EXHIBIT 10.4
LEASE AGREEMENT
BY AND BETWEEN
BOSTON PROPERTIES LIMITED PARTNERSHIP
AND
ORBITAL SCIENCES CORPORATION
TABLE OF CONTENTS
Page
----
ARTICLE I THE PREMISES.....................................................1
ARTICLE II TERM.............................................................2
ARTICLE III BASE RENT........................................................4
ARTICLE IV ADDITIONAL RENT..................................................5
ARTICLE V SECURITY DEPOSIT.................................................14
ARTICLE VI USE OF PREMISES..................................................17
ARTICLE VII ASSIGNMENT AND SUBLETTING........................................19
ARTICLE VIII MAINTENANCE AND REPAIRS..........................................23
ARTICLE IX ALTERATIONS......................................................24
ARTICLE X SIGNS, EQUIPMENT AND FURNISHINGS.................................27
ARTICLE XI INSPECTION BY LANDLORD...........................................28
ARTICLE XII INSURANCE........................................................29
ARTICLE XIII SERVICES AND UTILITIES...........................................31
ARTICLE XIV LIABILITY OF LANDLORD............................................35
ARTICLE XV RULES AND REGULATIONS............................................38
ARTICLE XVI DAMAGE OR DESTRUCTION............................................39
ARTICLE XVII CONDEMNATION.....................................................41
ARTICLE XVIII DEFAULT..........................................................41
ARTICLE XIX BANKRUPTCY.......................................................46
ARTICLE XX SUBORDINATION; MORTAGES..........................................47
ARTICLE XXI HOLDING OVER.....................................................49
ARTICLE XXII COVENANTS OF LANDLORD............................................49
ARTICLE XXIII PARKING..........................................................50
ARTICLE XXIV REPRESENTATIONS AND WARRANTIES...................................50
ARTICLE XXV RENEWAL..........................................................52
ARTICLE XXVI COMMUNICATIONS EQUIPMENT.........................................54
ARTICLE XXVII TENANT'S PURCHASE OPTION.........................................56
ARTICLE XXVIII TENANT'S RIGHT OF FIRST OFFER....................................59
ARTICLE XXIX GENERAL PROVISIONS...............................................61
ARTICLE XXX DIRECTORY OF DEFINED TERMS.......................................67
EXHIBIT A--Survey Depicting the Land
EXHIBIT A-1--Diagram of the Premises [to be added when available pursuant to
Section 1.1]
EXHIBIT A-2--Survey of the Complex
EXHIBIT B--Form of Estoppel Certificate
EXHIBIT C--Brokerage Agreement
EXHIBIT D--Form of Letter of Credit
EXHIBIT E--Rules and Regulations
EXHIBIT F--Form of Management Agreement
-i-
DEED OF LEASE AGREEMENT
THIS DEED OF LEASE AGREEMENT (this "LEASE") is made as of the
18th day of May, 1999 (the "EFFECTIVE DATE"), by and between BOSTON PROPERTIES
LIMITED PARTNERSHIP, a Delaware limited partnership (hereinafter referred to as
"LANDLORD"), and ORBITAL SCIENCES CORPORATION, a Delaware corporation
(hereinafter referred to as "TENANT" or "ORBITAL").
RECITALS:
A. Landlord is the fee simple owner of that certain real property
containing approximately 5.35 acres of land currently known as [Lot 10B], The
Corporate Center at Steeplechase, Section I ("STEEPLECHASE"), Loudoun County,
Virginia (the "LAND"), which Land is more particularly depicted on or described
on Exhibit A-1 attached hereto (and which is subject to adjustment in the
subdivision process described in Section 1.4 below) which Land is part of the
office complex development located on land depicted on Exhibit A-2 attached
hereto and known as the Orbital Campus (the "COMPLEX").
B. Concurrently with the execution of this Lease, Landlord and
Tenant have entered into that certain Build to Suit Agreement and Agreement to
Lease dated of even date herewith (the "DEVELOPMENT AGREEMENT") with respect to,
among other things, the financing, design and construction by Landlord of one
(1) building on the Land containing approximately [92,604] gross square feet of
space (the "BUILDING"), including all necessary or appropriate loading,
landscaping, site work, parking area and other infrastructure. The Development
Agreement contains terms, conditions and agreements governing the development of
the Land, the construction of the Building and additional buildings on other
parcels of land in the Complex, and Landlord's and Tenant's respective options
with regard to same.
C. Landlord and Tenant wish to set forth herein the terms and
conditions upon which Landlord (i) shall lease the Land and the Building to
Tenant and (ii) shall grant to Tenant an option to purchase the Land and the
Building.
NOW, THEREFORE, the parties hereto, intending to be legally
bound, hereby covenant and agree as follows:
ARTICLE I
THE PREMISES
1.1 Landlord hereby leases and demises to Tenant and Tenant hereby
leases and accepts from Landlord, for the term and upon the terms and conditions
hereinafter set forth, the Land and the Building (collectively, the "PREMISES").
Upon the design of the Building and completion of construction documents, a
diagram of each floor of the Building, which together with the Land, comprise
the Premises, shall be added to this Lease as Exhibit A-1.
1.2 The Lease of the Premises includes the right to use the adjacent
parking areas which shall be generally described on the [Revised Site Plan
Building 3], as defined in the
-1-
Development Agreement, and the right to use any common areas and facilities
(including the Building's loading docks, doors, platforms, staging areas and
service elevators) and all other facilities and areas that are located in and
adjacent to the Building, unless specifically excluded in this Lease. The lease
of the Premises also is subject to all covenants, conditions and restrictions of
record as of the date hereof or recorded hereafter with the agreement of Tenant.
1.3 The area of the Building is expected to be approximately
[92,604] square feet of Gross Floor Area and approximately [87,416] square feet
of "net rentable" area. The parameters for the size and design of the Building,
and other terms and conditions upon which the Land will be developed and the
Building will be constructed are set forth in the Development Agreement. The
number of rentable square feet in the Building shall be determined by Ai, the
Project Architect, as defined in the Development Agreement, upon design and
construction of the Building, and shall be confirmed in the declaration
described in Section 2.3 below. For the purposes hereof, rentable area shall be
calculated in accordance with the 1996 Building Owners and Managers Associated
Standard Method of Measurement, as in effect as of the date of this Lease. The
Project Architect shall provide Landlord and Tenant with its calculations for
the measurement of the Building.
1.4 Landlord and Tenant agree that the legal description of the Land
shall be adjusted as a result of the legal resubdivision of the Land as
described in Section 3(d) of the Development Agreement. When such adjustment
occurs, Landlord and Tenant agree to execute an amendment to this Lease, or such
other documentation, reflecting such adjustment.
ARTICLE II
TERM
2.1 The term of this Lease (hereinafter referred to as the "LEASE
TERM") shall commence on the Lease Commencement Date, as determined pursuant to
Section 2.2 below, and continue for a period of fifteen (15) years thereafter,
unless such Lease Term shall be extended, renewed or terminated earlier in
accordance with the provisions hereof. Notwithstanding the foregoing, if the
Lease Commencement Date shall occur on a day other than the first day of a
month, the Lease Term shall commence on such date and continue for the balance
of such month and for a period of fifteen (15) years thereafter. The term "Lease
Term" shall include any and all renewals and extensions of the term of this
Lease.
2.2 (a) The "LEASE COMMENCEMENT DATE" shall be the earlier of
(i) the date on which the Building is, or is deemed to be, substantially
complete as determined pursuant to Section 7 of the Development Agreement and
(ii) the date on which Tenant commences the conduct of its business upon any
portion of the Premises comprising, in the aggregate, seventy-five percent (75%)
or more of the rentable area of the Building.
(b) Tenant and its contractors shall be allowed access to
the Building approximately forty-five (45) days prior to Landlord's estimated
date of substantial completion of the Premises for the purpose of installing
Tenant's communication equipment and associated wiring and such persons shall
have access to the Premises approximately fifteen (15) days prior to Landlord's
estimated date of substantial completion of the Premises for the purpose of
-2-
installing Tenant's other special equipment, fixtures and furniture (all such
installations pursuant to this Section 2.2(b) being referred to herein as
"TENANT INSTALLATIONS") and, the provisions of Section 2.2(a) or 2.2(c) to the
contrary notwithstanding, such Tenant Installations and related activity shall
not be considered the commencement of business operations in the Premises by
Tenant. Landlord shall use reasonable efforts to provide Tenant with
approximately sixty (60) days prior written notice of Landlord's estimated date
of substantial completion of the Premises and shall promptly respond to any
written request of Tenant inquiring as to Landlord's estimated date of
substantial completion. Any and all Tenant Installations and other related
activity by Tenant or its contractors prior to the Lease Commencement Date (i)
shall be subject to Landlord's and its contractor's reasonable scheduling and
sequencing requirements and (ii) shall be coordinated with Landlord and its
general contractor to insure that Tenant's work in and to the Premises does not
hinder, delay, inhibit or otherwise interfere with the work being performed by
Landlord and its contractors, the parties hereby acknowledging and agreeing that
the schedule for the performance of the construction and the development of the
Building does not provide additional time for the performance by Tenant of the
Tenant Installations. Notwithstanding anything herein to the contrary neither
Tenant nor its agents or contractors shall have access to the Premises during
the times specified by Landlord or its general contractor as times that may
cause unreasonable delay or interference with the activities of or on behalf of
Landlord in the Premises or the Building. All terms and conditions of this Lease
including, without limitation, the insurance, release and waiver of liability
provisions of Articles XIII and XV hereof shall apply to and be effective during
such period of occupancy by Tenant, except for Tenant's obligation to pay Annual
Base Rent and additional rent attributable to Expenses.
(c) If one or more full floors within the Premises is
substantially complete prior to the Lease Commencement Date, and if Tenant
desires to occupy all or a portion of such full floor(s) for the conduct of its
business prior to the Lease Commencement Date, then, unless and until such early
occupancy includes 75% or more of the rentable area of the Building, such early
occupancy shall not cause the Lease Commencement Date to occur, but all the
terms of this Lease (including, without limitation, the requirement that Tenant
pay Annual Base Rent and additional rent (each, as hereinafter defined) with
respect to such full or partial floors) shall apply with respect to each space
thus occupied by Tenant from the date that Tenant takes occupancy thereof for
the conduct of its business therein. In the case of any such partial occupancy
prior to the Lease Commencement Date, Annual Base Rent shall be determined based
on the ratio of the rentable area so occupied to the total rentable area of the
Building.
2.3 Promptly after the Lease Commencement Date is ascertained,
Landlord and Tenant shall execute a written declaration setting forth the Lease
Commencement Date, the date upon which the Lease Term will expire, the exact
number of square feet of rentable area in the Premises, and the Annual Base
Rent. The form of such declaration is attached hereto as Exhibit B and made a
part hereof.
2.4 For purposes of this Lease, the term "LEASE YEAR" shall mean
either (a) each period of twelve (12) consecutive calendar months commencing on
the first day of the month immediately following the month in which the Lease
Commencement Date occurs, and on each anniversary of such date, except that the
first Lease Year shall also include the period from the Lease Commencement Date
to the first day of the following month; or (b) if the Lease
-3-
Commencement Date shall occur on the first day of a calendar month, each period
of twelve (12) consecutive calendar months commencing on the Lease Commencement
Date and on each anniversary of such date; whichever is applicable.
ARTICLE III
BASE RENT
3.1 (a) During the first Lease Year, Tenant shall pay to
Landlord as Annual Base Rent, net of all Expenses (which term is defined in
Section 4.2 below), for the Premises, without set-off, deduction or demand, an
amount equal to the Formula Rent (as hereinafter defined), which amount shall be
increased on an annual basis as provided in Section 3.2 below.
(b) The "FORMULA RENT" shall be an amount equal to the
product of (i) the Project Costs, as defined in the Development Agreement,
multiplied by (ii) Nine and Six Tenths Percent (9.6%).
(c) The Annual Base Rent payable hereunder during each Lease
Year shall be divided into equal monthly installments and such monthly
installments shall be due and payable in advance on the first day of each month
during such Lease Year. If the Lease Commencement Date (determined pursuant to
Section 2.2 hereof) occurs prior to a date when final Project Costs are
ascertained, then Annual Base Rent shall initially be determined and payable
based on projections of such costs as of the Lease Commencement Date, as
reasonably determined by Landlord and Tenant, and shall thereafter be
recalculated when such costs are ascertained. Upon such recalculation, Landlord
shall deliver to Tenant a written notice specifying (i) the calculation of
Annual Base Rent based upon actual Project Costs, (ii) the Annual Base Rent that
is payable to Landlord hereunder for the period commencing on the Lease
Commencement Date and continuing through the date of such notice based on actual
Project Costs, and (iii) the Annual Base Rent that was in fact paid to Landlord
for the same time period. If the amount of Annual Base Rent paid by Tenant for
such time period exceeds the amount of Annual Base Rent payable for such time
period based on actual Project Costs, Landlord shall credit the net overpayment
against the next monthly installment(s) of Annual Base Rent and additional rent
due hereunder. Conversely, if Tenant's actual liability for Annual Base Rent for
such time period exceeds the sums theretofore paid by Tenant on account thereof,
Tenant shall pay the amount of the deficiency within thirty (30) days following
Tenant's receipt of Landlord's notice. In either event, there shall be added to
the excess that is to be credited or the deficiency that is to be paid
(whichever is applicable) a sum equal to interest on each monthly component of
the amount to be credited or paid from the date each monthly component would
have been payable if actual Project Costs had been known on the Lease
Commencement Date to the date of the credit or payment pursuant to the
reconciliation statement calculated at the Interest Rate (as hereinafter
defined). Effective as of the date of such notice (the "RENT RECALCULATION
DATE"), Tenant shall begin paying Annual Base Rent at the recalculated rate. Any
dispute between Landlord and Tenant as to the amount of the Project Costs
(whether projected or final) shall be determined in accordance with the
provisions of the Development Agreement.
-4-
(d) For purposes of calculating the Formula Rent payable
hereunder, the term "PROJECT COSTS" shall be determined in accordance with the
provisions of Section 10(a) of the Development Agreement.
3.2 Commencing on (i) the first day of the second (2nd), third
(3rd), fourth (4th) and fifth (5th) Lease Years, the Annual Base Rent payable
for such Lease Year shall be increased over the escalated Annual Base Rent in
effect during the preceding Lease Year by two percent (2%), (ii) the first day
of the sixth (6th), seventh (7th), eighth (8th), ninth (9th) and tenth (10th)
Lease Years the Annual Base Rent payable for such Lease Year shall be increased
over the escalated Annual Base Rent in effect during the preceding Lease Year by
two and one-half percent (2.5%) and (iii) the first day of the eleventh (11th),
twelfth (12th), thirteenth (13th) fourteenth (14th) and fifteenth (15th) Lease
Years the Annual Base Rent payable for such Lease Year shall be increased over
the escalated Annual Base Rent in effect during the preceding Lease Year by
three percent (3%).
3.3 All rent shall be paid to Landlord, without set-off, deduction
or demand, in legal tender of the United States (i) at the address to which
notices to Landlord are to be given or to such other address as Landlord may
designate from time to time by written notice to Tenant, or (ii) by wire
transfer in accordance with wiring instructions to be provided to Tenant by
Landlord at least thirty (30) days prior to the Lease Commencement Date (or such
alternative wiring instructions as Landlord may designate from time to time by
written notice to Tenant). Any failure by Landlord to timely notify Tenant of
such wiring instructions shall not excuse the payment of rent by Tenant;
however, Tenant shall not be obligated to make any rent payment hereunder sooner
than five (5) business days following Tenant's receipt of Landlord's wiring
instructions. If Landlord shall at any time accept rent after it shall come due
and payable, such acceptance shall not excuse a delay upon subsequent occasions,
or constitute or be construed as a waiver of any of Landlord's rights hereunder.
ARTICLE IV
ADDITIONAL RENT
4.1 Tenant shall bear the costs and expenses incurred each year in
the operation of the Building and the Land. For so long as Tenant is the sole
lessee of the Building, Tenant shall have the right to provide input into the
determination of such annual costs and expenses, as follows. Not more than
thirty (30) days prior to the Lease Commencement Date, Landlord shall prepare
and submit to Tenant a proposed budget for the operation and maintenance of the
Building and the Land, the parties acknowledging and agreeing that such budget
shall represent Landlord's reasonable expectation of such costs and expenses as
the Building will not have been substantially completed at the time of the
preparation of such budget. On or before November 15 of each calendar year
during the Lease Term, Landlord shall prepare and submit to Tenant (i) a
proposed budget or other form of summary identifying with reasonable detail the
anticipated categories of expenditures to be made, proposed major vendors to
provide services and proposed scope of services (including, but not limited to,
security services) to be provided by Landlord for the ensuing calendar year in
the operation and maintenance of the Building and the Land and (ii) after the
first year of operation of the Building, the operating history of the Building
for the previous year (the "OPERATING PLAN"). It is the intention of Landlord
and Tenant that Operating Expenses, as defined below, and the individual
components thereof shall not materially exceed
-5-
prevailing market costs and rates for like items and services, however, the
parties acknowledge and agree that there may be occasions from time to time
where it is in the best interests of the Building for a particular item to be
performed or purchased at a cost or expense which exceeds prevailing market
rates. If Tenant has reasonable additions, deletions or modifications to any
elements of Landlord's proposed Operating Plan, Tenant shall notify Landlord of
same within thirty (30) days following receipt of the proposed Operating Plan
and Landlord shall incorporate Tenant's reasonable additions, deletions and
modifications into Landlord's proposed Operating Plan and shall operate the
Building substantially in accordance therewith; provided that, in no event shall
Landlord be obligated to operate the Building or the Land in a manner that is
inconsistent with the standards of a Class A suburban office building in the
Market Area. The Operating Plan (as it may be revised with Tenant's input as
aforesaid) shall serve as a general guide to the scope of services to be
provided and expenditures to be made in the operation and maintenance of the
Building and Land and Landlord shall not deviate therefrom in any material
manner without first obtaining Tenant's prior written consent, which consent
shall not be unreasonably withheld, conditioned or delayed. and shall be deemed
given if not withheld in writing within seven (7) business days following
Landlord's notice thereof to Tenant; provided that, in case of emergency or in
any case in which Landlord reasonably believes delay might cause injury to
persons, material injury to property or a violation of any Legal Requirement,
Landlord may act without Tenant's prior written consent. Any failure of Landlord
to timely provide an annual Operating Plan to Tenant as provided herein shall
not relieve Tenant of its obligation to pay additional rent pursuant to this
Article IV.
4.2 The costs and expenses (the "EXPENSES") for which Tenant shall
be responsible are defined as follows:
(a) "OPERATING EXPENSES" shall mean and include those direct
reasonable and customary expenses actually incurred and paid in operating and
maintaining the Building and the Land in a manner consistent with the operating
and maintenance standards observed at similar Class A suburban office buildings
located in the Market Area, including, but not limited to, the following: (1)
electricity, gas, water, sewer and other utility charges of every type and
nature; (2) premiums and other charges for insurance (including, but not limited
to, property insurance, rent loss insurance and liability insurance) incurred in
accordance with Section 12.2 hereof; (3) all management fees incurred in the
management of the Building (subject to the limitation set forth below); (4) all
costs incurred in connection with service and maintenance contracts; (5)
maintenance and repair expenses and supplies; (6) amortization (calculated on a
straight-line basis over the useful life of the improvement, with interest at
Landlord's applicable cost of funds or, if the improvement is not financed, at
the prime rate reported in The Wall Street Journal) for capital expenditures
made by Landlord, but only to the extent that they (i) are made after the first
two (2) years of the Lease Term and are intended to decrease Operating Expenses
or improve safety, or (ii) are made after the expiration of the tenth (10th)
Lease Year of the Lease Term as a result of Legal Requirements enacted after the
date of this Lease, provided, however, that Landlord shall be entitle to recoup
the cost of capital improvements which result in energy savings to the Building
within the savings period attributable to such improvement and provided further
that commencing in the sixth (6th) Lease Year, Landlord may pass through
directly to Tenant the entire actual cost incurred by Landlord in connection
with the maintenance, repair and replacement of major components of any Building
systems which
-6-
prematurely fail due to Tenant's mandated hours of operation of such system(s)
in excess of sixty-eight (68) hours per week; (7) salaries, wages, benefits and
other expenses of Building personnel, together with the costs of maintaining
engineering, maintenance and/or management offices in the Building (which costs
shall not include imputed rent for the space in the Building occupied for such
purposes); provided, however, that if during the Lease Term such personnel or
entities are working on projects other than the Building, then their wages,
salaries, fees and related expenses shall be appropriately allocated among all
of such projects and only that portion of such expenses reasonably allocable to
the Building shall be included in Operating Expenses; (8) legal fees (except as
excluded below), administrative expenses, and accounting, architectural and
other professional fees and expenses, except those that are normally absorbed by
the property manager and not charged separately to Landlord in addition to
management fees; (9) costs of any service not provided to the Building on the
Lease Commencement Date but thereafter provided by Landlord pursuant to the then
current Operating Plan established pursuant to Section 4.1 above, provided
pursuant to the request of Tenant, otherwise provided pursuant to Section 4.1
above, or, during any time that Orbital is not the sole lessee of the Building,
provided in the prudent management of the Building; (10) charges for concierge,
security, janitorial, char and cleaning services and supplies furnished to the
Building (except that costs of furnishing char and janitorial service to any
space in the Building shall be excluded with respect to such space for so long
as Tenant is furnishing its own char and janitorial service to such space in
accordance with the provisions of this Lease); (11) costs associated with the
provision or operation of any common facilities, including (without limitation)
parking areas, landscaped areas, access roads, and the Building's loading dock;
(12) fees and assessments payable pursuant to any declaration of covenants
recorded against the Land or any property owners' association affecting the
Land, which covenants if recorded against the Land after the effective date of
this Lease and if Orbital is the lessee of fifty-one percent (51%) of the
Building at such time, shall be subject to Orbital's approval; (13) Supplemental
Land Costs, as defined in Section 4.2(c) below; and (14) any other reasonable
expense incurred by Landlord in maintaining, repairing or operating the Building
or the Complex. Any provision herein to the contrary notwithstanding, Operating
Expenses shall not include the following:
(i) the cost of any work performed (such as preparing a
tenant's space for occupancy, including painting and
decorating) or services provided (such as separately
metered electricity) for any tenant (including Tenant)
at such tenant's cost, or provided by Landlord without
charge (such as free rent or improvement allowances);
(ii) salaries, benefits and other compensation of Landlord's
officers, partners, its headquarters staff and personnel
located outside of the Complex, except to the extent
includible pursuant to clause (7) above;
(iii) the cost of any work performed or service provided for
any tenant of the Building (other than Tenant, if any)
to a materially greater extent or in a materially more
favorable manner than that furnished generally to the
other tenants and occupants;
-7-
(iv) the cost of any items for which Landlord is reimbursed
by insurance proceeds (or would have been so reimbursed
if Landlord had maintained the insurance required
pursuant to Section 12.2 hereof), condemnation awards,
or otherwise, or the cost of any item or service for
which Landlord is actually reimbursed or is entitled to
be reimbursed by another tenant of the Building,
provided, however, that Landlord may include any
insurance deductible in Operating Expenses;
(v) depreciation of the Building and the cost of any
additions, changes, or replacements to the Building, or
amortization thereof, which under generally accepted
accounting principles are properly classified as capital
expenditures, except to the extent includable pursuant
to clause (6) above and subject to Tenant's obligations
with respect to capital expenditures pursuant to Section
4.2(a)(6) above and Sections 4.8 and 6.2 below;
(vi) the cost of any repair made in response to any fire or
casualty damage (except for the amount of any
commercially reasonable "deductible" under Landlord's
property insurance) or any condemnation;
(vii) interest and principal payments on any debt,
depreciation, and rental under any ground lease or other
underlying lease;
(viii) any real estate brokerage commissions or other costs
incurred in procuring tenants, or any fee in lieu of
commission;
(ix) property management fees in excess of two and one-half
percent (2.5%) of the Annual Base Rent payable hereunder
from time to time;
(x) any costs representing an amount paid to an entity
related to or affiliated with Landlord to the extent in
excess of the amount which would have been paid in the
absence of such a relationship;
(xi) any expenses for repairs or maintenance which are
covered by warranties, guaranties or service contracts
(excluding any mandatory deductibles);
(xii) legal expenses arising out of the construction, sale,
financing or refinancing of the Land or the Building, or
the enforcement or defense of the provisions of any
tenant's lease or organizational matters of Landlord or
of any other proceeding by or against Landlord with
respect to matters not specifically intended to be
included as Operating Expenses;
(xiii) insurance premiums to the extent of any refunds thereof;
(xiv) incremental costs necessitated by or resulting from the
negligence or willful misconduct of Landlord, its
managing agent, or its employees or
-8-
from the gross negligence or willful misconduct of
Landlord's independent contractors or other agents;
(xv) costs arising out of a sale, financing or refinancing of
the Land or the Building or any interests therein;
(xvi) costs and taxes associated with the operation of the
business entity of Landlord, including partnership
audit, business entity accounting, and business entity
legal matters;
(xvii) costs, legal expenses, interest, fines and penalties
associated with Landlord's making any late payments;
(xviii) any costs or expenses incurred in connection with the
remediation or removal of Hazardous Materials;
(xix) acquisition or leasing costs of sculpture, paintings or
other objects of art;
(xx) except as provided in Section 4.2(a)(6) above, costs for
repairing, replacing or otherwise correcting defects
(but not the costs of repair or normal wear and tear) in
the initial construction of the Premises;
(xxi) costs of initial construction of the Premises, including
all Project Costs;
(xxii) rent for any on-site offices of Landlord or its managing
agent; provided, however that Tenant shall make
available to Landlord, without cost to Landlord, a
minimum of 600 rentable square feet of space in Building
1 and Building 3 in the aggregate for a management
office and/or building engineer's shop, which space
shall be included in the rentable area of the Building
when determining the Base Rent to be paid by Tenant
under Article III hereof; and
(xxiii) charitable or political contributions.
In the event a single expenditure pays for the provision of a good or service to
both the Building and any other building in the Complex or owned by Landlord,
then Expenses shall include only the portion of such payment that is equitably
allocable to the Building, as reasonably determined by Landlord and disclosed in
writing to Tenant. Similarly, if any expenditure (whether in the nature of
Operating Expenses or Real Estate Taxes (as defined below) benefits or otherwise
relates to the Land and/or Building hereunder, as well as other land and/or
buildings (including any land that may have been excluded from the Land
hereunder pursuant to Section 1.4 hereof), then Expenses shall include only the
portion of such expenditure that is equitably allocable to the Land and/or
Building hereunder (as they may be constituted from time to time), as reasonably
determined by Landlord and disclosed in writing to Tenant.
-9-
(b) "REAL ESTATE TAXES" shall mean and include (i) all real
property taxes, including general and special assessments, if any, which are
imposed upon Landlord in connection with the Building and/or the Land or
assessed against the Building and/or the Land; (ii) any other present or future
taxes or governmental charges which are imposed upon Landlord in connection with
the Building and/or the Land, or assessed against the Building and/or the Land,
including, but not limited to, any tax levied on or measured by the rents
payable by tenants in the Building which are in the nature of, or in
substitution for, real property taxes; and (iii) all taxes which are imposed
upon Landlord, and which are assessed against the value of any improvements to
the Premises made by Tenant or any machinery, equipment, fixtures or other
personal property of Tenant used therein. In no event shall "Real Estate Taxes"
include (A) income or net profit taxes imposed upon Landlord, except to the
extent such taxes are in substitution for real property taxes, (B) the amount of
any special taxes or special assessments actually paid by Landlord in any
calendar year in excess of the minimum installment of special taxes or special
assessments required to be paid by Landlord during such calendar year (it being
agreed that Landlord shall elect the longest period of time allowed by the
authority imposing the tax or assessment in which to pay installments of special
taxes or special assessments that are to be prorated over several years), (C)
franchise, stock and inheritance or estate taxes and sales, use or excise taxes
imposed on rent, except to the extent such taxes are imposes in lieu of real
estate taxes, (D) any transfer taxes, recording fees, tap fees, excises, levies,
license fees, permit fees, impact fees, inspection fees or other authorization
fees and any other similar charges which are included in the term "Project
Costs". Tenant may request that all real estate taxing authorities, when issuing
notices of assessment and real estate tax bills with respect to the Building or
the Land, issue such notices and bills to both Landlord and Tenant
simultaneously, and Landlord shall cooperate with such request. If any such
taxing authority will not agree to same, then Tenant shall so notify Landlord
and Landlord shall thereafter use reasonable efforts to furnish to Tenant a copy
of each such notice of assessment or real estate tax ▇▇▇▇ that Landlord receives
from such taxing authority with respect to the Building and/or the Land within
thirty (30) days following Landlord's receipt thereof and shall be obligated to
furnish to Tenant a copy thereof (if available) within ten (10) days following
Landlord's receipt of Tenant's written request therefor. Landlord shall make a
determination whether or not to challenge or appeal such assessment based on
Landlord's reasonable judgment of which course is in the best interest of the
Building. So long as Orbital is leasing not less than fifty-one percent (51%) of
the rentable area of the Building, Landlord shall inform Tenant of such
determination, and shall make available appropriate personnel to discuss with
Tenant the reasons underlying such determination. In the event Landlord
determines not to challenge or appeal such assessment (or, having undertaken to
appeal or challenge such an assessment, does not pursue the appeal or challenge
with due diligence and continuity), and provided Tenant is leasing the minimum
square footage specified in the preceding sentence, Landlord agrees that Tenant
may appeal or challenge such assessment in Landlord's place and stead and that
Landlord will join in and cooperate with Tenant in prosecuting such appeal or
challenge; provided, however, that such appeal or challenge shall be undertaken
at Tenant's sole cost and at no expense to Landlord (except that, if Tenant's
appeal or challenge is successful, then Tenant may recover its costs out of the
refund or reduction of Real Estate Taxes achieved by Tenant prior to allocating
such reduction to the tenants of the Building).
-10-
(c) It is the intention of the parties that as the Complex
is subdivided and additional buildings are constructed therein, each of the lots
in the Complex shall bear their pro rata portion of the costs (collectively,
"SUPPLEMENTAL LAND COSTS") of all common roadwork and other common
infrastructure costs that are associated with the initial and any subsequent
development of the Complex (collectively, "COMMON SITE WORK"). For purposes
hereof, Supplemental Land Costs associated with a subsequent phase of
development of the Complex (i) shall include all costs and expenses (including,
without limitation, interest and interest carry) of the types that are incurred
(provided the cost incurred is subsequently paid) or paid by Landlord or the
owners of the other lots in the Complex in connection with the further
development of the lots in the Complex and (ii) shall be equitably apportioned
among all of the buildings in the Complex. Common Site Work shall include,
without limitation, the costs of extending the primary road network and
pedestrian walkways serving the Complex to serve subsequent phases; the costs of
extending utilities to the perimeter of a subsequent phase; the costs of
expanding storm water facilities to serve subsequent phases; the costs of
developing, installing lighting in, and landscaping entrances to the Complex and
other common areas of the Complex and any and all other site development
mandated by applicable Legal Requirements, as defined herein; and the costs of
installing directional signage and entrance signage in common areas situated on
subsequent phases
4.3 Tenant shall pay to Landlord, as additional rent for the
Premises, the Expenses incurred by Landlord in the operation of the Building and
the Land during any calendar year falling entirely or partly within the Lease
Term, but the Expenses for any calendar year during the Lease Term shall be
apportioned so that Tenant shall pay only that portion of such Expenses for such
year as fall within the Lease Term. This provision shall survive the expiration
or earlier termination of this Lease. Tenant shall also pay the Expenses
incurred by Landlord during any period of partial occupancy prior to the Lease
Commencement Date pursuant to Section 2.2 hereof.
4.4 If, during any period in which Orbital is not the sole lessee of
the Building, the occupancy rate for the Building during any calendar year is
less than ninety-five percent (95%), or if any office tenant is separately
paying for electricity or janitorial services furnished to its premises, then
Expenses for such calendar year shall be deemed to include all additional
expenses with respect to those Expenses that vary in accordance with the
occupancy of the Building, as reasonably estimated by Landlord, which would have
been incurred during such calendar year if the occupancy rate for the Building
had been ninety-five percent (95%) and if Landlord paid for electricity and
janitorial services furnished to such premises. This provision shall not operate
in a manner that would permit Landlord to recover from Tenant additional rent on
account of Operating Expenses for any calendar year which, when added to the
total additional rent payable by all tenants of the Building on account of
Operating Expenses for such year will exceed the actual Operating Expenses
incurred by Landlord for such year.
4.5 Commencing on the Lease Commencement Date and on the first day
of each month thereafter, Tenant shall make estimated monthly payments, based on
the Operating Plan, to Landlord on account of the Expenses that are reasonably
expected to be incurred during each calendar year falling entirely or partly
within the Lease Term. The amount of such monthly payments shall be determined
as follows: Commencing with the Lease Commencement Date (or
-11-
such earlier date as of which Expenses may be payable by Tenant pursuant to
Section 4.3) and at the beginning of each calendar year thereafter, Landlord
shall submit to Tenant a statement setting forth Landlord's reasonable estimate
of the Expenses that are expected to be incurred during such calendar year (and,
if Orbital is not the sole lessee of the Building, Tenant's proportionate share
thereof). Provided that Tenant receives such statement at least forty-five (45)
days in advance, Tenant shall pay to Landlord on the first day of each month
following receipt of such statement during such calendar year an amount equal to
(A) the excess of (i) the anticipated Expenses (or Tenant's proportionate share
thereof, during any period in which the Building is multi-tenanted) for the full
calendar year (or the portion of such calendar year that falls within the Lease
Term) over (ii) the monthly payments made by Tenant (on the basis of the
estimate in effect during the preceding calendar year) prior to the commencement
of payments made on the basis of Landlord's estimate for the current calendar
year, multiplied by (B) a fraction, the numerator of which is one (1) and the
denominator of which is the number of months during such calendar year which
fall within the Lease Term and follow the date of the foregoing statement.
Within approximately ninety (90) days after the expiration of each calendar
year, Landlord shall submit to Tenant a statement certified by Landlord (the
"RECONCILIATION STATEMENT"), showing (i) the Expenses actually incurred during
the preceding calendar year (and, during any period in which the Building is
multi-tenanted, Tenant's proportionate share thereof), and (ii) the aggregate
amount of the estimated payments made by Tenant on account thereof. If the
aggregate amount of such estimated payments exceeds Tenant's actual liability
for such Expenses, then Landlord shall credit the net overpayment against the
next monthly installment(s) of Annual Base Rent and additional rent coming due
under this Lease (or if the Lease Term has ended, shall pay such net overpayment
to Tenant within thirty (30) days after providing such Reconciliation Statement
to Tenant). If Tenant's actual liability for such Expenses exceeds the estimated
payments made by Tenant on account thereof, then Tenant shall pay to Landlord
the total amount of such deficiency within thirty (30) days after its receipt of
the Reconciliation Statement from Landlord. In the event Landlord has failed to
deliver a Reconciliation Statement to Tenant within approximately ninety (90)
days after the expiration of a calendar year, Tenant may deliver to Landlord a
written demand that the Reconciliation Statement be delivered within sixty (60)
days following the date of delivery of Tenant's demand notice, and if Landlord
fails to deliver the Reconciliation Statement to Tenant within sixty (60) days
after the date on which Landlord receives Tenant's demand notice, then Landlord
shall forfeit the right to ▇▇▇▇ Tenant for any amount on account of Expenses
incurred during such calendar year in excess of the estimated payments made by
Tenant during such calendar year (but Tenant shall not forfeit the right to be
reimbursed for any overpayment if its estimated payments exceeded the actual
Expenses, and Landlord shall not be excused from its obligation to deliver the
Reconciliation Statement). The provisions of this paragraph shall survive the
expiration or earlier termination of this Lease.
4.6 Tenant shall have the right, during business hours and upon
reasonable prior notice, from time to time to inspect and make copies of
Landlord's books and records relating to Expenses, and/or to have such books and
records audited at Tenant's expense by an independent certified public
accountant or other qualified consultant designated by Tenant, not more than ten
percent (10%) of the fees of whom shall be determined on a contingent basis,
except that any audit that discloses that annual Expenses have been overstated
by more than three percent (3%) shall be at Landlord's expense. Any discrepancy
shall be corrected by a payment of any shortfall
-12-
to Landlord by Tenant, or a refund of any overpayment to Tenant by Landlord,
within thirty (30) days after the applicable audit. In the event Tenant does not
contest a statement of Expenses within three (3) years after the date it
receives a Reconciliation Statement (and provided Landlord has cooperated with
Tenant undertaking an audit of Landlord's books and records, if so requested by
Tenant), such Reconciliation Statement shall become binding and conclusive upon
each party. Tenant shall use reasonable efforts to (and shall use reasonable
efforts to cause its agents to ) keep the results of such audit confidential.
Landlord shall retain the books and records for the Building for the period
subject to Tenant's audit rights.
4.7 So long as Tenant is the sole lessee of the Building, Tenant may
request that electric utility bills be sent directly from the electricity
provider to Tenant, in which event Tenant shall be obligated to pay all charges
for electricity directly to such electricity provider as and when due. If Tenant
ceases to be the sole lessee of the Building, Tenant may request that
electricity furnished to the Premises be separately metered, if such service is
available from the applicable utility provider, in which event Landlord shall,
subject to any conditions or limitations imposed by the electricity provider,
install a submeter or checkmeter at Tenant's expense. Following any such
separate metering, Tenant shall timely pay directly to the appropriate utility
all charges for electricity furnished to the Premises (and the charges for such
separately metered electricity shall not be included in Operating Expenses).
Notwithstanding anything contained herein to the contrary, if Tenant fails to
pay any electric ▇▇▇▇ that is provided directly to Tenant by the electric
utility as and when due, such failure shall constitute a default hereunder. If
any such default is not cured within ten (10) business days following written
notice from Landlord, then Landlord shall have the right, but shall not be
obligated, to pay the delinquent amounts, and Tenant shall reimburse Landlord
therefor within five (5) business days after receiving notice of such payment by
Landlord; provided that Landlord may act without notice to Tenant if delay would
cause an interruption of utility services, an emergency or similar situation.
Notwithstanding anything to the contrary herein, in the event electric service
to the Premises is measured by separate meter or check meter, Tenant shall not
be relieved of its obligation to pay its share of Expenses attributable to the
provision of electrical service to the common areas of the Building. Landlord
shall have the right to verify Tenant's electrical consumption in the Premises
through the energy management system in the Building.
4.8 Except as otherwise provided in Sections 4.2(a)(6), Section 6.2
and this Section 4.8, Landlord shall bear the cost of, and shall not pass
through to Tenant as an Expense hereunder, any necessary or appropriate capital
expenditures constituting additions or changes to, or replacements of, the base
building systems and other base building components of the Building ("BASE
BUILDING CAPITAL EXPENDITURES"). The preceding sentence notwithstanding,
Landlord shall not be obligated to make any such capital repair or replacement
to specifications that exceed building standard specifications unless Tenant
agrees to pay in full, at the time the Base Building Capital Expenditure is
incurred, the excess cost of such Tenant-upgraded capital repair or replacement
over the cost of making such capital replacement or repair to building standard
specifications; provided, however, in the event (i) the cost of the Base
Building Capital Expenditure in question is less than Five Hundred Thousand
Dollars ($500,000.00), which cap shall be increased annually by the increase in
the Consumer Price Index, as defined in the Development Agreement, and (ii)
Orbital's net worth (which shall be determined on a pro forma basis using
generally accepted accounting principles consistently applied and using the most
-13-
recent financial statements) is not less than it is on the Effective Date, then
Tenant may elect to amortize the cost of such Base Building Capital Expenditure,
at an interest rate acceptable to Landlord but not exceeding commercially
reasonable interests rates at the time of the expenditure, as additional rent to
be paid by Tenant over the remainder of the Lease Term, assuming that Tenant
does not and has not elected to renew this Lease. In addition, any necessary or
appropriate capital expenditures constituting additions or changes to, or
replacements of, any of Tenant's tenant improvements shall be payable in full by
Tenant at the time the capital expenditure is incurred. For purposes hereof,
"building standard" specifications shall mean specifications customary in Class
A suburban office buildings in the Market Area.
ARTICLE V
SECURITY DEPOSIT
5.1 (a) Tenant shall be obligated to post, as the "SECURITY DEPOSIT"
hereunder, a sum equal to Two Hundred Fifty Thousand Dollars ($250,000.00). Upon
the Lease Commencement Date, provided no default on the part of Tenant under
this Lease shall then be in existence and no Event of Default, as defined in
Section 18.1 hereof, has occurred hereunder, the security deposit shall be
reduced to Two Hundred Thousand Dollars ($200,000.00). All cash which Tenant
delivers to Landlord as a security deposit, including the proceeds if Landlord
draws of the Letter of Credit, as defined below, will be deposited in a
separate, interest-bearing account maintained by Landlord with a depository
selected by Tenant and approved by Landlord, in its reasonable discretion, with
interest accruing to the benefit of Tenant. Interest on the security deposit (if
it is in the form of cash) shall be disbursed to Tenant no less often than on a
quarterly basis. Following an Event of Default, interest earned on the security
deposit shall be added to and become a part of the security deposit and shall
not be disbursed to Tenant, except upon the return of the security deposit in
accordance with the terms hereof. Landlord hereby approves NationsBank, N.A. as
an acceptable depository for the security deposit.
(b) The security deposit shall be security for the
performance by Tenant of all of Tenant's obligations, covenants, conditions and
agreements under this Lease. Within thirty (30) days after the expiration of the
Lease Term, and provided Tenant has vacated the Premises and is not in default
hereunder, Landlord shall return the security deposit to Tenant, less such
portion thereof as Landlord shall have applied to satisfy any default by Tenant
hereunder. Following an Event of Default by Tenant hereunder, Landlord shall
have the right, but shall not be obligated, to use, apply or retain all or any
portion of the security deposit for (i) the payment of any Annual Base Rent or
additional rent or any other sum as to which Tenant is in default, (ii) the
payment of any amount which Landlord may spend or become obligated to spend to
repair physical damage to the Premises or the Building pursuant to Section 8.3
hereof, or (iii) the payment of any amount Landlord may spend or become
obligated to spend, or for the compensation of Landlord for any losses incurred,
by reason of Tenant's default hereunder, including, but not limited to, any
damage or deficiency arising in connection with the reletting of the Premises.
If any portion of the security deposit is so used or applied (including a draw
under any letter of credit that may serve as the security deposit hereunder),
within three (3) business days after written notice to Tenant of such use or
application, Tenant shall deposit with Landlord cash in an amount sufficient to
restore the security deposit to the full amount required to be maintained
hereunder (or, if the security deposit is in the form of a letter of credit,
replace or
-14-
restore the letter of credit to the full amount required to be maintained
hereunder), and Tenant's failure to do so shall constitute a default under this
Lease.
(c) Tenant shall have the right to deliver to Landlord an
unconditional, irrevocable letter of credit in substitution for the cash
security deposit, subject to the following terms and conditions. Such letter of
credit shall be (a) substantially in the form attached hereto as Exhibit D or
such other form and substance satisfactory to Landlord in its sole discretion;
(b) at all times in the amount of the security deposit, and shall permit
multiple draws; (c) issued by a commercial bank reasonably acceptable to
Landlord from time to time and located in the Washington, D.C. metropolitan
area; (d) made payable to, and expressly transferable and assignable at no
charge by, the owner from time to time of the Building (which
transfer/assignment shall be conditioned only upon the execution of a written
document in connection therewith); (e) payable at sight upon presentment to a
local branch of the issuer located in the Washington, D.C. metropolitan area of
a simple sight draft or certificate stating that an Event of Default has
occurred under this Lease and that Landlord is entitled to draw upon the letter
of credit in the amount set forth in the sight draft or certificate; (f) of a
term not less than one year; and (g) at least thirty (30) days prior to the
then-current expiration date of such letter of credit, either (1) renewed (or
automatically and unconditionally extended) from time to time through the
ninetieth (90th) day after the expiration of the Lease Term, or (2) replaced
with cash in the amount of the Security Deposit. Notwithstanding anything in
this Lease to the contrary, any cure or grace periods set forth in this Lease
shall not apply to Tenant's obligations under subsection (g) above, and,
specifically, if Tenant fails to timely comply with the requirements of
subsection (g) above, then Landlord shall have the right to immediately draw
upon the letter of credit without notice to Tenant and apply the proceeds to the
security deposit. Each letter of credit shall be issued by a commercial bank
that has a credit rating with respect to certificates of deposit, short term
deposits or commercial paper of at least P-2 (or equivalent) by ▇▇▇▇▇'▇ Investor
Service, Inc., or at least A-2 (or equivalent) by Standard & Poor's Corporation,
and shall be otherwise acceptable to Landlord in its reasonable discretion. If
the issuer's credit rating is reduced below P-2 (or equivalent) by ▇▇▇▇▇'▇
Investors Service, Inc. or below A-2 (or equivalent) by Standard & Poor's
Corporation, or if the financial condition of such issuer changes in any other
materially adverse way, then Landlord shall have the right the require that
Tenant obtain a substitute letter of credit from a different issuer that
complies in all respects with the requirements of this Section, and Tenant's
failure to obtain such substitute letter of credit within ten (10) business days
following Landlord's written demand therefor (with no other notice or cure or
grace period being applicable thereto, notwithstanding anything in this Lease to
the contrary) shall entitle Landlord to immediately draw upon the then existing
letter of credit in whole or in part, without notice to Tenant. In the event the
issuer of any letter of credit held by Landlord is placed into receivership or
conservatorship by the Federal Deposit Insurance Corporation, or any successor
or similar entity, then, effective as of the date such receivership or
conservatorship occurs, said letter of credit shall be deemed not to meet the
requirements of this Section, and, within ten (10) business days thereafter,
Tenant shall replace such letter of credit with a substitute security deposit
meeting the requirements of this Section (and Tenant's failure to do so shall,
notwithstanding anything in this Lease to the contrary, constitute an Event of
Default for which there shall be no notice or grace or cure periods being
applicable thereto other than the aforesaid ten (10) business day period).
Landlord shall return the superseded letter of credit to Tenant promptly upon
receipt of its replacement. Any failure or refusal of the issuer to
-15-
honor the letter of credit shall be at Tenant's sole risk and shall not relieve
Tenant of its obligations hereunder with respect to the security deposit.
(d) Tenant shall have the right, from time to time, to
substitute a letter of credit meeting the requirements of Subparagraph (c) for
the cash security deposit, and vice versa, on one or more occasions, provided
that substitutions may not occur more frequently than one (1) time in any twelve
(12) month period.
(e) Provided that, as of the applicable Reduction Date, as
defined below, (i) no default on the part of Tenant under this Lease shall then
be in existence and no Event of Default, as defined in Section 18.1, has
occurred hereunder, (ii) no uncorrected physical damages to the Premises shall
have occurred, ordinary wear and tear excepted and (iii) no other event shall
have occurred during the Lease Term which would entitle Landlord to use or to
retain all or a portion of the security deposit in accordance with the
provisions of this Article V, Tenant shall have the right on the first day of
the second (2nd) Lease Year and on the first day of each of the following four
(4) Lease Years thereafter (each a "REDUCTION DATE") to reduce the security
deposit by the amount of Forty Thousand Dollars ($40,000.00). Notwithstanding
anything herein to the contrary, if an Event of Default has occurred, then there
shall occur no further reduction in the security deposit. If any portion of the
security deposit is then in the form of a letter of credit, such reduction shall
occur by means of delivery by Tenant to Landlord of a substitute Letter of
Credit in such amount and in strict conformity with the terms of this Article V,
in which event, the original Letter of Credit and any substituted Letter of
Credit, as applicable, shall be returned to Tenant.
5.2 In the event of the sale or transfer of Landlord's interest in
the Building, Landlord shall have the right to transfer the security deposit to
the purchaser or assignee, provided such purchaser or assignee assumes
Landlord's obligations hereunder, as evidenced by the agreement of such
purchaser or assignee, a copy of which Landlord shall furnish to Tenant in
accordance with Section 14.3 hereof. If Landlord transfers the security deposit
to a purchaser or assignee, Tenant shall look only to such purchaser or assignee
for the return of the security deposit, and Landlord shall thereupon be released
from all liability to Tenant for the return of the security deposit. If the
security deposit is in the form of a letter of credit, then Tenant shall, within
ten (10) days after Landlord's request therefor, cause the Letter of Credit to
be amended or reissued by the issuer to indicate the new beneficiary.
5.3 Tenant hereby acknowledges that Tenant will not look to the
holder of any mortgage (as defined in Section 20.1) encumbering the Building for
return of the security deposit if such holder, or its successors or assigns,
shall succeed to the ownership of the Building, whether by foreclosure or deed
in lieu thereof, except if and to the extent the security deposit is actually
transferred to such holder; provided, however, that Landlord agrees to transfer
any security deposit from Tenant to such holder of any mortgage encumbering the
Building.
-16-
ARTICLE VI
USE OF PREMISES
6.1 Tenant shall use and occupy the Premises solely for general
office purposes, research and development and related and ancillary uses and any
other uses that are permitted under the Approved Site Plan, applicable zoning
laws and other Legal Requirements (as hereinafter defined) and are compatible
with a Class A suburban office complex in the Market Area, as defined in Section
25.4 below, and for no other use or purpose. The parties hereby agree that the
following uses are compatible with a Class A suburban office complex in the
Market Area: laboratories, light assembly areas, health club/fitness center,
outdoor fitness trail, day care center, sundries/lobby shop, laundry/dry
cleaning drop-off service, and food service operations. Notwithstanding anything
herein to the contrary, in no event shall such "compatible uses" in the
aggregate exceed more than forty percent (40%) of the rentable area of the
Building. Tenant shall not use or occupy the Premises for any unlawful purpose
or in any manner that will constitute waste, nuisance or unreasonable annoyance.
Tenant's use of the Premises shall also comply with all present and future laws,
ordinances (including zoning ordinances and land use requirements), regulations,
and orders of Loudoun County, the Commonwealth of Virginia and any other public
or quasi-public authority having jurisdiction over the Premises, concerning the
use, occupancy and condition of the Premises and all machinery, equipment and
furnishings therein (together referred to herein as "LEGAL REQUIREMENTS").
6.2 Pursuant to the provisions of the Development Agreement,
Landlord shall obtain the initial non-residential use permit and any other
similar governmental approvals which may be required for Tenant's occupancy of
the Premises. It is expressly understood that if any present or future Legal
Requirements require any other permit(s) for the Premises due to Tenant's
particular use thereof, or Tenant's improvements or future alterations thereto,
that Tenant will obtain such permit(s) at Tenant's own expense. Further, Tenant
will comply with all Legal Requirements which impose on Landlord or Tenant a
duty relating to or arising as a result of Tenant's use or occupancy of the
Premises. In particular, without limiting the generality of the foregoing, any
and all alterations or additions to the Premises that are required to be made
after the Lease Commencement Date, as a result of Legal Requirements (now
existing or hereafter enacted) shall be made by Tenant at Tenant's sole cost and
expense and in accordance with the requirements of Article IX hereof.
Notwithstanding anything contained herein to the contrary, Landlord shall be
required to comply with any present or future Legal Requirements with respect to
(i) elements and components of the "base building" structure and systems and
(ii) the common areas of the Building which are within Landlord's control,
unless, in either case, such Legal Requirements are imposed because of Tenant's
particular use or configuration of the Premises (as opposed to office use
generally) or any improvements constructed in the Premises by Tenant or caused
by Tenant or any of its employees, agents, contractors or subtenants in which
case Tenant shall bear the entire cost of performing such addition, replacement
or alteration. Tenant shall promptly pay all fines, penalties and damages that
may arise out of or be imposed on Landlord or Tenant because of Tenant's failure
to comply with the provisions of this Section.
6.3 Tenant shall pay any business, rent or other taxes that are now
or hereafter levied upon Tenant's use or occupancy of the Premises, the conduct
of Tenant's business at the Premises, or Tenant's equipment, fixtures or
personal property. In the event that any such taxes
-17-
are enacted, changed, or altered so that any of such taxes are levied against
Landlord, or the mode of collection of such taxes is changed so that Landlord is
responsible for collection or payment of such taxes, Tenant shall pay any and
all such taxes to Landlord within thirty (30) days following written demand from
Landlord.
6.4 Tenant shall not cause or permit any Hazardous Materials to be
generated, used, released, stored or disposed of in or about the Building or the
Complex, provided that Tenant may use and store reasonable quantities of
standard office supplies and cleaning materials as may be reasonably necessary
for Tenant to conduct normal general office use operations in the Premises and
in compliance with all Environmental Laws and other applicable Legal
Requirements. At the expiration or earlier termination of this Lease, Tenant
shall surrender the Premises to Landlord free of Hazardous Materials (except any
that may be Landlord's responsibility pursuant to Section 6.5 hereof and any
that are otherwise not Tenant's responsibility pursuant to the terms of this
Article VI) and, subject to the foregoing parenthetical, in compliance with all
Environmental Laws. "HAZARDOUS MATERIALS" means (a) asbestos and any asbestos
containing material and any substance that is then defined or listed in, or
otherwise classified pursuant to, any Environmental Law or any other applicable
Law as a "hazardous substance," "hazardous material," "hazardous waste," "toxic
substance," "toxic pollutant" or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, or
Toxicity Characteristic Leaching Procedure (TCLP) toxicity, (b) any petroleum
and drilling fluids, produced waters, and other wastes associated with the
exploration, development or production of crude oil, natural gas, or geothermal
resources, and (c) any petroleum product, polychlorinated biphenyls, urea
formaldehyde, radon gas, radioactive material (including any source, special
nuclear, or byproduct material), chlorofluorocarbon, lead or lead-based product,
and any other substance whose presence would be hazardous to health or the
environment. "ENVIRONMENTAL LAW" means any present and future Law and any
amendments (whether common law, statute, rule, order, regulation or otherwise),
permits and other requirements or guidelines of governmental authorities
applicable to the Building or the Land and relating to the environment and
environmental conditions or to any Hazardous Material (including, without
limitation, CERCLA, 42 U.S.C. Section 9601 et seq., the Resource Conservation
and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801 et seq., the Federal Water
Pollution Control Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 33
U.S.C. Section 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq., the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq., the
Emergency Planning and Community Right-To-Know Act, 42 U.S.C. Section 1101 et
seq., the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq., and
any so-called "Super Fund" or "Super Lien" law, any Law requiring the filing of
reports and notices relating to hazardous substances, environmental laws
administered by the Environmental Protection Agency, and any similar state and
local Laws, all amendments thereto and all regulations, orders, decisions, and
decrees now or hereafter promulgated thereunder concerning the environment,
industrial hygiene or public health or safety). At all times, and
notwithstanding any termination of this Lease, Tenant shall indemnify and hold
Landlord, its employees and agents harmless from and against any damage, injury,
loss, liability, charge, demand or claim based on or arising out of the presence
or removal of, or failure to remove, Hazardous Materials generated, used,
released, stored or disposed of by Tenant or its employees, agents, contractors,
licensees or invitees (collectively, "INVITEES") in or about the Building or the
-18-
Complex, whether before or after the Lease Commencement Date. In addition,
Tenant shall give Landlord immediate verbal and follow-up written notice of any
actual or threatened Environmental Default, which Environmental Default Tenant
shall cure in accordance with all Environmental Laws and to the reasonable
satisfaction of Landlord and, except in the case of an emergency (in which event
Tenant may act without Landlord's consent), only after Tenant has obtained
Landlord's prior written consent, which shall not be unreasonably withheld. An
"ENVIRONMENTAL DEFAULT" means any of the following by Tenant or any Invitee with
respect to the Building, the Land or the Complex: a violation of an
Environmental Law; a release, spill or discharge of a Hazardous Material on or
from the Premises, the Land or the Building; an environmental condition
requiring responsive action; or an emergency environmental condition. Upon any
Environmental Default, in addition to all other rights available to Landlord
under this Lease, at law or in equity, Landlord shall have the right but not the
obligation to immediately enter the Premises, to supervise and approve any
actions taken by Tenant to address the Environmental Default, and, if Tenant
fails to immediately address same to Landlord's reasonable satisfaction, to
perform, at Tenant's sole cost and expense, any lawful action necessary to
address same. If any lender or governmental agency shall require testing to
ascertain whether an Environmental Default is pending or threatened, then Tenant
shall pay the reasonable costs therefor as additional rent. Promptly upon
request, Tenant shall execute from time to time affidavits, representations and
similar documents concerning Tenant's best knowledge and belief regarding the
presence of Hazardous Materials at or in the Building, the Land or the Premises.
6.5 Landlord shall not cause or permit any Hazardous Materials to be
generated, used, released, stored or disposed of on the Land, in the Building or
any portion of the Complex that it owns, in violation of applicable
Environmental Laws. Except as otherwise provided below, if Landlord first
becomes aware that any such Hazardous Materials have been generated, used,
released, stored or disposed of on the Land, in the Building or any portion of
the Complex that it owns in violation of applicable Environmental Laws after
construction of the Building is substantially complete, Landlord shall take all
reasonable steps necessary to promptly remove such Hazardous Materials and/or
remediate any contamination resulting therefrom to the extent necessary to bring
the Land into compliance with all applicable Environmental Laws; provided that,
Landlord shall have no such obligations with respect to any Hazardous Materials
present as a result, directly or indirectly, of an Environmental Default by
Tenant, which Hazardous Materials, the removal and the remediation thereof,
shall be the responsibility of Tenant pursuant to Section 6.4 above. If the
parties become aware, prior to substantial completion of the Building, or during
any subsequent period of construction on behalf of Tenant pursuant to the
Development Agreement, that any Hazardous Materials have been generated, used,
released, stored or disposed of on the Land in violation of applicable
Environmental Laws, the remediation thereof shall be conducted pursuant to the
Development Agreement.
ARTICLE VII
ASSIGNMENT AND SUBLETTING
7.1 Except with respect to Tenant's Personal Property as
contemplated by Section 18.10 below and except as provided in Section 7.4 below,
Tenant shall not have the right to
-19-
assign, transfer, mortgage or otherwise encumber this Lease or its interest
herein without first complying with the provisions of subsections (a) and (b) of
this Section 7.1.
(a) No assignment, transfer, mortgage or other encumbrance
of this Lease shall be effected unless Tenant obtains the prior written consent
of Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed by Landlord; provided, however, that, (i) if an Event of Default then
exists under this Lease Landlord, in its sole judgment, may withhold its consent
to any proposed assignment, transfer, mortgage or other encumbrance of this
Lease, and (ii) Landlord may withhold its consent if it reasonably determines
that the character of the proposed assignee or the nature of the activities to
be conducted by such proposed assignee would materially affect the other tenants
of the Building, if any, or the Complex or would physically damage the Building
or impair the reputation of the Building as a Class A suburban office building
in the Market Area, or the financial history or credit rating of the proposed
assignee presents a material risk to Landlord of non-compliance with this Lease.
No assignment or transfer of this Lease or the right of occupancy hereunder may
be effectuated by operation of law or otherwise without the prior written
consent of Landlord, as aforesaid. Any attempted assignment or transfer by
Tenant of this Lease or its interest herein without Landlord's consent (if
Landlord's consent thereto is required) shall, if such attempted assignment or
transfer is not nullified or voided by Tenant within ten (10) business days
following written notice from Landlord to Tenant that the assignment or transfer
was improperly attempted without Landlord's consent, at the option of Landlord,
terminate this Lease; however, in the event of such termination, Tenant shall
remain liable for all rent and other sums due under this Lease and all damages
suffered by Landlord on account of such breach by Tenant.
(b) Tenant agrees to give Landlord at least ten (10)
business days' advance written notice of Tenant's intention to assign or
transfer this Lease, along with sufficient information about the proposed
assignee or transferee to enable Landlord to make the determination called for
by subsection (a) above.
(c) Notwithstanding anything contained herein to the
contrary, (i) Tenant shall not have the right to assign or transfer this Lease
prior to the Lease Commencement Date hereunder, except to an Affiliate of Tenant
(as hereinafter defined) or otherwise pursuant to Section 7.5 hereof; and (ii)
Tenant may not partially assign this Lease.
7.2 Tenant shall not have the right to sublease (which term, as used
herein, shall include any type of subrental arrangement and any type of license
to occupy) all or any part of the Premises without first complying with the
provisions of subsections (a) and (b) of this Section 7.2.
(a) Tenant shall have the right to sublease any portion or
portions of the Premises; provided that, if a proposed sublease, in the
aggregate with all other subleases then in existence, will cause more than fifty
percent (50%) of the rentable area of the Premises to be subject to any
sublease, then Tenant must obtain the prior written consent of Landlord to such
proposed sublease, which consent shall not be unreasonably withheld, conditioned
or delayed by Landlord; provided, however, that Landlord may withhold its
consent to any proposed sublease if (i) an Event of Default then exists under
this Lease or (ii) Landlord reasonably determines that
-20-
the character of the proposed subtenant or the nature of the activities to be
conducted by such proposed subtenant would materially affect the other tenants
of the Building or the Complex, or would physically damage the Building or
impair the reputation of the Building as a Class A suburban office building in
the Market Area, or that the financial history or credit rating of the proposed
subtenant presents a material risk to Landlord of non-compliance with this
Lease. Notwithstanding anything contained herein to the contrary, in the event a
proposed sublease will not cause more than fifty percent (50%) of the rentable
area of the Premises to be subject to any sublease or assignment, then Tenant
may enter into such sublease without Landlord's consent, but upon at least ten
(10) business days' prior written notice to Landlord and provided the sublease
document otherwise satisfies the terms of Section 7.3 below.
(b) Tenant agrees to give Landlord at least fifteen (15)
business days advance written notice of Tenant's intention to sublease a portion
of the Premises, along with a copy of the proposed sublease and sufficient
information about the proposed subtenant to enable Landlord to make the
determination called for by subsection (a) above (if such sublease is subject to
Landlord's consent). In the event Landlord fails to approve or disapprove any
proposed sublease or subtenant within the fifteen (15) business days after
Landlord's receipt of Tenant's notice of its intention to sublet together with
the information about the proposed subtenant require pursuant to this Section
7.2(b), then Landlord shall be deemed to have approved such sublease and
subtenant, unless Landlord has, in good faith, during such fifteen (15) period
requested additional information about the subtenant or requested changes to the
proposed form of sublease to be entered into between Tenant and its proposed
subtenant.
7.3 The consent by Landlord to any assignment or subletting shall
not be construed as a waiver or release of Tenant from any and all liability for
the performance of all covenants and obligations to be performed by Tenant under
this Lease, nor shall the collection or acceptance of rent from any assignee,
transferee or subtenant constitute a waiver or release of Tenant from any of its
liabilities or obligations under this Lease. Landlord's consent to any
assignment or subletting shall not be construed as relieving Tenant from the
obligation of complying with the provisions of Sections 7.1 or 7.2 hereof, as
applicable, with respect to any subsequent assignment or subletting. For any
period during which Tenant is in default hereunder with respect to the payment
of Annual Base Rent or additional rent and such default has continued beyond any
applicable grace or cure period, Tenant hereby assigns to Landlord the rent due
from any subtenant of Tenant and hereby authorizes each subtenant to pay said
rent directly to Landlord. Whether or not Landlord's prior written consent to a
subletting is required pursuant to Section 7.2 above, Tenant further agrees to
submit any and all instruments of assignment and sublease to Landlord prior to
the execution thereof to enable Landlord to determine whether such instrument
complies with the terms hereof. All such instruments shall provide that (i) such
sublease or assignment is subject and subordinate to this Lease in all respects,
and to any amendments, modifications, renewals, extensions or expansions hereof,
(ii) in the case of a sublease, Tenant shall remain primarily liable as Tenant
hereunder, (iii) such assignee or sublessee shall conduct a business in the
Premises which is a permitted use pursuant to Article VI of this Lease, (iv) in
the case of an assignment, such assignee is bound by the terms and conditions of
this Lease and assumes all of the obligations and liabilities of Tenant
hereunder, (v) in the case of a sublease, (A) Landlord is not, and will not
become, a party to such sublease, (B) Landlord's consent to such sublease does
not create a contractual relationship between Landlord and such sublessee,
-21-
nor does it create any liability of Landlord to such sublessee, and (C) such
sublessee shall not succeed to, or otherwise have the right to exercise or
enforce, any of Tenant's rights hereunder directly against Landlord, (vi)
Landlord's consent to such assignment or sublease does not affect the
obligations of Landlord or Tenant under this Lease, and (vii) Landlord's consent
to such assignment or sublease shall not be construed to mean that Landlord has
approved any plans or specifications for renovations to the Premises intended by
such assignee or sublessee and that any such work to the Premises must be
conducted in accordance with the terms of this Lease. Any such instrument of
assignment or sublease not approved by Landlord in each instance where
Landlord's approval is required, or, whether or not Landlord's approval is
required, which does not include all of the provisions described in clauses (i)
through (vii) above, as required (unless waived by Landlord in its sole
discretion), shall be null and void and of no force or effect. Any such
instrument of assignment or sublease submitted to Landlord for approval and not
approved or disapproved by Landlord within ten (10) business days after
submission shall be deemed approved by Landlord for all purposes under this
Lease. If Landlord disapproves any sublease or assignment submitted to Landlord
for approval, Landlord's notice of disapproval shall identify Landlord's reasons
therefor.
7.4 (a) Notwithstanding the above restrictions on subletting and
assignment in this Article VII, and provided that no Event of Default then
exists under this Lease, Tenant shall have the right, upon not less than five
(5) business days' prior written notice to Landlord but without Landlord's prior
written consent, to assign this Lease or to sublet all or any part of the
Premises to an Affiliate of Tenant (as hereinafter defined), provided (i) that
no Event of Bankruptcy (as hereinafter defined) shall have occurred with respect
to such assignee or sublessee, (ii) that the conditions set forth in Section
7.3(i) - (vii) are fully satisfied and (iii) that the character of such person
or entity and the nature of its activities in the Premises and in the Building
would not be inappropriate for a Class A suburban office building in the Market
Area.
(b) For purposes of this Section 7.5, an "AFFILIATE OF
TENANT" shall mean any corporation, association, trust, partnership, limited
liability company, joint venture or other entity (i) which Controls (as herein
defined) Tenant or (ii) which is under the Control of Tenant through stock
ownership or otherwise or (iii) which is under common Control with Tenant. The
terms "CONTROL" or "CONTROLS" as used in this Section 7.5 shall mean the power
to directly or indirectly influence the direction, management or policies of
Tenant or such other entity.
(c) Notwithstanding the above restrictions on assignment,
and provided that no Event of Default then exists under this Lease, Tenant shall
have the right, upon not less than thirty (30) days' prior written notice to
Landlord, but without Landlord's prior written consent, to assign this Lease
pursuant to a merger, consolidation, or other corporate reorganization of
Tenant, or the sale or transfer of all or substantially all of the capital stock
of Tenant or all or substantially all of the assets of Tenant, provided that (i)
Tenant, after such merger, consolidation, reorganization or sale of stock or
assets, has a creditworthiness (e.g. assets and capitalization) and net worth
(which shall be determined on a pro forma basis using generally accepted
accounting principles consistently applied and using the most recent financial
statements) equal to or greater than the net worth of Tenant on the Effective
Date, (ii) Tenant, after such merger, consolidation, reorganization or sale of
stock or assets, agrees in writing to be bound by the terms and conditions of
this Lease and to assume all of the obligations and
-22-
liabilities of Tenant under this Lease, (iii) Tenant, after such merger,
consolidation, reorganization or sale of stock or assets, shall conduct a
business on the Premises which is a permitted use pursuant to Article VI of this
Lease, (iv) the character of Tenant after the merger, consolidation,
reorganization or sale of stock or assets, as the case may be, and the nature of
Tenant's activities in the Premises would not be inappropriate for a Class A
suburban office building in the Market area, (v) the conditions set forth in
Section 7.3(i), (ii), (iii), (iv), (vi) and (vii) are fully satisfied, and (vi)
the assignment is not a so-called "sham" transaction intended by Tenant to
circumvent the provisions of Article VII of this Lease.
7.6 Tenant shall use reasonable efforts to notify Landlord in
writing of any intention by Tenant to market the Premises or any portion thereof
for assignment or sublease, and shall furnish to Landlord such information as
Landlord may reasonably request with respect to the economic terms of the
assignment or sublease transaction being sought by Tenant and the actions Tenant
is taking to market the Premises.
ARTICLE VIII
MAINTENANCE AND REPAIRS
8.1 Landlord shall keep, maintain, repair and replace as
appropriate, the elements and components which are provided as a part of the
Base Building Work, as defined in the Development Agreement, including, without
limitation, foundation, roof, exterior walls, structural portions (including
columns within the Premises and the vertical sprinkler loop through the
Building), and exterior glass and windows of the Building (specifically
excluding the interior walls, doors, partitions, locks, and door jambs in the
Building), as well as all mechanical, plumbing, heating, air conditioning,
sprinkler and electrical systems and utility service lines therein, the plumbing
system to and from the Premises and core area restrooms within the Premises, and
the driveways, parking areas and grounds on the Land in good condition and
repair and, subject to the provisions of Article VI above, in compliance with
applicable Legal Requirements and the costs incurred by Landlord in maintaining
and repairing such items shall be included in Expenses (unless the cost or
expense of any such repair or maintenance is excluded from Expenses under
Section 4.2(a) above).
8.2 Subject to the provisions of Section 8.1 above, Tenant will keep
and maintain the Premises, including, without limitation, the Leasehold.
Improvements, as defined in the Development Agreement, and all fixtures and
equipment located in the Building (specifically including the interior walls,
doors, partitions, locks, door jambs, windows, telephones, telephone systems,
inside voice/data/video cabling and associated equipment, special light
fixtures, kitchen fixtures, auxiliary heating, ventilation or air-conditioning
equipment, fixtures and other special equipment and glass in the Premises, but
excluding those portions of the Premises to be maintained by Landlord pursuant
to Section 8.1 above) in clean, safe and sanitary condition, will take good care
thereof and will maintain and make all required repairs thereto, and will suffer
no waste or injury thereto. If Tenant so requests by written notice to Landlord,
Landlord shall make any repairs and perform any maintenance that are otherwise
Tenant's obligations under this Section 8.2, and the costs of providing such
services shall be included in Operating Expenses and payable by Tenant pursuant
to Article IV hereof. In addition, Tenant shall have the right, but not the
obligation, to effect minor repairs and routine maintenance to the Premises
(and, for so long
-23-
as Tenant is the sole lessee of the Building, the Land) provided that (i)
Landlord shall be given reasonable prior notice thereof (except in the case of
emergency); (ii) once commenced, such maintenance and repair work shall be
completed promptly and in accordance with standards for a Class A suburban
office building; (iii) such repair or maintenance will not jeopardize compliance
with the Building's classification as a Class A suburban office building; and
(iv) Tenant shall not be entitled to make structural repairs or repairs or
maintenance that has a material effect on any of the base building systems,
except as permitted pursuant to Section 14.6 hereof. At the expiration or other
termination of the Lease Term, Tenant shall surrender the Premises, broom clean,
in substantially the same order and condition which they are in on the Lease
Commencement Date, as altered by any improvements (as defined in Section 9.2
hereof) made in accordance with Article IX hereof that Tenant is not obligated
to remove pursuant to Section 9.4 hereof, ordinary wear and tear, damage by the
elements, and casualty damage excepted.
8.3 Subject to the provisions of Section 12.4(b) below, all injury,
breakage and damage to the Premises or to any other part of the Building caused
by any negligent act or omission or willful misconduct of Tenant, or of any
agent, employee, subtenant, contractor, customer or invitee of Tenant, shall be
repaired by and at the sole expense of Tenant, except that Landlord shall have
the right, at its option, after Tenant's failure to cure (or commence to cure,
where applicable) within ten (10) business days after notice to Tenant of such
injury, breakage or damage, to make such repairs and to charge Tenant for all
costs and expenses incurred in connection therewith as additional rent
hereunder. The foregoing notwithstanding, should an emergency or similar
situation occur and delay would cause or is likely to cause preventable injury
to persons or material injury to property, Landlord may elect to act without
notice to Tenant.
ARTICLE IX
ALTERATIONS
9.1 (a) Tenant is contracting with Landlord, pursuant to the
Development Agreement for the construction of the Building, including all
Leasehold Improvements. Tenant hereby acknowledges that it has performed its own
due diligence with respect to the Land and the development potential thereof,
Landlord having made no representations or warranties whatsoever with respect to
the physical condition of the Land or its suitability for any particular
construction or use. The provisions of Section 9.2 and 9.3 below shall govern
only Improvements, as defined below, made following the initial construction of
the Building and Leasehold Improvements pursuant to the Development Agreement.
(b) Prior to the Lease Commencement Date, an Integrated
Punchlist shall be prepared in accordance with the provisions of Section 7 of
the Development Agreement. Tenant's taking possession of the Premises shall
constitute Tenant's acknowledgement that the Premises are in good condition and
that all work and materials are satisfactory, except as to any items set forth
in the Integrated Punchlist and except as to latent defects with respect to the
Leasehold Improvements discovered by Tenant within one (1) year following the
Lease Commencement Date (it being agreed that such one-year time period shall
not limit Landlord's ongoing obligation pursuant to Article VIII of this Lease
to maintain and repair the Base Building Work). Landlord will cause its
contractor to promptly correct any latent defect timely
-24-
brought to Landlord's attention by Tenant. Except to the extent that Landlord
must retain the ability to enforce warranties to obtain the correction of latent
defects, Landlord shall assign to Tenant the right to enforce all warranties
issued by Landlord's contractors and suppliers with respect to the Leasehold
Improvements.
9.2 Except as otherwise permitted pursuant to the Development
Agreement and Section 9.3 below, Tenant will not make or permit anyone to make
any alterations, additions or improvements (hereinafter referred to collectively
as "IMPROVEMENTS"), structural or otherwise, upon the Land or in or to the
Premises without the prior written consent of Landlord to the proposed
improvement (including the plans and specifications therefor). In the case of
any proposed improvement that is of a major structural nature or any proposed
improvement materially affecting any of the base building systems, Landlord may
grant or withhold its consent in its sole discretion, unless the improvement is
customary in Class A suburban office buildings in the Market Area, including
single user buildings, or would not materially affect, in Landlord's judgment,
the value or marketability of the Premises, in which case Landlord's consent
shall not be unreasonably withheld, conditioned or delayed. All Improvements
made by Tenant shall not be inconsistent with usual and customary improvements
to headquarters offices in Class A suburban office buildings in the Market Area,
including single user buildings. In the event Landlord fails to respond to a
request for its consent to an improvement within ten (10) business days
following submission of such request in writing, then Landlord's consent shall
be deemed granted. When granting its consent, Landlord may impose any conditions
it reasonably deems appropriate, including, without limitation, the approval by
Landlord of the contractor or other persons who will perform the work (which
consent shall not be unreasonably withheld, conditioned or delayed), Tenant's
obtaining all necessary permits and approvals for such work, and Tenant's
obtaining, and providing Landlord with certificates of insurance evidencing,
reasonably appropriate levels and types of insurance coverage. In addition,
Landlord may condition, at the time it is granted, its approval of any
Improvements that are not customarily maintained by landlords in Class A
suburban office buildings in the Market Area or would not materially affect, in
Landlord's judgment, the value or marketability of the Premises on Tenant's
agreeing to maintain such Improvements and/or to remove such Improvements at the
expiration or earlier termination of the Lease Term and to restore the Premises
to substantially the condition they were in prior to the making of such
Improvements. All Improvements permitted by Landlord (or allowed hereunder
without Landlord's approval) must conform to all applicable requirements of the
insurers of the Building, including, without limitation, Boston Properties' Loss
Control Guidelines ("INSURANCE REQUIREMENTS") and to all applicable Legal
Requirements. Landlord's review and approval of any such plans and
specifications and consent to the performance of work described therein shall
not be deemed an agreement by Landlord that such plans, specifications and work
conform with all applicable Legal Requirements and Insurance Requirements nor be
deemed a waiver of Tenant's obligations under this Lease with respect to Legal
Requirements and Insurance Requirements nor impose any liability or obligation
upon Landlord with respect to the completeness, design sufficiency or compliance
with Legal Requirements or Insurance Requirements of such plans, specifications
and work. Upon completion of any Improvements requiring Landlord's approval,
Tenant shall provide Landlord with final release of lien forms executed by
Tenant's general contractor. If, notwithstanding the foregoing, any mechanic's
or materialmen's lien is filed against the Premises, the Building and/or the
Land, for work claimed to have been done for, or materials claimed to have been
-25-
furnished to, the Premises on Tenant's account, such lien shall be discharged by
Tenant within twenty (20) days after Tenant has notice thereof, at Tenant's sole
cost and expense, by the payment thereof or by the filing of a surety bond that
discharges the lien. If Tenant shall fail to discharge any such mechanic's or
materialmen's lien within twenty (20) days after receiving written notice
thereof from Landlord, Landlord may, at its option, discharge such lien and
treat the cost thereof (including reasonable attorneys' fees incurred in
connection therewith) as additional rent payable with the next monthly
installment of Annual Base Rent falling due. It is further understood and agreed
that in the event Landlord shall give its written consent to the making of any
Improvements to the Premises, such written consent shall not be deemed to be an
agreement or consent by Landlord to subject its interest in the Premises, the
Building or the Land to any mechanic's or materialmen's liens which may be filed
in connection therewith. Upon completion of any structural Improvements by
Tenant, Tenant shall provide Landlord with accurate "as-built" plans showing the
new work in a "CADD" format. In addition, if Tenant has made any Improvements
(structural or otherwise) in the Premises during the course of any calendar
year, then Tenant shall provide Landlord with such "as-built" plans (in CADD
format, if available) within thirty (30) days following the end of such calendar
year; provided, however, that Tenant shall not be obligated to provided Landlord
with as-built plans if such improvements are limited to painting and carpeting
all or a portion of the Premises and other work of a cosmetic nature.
9.3 Notwithstanding the provisions of Section 9.2 hereof to the
contrary, throughout the Lease Term, Tenant may make alterations or additions to
the Premises which (a) cost less than Twenty-Five Thousand Dollars ($25,000.00)
individually or Two Hundred Thousand Dollars ($200,000.00) in the aggregate
during any twelve (12) consecutive month period, (b) are not structural in
nature and which do not relate to or affect the base Building electrical,
mechanical, fire or life safety systems, (c) are in conformance with all
applicable building, zoning and other codes or regulations affecting or applying
to the Building and (d) are shown on working drawings, space plans or plans and
specifications copies of which are delivered to Landlord within twenty (20) days
of Tenant's completion of such alterations or additions, without obtaining
Landlord's prior written approval; provided, however, that upon completion of
such work Tenant shall deliver to Landlord copies of lien waivers from the
contractors and materialmen providing the supplies, materials and work therefor.
In addition to the foregoing, Tenant shall not be required to obtain the consent
of Landlord for the making of alterations that are purely decorative or cosmetic
in nature, such as painting and carpeting, or alterations consisting of minor
re-partitioning and appurtenant changes to distribution systems (i.e.,
electrical outlets, HVAC vents). In the event Tenant intends to make any
alterations to the Premises in accordance with the provisions of this Section
9.3, Tenant, not less than ten (10) days prior to the commencement of such work,
shall notify Landlord, in writing, as to (i) the date on which such work is to
commence, (ii) the date on which such work is scheduled to be completed, and
(iii) the name of the contractor or other person performing such work. In
addition, Tenant and Tenant's contractor shall coordinate the performance of
such work with the on-site property manager of the Building.
9.4 Tenant shall indemnify and hold Landlord harmless from and
against any and all expenses, liens, claims, liabilities and damages based on or
arising, directly or indirectly, by reason of the making of any Improvements to
the Premises, the furnishing of any services to the
-26-
Premises or the Building or the repair and maintenance of the Premises or the
Building, in each case by Tenant or its employees, agents or contractors;
provided that Tenant's obligations to indemnify and hold harmless Landlord
pursuant to this Section 9.4 shall not include any costs, damages, claims,
liabilities or expenses suffered by or claimed against Landlord directly based
on, arising out of or resulting from Landlord's breach of, or default as to, any
of its covenants or other obligations under this Lease or Landlord's or its
employees negligence or willful misconduct or the gross negligence of Landlord's
agents or contractors. If any Improvements are made without the prior written
consent of Landlord (if such consent is required hereunder) and they are not
removed and the Premises restored within thirty (30) days following Tenant's
receipt of written notice from Landlord requiring such removal and restoration,
Landlord shall have the right to remove and correct such Improvements and
restore the Premises to their condition immediately prior thereto, and Tenant
shall be liable for all expenses incurred by Landlord in connection therewith.
All Improvements affixed to the Premises or the Building made by either party,
including all Improvements made as part of the initial construction of the
Building and tenant build-out pursuant to the Development Agreement, shall
remain upon and be surrendered with the Premises as a part thereof at the end of
the Lease Term, except that (i) Tenant shall have the right to remove, prior to
the expiration of the Lease Term, all furniture, furnishings, fixtures, trade
fixtures and equipment installed in the Premises solely at the expense of Tenant
or otherwise identified by Tenant and agreed by Landlord, and (ii) except with
respect to the initial construction of the Building and tenant build-out
pursuant to the Development Agreement, Tenant shall be required to remove all
Improvements to the Premises which Landlord designates in writing for removal at
the time Landlord approves installation of such improvement (provided that
Landlord shall have the right to designate for removal any Improvements only if
they are of a nature that is materially different from that typically included
in an office build-out). All damage and injury to the Premises or the Building
caused by such removal shall be repaired by Tenant, at Tenant's sole expense,
except any damage or injury to tenant finishes in individual tenant space that
would customarily be replaced by Landlord in preparation for the next tenant. If
any property of Tenant is not removed by Tenant prior to the expiration or
termination of this Lease, the same shall become the property of Landlord and
shall be surrendered with the Premises as a part thereof.
ARTICLE X
SIGNS, EQUIPMENT AND FURNISHINGS
10.1 Throughout the Term of this Lease and subject to compliance with
any applicable Legal Requirements and Landlord's reasonable prior approval,
Tenant shall have the exclusive right to install and maintain, at Tenant's sole
expense, such signage identifying Tenant on the Building facade, within the
Building and in the form of exterior monument signs on the Land as Tenant shall
desire. The size, position, materials, color, style and manner of installation
of such signage shall be determined by Tenant, subject to Landlord's reasonable
approval. If Tenant and its Affiliates are leasing less than fifty percent (50%)
of the rentable area of the Building, then Tenant may continue to maintain any
then-existing signage; however, such right shall thereafter be non-exclusive,
and shall be subject to such changes in the size and positioning of such signage
as Landlord may reasonably require in order to accommodate dual signage in the
event that Landlord grants similar signage rights to any tenant leasing space in
the Building that is comparable to or greater than the amount of space then
leased by Tenant. If Tenant and its
-27-
Affiliates are leasing less than twenty-five percent (25%) of the rentable area
of the Building, then Landlord may require Tenant to remove, at Tenant's sole
cost and expense, any then existing signage and Tenant shall repair any damage
to the Building resulting therefrom. All of Tenant's signage shall be removed at
the expiration or earlier termination of the Lease Term, and Tenant shall repair
any damage to the Building resulting therefrom, at Tenant's cost and expense. If
any sign, advertisement or notice is exhibited or installed by Tenant in
violation of the terms hereof, Landlord shall have the right to remove the same
at Tenant's expense. If Tenant sublets all or any portion of the Premises,
Tenant may delegate its signage rights hereunder to its sublessee, without
obtaining Landlord's consent thereto, provided the name and logo to be displayed
by such sublessee is compatible with a Class A suburban office building and
Landlord has approved such sign andlor logo, which approval shall not be
unreasonably withheld, conditioned or delayed.
10.2 If Tenant and its Affiliates are leasing more than fifty percent
(50%) of the rentable area of the Building Tenant shall have the right, subject
to (a) Landlord's reasonable approval and (b) the approval, if required, of
requisite government authorities, to designate the name of the Building and any
associated private roads or drives, provided such names are appropriate for a
Class A suburban office building in the Market area. If Tenant or an Affiliate
of Tenant, individually or together, ceases at any time to lease at least
fifty-one percent (5 1%) of the rentable area of Premises, Landlord shall have
the right to rename the Building and any associated private roads or drives.
10.3 In addition to the other signage rights provided herein, Tenant
shall have the right to erect temporary signage during the pre-development and
construction periods prior to the Lease Commencement Date, publicizing the names
and roles of the parties participating in the development of the Complex;
provided that, the design and content thereof shall be subject to the mutual
agreement of the parties. The parties agree to act reasonably in attempting to
reach such mutual agreement.
10.4 Tenant shall not place or install in any portion of the Premises
any safes, fixtures or other equipment which will exceed the load factor for
which such portion of the Premises was designed and constructed. Any and all
damage or injury to the Premises or the Building caused by moving the property
of Tenant into or out of the Premises, or due to the same being in or upon the
Premises, other than damage or injury to tenant finishes in individual tenant
space that would customarily be replaced by Landlord in preparation for the next
tenant shall be repaired at the sole cost of Tenant. Tenant agrees to remove
promptly from the parking areas or sidewalks adjacent to the Building any of
Tenant's furniture, equipment or other material there delivered or deposited.
ARTICLE XI
INSPECTION BY LANDLORD
11.1 Subject to Tenant's published security regulations and
procedures, Tenant will permit Landlord, or its agents or representatives, to
enter the Premises, without charge therefor to Landlord and without diminution
of the rent payable by Tenant, (i) to examine, inspect and protect the Premises
and the Building, (ii) to make such alterations and/or repairs as in
-28-
Landlord's reasonable judgment may be required by law or be necessary to
maintain the Building in good condition and repair, (iii) to comply with and
carry out Landlord's obligations under this Lease, and (iv) to exhibit the same
to prospective tenants (provided that Tenant's consent, which shall not be
unreasonably withheld, shall be required if the Premises are to be exhibited to
a prospective tenant prior to Tenant's exercise of its right to renew this Lease
or the expiration of such right as provided in Article XXV below, or if there is
no such right in accordance with this Agreement, no earlier than twelve (12)
months prior to the expiration of the term of this Lease). In connection with
any such entry, Landlord shall reasonably endeavor to minimize the disruption to
Tenant's use of the Premises, shall (except in the event of an emergency) give
Tenant at least twenty-four (24) hours advance notice of such entry or such
greater amount of time as may be reasonable under the circumstances, shall
(except in the event of an emergency) conduct such entry only during normal
working hours, and, except in the event of an emergency, if requested by Tenant,
shall permit a representative of Tenant to escort Landlord (or its agents or
representatives) during its entry in the Premises. In connection with any
alterations or repairs made pursuant to clause (ii) above, (a) Landlord shall
reasonably endeavor to minimize the impact thereof on Tenant, both during and
following the period of construction or repair, (b) such alterations and repairs
shall not materially reduce the number of square feet of rentable area in the
Premises, (c) such alterations and repairs shall be performed in a manner that
is reasonably compatible with the then existing architectural and, in Landlord's
judgment, aesthetic design of the Premises, and (d) Landlord shall restore any
tenant finishes that may be disrupted by such alterations or repairs.
Notwithstanding anything to the contrary set forth in this Lease, except in the
event of an emergency, Landlord shall not be permitted access to areas
previously designated in writing by Tenant as security areas, unless Landlord
and its representatives are accompanied by an agent of Tenant designated and
made available by Tenant for such purposes.
11.2 Tenant may install additional locks, other devices and systems
which restrict access to the Premises and any part thereof. Tenant shall provide
Landlord with a means of access to the Premises and any part thereof for
emergency purposes, subject to applicable national security clearance
requirements and shall provide Landlord with a means of full access to the
Premises upon expiration of the Lease Term or earlier termination of this Lease.
ARTICLE XII
INSURANCE
12.1 Subject to the provisions of Section 6.1 above, Tenant shall not
conduct or permit to be conducted any activity, or place any equipment,
inventory or other materials, in or about the Premises or the Building that will
in any way increase the rate of fire insurance or other insurance on the
Building. If any increase in the rate of fire insurance or other insurance is
stated by any insurance company or by the applicable Insurance Rating Bureau to
be due solely to any activity of Tenant or the placing of any equipment,
inventory or other materials by Tenant in or about the Premises or the Building,
such statement shall be conclusive evidence that the increase in such rate is
due to such activity or equipment and, as a result thereof, Tenant shall be
liable for the amount of such increase. Tenant shall reimburse Landlord for such
amount upon written demand from Landlord and such sum shall be considered
additional rent payable hereunder.
-29-
12.2 Throughout the Lease Term, Landlord shall insure the Building
against loss due to fire and other casualties included in standard, all-risk,
extended coverage insurance policies, in an amount equal to at least ninety-five
percent (95%) of the full replacement cost thereof. Throughout the Lease Term,
Landlord shall obtain and maintain commercial general liability insurance in a
company or companies licensed to do business in the Commonwealth of Virginia.
Such insurance shall be in minimum amounts of Five Million Dollars ($5,000,000)
per occurrence plus a general aggregate of Five Million Dollars ($5,000,000) for
injury to persons and damage to property and shall be for a minimum term of one
(1) year. Landlord and Tenant may re-evaluate such minimum amount at the
expiration of every third (3rd) Lease Year and such minimum amounts may be
adjusted as appropriate to be consistent with Class A suburban office buildings
in the Market Area, provided, however, in no event shall such minimum amounts be
adjusted downward (i) without the approval of the holder of any mortgage, as
defined in Section 22.1 below, secured by the Building or (ii) below any
corporate minimum requirements of Landlord. Throughout the Lease Term, Landlord
shall obtain and maintain a policy of insurance protecting Landlord from loss of
rents and other charges during the period while the Premises are untenantable
due to fire or other insured casualty. The insurance required to be maintained
by Landlord shall be subject to the foregoing minimum requirements and shall
otherwise be in amounts and coverages that are commercially reasonable. So long
as Tenant or an Affiliate of Tenant is leasing the entire Building, Landlord's
commercial general liability insurance policy shall name Tenant as an additional
insured. Receipts or certificates evidencing payment of the premiums for such
insurance shall be delivered by Landlord to Tenant if requested by Tenant.
Landlord's casualty insurance policy shall contain an endorsement prohibiting
cancellation or reduction of coverage without first giving Tenant at least
thirty (30) days' prior written notice of such proposed action.
12.3 Throughout the Lease Term, Tenant shall insure the contents of
the Premises, including all furnishings, trade fixtures, and equipment used or
installed in the Premises by Tenant, and any other personal property of Tenant
therein, against loss due to fire and other casualties included in standard
extended coverage insurance policies in minimum amounts not less than ninety
percent (90%) of the full replacement cost of Tenant's furnishings, trade
fixtures, equipment and other personal property. Throughout the Lease Term,
Tenant shall obtain and maintain commercial general liability insurance in a
company or companies licensed to do business in the Commonwealth of Virginia and
reasonably approved by Landlord. Such insurance shall be in minimum amounts of
Five Million Dollars (S5.000,000) per occurrence plus a general aggregate of
Five Million Dollars ($5,000,000) for injury to persons and damage to property
and shall be for a minimum term of one (1) year. Landlord and Tenant may
re-evaluate such minimum amount at the expiration of every third (3rd) Lease
Year and such minimum amounts may be adjusted as appropriate to be consistent
with Class A suburban office buildings in the Market Area, provided, however, in
no event shall such minimum amounts be adjusted downward (i) without the
approval of the holder of any mortgage, as defined in Section 22.1 below,
secured by the Building or (ii) below any corporate minimum requirements of
Landlord. Such limits may be covered by a combination of a general liability
policy and an umbrella liability policy. In addition, Tenant's commercial
general liability insurance policy shall name Landlord and the managing agent of
the Building, as additional insureds. If requested by the holder of any mortgage
or deed of trust against the Building, the commercial general liability policy
referred to above shall also name such holder as an additional insured
thereunder.
-30-
Receipts or certificates evidencing payment of the premiums for such insurance
shall be delivered by Tenant if requested by Landlord. Each such policy shall
contain an endorsement prohibiting cancellation or reduction of coverage without
first giving Landlord and the holder of any mortgage or deed of trust on the
Building at least thirty (30) days' prior written notice of such proposed
action.
12.4 (a) Tenant hereby waives its right of recovery against Landlord
and releases Landlord from any losses, claims, casualties or other damages for
which Landlord may otherwise be liable to the extent either (i) such loss,
claim, casualty or other damage would have been covered under insurance coverage
Tenant is required to maintain pursuant to this Article XII (without regard to
any deductible) or (ii) Tenant receives insurance proceeds on account of any
such losses, claims, casualties or other damages. Each policy of property
insurance obtained by Tenant pursuant to the provisions of this Article XII
shall include a waiver of the insurer's right of subrogation against Landlord,
and shall contain an endorsement to the effect that any loss payable under such
policy shall be payable notwithstanding any act or negligence of Landlord, or
any agent, contractor, employee or invitee of Landlord, which might, absent such
agreement, result in the forfeiture of payment for such loss.
(b) Landlord hereby waives its right of recovery against
Tenant and releases Tenant from any losses, claims, casualties or other damages
for which Tenant may otherwise be liable to the extent either (i) such loss,
claim, casualty or other damage would have been covered under insurance coverage
Landlord is required to maintain pursuant to this Article XII (without regard to
any deductible) or (ii) Landlord receives insurance proceeds on account of any
such losses, claims, casualties or other damages. Each policy of property
insurance obtained by Landlord with respect to the Building shall include a
waiver of the insurer's right of subrogation against Tenant, and shall contain
an endorsement to the effect that any loss payable under such policy shall be
payable notwithstanding any act or negligence of Tenant, or any agent,
contractor employee or invitee of Tenant, which might, absent such agreement,
result in the forfeiture of payment for such loss.
ARTICLE XIII
SERVICES AND UTILITIES
13.1 (a) Landlord will furnish to the Premises during the normal
hours of operation of the Building (as set forth hereinbelow) air-conditioning
and heating during the seasons when such utilities are required. Landlord will
provide the following services consistent with the standards generally
applicable to Class A suburban office buildings in the Market Area: char and
janitorial service, electricity; elevator service; a perimeter access-control
system for the Building; maintenance of the grounds and landscaping surrounding
the Building, including prompt waste and snow removal; maintenance of interior
common areas, including lighting fixtures and bulb replacements, hot and cold
water supply, restroom facilities and furnishing of lavatory supplies; and
exterior window-cleaning service. Notwithstanding anything herein to the
contrary, Landlord shall have the right to remove elevators from service as may
be required for moving freight, or for servicing and maintaining the elevators
or the Building. At least one elevator cab shall be available for use by Tenant
at all times. The normal hours of operation of the Building will be 7:00 a.m. to
7:00 p.m. on Monday through Friday (except legal holidays)
-31-
and 8:00 a.m. to 2:00 p.m. on Saturday (except legal holidays) or such
alternative hours of operation as Tenant may designate so long as Tenant is the
sole lessee of the Building. Landlord shall provide a Building security system
in accordance with the Construction Drawings and Specifications, as defined in
the Development Agreement. Tenant shall be permitted access to the Premises on a
twenty-four hours, seven-days-a-week basis.
(b) Tenant, for so long as it is the sole lessee of the
Building, upon not less than thirty (30) days prior written notice to Landlord,
may elect to perform janitorial or security services (the "Assumed Services").
If Tenant elects to perform either of the Assumed Services, (i) Landlord shall
not be obligated to perform such Assumed Service and shall have no liability to
Tenant if such services are not performed to Tenant's satisfaction and (ii) all
costs incurred in connection with providing the Assumed Service shall be
excluded from Operating Expenses. On the date of execution of this Lease, Tenant
has elected to perform janitorial and char services in all secured areas of the
Building, all research and development areas and all control centers of the
Building. Tenant may, at any time upon thirty (30) days written notice to
Landlord elect to discontinue the performance of the Assumed Services and
Landlord shall be required to resume or commence such Assumed Service in
accordance with Section 13.1(a) beginning on the date set forth in Tenant's
notice and such costs shall be included in Operating Expenses. In the event
Landlord reasonably determines that Tenant's provider of an Assumed Service is
not providing such service in accordance with the standards applicable to Class
A suburban office buildings in the Market Area, Landlord shall notify Tenant, in
writing, of the deficiencies it has identified and Landlord and Tenant shall use
commercially reasonable efforts to correct such identified deficiencies in the
provision of such Assumed Service. If the provider of such Assumed Service fails
to institute such corrective measures promptly after Tenant's receipt of
Landlord's notice, Landlord shall have the right, at its option, upon thirty
(30) days prior written notice to Tenant, to direct Tenant to terminate the
provider of such Assumed Service and Landlord and Tenant shall mutually agree
upon a different provider of such Assumed Service. Landlord shall not undertake
any action under the preceding sentence unless such violation or failure shall
continue uncured for a period of thirty (30) days after Landlord has given
notice to Tenant of such deficiency or failure; provided that if such deficiency
or failure is not susceptible of being cured within such thirty (30) day period,
Landlord shall not undertake any action if the provider of the Assumed Service
commences curative action within such thirty (30) day period and proceeds
diligently thereafter to cure such deficiency or failure until completion.
13.2 It is understood and agreed that Landlord shall not have any
liability to Tenant whatsoever as a result of Landlord's inability (despite the
exercise of its commercially reasonable efforts) to furnish any of the utilities
or services required to be furnished by Landlord under the terms of this Lease,
whether resulting from breakdown, removal from service for maintenance or
repairs, strikes, scarcity of labor or materials, acts of God, governmental
requirements or from any other cause whatsoever. It is further agreed that,
except as provided in this Section 13.2 and Section 14.6 below, any such
inability to furnish the utilities or services required hereunder shall not be
considered an eviction, actual or constructive, of Tenant from the Premises, and
shall not entitle Tenant to terminate this Lease or to an abatement of any rent
payable hereunder. Notwithstanding the foregoing or anything else in this Lease,
but subject to the provisions of Section 14.6 below, in the event that Tenant is
prevented from using, and does not use, the Premises or any portion thereof for
five (5) consecutive business days or for ten (10)
-32-
business days in any twelve (12) month period (the "ELIGIBILITY PERIOD") as a
result of any interruption of utilities or services or access (including
elevator access) or any repair, maintenance or alteration performed by Landlord
after the Lease Commencement Date (other than repairs undertaken pursuant to
Article XVI hereof) which renders the Premises inaccessible or untenantable (the
foregoing circumstances being referred to herein as "SUSPENSION EVENTS"), then
all Annual Base Rent and additional rent payable hereunder shall be reduced
after expiration of the Eligibility Period for such time that Tenant continues
to be so prevented from using, and does not use, the Premises or a portion
thereof, in the proportion that the rentable area of the portion of the Premises
that Tenant is prevented from using, and does not use, bears to the total
rentable area of the Premises; provided that, any interruption of utilities or
services resulting from Tenant's failure to timely pay for any electricity that
is billed directly to Tenant by the electric utility pursuant to Section 4.7
hereof shall not be deemed a Suspension Event and shall not entitle Tenant to
any rent abatement hereunder. Landlord will repair and restore any such
interrupted services or utilities as soon as reasonably practicable following
the interruption thereof.
13.3 (a) Landlord shall enter into a management agreement in form an
substance approved by Tenant (the "MANAGEMENT AGREEMENT") with an entity
designated by Landlord ("MANAGER"), subject to Tenant's approval, which shall
not be unreasonably withheld, conditioned or delayed; provided, however that
Tenant's approval of the terms and conditions of the Management Agreement and
the Manager shall not be required if the Manager is Landlord or an Affiliate of
Landlord and the terms of such agreement are substantially in the form attached
hereto as Exhibit F. If the Management Agreement is with a third party, the
Management Agreement shall contain a provision permitting Landlord to terminate
the Management Agreement without liability on the part of Landlord or Tenant
upon thirty (30) days prior notice to Manager and Tenant. Any Management
Agreement shall state that it is subject and subordinate to this Lease. Landlord
agrees not to cancel, amend or extend the Management Agreement or appoint a new
third-party Manager or enter into a new Management Agreement with a third party
without Tenant's approval, which shall not be unreasonably withheld, conditioned
or delayed. For purposes of this Section 13.3, an "AFFILIATE OF LANDLORD" shall
mean any corporation, association, trust, partnership, limited liability
company, joint venture or other entity (i) which Controls (as herein defined)
Landlord or (ii) which is under the Control of Landlord through stock ownership
or otherwise or (iii) which is under common Control with Landlord. The terms
"CONTROL" or "CONTROLS" as used in this Section 13.3 shall mean the power to
directly or indirectly influence the direction, management or policies of
Landlord or such other entity.
(b) Prior to the expiration of the fifth (5th) Lease Year,
if Landlord or an Affiliate of Landlord is the Manager and Tenant reasonably
determines that the Premises are not being managed in accordance with the
standards set forth in the Management Agreement, Tenant shall notify Landlord,
in writing, of the deficiencies it has identified and Landlord shall use
commercially reasonable efforts to correct such identified deficiencies in the
management of the Building. If Landlord fails to institute such measures
promptly after notice from Tenant, Tenant shall have the right, at its option,
upon thirty (30) days prior written notice to Landlord, to terminate the
Management Agreement and to direct Landlord to engage a third-party Manager.
Tenant shall not undertake any action under the preceding sentence unless such
violation or
-33-
failure shall continue uncured for a period of thirty (30) days after Tenant has
given notice to Landlord of such deficiency or failure; provided that if such
deficiency or failure is not susceptible of being cured within such thirty (30)
day period, Tenant shall not undertake any action if Landlord commences curative
action within such thirty (30) day period and proceeds diligently thereafter to
cure such deficiency or failure until completion.
(c) Commencing in the sixth (6th) Lease Year, provided that
(i) there is no Event of Default, and (ii) Tenant and/or its Affiliates are the
sole lessees of the Premises, Tenant shall have the right, upon ninety (90) days
prior written notice to Landlord to direct Landlord to enter into a Management
Agreement with an independent third party manager reasonably acceptable to
Landlord. Landlord's approval of such third party manager shall not be
unreasonably withheld, conditioned or delayed.
(d) In the event Landlord reasonably determines that the
third party Manager is not managing the Premises in accordance with the
standards set forth in the Management Agreement, Landlord shall notify Tenant,
in writing, of the deficiencies it has identified and Landlord and Tenant shall
use commercially reasonable efforts to cause the Manager to correct such
identified deficiencies in the management of the Building. If the third party
Manager fails to institute such corrective measures promptly after Tenant's
receipt of Landlord's notice, Landlord shall have the right, at its option, upon
thirty (30) days prior written notice to Tenant, to terminate the Management
Agreement and Landlord and Tenant shall mutually agree upon a third-party
Manager to manage the Building. Landlord shall not undertake any action under
the preceding sentence unless such violation or failure shall continue uncured
for a period of thirty (30) days after Landlord has given notice to Tenant of
such deficiency or failure; provided that if such deficiency or failure is not
susceptible of being cured within such thirty (30) day period, Landlord shall
not undertake any action if the third-party Manager commences curative action
within such thirty (30) day period and proceeds diligently thereafter to cure
such deficiency or failure until completion.
13.4 In the event Tenant determines that the services being furnished
by any contractor (including, commencing in the sixth (6th) Lease Year, Landlord
or an Affiliate of Landlord as Manager) employed by Landlord are unsatisfactory,
in Tenant's reasonable judgment, Tenant shall deliver written notice to Landlord
specifying in detail the manner in which the services are deemed deficient. If
the deficiencies are not, in Tenant's reasonable judgment, substantially
corrected during the next succeeding thirty (30) days, then Tenant may deliver a
further notice to Landlord advising Landlord of such fact, and, provided such
contract is terminated in accordance with its terms and, therefor, Landlord will
not incur any liability to the contractor as a result thereof, Landlord shall
terminate the contract of such deficient contractor and select a qualified
replacement contractor. Landlord shall not be deemed to incur any such liability
if Tenant agrees to assume responsibility for any such liability. Landlord shall
include a thirty-day termination for convenience clause in any service contracts
in which such a clause is customary; any service contract not including such
clause shall require Tenant's approval, which approval shall not be unreasonably
conditioned, withheld or delayed..
-34-
ARTICLE XIV
LIABILITY OF LANDLORD
14.1 Except as expressly set forth in this Lease and without limiting
or reducing Tenant's rights under the Development Agreement, Landlord shall not
be liable to Tenant, its employees, agents, business invitees, licensees,
customers, clients, family members or guests for any damage, injury, loss,
compensation or claim, including, but not limited to, claims for the
interruption of or loss to Tenant's business, based on, arising out of or
resulting from any cause whatsoever (except as hereinbelow set forth), including
but not limited to the following: (i) repairs to any portion of the Premises or
the Building; (ii) interruption in the use of the Premises; (iii) any accident
or damage resulting from the use or operation (by Landlord, Tenant or any other
person or persons) of elevators, or of the heating, cooling, electrical or
plumbing equipment or apparatus; (iv) the termination of this Lease by reason of
the destruction of the Premises or the Building; (v) any fire, robbery, theft,
mysterious disappearance and/or any other casualty; (vi) the actions of other
tenants in the Building, if any, or of any other person or persons; and (vii)
any leakage in any part or portion of the Premises or the Building, or from
water, rain or snow that may leak into, or flow from, any part of the Premises
or the Building, or from drains, pipes or plumbing fixtures in the Building;
provided, however, that Landlord shall not be released pursuant to this Section
14.1 from any liability (a) resulting directly from Landlord's breach of, or
default, beyond any applicable notice and cure period, as to, any of its
covenants or other obligations under this Lease, or (b) subject to Section
12.4(a) above, property damage, personal injury or death caused directly by
Landlord's or its employees' negligence or willful misconduct or the gross
negligence or willful misconduct of Landlord's contractors or agents. In no
event (notwithstanding anything in the immediately-preceding sentence to the
contrary) shall Landlord have any liability to Tenant for any claims based on
the interruption of or loss to Tenant's business or consequential damages or
indirect losses whatsoever.
14.2 Tenant hereby agrees to indemnify, defend on request, and hold
Landlord harmless from and against all costs, damages, claims, liabilities and
expenses (including reasonable attorneys' fees and any costs of litigation)
suffered by or claimed against Landlord, directly or indirectly, and not covered
by the insurance required to be maintained by Landlord hereunder, based on,
arising out of or resulting from (i) Tenant's use and occupancy of the Premises
or the business conducted by Tenant therein, (ii) any accident, injury or damage
whatsoever caused to any person, or to the property of any person, occurring on
or about the Premises during the Lease Term, (iii) the operation of a food
service, health club, daycare center or other "compatible use" (as defined in
Section 6.1 hereof) at the Premises, including any accident, injury or damage
whatsoever caused to any person or property arising therefrom, (iv) any act or
omission to act by Tenant or its employees, contractors, agents, licensees, or
invitees, or (v) any breach or default by Tenant in the performance or
observance of its covenants or obligations under this Lease; provided that
Tenant's obligations to indemnify and hold harmless Landlord pursuant to this
Section 14.2 shall not include any costs, damages, claims, liabilities or
expenses suffered by or claimed against Landlord directly based on, arising out
of or resulting from Landlord's breach of, or default as to, any of its
covenants or other obligations under this Lease or the negligence or willful
misconduct of Landlord or its employees or the gross negligence or willful
misconduct of Landlord's contractors or agents.
-35-
14.3 In the event that at any time Landlord shall sell or transfer
the Building, provided the purchaser or transferee assumes the obligations of
Landlord hereunder, the Landlord named herein shall not be liable to Tenant for
any obligations or liabilities based on or arising out of events or conditions
occurring on or after the date of such sale or transfer. If requested by Tenant,
Landlord shall furnish to Tenant a copy of the agreement pursuant to which any
such purchaser or transferee shall have assumed the obligations of Landlord
hereunder. Furthermore, upon such assumption, Tenant agrees to attorn to any
such purchaser or transferee upon all the terms and conditions of this Lease.
Notwithstanding any of the foregoing to the contrary, Landlord agrees that (i)
Landlord will not sell or transfer the Building prior to the Lease Commencement
Date; (ii) Landlord will not sell or transfer the Building to any person or
entity if an Event of Bankruptcy (as hereinafter defined) shall have occurred
and be continuing with respect to such transferee at the time Landlord contracts
to sell or transfer the Building to such transferee; (iii) Landlord's right to
sell the Building shall be subject to Tenant's right of first offer provided in
Article XXVIII below; (iv) any sale of the Building shall be subject to Tenant's
right of purchase provided in XXVII below and (v) so long as Tenant and/or its
Affiliates are the sole lessees of the Building, if Landlord transfers or sells
the Building, then Tenant shall have the right, at its option, to assume all of
Landlord's operation, maintenance and repair obligations hereunder in lieu of
the performance thereof by such successor landlord (in which event no management
fee shall be payable to such successor landlord); provided that if Tenant elects
to assume such obligations, then Tenant shall perform such obligations to the
same extent and in the same manner and to the same standards required of
Landlord hereunder; provided further that, prior to the expiration of the fifth
(5th) Lease Year, Tenant shall not have the right to self-manage the Building as
aforesaid during the initial twelve (12) month period following any such
transfer or, if earlier, until the expiration of the fifth (5th) Lease Year,
unless the transferee is an institutional investor or other person or entity
that is not itself, and is not affiliated with another entity that is, in the
business of managing commercial real estate.
14.4 In the event that at any time during the Lease Term Tenant shall
have a claim against Landlord, except as otherwise provided in Section 14.6
hereof, Tenant shall not have the right to deduct the amount allegedly owed to
Tenant from any rent or other sums payable to Landlord hereunder, it being
understood that Tenant's sole remedy for recovering upon such claim shall be to
institute an independent action against Landlord.
14.5 Tenant agrees that in the event Tenant is awarded a money
judgment against Landlord, Tenant's sole recourse for satisfaction of such
judgment shall be limited to execution against Landlord's equity interest in the
Building and the Land at the time of such execution, which, if the Building has
been sold prior to such execution, shall include the net sale proceeds, after
payment of all prior liens, from the sale of the Building. In no event shall
Landlord or any partner or member of Landlord or any other person be held to
have any personal liability for satisfaction of any claims or judgments that
Tenant may have against Landlord.
14.6 In the event Landlord shall be in default with respect to any
service or action that Landlord is obligated to furnish or perform under this
Lease, then Tenant shall have the right to obtain such service or perform such
act on Landlord's account subject to the terms and conditions set forth below.
Notwithstanding anything contained herein to the contrary, Tenant shall have the
rights set forth in this Section 14.6 with respect to services and actions that
-36-
materially affect the structure of the Building, materially affect any
multi-tenant common area or materially affect any base-building system only if
Tenant gives Landlord and Landlord's lender(s) (whose identity and notice
address shall have been provided to Tenant) written notice of Landlord's alleged
default and Landlord does not in good faith dispute such alleged default in
writing within ten (10) business days following the delivery of Tenant's notice.
Prior to Tenant undertaking any action to cure or remedy any Landlord default
with respect to any service or action that Landlord is obligated to furnish or
perform under this Lease, Tenant shall first give written notice of such default
to Landlord and Landlord's lender(s) (whose identity and notice address shall
have been provided to Tenant) and allow Landlord and such lender(s) ten (10)
business days following receipt by Landlord and such lender(s) of such written
notice to cure or remedy the condition specified in Tenant's notice; provided,
however, that if such condition cannot be cured within the ten (10) business day
period despite Landlord's exercise of its commercially reasonable efforts, such
period shall be extended for a reasonable additional time, so long as Landlord
or such lender(s) commence to cure such condition within the ten (10) business
day period and proceed diligently thereafter to effect such cure.
Notwithstanding any of the foregoing to the contrary, in the event of a material
failure of, or deficiency in, any of the Essential Building Services (as
hereinafter defined) which renders all or a substantial portion of the Premises
unsafe or unsuitable for the conduct of Tenant's business therein, the period in
which Landlord or such lender(s) must cure such condition prior to Tenant's
having the right to undertake any such action, shall be forty-eight (48) hours
following receipt by Landlord and such lender(s) of such written notice provided
notice is received between the hours of 8:00 a.m. and 5:00 p.m. Monday through
Friday, or between the hours of 8:00 a.m. and 2:00 p.m. on Saturday, excluding
legal holidays; provided that, if the condition cannot be cured within such
48-hour period, then, provided Landlord or such lender(s) commence to cure such
condition within such 48-hour period and proceed diligently thereafter to effect
such cure, then such 48-hour period shall be extended for such reasonable period
as is necessary to effect such cure using diligent efforts. For purposes hereof,
the term "ESSENTIAL BUILDING SERVICES" shall mean (i) plumbing systems; (ii)
electrical service; (iii) HVAC service; (iv) life-safety systems; (v) elevator
service; and (vi) building access systems. If Landlord or such lender(s) fail to
cure or remedy any such condition within the applicable time period, as set
forth above, then Tenant may cure or remedy such condition and deliver an
invoice to Landlord for such costs and expenses, and Landlord shall pay to
Tenant the amount of such invoice within thirty (30) days after delivery by
Tenant. The amount of such expenses, when paid by Landlord, shall be included
within Expenses, to the extent such costs and expenses are not excluded from the
definition of Expenses. In the event Landlord fails to pay to Tenant when due
any sum which Tenant is entitled to recover from Landlord pursuant to this
Section 14.6, then Tenant shall have the right to a credit against Annual Base
Rent in the amount of any such unpaid sum, together with interest thereon at the
Default Rate (as defined in Section 18.7 below) from the date due until the date
paid, if Tenant has obtained a final, nonappealable court judgment that such sum
was due and payable to Tenant under the terms of this Section 14.6 but was not
paid by Landlord. In the event Tenant seeks to cure or remedy any condition
which gives rise to Tenant's remedies set forth in this Section 14.6, Tenant
shall (i) proceed in accordance with the applicable provisions of this Lease and
all applicable Legal Requirements; (ii) use only such con-tractors, suppliers,
etc. as are duly licensed in the Commonwealth of Virginia and insured to effect
such repairs and who perform such repairs on first-class buildings in the normal
course of their business; (iii) promptly effect such repairs in a good
workmanlike quality and in a first-
-37-
class manner; and (iv) use new or other first-quality materials. Landlord agrees
to cooperate with Tenant in the performance of repairs by Tenant's contractors,
including granting access to portions of the Building outside the Premises and
making available for inspection and copying any plans that might be required by
such contractors. Nothing in this Section 14.6 is intended to obviate the
provisions of Section 13.2 above.
14.7 Landlord hereby agrees to indemnify, defend on request, and hold
Tenant harmless from and against all costs, damages, claims, liabilities and
expenses (including reasonable attorneys' fees and court costs) suffered by or
claimed against Tenant, directly or indirectly, and not to be covered by the
insurance required to be maintained by Tenant hereunder, based on, arising out
of or resulting from any breach or default by Landlord in the performance or
observance of its covenants or obligations under this Lease, including, but not
limited to, Landlord's obligations pursuant to Section 6.5 hereof; provided that
Landlord's obligations to indemnify and hold harmless Tenant pursuant to this
Section 14.7 shall not include any costs, damages, claims, liabilities, or
expenses suffered by or claimed against Tenant directly based on, arising out of
or resulting from any negligence or willful misconduct of Tenant or its agents
or employees. Notwithstanding anything to the contrary in this Section 14.7 or
elsewhere in this Lease, this Section 14.7 shall not apply to the holder of any
mortgage or deed of trust secured by the Complex or the Building unless such
holder acts as landlord under this Lease or otherwise owns or holds title to the
Building by foreclosure or deed-in-lieu of foreclosure.
ARTICLE XV
RULES AND REGULATIONS
15.1 Tenant agrees to comply with and observe the rules and
regulations pertaining to the use and occupancy of the Premises or the Building
set forth in Exhibit E hereto, together with all reasonable amendments thereto
as may be promulgated hereafter by Landlord (collectively, the "RULES AND
REGULATIONS"); provided that (i) any such amendment shall not increase Tenant's
monetary obligations hereunder or cause Tenant to incur significant additional
costs or adversely affect the rights expressly granted to Tenant hereunder or
Tenant's use and enjoyment of the Premises, (ii) Tenant shall be given written
notice of such amendment at least thirty (30) days before it takes effect, (iii)
if there is any inconsistency between this Lease and the Rules and Regulations,
this Lease shall govern; and (iv) while Tenant is the sole tenant of the
Building, Tenant shall not be subject to any of the Rules and Regulations or any
amendments thereto, except those that are necessary to keep the Building in
compliance with the standards applicable to a Class A suburban office building
in the Market Area. Without limiting the generality of clause (iii) above, it is
understood and agreed that if the Rules and Regulations with respect to a
particular matter call for stricter Landlord approval rights than those
contained herein, or the Rules and Regulations are otherwise more restrictive
than any provision herein governing the same matter, then this Lease shall
govern and control. Tenant's failure to keep and observe said Rules and
Regulations after applicable notice and opportunity to cure shall constitute an
Event of Default under this Lease. Landlord shall use reasonable efforts to
enforce the Rules and Regulations, including any exceptions thereto, uniformly
and shall not discriminate against Tenant in the enforcement of the Rules and
Regulations; provided that it is understood that Landlord may grant exceptions
to the Rules and Regulations in circumstances in which it reasonably determines
that such exceptions are warranted.
-38-
15.2 This Lease is made subject to the provisions of the Declaration
of Covenants recorded in Deed Book _________ at Page _______, among the land
records of Loudoun County, Virginia, and that certain Parking Easement and
Option Agreement recorded in Deed Book _________ at Page _______, among the land
records of Loudoun County, Virginia and that certain Reciprocal Easement
Agreement recorded in Deed Book __________ at Page _______, among the land
records of Loudoun County, Virginia a copy of each of which is attached hereto
as Exhibit C. Landlord and Tenant agree to observe and to comply with all
provisions of said documents which may be applicable to it. The Reciprocal
Easement Agreement governs certain easements, rights-of-way and obligations of
the owners of the land comprising the Complex deemed necessary or appropriate
for utility, construction, pedestrian pathway, shared parking, stormwater
management and similar purposes.
ARTICLE XVI
DAMAGE OR DESTRUCTION
16.1 If, during the Lease Term, the Premises or the Building are
totally or partially damaged or destroyed from any cause, thereby rendering the
Premises totally or partially inaccessible or unusable by Tenant for its
business, Landlord shall diligently (taking into account the time necessary to
effectuate a reasonably satisfactory settlement with any insurance company
involved) restore, replace and repair the Premises and the Building to
substantially the same condition they were in prior to such damage; provided,
however, if in the reasonable judgment of an independent architect selected by
Landlord the repairs, replacement and restoration cannot be completed within two
hundred seventy (270) days after the occurrence of such damage, including the
time needed for removal of debris, preparation of plans and issuance of all
required governmental permits, then Landlord shall have the right, at its sole
option, to terminate this Lease by giving written notice of termination to
Tenant within sixty (60) days after the occurrence of such damage. If this Lease
is terminated pursuant to the preceding sentence, all rent payable hereunder
shall be equitably apportioned and paid to the date of the occurrence of such
damage or destruction, and neither Landlord nor Tenant shall have any further
rights or remedies as against each other pursuant to this Lease accruing after
the date of termination. The judgment by Landlord's independent architect as to
whether it will take more than or less than 270 days to complete the repairs,
replacement and restoration shall be subject to review and challenge by an
independent architect selected by Tenant, as follows. If Tenant wishes to
challenge such determination, an independent architect selected by Tenant shall
have a period of ten (10) business days following Tenant's receipt of written
notice from Landlord of its determination in which to set forth its
determination as to whether it will take more than or less than 270 days to
complete the repairs, replacement and restoration (without regard to any delay
occasioned by such challenge). If Landlord's and Tenant's architects do not
agree, then such architects shall jointly appoint an independent architect who
shall make a determination as to whether it will take more than or less than 270
days to complete the repairs, replacement and restoration (without regard to any
delay occasioned by Tenant's challenge), and the determination of such third
architect shall be binding on both Landlord and Tenant. Each party shall be
responsible for its own architect's fees, and shall share jointly in the fees of
the third architect.
-39-
16.2 If the repairs and restoration cannot be completed within two
hundred and seventy (270) days after the date of such damage or destruction (as
determined pursuant to Section 16.1 above), but Landlord does not elect to
terminate this Lease pursuant to Section 16.1, then Landlord shall promptly
notify Tenant of such determination. For a period continuing through the tenth
(10th) day after receipt of such notice, Tenant shall have the right to
terminate this Lease by providing written notice thereof to Landlord, in which
event the Lease Term shall end on the date of the giving of such notice as if
such date were the date originally provided herein as the end of the Lease Term.
If Tenant does not elect to terminate this Lease within such period, and
provided Landlord does not elect to terminate this Lease, then Landlord shall
proceed diligently to repair and restore the Premises and the Building.
16.3 Notwithstanding anything to the contrary contained herein, in
the event the Premises are damaged during the last two (2) years within the
Lease Term, and if the period of time reasonably projected by Landlord for
restoration of the damage (taking into account the time necessary to effectuate
a satisfactory settlement with any insurance company involved) exceeds
one-fourth (1/4) of the time remaining in the Lease Term as of the date of the
damage, then Landlord and Tenant shall each have the right to terminate this
Lease by written notice delivered to the other party within fifteen (15) days
after Landlord notifies Tenant in writing of the projected restoration period;
provided, however, that if (i) Landlord exercises its right of termination under
this Section 16.3, and (ii) at such time, Tenant has a right to renew the Lease
Term pursuant to Article XXV hereof, and (iii) Tenant notifies Landlord in
writing, within fifteen (15) days following the delivery of Landlord's
termination notice, that Tenant is exercising its right to renew the Lease Term,
and (iv) pursuant to Article XXV, Landlord and Tenant either reach agreement
concerning the Market Rent applicable to the Renewal Term or cause such
determination to be made by the means described in Section 25.3(b), then
Landlord's termination notice shall be deemed nullified and this Lease shall
continue in full force and effect through the remainder of the Lease Term (as
thus renewed).
16.4 If this Lease is not terminated in accordance with the
provisions of this Article XVI, until the repair and restoration of the Premises
is completed, Tenant shall be required to pay Annual Base Rent and additional
rent only for that part of the Premises that Landlord and Tenant mutually agree,
in their reasonable judgment, that Tenant is able to use (as such use is
contemplated by this Lease) while repairs are being made, based on the ratio
that the amount of usable rentable area bears to the total rentable area in the
Premises. In addition to any abatement granted pursuant to the previous
sentence, Tenant's abatement period shall continue until Tenant has been given
reasonably sufficient time, and sufficient access to the Premises, to (i)
rebuild any portion of the Premises it is required to rebuild, (ii) install its
property, furniture, fixtures, cabling and equipment, and (iii) move in over a
period of seven (7) consecutive days. The foregoing additional abatement period
shall extend for a period not to exceed sixty (60) days following the date
Landlord's repair and restoration is substantially complete. In addition, the
Lease Term shall be extended for the period of time during which all or any
portion of the rent is abated pursuant to this Section 16.4. Subject to the
terms of Section 16.5 below, Landlord shall bear the costs and expenses of
repairing and restoring the Premises.
16.5 If Landlord repairs and restores the Premises as provided in
this Article XVI, Landlord shall not be required to repair or restore any
decorations, alterations or Improvements
-40-
to the Premises previously made by or at the expense of Tenant or any trade
fixtures, furnishings, equipment or personal property belonging to Tenant. It
shall be Tenant's sole responsibility to repair and restore all such items at
Tenant's discretion.
ARTICLE XVII
CONDEMNATION
17.1 If (i) more than twenty percent (20%) of the rentable area of
the portion of the Premises comprised of space leased by Tenant in the Building
(the "BUILDING PREMISES"), or (ii) the use or occupancy of more than twenty
percent (20%) of the rentable area of the Building Premises, shall be taken or
condemned by any governmental or other authority having the power of eminent
domain for any public or quasi-public use or purpose (including a sale thereof
under threat of such a taking) (each such event being referred to herein as a
"TAKING"), then this Lease shall terminate on the date title thereto (or the
right to use or occupy, as appropriate) vests in such governmental or
quasi-governmental authority, and all Annual Base Rent and additional rent
payable hereunder shall be equitably apportioned as of such date. This Lease
shall similarly terminate if there is a Taking of more than twenty percent (20%)
of the minimum necessary parking for the Building according to the Approved Site
Plan that cannot be replaced by substitute parking spaces on other portions of
the Land. If less than twenty percent (20%) of the rentable area of the Building
Premises or such minimum necessary parking area or the use or occupancy thereof
is condemned, then this Lease shall continue in full force and effect as to the
part of the Building Premises and the Land not condemned, except that (i) as of
the date title (or the right to use or occupy, as appropriate) vests in such
authority, Annual Base Rent and Expenses with respect to the part of the
Building Premises and the Land condemned shall be equitably reduced for the
balance of the Lease Term, and (ii) Landlord shall, at its cost, restore the
Building Premises to create, to the extent reasonably possible, a single unit of
space, including (but not limited to) building or moving demising walls, suite
entries, heating and air conditioning equipment, and utility lines.
17.2 All awards, damages and other compensation paid by the
condemning authority on account of such Taking shall belong to Landlord, and
Tenant hereby assigns to Landlord all rights to such awards, damages and
compensation. Tenant agrees not to make any claim against Landlord or the
condemning authority for any portion of such award or compensation attributable
to damages to the Premises, the value of the unexpired term of this Lease, the
loss of profits or goodwill, leasehold improvements or severance damages.
Nothing contained herein, however, shall prevent Tenant from pursuing a separate
claim against the condemning authority for the value of furnishings, equipment
and trade fixtures installed in the Premises at Tenant's expense and for
relocation expenses, provided that such claim does not in any way diminish the
award or compensation payable to or recoverable by Landlord in connection with
such taking or condemnation.
ARTICLE XVIII
DEFAULT
18.1 The occurrence of any of the following shall constitute an Event
of Default by Tenant under this Lease:
-41-
(a) If Tenant shall fail to pay any installment of Annual
Base Rent or additional rent or any other payment required by this Lease when
due and such failure shall continue uncured for a period of ten (10) days after
Landlord notifies Tenant of such failure in writing; provided, however, that
after Landlord has given Tenant two (2) such written notices in any twelve
(12)-month period, Tenant shall be in default if any such payment accruing
during such twelve (12)-month period (and after the second of such notices) is
not made within ten (10) days after such payment is due (without the necessity
of any notice being sent by Landlord).
(b) If Tenant shall violate or fail to perform any other
term, condition, covenant or agreement to be performed or observed by Tenant
under this Lease and such violation or failure shall continue uncured for a
period of thirty (30) days after Landlord notifies Tenant in writing of such
failure. If such violation or failure is not capable of being cured within such
thirty (30)-day period, Tenant shall not be deemed to be in default hereunder if
Tenant commences curative action within such thirty (30)-day period and proceeds
diligently and in good faith thereafter to cure such violation or failure until
completion.
(c) An Event of Bankruptcy as defined in Article XIX hereof.
18.2 If there shall occur an Event of Default under this Lease,
including without limitation an Event of Default prior to the Lease Commencement
Date, Landlord shall have the right, at its sole option, to terminate this
Lease. In addition, with or without terminating this Lease, Landlord may
re-enter, terminate Tenant's right of possession, and take possession of the
Premises. The provisions of this Article XVIII shall operate as a notice to
quit, and Tenant waives any other notice to quit or notice of Landlord's
intention to re-enter the Premises or terminate this Lease. If necessary,
Landlord may proceed to recover possession of the Premises under and by virtue
of the laws of the Commonwealth of Virginia, or by such other proceedings,
including re-entry and possession, as may be applicable. If Landlord terminates
this Lease and/or terminates Tenant's right of possession, then everything
contained in this Lease on the part of Landlord to be done and performed shall
cease without prejudice, however, to the right of Landlord to recover from
Tenant all rent and other sums due under this Lease. Whether or not this Lease
and/or Tenant's right of possession is terminated by reason of Tenant's default,
Landlord shall have the right, after any Event of Default occurs but only during
the continuation thereof, to grant or withhold any consent or approval pursuant
to this Lease in its sole and absolute discretion. Landlord agrees to use
reasonable efforts to relet the Premises for such rent and upon such terms as
are not unreasonable under the circumstances, and if the full rental provided
herein plus the reasonable costs, expenses and damages hereafter described shall
not be realized by Landlord, Tenant shall be liable for all damages sustained by
Landlord, including, without limitation, deficiency in Annual Base Rent and
additional rent, reasonable attorneys' fees, brokerage fees, and the expenses of
placing the Premises in the condition that would have been required if the date
of termination had been the date of expiration of the Lease Term. Tenant
expressly acknowledges that Landlord's agreement to use reasonable efforts to
relet the Premises shall in no event limit, restrict or prejudice in any way
Landlord's and Landlord's affiliates' and agents' rights to lease other space in
the Building, if any, or the Complex prior to reletting the Premises. Subject to
Landlord's obligations pursuant to the preceding two sentences, Landlord shall
in no way be responsible or liable for any failure to relet the Premises
-42-
or any part thereof, or any failure to collect any rent due or accrued upon such
reletting, to the end and intent that Tenant may be liable for the Annual Base
Rent, additional rent, and any and all other items of cost and expense which
Tenant shall have been obligated to pay throughout the remainder of the Lease
Term. Any damages or loss of rent sustained by Landlord may be recovered by
Landlord, at Landlord's option, at the time of the reletting, or in separate
actions, from time to time, as said damage shall have been made more easily
ascertainable by successive relettings, or, at Landlord's option, may be
deferred until the expiration of the Lease Term, in which event Tenant hereby
agrees that the cause of action shall not be deemed to have accrued until the
date of expiration of the Lease Term. The provisions contained in this Section
18.2 shall not prevent the enforcement of any claim Landlord may have against
Tenant for anticipatory breach of this Lease.
18.3 As an alternative to recovering damages on account of rental
deficiencies on a periodic basis as set forth in Section 18.2 above, Landlord
may elect to hold Tenant liable from and after the date of termination of this
Lease, for the Annual Base Rent, additional rent and all other items of cost and
expenses that will accrue under the Lease until the expiration of the Lease
Term. In the event Landlord elects to hold Tenant liable for the Annual Base
Rent, additional rent and all other items of cost and expenses including,
without limitation, brokers' and attorneys' fees (the "DEFAULT AMOUNT") at the
time of reletting of the Premises or if Landlord is unable to relet the Premises
at the time this Lease is terminated pursuant to this Article XVIII, then Tenant
shall pay to Landlord (i) the Default Amount minus (ii) any Annual Base Rent,
additional rent and other sums which Tenant proves by a preponderance of the
evidence would be received by Landlord upon commercially reasonable efforts to
relet the Premises through the expiration of the scheduled Lease Term. The
Default Amount shall be discounted at a rate equal to the then current "Prime
Rate" as published in the Money Rates section of The Wall Street Journal and
such amount shall be payable to Landlord in a lump sum on demand, it being
understood that upon payment of such liquidated and agreed upon final damages,
Tenant shall be released from further liability under this Lease with respect to
the period after the date of such payment and, that if Tenant fails to pay such
amount to Landlord within five (5) days thereafter, Landlord may bring suit to
collect any such damages at any time after an Event of Default shall have
occurred. In the event Landlord relets the Premises together with other premises
or for a term extending beyond the scheduled expiration of the Lease Term, it is
understood that Tenant will not be entitled to apply any Annual Base Rent,
additional rent or other sums generated or projected to be generated by either
such other premises or in the period extending beyond the scheduled Lease Term
(collectively, the "EXTRA RENT") against Landlord's damages. Similarly in
proving the amount that would be received by Landlord upon a reletting of the
Premises set forth in clause (ii) above, Tenant shall not take into account the
Extra Rent. Nothing herein shall be construed to affect or to prejudice
Landlord's right to prove and claim in full unpaid rent accrued prior to
termination of this Lease and Tenant's vacating the Premises. If Landlord is
entitled or Tenant is required pursuant to any provision hereof to take any
action upon the termination of the Lease Term, then Landlord shall be entitled
and Tenant shall be required to take such action also upon the termination of
Tenant's right of possession.
18.4 All rights and remedies of Landlord set forth herein are in
addition to all other rights and remedies available to Landlord pursuant to the
Development
-43-
Agreement, at law or in equity. All rights and remedies available to Landlord
hereunder, pursuant to the Development Agreement, or at law or in equity are
expressly declared to be cumulative. The exercise by Landlord of any such right
or remedy shall not prevent the concurrent or subsequent exercise of any other
right or remedy; provided that Landlord may not recover more than once for the
same damages. No delay in the enforcement or exercise of any such right or
remedy shall constitute a waiver of any default by Tenant hereunder or of any of
Landlord's rights or remedies in connection therewith. Landlord shall not be
deemed to have waived any default by Tenant hereunder unless such waiver is set
forth in a written instrument signed by Landlord. If Landlord waives in writing
any default by Tenant, such waiver shall not be construed as a waiver of any
covenant, condition or agreement set forth in this Lease except as to specific
circumstances described in such written waiver.
18.5 If Landlord shall institute proceedings against Tenant and a
compromise or settlement thereof shall be made, the same shall not constitute a
waiver of default or of any other covenant, condition or agreement set forth
herein, nor of any of Landlord's rights hereunder, except to the extent agreed
by Landlord in writing in connection with such compromise or settlement. Neither
the payment by Tenant of a lesser amount than the installments of base rent,
additional rent or of any sums due hereunder nor any endorsement or statement on
any check or letter accompanying a check for payment of rent or other sums
payable hereunder shall be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord's right to recover
the balance of such rent or other sums or to pursue any other remedy available
to Landlord. Notwithstanding any request or designation by Tenant, Landlord may
apply any payment received from Tenant to any payment then due. No re-entry by
Landlord, and no acceptance by Landlord of keys from Tenant, shall be considered
an acceptance of a surrender of this Lease.
18.6 If Tenant defaults in the making of any payment or in the doing
of any act herein required to be made or done by Tenant, then Landlord may
(after giving Tenant the appropriate notice and opportunity to cure specified in
Section 18.1 hereof), but shall not be required to, make such payment or do such
act. If Landlord elects to make such payment or do such act, all reasonable
costs and expenses incurred by Landlord, plus interest thereon at the rate per
annum which is two percent (2%) higher than the prime rate then being quoted in
The Wall Street Journal, from the date paid by Landlord to the date of payment
thereof by Tenant, shall constitute additional rent hereunder and shall be
immediately paid by Tenant to Landlord; provided, however, that nothing
contained herein shall be construed as permitting Landlord to charge or receive
interest in excess of the maximum rate then allowed by law. The taking of such
action by Landlord shall not be considered a cure of such default by Tenant
prevent Landlord from pursuing any remedy it is otherwise entitled to in
connection with such default.
18.7 If Tenant fails to make any payment of Annual Base Rent or of
additional rent on or before the date such payment is due and payable, Tenant
shall pay to Landlord a late charge of five percent (5%) of the amount of such
payment. In addition, such payment shall bear interest at the rate per annum
which is two percent (2%) higher than the prime rate then being quoted in The
Wall Street Journal (the "DEFAULT RATE"), from the date such payment became due
to the date of payment thereof by Tenant; provided, however, that nothing
contained herein shall be construed as permitting Landlord to charge or receive
interest in excess of the maximum rate then allowed by law. Notwithstanding any
of the foregoing to the contrary, Landlord hereby
-44-
waives the imposition of such late charge and the interest payable on late
payments with respect to the first two (2) such late payments to occur in any
twelve (12) month period, provided Tenant in fact cures the default within ten
(10) days following Tenant's receipt of notice of such default. Such late charge
and interest shall constitute additional rent due and payable hereunder with the
next installment of Annual Base Rent due hereunder.
18.8 Notwithstanding anything in this Lease to the contrary, in the
event (i) an Event of Default shall occur under this Lease and (ii) Tenant shall
thereafter tender performance of the obligation that gave rise to such Event of
Default and (iii) Landlord, in its discretion, shall agree to accept such
performance as curing the Event of Default, then, for all purposes of this
Lease, no Event of Default shall thereafter be deemed to exist. Notwithstanding
any of the foregoing to the contrary, Landlord shall be obligated to accept
Tenant's cure of the first (1st) Event of Default to occur and be cured within
any twelve (12) month period provided such cure, when tendered, includes payment
of all interest, late charges, and other costs of enforcement incurred by
Landlord on account of such default (including, but not limited to, reasonable
attorneys' fees).
18.9 (a) Landlord shall be in default under this Lease if (i) any of
Landlord's representations, warranties or covenant contained in this Lease
proves to be untrue in any material respect, or (ii) Landlord fails to perform
any covenant or agreement to be performed by Landlord hereunder and with respect
to clauses (i) and (ii) Landlord either: (A) fails promptly after written notice
from Tenant to commence to cure such failure or fails to complete such cure
diligently and within thirty (30) days after Tenant's notice or (B) if such
failure is of a type that cannot with the exercise of reasonable diligence be
cured within such thirty (30) day period, either fails promptly to commence its
cure during such period or fails thereafter to use its best efforts to complete
its cure in as short a time as possible.
(b) Except as otherwise expressly limited in this Lease, in
the event a material default by Landlord (as defined below) occurs, upon written
notice of such material default to Landlord, Tenant shall have the right to
terminate this Lease effective on the date specified in such notice, which date
shall not be not less than three (3) months and not more than one (1) year after
the date of such notice, provided that Landlord's default has not been cured by
such date. As used herein, the term "material" means a breach or failure by
Landlord, to cure or if not possible of cure to commerce curing and; thereafter,
to diligently pursue the cure of such default within thirty (30) days after
Landlord's receipt of Tenant's notice specifying in reasonable detail such
failure and such failure, affects in a material, adverse way the ability of
Tenant to use and occupy the Premises for any of the purposes permitted
hereunder or to exercise its rights hereunder.
18.10 For so long as Orbital Sciences Corporation or any Affiliate of
Orbital Sciences is the tenant under this Lease, Landlord hereby releases and
waives any and all liens or security interests (including any statutory liens)
Landlord may have upon any of Tenant's Personal Property, as herein defined.
Landlord agrees that to the extent such liens or security interests may not be
waived by Landlord, any such liens or security interests shall at all times be
subject and subordinate to any security interests and liens granted by Tenant
which may now or hereafter affect Tenant's Personal Property, and to all
renewals, modifications, consolidations, replacements and extensions thereof.
This clause shall be self-operative and nor further
-45-
instrument of release, waiver or subordination shall be required to affirm to
any secured party the effect of this clause. Notwithstanding the foregoing, in
confirmation of such release, waiver and subordination, Landlord shall at
Tenant's written request, execute and deliver to Tenant within twenty (20) days
of Landlord's receipt of Tenant's request, any reasonable requisite or
appropriate certificate, waiver, release or subordination agreement or other
document that may be reasonably requested by Tenant or other third party
requiring such certificate waiver, release or subordination agreement or
document. "Tenant's Personal Property" shall mean the leasehold improvements,
good, wares, merchandise, inventory, furniture, trade fixtures, machinery,
equipment, telephones, telephone systems, inside wire, business records,
accounts receivable and other personal property of Tenant in or about the
Premises or that may be placed or kept therein during the Lease Term and also
upon all proceeds of any insurance which may accrue to Tenant by reason of
damage to or destruction of any such property, chattels or merchandise.
ARTICLE XIX
BANKRUPTCY
19.1 The following shall be an Event of Bankruptcy under this Lease:
(a) Tenant's becoming insolvent, as that term is defined in
Title 11 of the United States Code (the "BANKRUPTCY CODE"), or under the
insolvency laws of any State, District, Commonwealth or territory of the United
States that are applicable to Tenant (the "INSOLVENCY LAWS");
(b) The filing of a voluntary petition under the provisions
of the Bankruptcy Code or Insolvency Laws;
(c) The filing of an involuntary petition against Tenant as
the subject debtor under the Bankruptcy Code or Insolvency Laws, which either
(i) is not dismissed within ninety (90) days of filing or (ii) results in the
issuance of an order or relief against the debtor; or
(d) Tenant's making or consenting to an assignment for the
benefit of creditors or a common law composition of creditors.
19.2 (a) Upon occurrence of an Event of Bankruptcy, Landlord shall
have all rights and remedies available to Landlord pursuant to Article XVIII,
provided that while a case in which Tenant is the subject debtor under the
Bankruptcy Code is pending and only for so long as Tenant or its Trustee in
Bankruptcy (hereinafter referred to as "TRUSTEE") is in compliance with the
provisions of Section 19.2(b), (c) and (d) below, Landlord shall not exercise
its rights and remedies pursuant to Article XVIII.
(b) In the event Tenant becomes the subject debtor in a case
pending under the Bankruptcy Code, Landlord's right to terminate this Lease
pursuant to Section 19.2(a) shall be subject to the rights of Trustee to assume
or assign this Lease. Trustee shall not have the right to assume or assign this
Lease unless Trustee promptly (i) cures all defaults under this Lease, (ii)
compensates Landlord for monetary damages incurred as a result of such defaults,
and (iii)
-46-
provides adequate assurance of future performance on the part of Tenant as
debtor in possession or on the part of the assignee tenant
(c) Landlord and Tenant hereby agree in advance that
adequate assurance of future performance, as used in Section 19.2(b) above,
shall mean that all of the following minimum criteria must be met: (i) Tenant's
gross receipts in the ordinary course of business during the thirty (30) day
period immediately preceding the initiation of the case under the Bankruptcy
Code must be at least two (2) times greater than the next monthly installment of
annual base rent and additional rent due under this Lease; (ii) both the monthly
average and median of Tenant's gross receipts in the ordinary course of business
during the six month period immediately preceding the initiation of the case
under the Bankruptcy Code must be at least two (2) times greater than the next
monthly installment of annual base rent and additional rent due under this
Lease; (iii) Trustee must deliver to the Trustee adequate security in
commercially reasonable amounts said amount to be held by Trustee in escrow,
without interest, until either Trustee or Tenant defaults in its payment of rent
or other obligations under this Lease (whereupon Landlord shall have the right
to draw on such escrowed funds) or until the expiration of this Lease (whereupon
the funds shall be returned to Trustee or Tenant); (iv) Tenant must pay its
estimated pro rata share of the cost of all services provided by Landlord
(whether or not previously included as a part of the annual base rent) in
accordance with the provisions of Article IV hereof; (v) Trustee must agree that
no prohibited use shall be permitted; and (vi) Tenant or Trustee must agree to
redeposit with the Trustee at any time Landlord is authorized to and does draw
on the escrow account referred to in (iii) hereof the amount necessary to
restore such escrow account to the original level.
(d) In the event Tenant is unable to (i) cure its defaults
within any applicable notice and cure period, (ii) pay the rent due under this
Lease and all other payments required of Tenant under this Lease on time (or
within five (5) days of the due date), or (iii) meet the criteria and
obligations imposed by Section 19.2(c) above, Tenant agrees in advance that it
has not met its burden to provide adequate assurance of future performance and
this Lease may be terminated by Landlord in accordance with Section 19.2(a)
above.
ARTICLE XX
SUBORDINATION: MORTGAGES
20.1 This Lease is subject and subordinate to the lien of any and all
mortgages (which term "MORTGAGES" shall include both construction and permanent
financing and shall include deeds of trust and similar security instruments)
which may now or hereafter encumber the Premises, and to all and any renewals,
extensions, modifications, recastings or refinancings thereof; provided,
however, that the effectiveness of such subordination is subject to the
condition that Landlord obtain from any holder of any such mortgage or deed of
trust on the Premises a non-disturbance agreement, to the end and intent that as
long as Tenant pays all rent when due and punctually observes all other
covenants and obligations on its part to be observed under this Lease (subject
to applicable notice and cure provisions), the terms and conditions of this
Lease shall continue in full force and effect and Tenant's rights under this
Lease and its possession, use and occupancy of the Premises shall not be
disturbed during the Lease Term by the holder of such mortgage or deed of trust
or by any purchaser upon foreclosure of such
-47-
mortgage or deed of trust. At any time after the execution of this Lease, the
holder of any mortgage to which this Lease is subordinate shall have the right
to declare this Lease to be superior to the lien of such mortgage, and Tenant
agrees to execute all documents required by such holder in confirmation thereof.
20.2 In confirmation of the foregoing subordination and
non-disturbance provisions and subject to the provisions of Section 20.1 above,
Tenant shall, within fifteen (15) days of its receipt of a request therefor,
promptly execute and deliver any reasonable and appropriate certificate or other
document evidencing such subordination. Tenant agrees that neither the
institution of any suit, action or other proceeding by the holder of any
mortgage on the Premises to realize upon such mortgage holder's interest in the
Premises, nor any sale of the Premises pursuant to the provisions of the
mortgage in favor of such mortgage holder, shall, by operation of law or
otherwise, result in the cancellation or termination of this Lease or of the
obligations of Tenant hereunder, and that Tenant shall attorn to the purchaser
at such foreclosure sale and shall recognize such purchaser as the landlord
under this Lease. Tenant further agrees that for the purposes of this Section
20.2, the term "PURCHASER" or "PURCHASER AT A FORECLOSURE SALE" shall mean,
without limitation, a purchaser at a foreclosure sale affecting the Premises or
the holder of any mortgage on the Premises. Tenant agrees that upon such
attornment, such purchaser shall not (a) be bound by any rent credits or
payments of Annual Base Rent for more than one (1) month in advance, (b) be
bound by the amendment of any material term of this Lease (e.g. an amendment
which decreases the Annual Base Rent to be paid by Tenant under this Lease) made
without the consent of any lender providing financing for the Premises of which
Tenant has notice prior to entering into the amendment, (c) be liable for
damages for any act or omission of any prior landlord; or (d) be subject to any
offsets or defenses which Tenant might have against any prior landlord;
provided, however, that after succeeding to Landlord's interest under this
Lease, such purchaser shall perform in accordance with the terms of this Lease
all obligations of Landlord arising after the date such purchaser acquires title
to the Premises. Upon request by such purchaser, Tenant shall execute and
deliver an instrument or instruments confirming its attornment.
20.3 (a) After Tenant receives notice in writing from any person,
firm or other entity that it holds a mortgage or deed of trust on the Premises
or the Land requesting that copies of notices from Tenant to Landlord be sent to
it, no notice from Tenant to Landlord alleging any default by Landlord shall be
effective unless and until a copy of the same is given to such holder or Trustee
at the last address of such holder or Trustee; that shall have been furnished to
Tenant. The curing of any of Landlord's defaults by such holder or Trustee shall
be treated as performance by Landlord.
(b) In addition to the time afforded Landlord for the curing
of any default, except with respect to the time periods set forth in Sections
13.2 and 14.6, any such holder or Trustee shall have an additional fifteen (15)
business days after the expiration of the period allowed to Landlord for the
cure of any such default within which to commence a cure and such additional
time as may be reasonable necessary to effect the cure using diligent efforts.
20.4 In the event that any lender providing construction or permanent
financing or any refinancing for the Premises or the Land requires, as a
condition of such financing, that
-48-
modifications to this Lease be obtained, and provided that such modifications
(i) are reasonably acceptable to Tenant, (ii) do not adversely affect in a
material manner Tenant's rights or obligations hereunder, including its use of
the Premises as herein permitted, (iii) do not increase the rent or other sums
to be paid by Tenant hereunder, (iv) do not adversely affect in a material
manner Tenant's use of the Premises as herein permitted and (v) do not reduce or
limit in a material manner Landlord's obligations under this Lease, Landlord may
submit to Tenant a written amendment to this Lease incorporating such required
changes, and Tenant hereby covenants and agrees to execute, acknowledge and
deliver such amendment to Landlord within fifteen (15) days of Tenant's receipt
thereof with such modifications as may reasonably agreed upon by Landlord,
Tenant and the lender requiring such modifications.
ARTICLE XXI
HOLDING OVER
21.1 In the event that Tenant shall not immediately surrender the
Premises on the date of the expiration of the Lease Term, Tenant shall become a
tenant by the month. During such holdover period, Tenant shall pay a rent equal
to one hundred fifty percent (150%) of the Annual Base Rent in effect during the
last month of the Lease Term. Said monthly tenancy shall commence on the first
day following the expiration of the Lease Term. As a monthly tenant, (i) Tenant
shall be subject to all the terms, conditions, covenants and agreements of this
Lease; (ii) Tenant shall give to Landlord at least thirty (30) days' written
notice of any intention to vacate the Premises; and (iii) Tenant shall be
entitled to thirty (30) days' written notice to quit the Premises, unless Tenant
is in default hereunder, in which event Tenant shall not be entitled to any
notice to quit, the usual thirty (30) days' notice to quit being hereby
expressly waived. Notwithstanding the foregoing provisions of this Section 21.1,
in the event that Tenant shall hold over after the expiration of the Lease Term,
and if Landlord shall desire to regain possession of the Premises promptly at
the expiration of the Lease Term, then at any time prior to Landlord's
acceptance of rent from Tenant as a monthly tenant hereunder, Landlord, at its
option, may forthwith re-enter and take possession of the Premises by any legal
process in force in the Commonwealth of Virginia.
ARTICLE XXII
COVENANTS OF LANDLORD
22.1 Landlord represents and covenants that it has the right to make
this Lease for the term aforesaid, and Landlord covenants that Tenant shall,
during the term hereby created, freely, peaceably and quietly occupy and enjoy
the full possession of the Premises without disturbance, molestation or
hindrance by any person or entity whatever claiming an interest in the Premises
prior or superior to Tenant's. Nothing in this Section 22.1, however, shall
prevent Landlord from exercising any remedy available to it on account of an
Event of Default by Tenant under this Lease. Landlord and Tenant each
acknowledge and agree that Tenant's leasehold estate in and to the Premises
vests on the date this Lease is fully executed by Landlord and Tenant,
notwithstanding that the Lease Term will not commence until a future date.
22.2 Landlord hereby reserves to itself and its successors and
assigns the following rights (all of which are hereby consented to by Tenant):
(i) if imposed by Legal Requirements in Landlord's reasonable judgment after
consultation with Tenant, if Tenant and/or its Affiliates are
-49-
the lessees of more than fifty-one percent (51%) of the Premises, to change the
street address and/or the arrangement and/or location of entrances, passageways,
doors, doorways, corridors, elevators, stairs, toilets, or other public parts of
the Building; and (ii) subject to compliance with Landlord's obligations
pursuant to Sections 8.1 and 11.1, if imposed by Legal Requirements or if
necessary for the proper functioning of the Premises after consultation with
Tenant, if Tenant and/or its Affiliates are the lessees of more than fifty-one
percent (51%) of the Premises, to erect, use and maintain pipes and conduits in
and through the Premises; and (iii) to establish and maintain field offices in
the Building for site engineers, property management and maintenance personnel
comprising, in the aggregate, approximately 600 rentable square feet; and in
number and locations that are typical for Class A suburban office buildings in
the Market Area provided that, subject to the foregoing standards, Tenant shall
have approval rights over the particular size and locations of such facilities,
which approval shall not be unreasonably withheld, conditioned or delayed.
Provided Landlord acts reasonably and diligently and in a manner not likely to
materially, adversely affect Tenant's continuing and reasonably uninterrupted
business functions, Landlord may exercise any or all of the foregoing rights
without being deemed to be guilty of an eviction, actual or constructive, or a
disturbance or interruption of the business of Tenant or of Tenant's use or
occupancy of the Premises and without diminishing the rent payable hereunder.
ARTICLE XXIII
PARKING
23.1 Parking shall be available in the surface parking areas
appurtenant to the Building. Landlord and Tenant shall agree upon reasonable
access controls and operating policies that will govern the parking areas, all
of which shall be consistent with the standards of Class A suburban office
buildings and shall comply with all Legal Requirements (including, but not
limited to, those set forth in the Americans with Disabilities Act and similar
such laws in effect from time to time). Vehicles may be parked at any time free
of charge (during the initial Lease Term), seven (7) days per week, twenty-four
(24) hours per day. Landlord and Tenant agree that it is the parties' intention
that parking shall be made available to Tenant in a ratio of approximately four
(4) vehicles for every 1,000 gross square foot of Building area. Notwithstanding
anything in this Section 23.1 to the contrary, in no event shall Landlord be
obligated to provide Tenant more parking spaces than shown on the Revised Site
Plan 8A for the Building.
23.2 Subject to the provisions of Sections 14.1 and 14.7 hereof, it
is understood and agreed that Landlord does not assume any responsibility for,
and shall not be held liable for, any damage or loss to any automobiles parked
in the parking area or to any personal property located therein, or for any
injury sustained by any person in or about the parking areas.
ARTICLE XXIV
REPRESENTATIONS AND WARRANTIES
24.1 Landlord hereby warrants and represents to Tenant as follows:
(a) Landlord is a limited partnership, validly existing and
in good standing under the laws of the State of Delaware.
-50-
(b) Landlord has the full capacity, right, power and
authority to execute and deliver this Lease. The individuals signing this Lease
and all other documents executed or to be executed pursuant hereto on behalf of
Landlord are and shall be duly authorized to sign the same on Landlord's behalf
and to bind Landlord thereto.
(c) Landlord has not (i) made a general assignment for the
benefit of creditors, (ii) filed any involuntary petition in bankruptcy or
suffered the filing of any involuntary petition by Landlord's creditors, (iii)
suffered the appointment of a receiver to take possession of all or
substantially all of Landlord's assets, (iv) suffered the attachment or other
judicial seizure of all, or substantially all, of Landlord's assets, (v)
admitted in writing its inability to pay its debts as they come due, or (vi)
made an offer of settlement, extension or composition to its creditors
generally.
(d) Neither the execution of this Lease nor the consummation
of the transaction contemplated hereby will (i) conflict with, or result in a
breach of, the terms, conditions or provisions of, or constitute a default
under, any agreement or instrument to which Landlord is a party or (ii) violate
any restriction or court order to which Landlord is subject.
24.2 Tenant hereby warrants and represents to Landlord as follows:
(a) Tenant is a corporation, validly existing and in good
standing under the laws of Delaware and is authorized to do business as a
foreign corporation in the Commonwealth of Virginia.
(b) Tenant has the full capacity, right, power and authority
to execute and deliver this Lease. The individuals signing this Lease and all
other documents executed or to be executed pursuant hereto on behalf of Tenant
are and shall be duly authorized to sign the same on Tenant's behalf and to bind
Tenant thereto.
(c) Tenant has not (i) made a general assignment for the
benefit of creditors, (ii) filed any involuntary petition in bankruptcy or
suffered the filing of any involuntary petition by Tenant's creditors, (iii)
suffered the appointment of a receiver to take possession of all or
substantially all of Tenant's assets, (iv) suffered the attachment or other
judicial seizure of all, or substantially all, of Tenant's assets, (v) admitted
in writing its inability to pay its debts as they come due, or (vi) made an
offer of settlement, extension or composition to its creditors generally.
(d) Neither the execution of this Lease nor the consummation
of the transaction contemplated hereby will (i) conflict with, or result in a
breach of, the terms, conditions or provisions of, or constitute a default
under, any agreement or instrument to which Tenant is a party or (ii) violate
any restriction or court order to which Tenant is subject.
24.3 Neither Landlord nor Tenant will intentionally cause or permit
any action to be taken which would cause any of their respective foregoing
representations or warranties to be untrue as of the Lease Commencement Date.
-51-
ARTICLE XXV
RENEWAL
25.1 Landlord hereby grants to Tenant three (3) successive five
(5)-year renewal options, each exercisable at Tenant's option and subject to the
conditions described below (each such five-year term, if exercised, being
referred to herein as a "RENEWAL TERM"). If exercised, and if the conditions
applicable thereto have been satisfied, the first Renewal Term shall commence
immediately following the end of the Lease Term provided in this Lease (as it
may be extended pursuant to Section 2.3 hereof), the second Renewal Term shall
commence immediately following the end of the first Renewal Term, and the third
Renewal Term shall commence immediately following the end of the second Renewal
Term. The right of renewal herein granted to Tenant with respect to each Renewal
Term shall be subject to, and shall be exercised in accordance with, the
following terms and conditions:
(a) Tenant shall exercise its right of renewal with respect
to each Renewal Term by giving Landlord written notice thereof not earlier than
twenty-four (24) months and not later than twelve (12) months prior to the
expiration date of the then-current Lease Term. Tenant's exercise of its right
of renewal shall be irrevocable (except as provided in Section 25.3(a) below)
and shall be binding upon both Landlord and Tenant.
(b) In the event a renewal option notice is not given
timely, Tenant's right of renewal with respect to such Renewal Term shall lapse
and be of no further force or effect.
(c) If a monetary or material non-monetary Event of Default
has occurred hereunder and has continued for ten (10) business days and is
continuing uncured on the date a renewal option notice is sent or on the date
such Renewal Term is to commence, then, at Landlord's option, to be exercised
within fifteen (15) business days after the expiration of the applicable cure
period for such default, such Renewal Term shall not commence and the Lease Term
shall expire on the date the Lease Term would have expired without such renewal.
(d) In the event this Lease is not renewed for any Renewal
Term, Tenant's right to renew this Lease for any subsequent Renewal Terms shall
also lapse.
25.2 During any Renewal Term, all the terms, conditions, covenants
and agreements set forth in this Lease shall continue to apply and be binding
upon Landlord and Tenant, except that: (1) the Annual Base Rent shall be
calculated at the beginning of each Renewal Term as provided in this Article XXV
so that the Annual Base Rent payable during each Lease Year of such Renewal Term
shall be equal to ninety-five percent (95%) of Market Rent for such Renewal
Term, including a market-based formula for adjusting Market Rent for each Lease
Year of each Renewal Term; (2) Tenant shall pay for parking if such is the
market standard at the time it exercises its renewal option or if Tenant does
not wish to pay for parking the Annual Base Rent shall be adjusted to take into
account that Tenant is not paying for parking when it is market standard at the
time the Annual Base Rent is calculated for Tenant to do so; and (3) in no event
shall Tenant have the right to renew the Lease Term beyond the expiration of the
third Renewal Term provided for in Section 25.1.
-52-
25.3 "MARKET RENT" shall be the fair market amount of "net" Annual
Base Rent (including escalations if escalations are customary for comparable
facilities in the Market Area, as defined below) determined as follows:
(a) Following the giving of the renewal option notice,
Landlord and Tenant shall commence negotiations concerning the amount of Annual
Base Rent that shall constitute Market Rent. The parties shall have sixty (60)
days (the "NEGOTIATION PERIOD") after the date Tenant delivers its renewal
option notice in which to agree on such Market Rent. If, during such negotiation
period, the parties are unable to agree on such Market Rent, then Tenant shall
have the right, at its sole election, to rescind its exercise of the renewal
option by notice of rescission delivered to Landlord no later than thirty (30)
days after the expiration of the Negotiation Period (the "RESCISSION PERIOD").
The Market Rent shall be stated and comprised of a component of Annual Base Rent
for the first Lease Year of the Renewal Term and, if customary, a component of
annual escalations to be stated in terms of percentage increases to Annual Base
Rent for the second, third, fourth and fifth Lease Years of the Renewal Term.
(b) (i) In the event Landlord and Tenant do not reach
agreement concerning the Market Rent, and Tenant does not timely exercise the
right of rescission described in subsection (a) above, then the Market Rent and
a formula for escalations shall be determined by three (3) real estate brokers.
Landlord and Tenant shall each, within fifteen (15) days from the expiration of
the Rescission Period described in subsection (a) above, designate an
independent, licensed real estate broker or a licensed real estate professional
associated with a licensed real estate broker who shall have more than ten (10)
years' experience as a real estate broker specializing in commercial office
leasing, and who shall have expertise with the commercial real estate market in
which the Building is located; and the third broker shall be appointed by the
first two brokers. For purposes of this Lease, a broker shall not be deemed
"independent" if such broker shall have been engaged to work on behalf of the
party that is appointing such broker at the time of, or at any time during the
three (3) year period preceding, such broker's appointment; provided, however,
that the third (3rd) broker selected by the first two brokers shall not be
deemed independent if such broker or any entity with which such broker is
affiliated shall have been engaged to work on behalf of either Landlord or
Tenant during the two (2) year period immediately preceding such broker's
appointment. The costs and expenses of each broker appointed separately by
Landlord and Tenant will be borne by the party who appointed the broker. The
costs and expenses of the third broker will be shared equally by Landlord and
Tenant. The brokers appointed by Landlord and Tenant shall select a third broker
within fifteen (15) days of the date of appointment of the latter of the first
two brokers.
(ii) The brokers shall each establish what they believe to be
the Market Rent, including, if customary, the escalation
formula and shall notify Landlord and Tenant thereof by
written notice within thirty (30) days of the date of
the appointment of the third broker, which notice shall
be accompanied by their reports. The Market Rent shall
be stated and comprised of a component of Annual Base
Rent for the first Lease Year of the Renewal Term and,
if customary, a component of annual escalations to be
stated in terms of percentage increases to Annual Base
Rent for the second, third, fourth and fifth Lease Years
of the Renewal Term. If any broker fails to
-53-
render its determination within such thirty (30) day
period, it shall be disregarded. If the aggregate dollar
value (ignoring any present value calculations) of the
determinations for the five year Renewal Term of any two
or three of the brokers shall be identical in amount,
said amount shall be deemed to be the Market Rent for
the Premises. If both the highest and the lowest
determination differ by less than five percent (5%) from
the middle determination, then the Market Rent shall be
deemed to be the average of the three determinations. If
the lowest determination and/or the highest
determination differs by more than five percent (5%)
from the middle determination, such determination or
determinations shall be disregarded and the Market Rent
shall be deemed to be the average of the remaining
determinations.
(iii) The Market Rent (including escalations, if any) for the
Premises to begin as of the first day of the applicable
Renewal Term determined in accordance with the
provisions of this Section shall be binding and
conclusive on Tenant and Landlord. Notwithstanding the
foregoing, if either party shall fail to appoint the
broker to be appointed by such party within fifteen (15)
days following the Rescission Period, the Market Rent of
the Premises as determined by the broker so appointed
shall be binding and conclusive on Landlord and Tenant.
25.4 As used herein, "Market Rent" shall be equal to "triple net"
base footage rent which would be available to new tenants (taking into account
all rent escalation factors) in buildings (to the extent such tenants are
single-users or have the space in a building comparable to the space leased by
Tenant in the Building) of similar age, finish, quality, design, location,
condition and value as the Building (excluding Improvements installed in the
Building at Tenant's sole expense) and located in office parks of quality
comparable to and in the ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇▇▇) ▇▇▇▇ between the Dulles Toll
Road and Route 7 (the "MARKET AREA"). The Market Rent shall reflect the absence
of landlord concessions such as rental abatement, build-out allowances, free
parking, costs such as brokerage commissions and a base year established as the
calendar year in which the first day of the Renewal Terms occurs. Such allowable
concessions and costs shall be factored into Market Rent by amortizing such
concessions and costs over the applicable Renewal Term through a reduction of
the base footage rent otherwise payable in the absence of such concessions and
costs including a reasonable amount of "downtime" not to exceed nine (9) months.
For purposes hereof, leases of seventy thousand (70,000) square feet of rentable
area or greater shall be deemed to be leases of similar size.
ARTICLE XXVI
COMMUNICATIONS EQUIPMENT
26.1 Tenant may install, free of charge (with the right to collect
and retain any income that may be derived therefrom), at its sole cost, risk and
expense, satellite dishes, antennas and communications equipment (the
"COMMUNICATIONS EQUIPMENT") on the roof of the Building and/or on portions of
the Land (for so long as such portions of the Land remain subject to this
Lease), in an amount and of a type determined by Tenant, subject to Tenant's
compliance with
-54-
the Approved Site Plan and all other Legal Requirements and subject further to
Landlord's prior written approval of location, placement, plans and
specifications for the Communications Equipment and the type and placement of
all cabling and wiring ancillary thereto, all of which Landlord approvals shall
not be unreasonably withheld, conditioned or delayed. Landlord makes no
representation concerning the suitability of the rooftop or the Land as a
location for the Communications Equipment, and Landlord's approval of Tenant's
plans and specifications shall in no event be construed as constituting such a
representation. Tenant shall be responsible for obtaining and maintaining all
approvals, permits and licenses required by any federal, state or local
government for installation and operation of the Communications Equipment and
for paying all fees attendant thereto and for complying with all other Legal
Requirements relating to the Communications Equipment. If the Communications
Equipment is installed, Tenant shall have sole responsibility for the
maintenance, repair and replacement thereof and of all cabling and wiring
ancillary thereto. Tenant shall coordinate with Landlord's property manager
concerning any penetration of the roof or the exterior facade of the Building,
and shall in no event take any action that will void any then-existing roof
warranty. All repairs to the Building made necessary by reason of the
furnishing, installation, maintenance, operation or removal of the
Communications Equipment or any replacements thereof shall be at Tenant's sole
cost. Upon expiration or termination of this Lease, Tenant agrees that it will
remove, forthwith, the Communications Equipment (but not the wiring or
accessories) and shall repair any damage to the Building caused by the
installation or removal of the Communications Equipment and related equipment.
In the event Tenant fails to remove the Communications Equipment, Landlord may
remove and dispose of such Communications Equipment and charge Tenant the entire
reasonable cost thereof. Tenant's Communications Equipment shall not interfere
with the structure of the Building, any of the building systems, or, at any time
that Tenant is not the sole lessee of the Building, the equipment (including
airwaves reception and other equipment) of any other tenant in the Building who
shall have similar rights to maintain Communications Equipment and shall have
exercised those rights prior to the exercise thereof by Tenant hereunder. Any
such similar rights granted to any other tenant shall similarly restrict such
other tenant's Communications Equipment from interfering with Tenant's
Communications Equipment. Landlord shall enforce all such restrictions. If
Tenant ceases at any time to be the sole tenant of the Building, Tenant's rights
pursuant to this Section 26.1 shall be non-exclusive. Landlord shall have no
liability on account of any damage to or interference with the operation of the
Communications Equipment by any third party. Notwithstanding the foregoing,
Landlord agrees that it will manage the available space on the rooftop so as to
accommodate Tenant's needs with respect to the Communications Equipment to the
greatest extent reasonably possible, including requesting that other tenants or
rooftop users relocate their equipment if such relocation is necessary to enable
Tenant to operate its Communications Equipment. Landlord shall have the right to
require Tenant to relocate the Communications Equipment at Landlord's cost to
another suitable location on the rooftop reasonably acceptable to Tenant,
provided such relocation can be done at a time and in a manner that only
minimally and temporarily interferes with Tenant's use of the Communications
Equipment.
-55-
ARTICLE XXVII
TENANT'S PURCHASE OPTION
27.1 Tenant shall have the one (1) time option (the "PURCHASE
OPTION") to purchase the Premises upon six (6) months prior written notice
during the period commencing on the first day of the twelfth (12th) Lease Year
and continuing through the expiration of the ninth (9th) full calendar month of
the thirteenth (13th) Lease Year (the "PURCHASE OPTION WINDOW"). Tenant shall
notify Landlord (the "PURCHASE OPTION NOTICE") in writing, of its exercise of
the Purchase Option not earlier than the commencement of the seventh (7th) full
calendar month of the eleventh (11th) Lease Year and not later than the
expiration of the third (3rd) full calendar month of the thirteenth (13th) Lease
Year. The purchase price for the Premises shall be determined in accordance with
the provisions of Section 27.2 below.
27.2 The purchase price for the Premises shall be their Fair Market
Value which shall be determined as follows:
(a) During the sixty (60) day period following Landlord's
receipt of the Purchase Option Notice (the "PURCHASE PRICE NEGOTIATION PERIOD"),
Landlord and Tenant shall meet and shall seek to establish the Fair Market Value
of the Premises. For the purposes of this Article XXVII, the term "FAIR MARKET
Value" shall mean the all-cash price which a ready. willing and able buyer would
agree to pay for the Premises, after arm's length negotiations, giving due
consideration to all appropriate factors, including, the age, quality, finish,
design, current function, location and condition of the Premises and recognizing
the effect of this Lease remaining in place as of the Closing Date at the then
current Base Rent plus scheduled escalations and rights of renewal. If Landlord
and Tenant are unable to agree upon the Fair Market Value of the Premises during
the Purchase Price Negotiation Period, Tenant may elect to revoke its Purchase
Option Notice by written notice to Landlord within the thirty (30) day period
following the expiration of the Purchase Price Negotiation Period (the "PURCHASE
OFFER REVOCATION PERIOD"). If Tenant does not revoke its option in accordance
with the preceding sentence, it shall, no later than five (5) business days
thereafter, post a deposit (the "PURCHASE DEPOSIT") in an amount equal to seven
and one-half percent (7.5%) of the then current Annual Base Rent, which deposit
shall be held in escrow by a mutually acceptable title insurance company (the
"ESCROW AGENT"). Not more than five business days after the Fair Market Value of
the Premises is determined, Tenant shall increase the Purchase Deposit in to an
amount which will cause the Purchase Deposit to be seven and one-half percent
(7.5%) of the Fair Market Value of the Premises.
(b) If Tenant does not give written notice of revocation to
Landlord within the Purchase Offer Revocation Period, the Fair Market Value of
the Premises shall be determined by three (3) MAI appraisers, each of whom shall
be licensed in the Commonwealth of Virginia as a real estate appraiser and shall
have at least ten (10) years of commercial office sales, acquisition and leasing
experience in the Market Area. The three appraisers shall be appointed in the
same manner as the three brokers are appointed pursuant to Section 25.3 hereof.
In determining the Fair Market Value of the Premises, the appraisers (i) shall
be directed to assume a single building user in the Market Area with a five (5)
year lease term including full concessions and (ii) shall be directed to
determine (x) the market "triple net" rent for the Premises, assuming no
defaults
-56-
under the terms and provisions of this Lease (the "PURCHASE OPTION MARKET RENT")
and (y) a market "cap" rate using the same assumptions specified in (i) hereof
(the "MARKET CAP RATE"). The Fair Market Value shall then be calculated by
dividing the Market Rent by the Market Cap Rate. The Fair Market Value
determined pursuant to the preceding sentence shall be further adjusted by
taking into account the net present value (using a discount rate of eight
percent (8%)) of the difference between Market Rent and the total rent to be
paid by Tenant for the balance of the Lease Term (including, without limitation,
any Supplemental Land Costs and increases in Annual Base Rent attributable to
amortizing Base Building Capital Expenditures). The appraisers shall each
establish what they believe to be the Fair Market Value of the Premises and
shall notify Landlord and Tenant thereof by written notice within thirty (30)
days of the date of appointment of the third appraiser, which notices shall be
accompanied by copies of their reports. If any appraiser fails to render its
determination within such thirty (30) day period, it shall be disregarded. If
the determinations of any two or three of the appraisers shall be identical in
amount, said amount shall be deemed to be the Fair Market Value for the
Premises. If both the highest and the lowest determination differ by less than
two percent (2%) from the middle determination, then the Fair Market Value shall
be deemed to be the average of the three determinations. If the lowest
determination and/or the highest determination differs by more than two percent
(2%) from the middle determination, such determination or determinations shall
be disregarded and the Fair Market Value shall be deemed to be the average of
the remaining determinations.
(c) Notwithstanding anything to the contrary in this Article
XXVII, Landlord and Tenant agree that the minimum purchase price for the
Premises shall be eighty percent (80%) of the Project Costs escalated by
increases in the Revised Consumer Price Index for Urban Wage Earners and
Clerical Workers, 1996 Base Year, All Items, Washington, DC-MD-VA Metropolitan
Area (CPI-W), as published by the Bureau of Labor Statistics of the United
States Department of Labor (herein referred to as the "Index"), which is
published for the period that includes the month immediately preceding the first
day of the first Lease Year and the month immediately preceding the month that
the Purchase Option Notice is dated (herein referred to as the "ADJUSTMENT
INDEX"). If the Index is changed so that a base year other than 1996 is used,
the Index used herein shall be converted in accordance with the conversion
factor published by the Bureau of Labor Statistics of the United States
Department of Labor. If the Index is discontinued or otherwise revised during
the Lease Term, such other government index or computation with which it is
replaced shall be used in order to obtain substantially the same result as would
be obtained if the Index had not been discontinued or revised.
(d) The Fair Market Value for the Premises determined in
accordance with the provisions of this Section 27.2 shall be binding and
conclusive upon Landlord and Tenant.
(e) In the event (i) Tenant does not deliver its Purchase
Option Notice to Landlord six (6) months prior to the expiration of the Purchase
Option Window (the "PURCHASE OPTION EXPIRATION DATE") or (ii) Tenant elects to
revoke its exercise of the Purchase Option as provided above, Tenant's Purchase
Option described herein shall lapse and be void and of no further force or
effect.
-57-
27.3 (a) The closing (the "CLOSING") of the purchase of the Premises
shall occur on a date (the "CLOSING DATE") which is no more than six (6) months
after the date of Tenant's Purchase Option Notice, but in any event shall occur
no later than the expiration of the Purchase Option Window. At Closing, Tenant
shall pay the full purchase price by federal wire transfer or other mutually
agreeable means. Closing shall be conducted through an escrow with a title
company selected by Tenant and reasonably acceptable to Landlord.
(b) Landlord shall execute a special warranty deed in
customary form conveying to Tenant fee simple title to the Land, in the form
attached to the Purchase and Sale Agreement between Landlord and Tenant dated of
even date herewith, free and clear of all mortgages, deeds of trust and other
encumbrances and subject only to permitted encumbrances and any such other
liens, encumbrances, covenants, restrictions, matter or thing of record which
(i) were placed on record by or because of Tenant or any Affiliate thereof, (ii)
which Tenant or any Affiliate has joined or consented or (iii) which Tenant
expressly agrees to assume. Except as provided in the preceding sentence, the
Premises shall be conveyed "as is" with no representations or warranties,
express or implied.
(c) Landlord shall execute a certificate that it is not a
foreign person, partnership or other entity and any other affidavits or
instruments reasonably requested by the title company handling the closing that
are then customary in commercial transactions of a similar nature.
(d) The Closing shall take place at a mutually agreed upon
time and location in the Washington, D.C. metropolitan area.
(e) Landlord and Tenant will each pay their own attorneys'
fees in connection with the Closing. Landlord and Tenant shall each pay one-half
of all applicable escrow fees charged by the Escrow Agent. All Virginia state,
county and all other taxes imposed upon the grantor shall be paid by Landlord.
All Virginia state, county and all other taxes and recordation taxes shall be
paid by Tenant. Title examination, title insurance premiums, survey charges,
notary fees, costs and expenses related purchase money financing and all other
charges incident to settlement (other than charges related to the release of any
existing liens on the Premises) shall be paid by Tenant. All other charges shall
be borne by Landlord or Tenant as is usual and customary to be borne by seller
and purchaser, respectively, in customary transactions not involving a
landlord/tenant relationship.
(f) All rent payments payable or receivable, taxes,
assessments, utility charges and other similar items usually adjusted and
prorated at closing shall be prorated as of the date of Closing.
(g) This Lease shall continue in full force and effect
through the Closing Date.
27.4 If either party shall fail to close on the Purchase Option
hereunder under circumstances when such party is required to close, then the
other party may pursue all remedies available to it at law or in equity,
including specific performance. At its election, Landlord may
-58-
retain the Purchase Deposit as liquidated damages and this Lease shall, at
Landlord's sole discretion, continue in full force and effect as if Tenant had
never exercised its Purchase Option.
27.5 Nothing set forth in this Article XXVII shall restrict or
prevent Landlord from (a) making an assignment of its interest in this Lease for
security, (b) admitting lenders or others as limited partners in the partnership
which constitutes Landlord or (c) granting to lenders or others equity interests
in the Premises or the partnership which constitutes Landlord; provided,
however, that any such conveyance shall not affect Tenant's Purchase Option and
any such assignee or transferee shall comply with the provisions of this Article
XXVII.
27.6 The rights of purchase set forth herein may be exercised by
Orbital Sciences Corporation and not by any assignee of Orbital Sciences
Corporation other than an Affiliate of Tenant or an assignee permitted pursuant
to Section 7.4 above and only if Tenant and/or its Affiliates are occupying not
less than fifty percent (50%) of the Premises demised under this Lease. Such
rights shall not be assignable by Orbital Sciences Corporation to any third
party nor, except as expressly provided herein, to any assignee, subtenant or
successor-in-interest to Tenant, other than an Affiliate of Tenant.
27.7 If there is a monetary or material non-monetary Event of Default
under this Lease on the date the Purchase Option Notice is delivered to Landlord
or at any time thereafter prior to Closing, then, at Landlord's Option, to be
exercised within fifteen (15) business days after the expiration of the
applicable cure period for such default, Tenant's right to purchase the Premises
provided herein shall lapse and be of no further force or effect.
ARTICLE XXVIII
RIGHT OF FIRST OFFER
28.1 In the event Landlord, during the Lease Term, wishes to sell or
assign its fee interest in the Premises Landlord shall first give Tenant the
opportunity to purchase such fee interest subject to the following terms and
conditions:
(a) If Landlord decides to sell the Premises, Landlord shall
deliver written notice to Tenant of Landlord's intent to sell the Premises,
which notice shall include the cash purchase price and other terms upon which
Landlord is willing to sell the Premises (the "NOTICE OF INTENT TO SELL"). If
Tenant wishes to purchase the Premises upon the terms and conditions set forth
in the Notice to Sell, Tenant shall give Landlord written notice ("OFFER
EXERCISE NOTICE") of its election to exercise its right to purchase the Premises
within thirty (30) days following Tenant's receipt of the Notice of Intent to
Sell. Failure of Tenant to respond within such thirty (30) day period shall be
deemed an election not to exercise Tenant's right to purchase granted herein;
provided that Tenant agrees to confirm such deemed waiver by executing a
recordable written waiver and providing such further assurances thereof as
Landlord may reasonably request.
(b) If Tenant exercises its right to purchase the Premises
pursuant to this Section 28.1, the purchase price shall be the price specified
in the Notice of Intent to Sell and closing shall occur within the time frames
set forth in the Notice of Intent to Sell (but if Tenant
-59-
elects to exercise its rights hereunder such closing shall occur within sixty
(60) days from the date of Tenant's Offer Exercise Notice) and otherwise
pursuant to the terms of Section 27.3 hereof.
(c) If a Notice of Intent to Sell is given and Tenant elects
(or is deemed to have elected) not to purchase the Premises, then Landlord shall
be free to sell the Premises to any other person or entity on terms not
materially more favorable to the prospective purchaser than the terms upon which
Tenant shall have had the right to purchase the Premises. For purposes hereof,
any purchase that is at a purchase price (taking into account the closing costs
described in Section 27.3(e) above) that is not less than ninety-five percent
(95%) of the purchase price that would have been payable by Tenant shall be
deemed not to be materially more favorable to the prospective purchaser. In the
event of a proposed sale on terms that are materially more favorable to the
prospective purchaser, Landlord shall be required to give Tenant another notice
of Intent to Sell, specifying the proposed terms of sale and to afford Tenant
the opportunity, once again, to elect to purchase the Premises on the terms so
specified, in accordance with the provisions hereof.
(d) In no event shall Tenant have the right to purchase and,
except as expressly permitted herein, Landlord shall not sell less than the
entire Premises.
(e) Notwithstanding anything contained herein to the
contrary, Tenant shall not be afforded the rights specified in this Section 28.1
and shall not be entitled to purchase the Premises in the case of (i) a sale or
other transfer to an Affiliate of Landlord or (ii) any transfer or conveyance of
title to the Premises or any interest therein or in Landlord as part of a group
of assets marketed for sale, exchange or other disposition in a single or
related series of transactions by Landlord or any Affiliate of Landlord.
Furthermore, Tenant shall have no rights pursuant to this Article XXVIII with
respect to any conveyance or contribution of the Building or any interest
therein or in Landlord to a real estate investment trust, umbrella partnership
real estate investment trust or other entity as part of a transaction in which
shares of a real estate investment trust are being sold to the public.
28.2 (a) Provided Tenant has been afforded the rights granted to
Tenant in this Article XXVIII, Tenant's right to purchase the Premises pursuant
to Section 28.1 shall forever terminate automatically upon the consummation of a
sale of the Premises to an unaffiliated third party purchaser. Tenant agrees to
confirm the termination of its rights hereunder by executing a recordable,
written termination and providing such further assurances thereof as Landlord
may reasonably request.
(b) Any election by Tenant not to exercise its rights
pursuant to Section 28.1 above shall not extinguish or otherwise impair any of
Tenant's right to purchase the Premises pursuant to Article XXVII above.
28.3 Nothing set forth in this Article XXVIII shall restrict or
prevent Landlord from (a) making an assignment of its interest in this Lease for
security, (b) admitting lenders or others as limited partners in the partnership
which constitutes Landlord or (c) granting to lenders or others equity interests
in the Premises or the partnership which constitutes Landlord; provided,
-60-
however, that any such conveyance shall not affect Tenant's Right of First
Refusal and any such assignee or transferee shall comply with the provisions of
this Article XXVIII.
28.4 The rights of purchase set forth herein may be exercised by
Orbital Sciences Corporation and not by any assignee of Orbital Sciences
Corporation other than an Affiliate of Tenant or an assignee permitted pursuant
to Section 7.4 above only during the Lease Term and only if Tenant and/or its
Affiliates are occupying not less than fifty percent (50%) of the Premises
demised under this Lease. Such rights shall not be assignable by Orbital
Sciences Corporation to any third party nor, except as expressly provided in the
preceding sentence, to any assignee, subtenant or successor-in-interest to
Tenant, other than an Affiliate of Tenant.
28.5 Notwithstanding anything to the contrary set forth herein,
Tenant's rights to purchase under this Article XXVIII shall not be applicable to
a transaction involving the transfer of the Premises to a
mortgagee-in-possession or a receiver of the Building, the Land or the Premises
or a purchaser of the Building, the Land or the Premises at any foreclosure sale
thereof, or a grantee of the Land, the Building or the Premises under a
deed-in-lieu of foreclosure nor shall the provisions of this Article XXVIII be
binding upon any such mortgagee-in-possession or receiver or purchaser at
foreclosure or grantee under a deed-in-lieu of foreclosure, after a default by
Landlord under any financing documents encumbering the Building, the Land or the
Premises, as applicable, at any time during the Lease Term. Further, if the
Land, the Building or the Premises is sold as a result of any mortgage financing
secured thereby (e.g. a convertible mortgage or convertible securities) then
Tenant's rights under this Article XXVIII shall terminate and be of no force or
effect. Tenant shall have no right to approve nor have any control over the type
or extent of financing obtained by Landlord with respect to the Land, the
Building or the Premises, except as may be expressly provided in Article XX of
this Lease.
28.6 In the event that at any time Landlord sells or transfers any of
its interest in the Premises or this Lease to an unaffiliated third party and
has otherwise complied with the provisions of this Article XXVIII, then provided
the purchaser or transferee assumes the obligations of Landlord hereunder,
Landlord named herein shall not be liable to Tenant for any obligations or
liabilities based on or arising out of events or conditions occurring on or
after the date of such sale or transfer.
28.7 If there is an Event of Default under this Lease on the date the
Offer Exercise Notice is delivered to Landlord or at any time thereafter prior
to Closing, then, at Landlord's Option, Tenant's right to purchase the Premises
provided herein shall lapse and be of no further force or effect.
ARTICLE XXIX
GENERAL PROVISIONS
29.1 Tenant acknowledges that neither Landlord nor any broker, agent
or employee of Landlord has made any representations or promises with respect to
the Premises or the Building except as herein expressly set forth, and no
rights, privileges, easements or licenses are being acquired by Tenant except as
herein expressly set forth. The preceding sentence to the contrary
notwithstanding, Landlord and Tenant acknowledge the execution and delivery of
(a) the
-61-
Development Agreement and (b) a purchase and sale agreement with respect to the
Land (the "PURCHASE CONTRACT") concurrently with the execution and delivery of
this Lease. Landlord and Tenant agree that the Development Agreement and the
Purchase Contract create certain rights, obligations, liabilities and
responsibilities on both Landlord and Tenant as specifically provided therein.
Landlord and Tenant agree that each of them has made certain representations and
warranties to the other in the Development Agreement and the Purchase Contract
as more specifically provided therein.
29.2 Nothing contained in this Lease shall be construed as creating a
partnership or joint venture of or between Landlord and Tenant, or to create any
other relationship between the parties hereto other than that of landlord and
tenant.
29.3 Landlord and Tenant recognize CB ▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. ("CB") as
the broker procuring this Lease and Landlord shall pay said broker a commission
pursuant to a separate agreement between CB and Landlord, a copy of which
agreement is attached hereto as Exhibit C and made a part hereof (the "BROKERAGE
Agreement"). Tenant hereby acknowledges and agrees to the terms and provisions
of the Brokerage Agreement. Tenant hereby agrees that any and all commissions
paid to CB by Landlord in accordance with the terms and provisions of the
Brokerage Agreement shall be included in Project Costs as determined in
accordance with the provisions of the Development Agreement. Landlord and Tenant
each represents and warrants to the other that, except as provided in the first
sentence of this Section 29.3, neither of them has employed or dealt with any
broker, agent or finder in carrying on the negotiations relating to this Lease.
Each party shall indemnify and hold the other harmless from and against any
claim or claims for brokerage or other commissions asserted by any broker, agent
or finder engaged by the indemnifying party or with whom the indemnifying party
has dealt in connection with this Lease, other than CB.
29.4 Tenant agrees, at any time and from time to time (but no more
than twice in any twelve (12) month period), upon not less than fifteen (15)
days' prior written notice by Landlord, to execute, acknowledge and deliver to
Landlord a statement in writing (i) certifying that this Lease is unmodified and
in full force and effect (or if there have been any modifications, that the
Lease is in full force and effect as modified and stating the modifications);
(ii) stating (x) the amounts of Base Rent and Additional Rent currently due and
payable by Tenant, (y) that Tenant has not paid rent more than thirty (30) days
in advance of its due date and (z) the dates to which the rent and any other
charges hereunder have been paid by Tenant; (iii) stating whether or not, to the
best knowledge of Tenant, Landlord is in default in the performance of any
covenant, agreement or condition contained in this Lease, and if so, specifying
the nature of such default; (iv) stating the address to which notices to Tenant
are to be sent; (v) certifying that Tenant is (or is not) in possession of the
Premises and conducting its business therein; (vi) stating that the Lease Term
has commenced and the full rental is now accruing; (vii) stating that any
improvements required by the Lease or the Development Agreement to be made by
Landlord have been made to the satisfaction of Tenant; (viii) stating whether
there are then existing any set-offs, charges, liens, claims or defenses against
the enforcement of any right )and if so, specifying the same in detail); and
(ix) stating such other information as Landlord or any mortgagee or prospective
mortgagee of the Building may reasonably request. Any such statement delivered
by Tenant may be relied upon by any landlord of the Building or the Land,
-62-
any prospective purchaser of the Building or such land, any mortgagee or
prospective mortgagee of the Building or such land or of Landlord's interest
therein, or any prospective assignee of any such mortgagee. Landlord agrees, at
any time and from time to time (but no more than twice in any twelve (12) month
period), upon not less than fifteen (15) days' prior written notice by Tenant,
to execute, acknowledge and deliver to Tenant a statement in writing (i)
certifying that this Lease is unmodified and in full force and effect (or if
there have been any modifications, that the Lease is in full force and effect as
modified and stating the modifications); (ii) stating the dates to which the
rent and any other charges hereunder have been paid by Tenant; (iii) stating
whether or not, to the best knowledge of Landlord, Tenant is in default in the
performance of any covenant, agreement or condition contained in this Lease, and
if so, specifying the nature of such default; (iv) stating the address to which
notices to Landlord are to be sent; and (v) stating such other information as
Tenant may reasonably request.
29.5 Landlord and Tenant each hereby waives trial by jury in any
action, proceeding or counterclaim brought by either of them against the other
in connection with any matter arising out of or in any way connected with this
Lease, the relationship of landlord and tenant hereunder, Tenant's use or
occupancy of the Premises, and/or any claim of injury or damage.
29.6 All notices or other communications required hereunder shall be
in writing and shall be delivered in person (with receipt therefor), or sent by
certified mail, return receipt requested, postage prepaid, or by facsimile
transmission, to the following addresses or facsimile numbers:
(i) if to Landlord, at:
do Boston Properties, Inc.
▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: Senior Vice President/Property Management
facsimile no. ▇▇▇-▇▇▇-▇▇▇▇ (verify no. 202-646-7600);
with a copy to:
c/o Boston Properties, Inc.
▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: Associate General Counsel
facsimile no. ▇▇▇-▇▇▇-▇▇▇▇ (verify no. 202-646-7600);
and a copy to:
Boston Properties, Inc.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
facsimile no. ▇▇▇-▇▇▇-▇▇▇▇ (verify no. 617-859-2600);
-63-
(ii) if to Tenant, at:
the Premises
Attn: Director, Corporate Finance and Real Estate
(facsimile no. to be designated by Tenant by notice given to Landlord in
accordance herewith);
except that, prior to the Lease Commencement Date, notices to such Director of
Operations shall be given at:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
facsimile no.: 703 406-3506 (verify no.: 703 406-5051);
with a copy to:
the Premises
Attn: General Counsel
facsimile no.: ▇▇▇-▇▇▇-▇▇▇▇ (verify no. 703-406-5505);
except that, prior to the Lease Commencement Date, notices to such General
Counsel shall be given at:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
facsimile no.: 703 _____________ (verify no.: 703 __________________________);
and a copy to:
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, Esq.
▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
facsimile no.: ▇▇▇-▇▇▇-▇▇▇▇ (verify no. 202-637-5900).
Notwithstanding anything contained herein to the contrary, all notices given by
Tenant pursuant to Section 14.6 hereof shall be given at the addresses and in
the manner specified above but, in addition, in order to constitute effective
notice to Landlord, shall be given to the on-site building engineer or to such
other person at such other address as Landlord may specify by written notice to
Tenant. Either party may change its address for the giving of notices by notice
given in accordance with this Section. Notices given by any means other than by
facsimile shall be deemed given or received on the date actually received or, if
refused, on the date delivery was attempted and refused. Notices given by
facsimile shall be deemed given or received when confirmation of complete
receipt is obtained by the transmitting party during normal business hours or,
if not confirmed during normal business hours, on the next business day.
-64-
29.7 If any provision of this Lease or the application thereof to any
person or circumstances shall to any extent be invalid or unenforceable, the
remainder of this Lease, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected thereby, and each provision of this Lease shall be valid and
enforced to the fullest extent permitted by law.
29.8 Feminine or neuter pronouns shall be substituted for those of
the masculine form, and the plural shall be substituted for the singular number,
in any place or places herein in which the context may require such
substitution.
29.9 The provisions of this Lease shall be binding upon, and shall
inure to the benefit of, the parties hereto and each of their respective
representatives, successors and assigns, subject to the provisions hereof
restricting assignment by Landlord or Tenant or subletting by Tenant. The term
"Tenant" as used in this Lease shall include Orbital's permitted assigns in
accordance with the provisions of Article VII of this Lease.
29.10 This Lease, together with the Development Agreement and the
other contemporaneous agreements entered into pursuant thereto, contains and
embodies the entire agreement of the parties hereto and supersedes all other
prior agreements, negotiations and discussions between the parties hereto, all
of which are merged herein. Any representation, inducement or agreement that is
not contained in this Lease shall not be of any force or effect. This Lease may
not be modified or changed in whole or in part in any manner other than by an
instrument in writing duly signed by both parties hereto.
29.11 This Lease shall be governed by and construed in accordance with
the laws of the Commonwealth of Virginia, without regard to the principles of
conflicts of law.
29.12 Article and section numbers and headings are used herein for the
convenience of reference and shall not be considered when construing or
interpreting this Lease. In this Lease, unless otherwise specified, (a) the
singular includes the plural and the plural the singular; (b) words and terms
which include a number of constituent parts, things or elements, including the
terms Premises, Land, Building, Parking Structure and Personal Property, unless
otherwise specified, shall be construed as referring separately to each
constituent part, thing, or element thereof as well as to all of such
constituent parts, things or elements as a whole; (c) reference to statutes are
to be construed as including all rules and regulations adopted pursuant to the
statute referred to; (d) references to agreements and other contractual
instruments shall be deemed to include all subsequent amendments thereto or
changes therein entered into in accordance with their respective terms; (e)
references to persons include their permitted successors and assigns; (f) the
words "hereto" or "herein" or "hereof" or "hereunder" or words of similar import
refer to this Lease in its entirety; and (g) the words "including" or "include"
or words of similar import, unless otherwise specified shall be deemed to be
followed by the words "without limitation".
29.13 The submission of an unsigned copy of this document to Tenant
for Tenant's consideration does not constitute an offer to lease the Premises or
an option to or for the Premises. This document shall become effective and
binding only upon the execution and delivery of this Lease by both Landlord and
Tenant.
-65-
29.14 Time is of the essence of each provision of this Lease.
29.15 This Lease shall not be recorded, except that upon the request
of either party, the parties agree to execute, in recordable form, a short-form
memorandum of this Lease, provided that such memorandum shall not contain any of
the specific rental terms set forth herein and shall otherwise be mutually
acceptable to Landlord and Tenant. Such memorandum may be recorded in the land
records of Loudoun County, Virginia, and the party desiring such recordation
shall pay all recordation costs.
29.16 Except as otherwise specifically provided herein, any additional
rent owed by Tenant to Landlord, and any cost, expense, damage or liability
shall be paid by Tenant to Landlord no later than fifty (50) days after the date
Landlord notifies Tenant in writing of the amount of such additional rent or
such cost, expense, damage or liability; provided that regularly scheduled
monthly payments of additional rent pursuant to Article IV hereof shall be due
and payable on the first day of each month, subject to the terms and conditions
of Article IV. If any payment hereunder is due after the end of the Lease Term,
such additional rent or such cost, expense, damage or liability shall be paid by
Tenant to Landlord not later than fifty (50) days after Landlord notifies Tenant
of the amount of such additional rent or such cost, expense, damage or
liability.
29.17 All claims by Landlord with respect to Tenant's duties and
obligations hereunder, including but not limited to Tenant's duties and
obligations to pay Annual Base Rent, additional rent and the costs, expenses,
damages and liabilities incurred by Landlord for which Tenant is liable, shall
survive the termination of this Lease for any reason whatsoever. All claims by
Tenant with respect to Landlord's duties and obligations hereunder shall survive
the termination of this Lease for any reason whatsoever.
29.18 Except as expressly provided in the Development Agreement with
respect to the initial construction of the Building and the Leasehold
Improvements, in the event either Tenant or Landlord is in any way delayed,
interrupted or prevented from performing any of its respective obligations under
this Lease (other than Tenant's obligation to pay any rent due hereunder), and
such delay, interruption or prevention is due to fire, act of God, governmental
or quasi-governmental act (including, without limitation, any delay in the
issuance of required permits or in the scheduling or performance of required
inspections), national emergency, strike, labor dispute, unusual delays in
transportation, inability to procure materials or utilities (where such
inability was not reasonably capable of being anticipated), or any other cause
beyond Tenant's or Landlord's reasonable control (whether similar or dissimilar)
(all of which are collectively referred to herein as "FORCE MAJEURE"), then
Tenant or Landlord (as applicable) shall be excused from performing the affected
obligations for the period of such delay, interruption or prevention.
Notwithstanding the foregoing, each party shall use reasonable efforts to
mitigate the delay in such party's performance due to Force Majeure.
29.19 Any amounts required to be paid by Tenant under this Lease shall
be considered additional rent. All payments of additional rent shall be paid to
Landlord without diminution,
-66-
set-off or deduction (except as otherwise provided in Section 14.6 hereof) in
the same manner as Annual Base Rent pursuant to Section 3.3 hereof or as may
otherwise be provided in this Lease.
29.20 If Landlord or Tenant is required or elects to take legal action
against the other party to enforce the provisions of this Lease and a judgment
is rendered in such action by a court of competent jurisdiction, then the
prevailing party in such action shall be entitled to collect from the other
party its costs and expenses incurred in connection with such legal action
(including, but not limited to, reasonable attorneys' fees and court costs).
29.21 Notwithstanding anything to the contrary in this Lease, for so
long as Orbital Sciences Corporation or any Affiliate of Orbital Sciences
Corporation is the tenant under this Lease, Landlord agrees that any liability
of Tenant arising out of or in connection with this Lease or the relationship of
Landlord and Tenant and the ability of Landlord to recover damages or other
relief under this Lease shall be limited solely to the assets of Tenant. For so
long as Orbital Sciences Corporation or any Affiliate of Orbital Sciences
Corporation is the tenant under this Lease, in no instance whatsoever shall any
present, past or future employee, officer, director or shareholder of Orbital
Sciences Corporation or any Affiliate of Orbital Sciences Corporation have any
personal liability to Landlord for the satisfaction of any obligations or
liabilities of Tenant under this Lease.
29.22 This Lease includes and incorporates Exhibits A, ▇-▇, ▇-▇, ▇, ▇,
▇, ▇ and F attached hereto.
The parties hereto acknowledge and agree that this Lease and the
Development Agreement shall be interpreted, to the maximum extent possible, so
that they are consistent with each other and with the view that they are
intended to effectuate common and unified purposes. In the event that there is
any conflict or inconsistency between the terms or conditions in any of these
documents, or if the application of the terms or conditions in these documents
to any circumstances may result in inconsistent treatment, the parties agree
that the terms and conditions of this Lease shall take precedence over the
Development Agreement.
ARTICLE XXX
DIRECTORY OF DEFINED TERMS
The following terms used herein are defined where indicated below:
Term Definition
---- ----------
Affiliate of Tenant................................................................ Section 7.5
Affiliate of Landlord.............................................................. Section 13.3(a)
Annual Base Rent................................................................... Section 3.1
Bankruptcy Code.................................................................... Section 19.1(a)
Base Building Capital Expenditures................................................. Section 4.8
Base Building Work................................................................. Section 8.1
Brokerage Agreement................................................................ Section 29.3
Building........................................................................... Recital B
Building Premises.................................................................. Section 17.1
-67-
Closing............................................................................ Section 27.3
Closing Date....................................................................... Section 27.3
Communications Equipment........................................................... Section 26.1
Complex............................................................................ Recital A
Default Amount..................................................................... Section 18.3
Default Rate....................................................................... Section 18.7
Development Agreement.............................................................. Recital B
Divisible Portion of the Building Premises......................................... Section 26.1
Effective Date..................................................................... Introduction
Eligibility Period................................................................. Section 13.2
Environmental Default.............................................................. Section 6.4
Environmental Law.................................................................. Section 6.4
Escrow Agent....................................................................... Section 27.2(a)
Essential Building Services........................................................ Section 14.6
Expenses........................................................................... Section 4.2
Fair Market Value.................................................................. Section 27.2
Formula Rent....................................................................... Section 3.1(c)
Hazardous Materials................................................................ Section 6.4
Improvements....................................................................... Section 9.2
Insolvency Laws.................................................................... Section 19.1
Insurance Requirements............................................................. Section 9.2
Invitees........................................................................... Section 6.4
Landlord Affiliate................................................................. Section 13.3
Lease Commencement Date............................................................ Section 2.2
Lease Term......................................................................... Section 2.1
Lease Year......................................................................... Section 2.2
Leasehold Improvements............................................................. Section 8.2
Legal Requirements................................................................. Section 6.1
Management Agreement............................................................... Section 13.3(a)
Manager............................................................................ Section 13.3(a)
Market Area........................................................................ Section 25.4
Market Cap Rate.................................................................... Section 27.2(b)
Market Rent........................................................................ Section 26.3
Minimum Net Worth Amount........................................................... Section 5.1
mortgages.......................................................................... Section 20.1
Notice of Intent to Sell........................................................... Section 28.1(a)
Offer Exercise Notice.............................................................. Section 28.1(a)
Operating Expenses................................................................. Section 4.2
Operating Plan..................................................................... Section 4.1
Parking Structure.................................................................. Section 23.3
Premises........................................................................... Section 1.1
Project Architect.................................................................. Section 1.3
Project Costs...................................................................... Section 3.1
Purchase Deposit................................................................... Section 27.2
Purchase Offer Revocation Period................................................... Section 27.2
Purchase Option.................................................................... Section 27.1
-68-
Purchase Option Market Rent........................................................ Section 27.2(b)
Purchase Option Notice............................................................. Section 27.1
Purchase Option Window............................................................. Section 27.1
Purchase Price Negotiation Period.................................................. Section 27.2
purchaser/purchaser at a foreclosure sale.......................................... Section 20.2
Real Estate Taxes.................................................................. Section 4.2
Reconciliation Statement........................................................... Section 4.5
Renewal Term....................................................................... Section 26.1
Rent Recalculation Date............................................................ Section 3.1
Right of First Offer............................................................... Section 28.2
Rules and Regulations.............................................................. Section 15.1
security deposit................................................................... Section 5.1
Supplemental Land Costs............................................................ Section 4.2(c)
Suspension Events.................................................................. Section 13.2
Taking............................................................................. Section 17.1
Tenant Installations............................................................... Section 2.2(b)
Trustee............................................................................ Section 19.2
-69-
IN WITNESS WHEREOF, Landlord and Tenant have executed this Deed of Lease
under seal on or as of the day and year first above written.
WITNESS LANDLORD:
By: BOSTON PROPERTIES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Boston Properties, Inc./Its General Partner
[SIG] By: /s/ E. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------- --------------------------------------
Name: E. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
[Corporate Seal] Title: Senior Vice President
WITNESS:
-------------------------
[Corporate Seal]
WITNESS: TENANT:
ORBITAL SCIENCES CORPORATION,
a Delaware corporation
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------- --------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
[Corporate Seal] ------------------------------------------
Title: Vice Pres. & Corp. Controller
-----------------------------------------
-70-
