review Period") after receipt of Landlord's
notice of the new base rent within which to accept such rental. In the event
Tenant fails to accept in writing such rental proposal by Landlord, then such
proposal shall be deemed rejected and Landlord and Tenant shall attempt to agree
upon such Fair Market Rental, using their best good faith efforts. If Landlord
and Tenant fail to reach agreement within fifteen (15) days following Tenant's
Review Period ("Outside Agreement Date") then the parties shall each within ten
(10) days following the Outside Agreement Date appoint a real estate broker who
shall be licensed in the Commonwealth of Virginia and who specializes in the
field of commercial office space leasing in the Northern Virginia market, has at
least five (5) years of experience and is recognized within the field as being
reputable and ethical. If one party does not timely appoint a broker, then the
broker appointed by the other party shall promptly appoint a broker for such
party. Such two individuals shall each determine within ten (10) days after
their appointment such base rent. If such individuals do not agree on base rent,
then the two individuals shall, within five (5) days, render separate written
reports of their determinations and together appoint a third similarly qualified
individual having the qualifications described above. If the two brokers are
unable to agree upon a third broker, the third broker shall be appointed by the
President of the Northern Virginia Board of Realtors. In the event the Northern
Virginia Board of Realtors is no longer in existence, the third broker shall be
appointed by the President of its successor organization. If no successor
organization is in existence, the third broker shall be appointed by the Chief
Judge of the Circuit Court of Fairfax County, Virginia. The third individual
shall within ten (10) days after his or her appointment make a determination of
such base rent. The third individual shall determine which of the determinations
of the first two individual is closest to his own and the determination that is
closest shall be final and binding upon the parties, and such termination may be
enforced in any court of competent jurisdiction. Landlord and Tenant shall each
bear the cost of its broker and shall share equally the cost of the third
broker. Upon determination of the base rent payable pursuant to this Section,
the parties shall promptly execute an amendment to this Lease stating the rent
to determined.
(c) The term "Fair Market Rental" shall mean the annual amount per rentable
square foot that a willing, comparable renewal tenant would pay and a willing,
comparable landlord of a similar office building would accept at arm's length
for similar office space, giving appropriate consideration to the following
matters: (i) annual rental rates per rentable square foot; (ii) the type of
escalation clauses (including, without limitation, operating expenses, real
estate taxes, and CPI) and the extent of liability under the escalation clauses
(i.e., whether determined on a "net lease" basis or by the increases over a
particular base year or base dollar amount); (iii) rent abatement provisions
reflecting free rent and/or no rent during the lease term; (iv) length of lease
term; (v) size and location of premises being leased; (vi) other generally
applicable terms and conditions of tenancy for similar space; (viii) location of
Premises within Building; (viii) other allowances and concessions; (ix) credit
of applicable tenant; (x) brokerage commissions; (xi) comparable vacancy; and
(xii) existing conditions of the space; provided, however, Tenant shall not be
entitled to any tenant improvement or refurbishment allowance. The Fair Market
Rental may also designate periodic rental increases, a new Base Year and similar
economic adjustments. The Fair Market Rental shall be the Fair Market Rental in
effect as of the beginning of the Option period, even though the determination
may be made in advance of that date, and the parties may use recent trends in
rental rates in determining the proper Fair Market Rental as of the beginning of
the Option period.
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