EXHIBIT 10.9
DEED OF LEASE
by and between
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
("Landlord")
and
AMERICAN MANAGEMENT SYSTEMS, INC.
("Tenant")
TABLE OF CONTENTS
Section Page
1. Demise.........................................................................................
2. Term...........................................................................................
3. Rent...........................................................................................
4. Permitted Use..................................................................................
5. Expenses; Services ............................................................................
6. Additional Rent................................................................................
7. Sorting and Separation of Refuse and Trash.....................................................
8. Hazardous Substances...........................................................................
9. Insurance......................................................................................
10. Damage or Restoration..........................................................................
11. Indemnification................................................................................
12. Assignment and Subletting......................................................................
13. Care of Premises...............................................................................
14. Alteration by Tenant...........................................................................
15. Condemnation...................................................................................
16. Subordination..................................................................................
17. Access to Premises.............................................................................
18. Rules and Regulations..........................................................................
19. Covenants of Right to Lease....................................................................
20. Mechanic's Liens...............................................................................
21. Expiration of Lease and Surrender of Possession................................................
22. Default-Remedies...............................................................................
23. Re-Entry by Landlord...........................................................................
24. Additional Rights to Landlord..................................................................
25. Successors, Assigns and Liability..............................................................
26. Notices........................................................................................
27. Mortgagee's Approval...........................................................................
28. Estoppel Certificates..........................................................................
29. Default Rate of Interest.......................................................................
30. Exculpatory Provisions.........................................................................
31. Mortgage Protection............................................................................
32. Reciprocal Covenant on Notification of ADA Violations..........................................
33. Laws that Govern...............................................................................
34. Financial Statements...........................................................................
35. Parking........................................................................................
36. Signage........................................................................................
37. Recordation....................................................................................
38. Force Majeure..................................................................................
39. Intentionally Omitted..........................................................................
40. Brokers........................................................................................
41. Effectiveness..................................................................................
42. Lease/Deed of Lease............................................................................
43. Miscellaneous..................................................................................
44. Roof Top Rights................................................................................
45. Early Termination Fee..........................................................................
EXHIBITS
EXHIBIT A - Legal Description of the Land
EXHIBIT ▇-▇ - ▇▇▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇ - ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇ - ▇▇▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇ - ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇ - ▇▇▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇ - ▇▇▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇ - ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇ - ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇ - ▇▇▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇▇ - ▇▇▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇▇ - ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇▇ - ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇▇ - ▇▇▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT A-14 - Premises Rentable Areas
EXHIBIT B - Work Agreement
EXHIBIT B-1 - Landlord's Work
EXHIBIT B-2 - Landlord's ADA and BOCA Work
EXHIBIT B-3 - Landlord's Base Building Improvements
EXHIBIT C - Declaration of Lease Commencement
EXHIBIT D - Rules and Regulations
EXHIBIT E - Roof-Top Rights
EXHIBIT F - HVAC Specifications
EXHIBIT G - Janitorial Specifications
EXHIBIT H - Ancillary Use Restrictions
EXHIBIT I - Termination Payment Schedule
DEED OF LEASE
THIS DEED OF LEASE ("Lease") is made by and between PRINCIPAL MUTUAL
LIFE INSURANCE COMPANY, an Iowa corporation, whose address for the purpose of
this Lease shall be ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: CRE
Equities/Mid-Atlantic Team, hereinafter referred to as "Landlord", and AMERICAN
MANAGEMENT SYSTEMS, INC., a Delaware corporation, whose address for the purpose
of this Lease shall be ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇, hereinafter referred to as "Tenant".
IT IS AGREED AS FOLLOWS:
1. DEMISE.
Upon and subject to the terms hereof, Landlord does hereby lease to
Tenant and Tenant does hereby lease from Landlord the premises (the
"Premises") consisting of all of the rentable area of the building
(the "Building") commonly known as the One Fair Oaks Office Building
and located on that certain parcel of real property in Fairfax County,
Virginia known as ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and more
particularly described on the attached Exhibit A (the "Land", the Land
and the Building herein collectively referred to as the "Property"),
which Premises the Landlord and Tenant agree contains approximately
two hundred fourteen thousand two hundred fourteen (214,214) square
feet of rentable area. For purposes of this Lease, (i) the portion of
the Premises consisting of the entire rentable areas of the second
(2nd), seventh (7th), eighth (8th), ninth (9th), tenth (10th),
eleventh (11th) and twelfth (12th) floors of the Property, which the
Landlord and Tenant agree contains approximately one hundred nineteen
thousand four hundred seventy-nine (119,479) square feet of rentable
area, is referred to as the "Phase I Premises", and (ii) the portion
of the Premises consisting of the entire rentable areas of the lower
level, the first (1st), third (3rd), fourth (4th), fifth (5th) and
sixth (6th) floors of the Property, which the Landlord and Tenant
agree contains approximately ninety-four thousand seven hundred
thirty-five (94,735) square feet of rentable area, is referred to as
the "Phase II Premises"; provided that, Tenant shall have the right,
to be exercised by written notice delivered to Landlord not later than
December 15, 1996, to alter the floors designated as the Phase I
Premises and the Phase II Premises, so long as (i) the Phase I
Premises shall consist of not less than one hundred eighteen thousand
two hundred eighty-five (118,285) square feet, and (ii) the Phase I
Premises and the Phase II Premises shall comprise the entire rentable
area of the Building. Landlord and Tenant hereby acknowledge and
agree to the designation of rentable area for each floor of the
Building, as set forth on the attached Exhibits ▇-▇, ▇-▇, ▇-▇, ▇-▇,
▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇▇, ▇-▇▇, ▇-▇▇ and A-13, respectively, and
the rentable square footages set forth on the attached Exhibit A-14.
The Premises does not include the roof or exterior surfaces of the
walls of the Premises or the Property, or any improvements or areas
outside of such walls.
2. TERM.
(A) Initial Term.
Subject to the terms hereof, the term of this Lease (the
"Lease Term") shall be for a period (the "Initial Term") of
thirteen (13) years, commencing on the first (1st) day of
January, 1997 (the "Commencement Date") and ending at 11:59
p.m. on the thirty-first (31st) day of December, 2009 (the
"Expiration Date"). If Landlord fails to tender possession of
the Premises to the Tenant on or before the Commencement Date
stated in the preceding sentence, Landlord shall not be liable
for any damage caused by any such delay in the Commencement
Date or failure to tender possession of the Premises, nor
shall this Lease be void or voidable; provided that, to the
extent such failure in tendering possession is not caused by
or reasonably attributable to Tenant or Tenant's agents,
contractors, subtenants, assignees, employees, officers,
directors, shareholders, partners, licensees and/or others for
whose actions Tenant is responsible or over whose actions
Tenant can reasonably be expected to exercise control
(collectively, "Tenant's Agents"), the Commencement Date shall
be extended to that date on which Landlord tenders possession
of the
1
Premises to Tenant, and the Expiration Date shall be extended
by an equal amount so that the Initial Term remains thirteen
(13) years. Notwithstanding anything herein to the contrary,
Tenant shall have the right to terminate this Lease (and shall
have no further liability hereunder) if Landlord fails to
tender possession of the Premises to Tenant on or before
January 31, 1997 (such date to be subject to a day-for-day
extension for each day of delay in tendering possession which
is caused by or reasonably attributable to Tenant or Tenant's
Agents). Tenant expressly acknowledges and agrees that (i)
Landlord shall be entitled to tender possession of the
Premises subject to the continued occupancy by the existing
tenant of the Premises, ▇▇▇▇▇▇▇ International Service Company
("▇▇▇▇▇▇▇") and ▇▇▇▇▇▇▇ shall be deemed to be a permitted
subtenant of Tenant, and (ii) no such continued occupancy by
▇▇▇▇▇▇▇ of any portion of the Premises after December 31, 1996
shall constitute a failure by Landlord to tender possession of
the Premises, so long as (i) Landlord shall have elected to
treat such continued occupancy as a direct sublease between
Tenant and ▇▇▇▇▇▇▇, and (ii) ▇▇▇▇▇▇▇ shall have agreed in
writing to execute and deliver to Tenant such form of sublease
with respect to ▇▇▇▇▇▇▇' continued occupancy of the Premises
as Tenant may reasonably request (Tenant hereby acknowledging
that ▇▇▇▇▇▇▇ shall in no event be required to execute and
deliver any such sublease which provides (on a per rentable
square foot basis) for a higher base rent than the Base Rent
under the Lease Agreement dated March 5, 1993, between
Landlord and ▇▇▇▇▇▇▇ (the "▇▇▇▇▇▇▇ Lease")). Such sublease
shall contain ▇▇▇▇▇▇▇' agreement that (i) ▇▇▇▇▇▇▇ shall not be
permitted to control access to any portion of the Building by
means of previously-existing security systems or practices,
and (ii) ▇▇▇▇▇▇▇ shall have no right to object to any
construction activities taking place in or around the
Building. At the request of Landlord, Tenant hereby agrees to
execute a declaration in the form attached hereto as Exhibit C
(the "Declaration") as incorporated herein by reference.
Tenant's failure to execute the Declaration shall not affect
the Commencement Date or the Lease Term, as same are
determined by the terms of this Lease.
(B) Extension Period.
(i) Provided Tenant is not in default beyond the
expiration of any applicable notice and cure period at the
time of the exercise of the applicable Extension Option or
thereafter (through and including the commencement date of the
applicable Extension Period as herein defined), and provided
that this Lease shall not theretofore have been terminated,
Tenant shall have two (2) options (the "Extension Options") to
extend the Expiration Date of the Lease Term, each for a
period of five (5) consecutive years (individually, the "First
Extension Period" and the "Second Extension Period", and
collectively the "Extension Periods"), the First Extension
Period commencing on the thirteenth (13th) anniversary of the
Commencement Date and ending on the day preceding the
eighteenth (18th) anniversary of the Commencement Date, and
the Second Extension Period commencing on the eighteenth
(18th) anniversary of the Commencement Date and ending on the
day preceding the twenty-third (23rd) anniversary of the
Commencement Date, subject to adjustment pursuant to the terms
hereof. The Extension Periods shall be upon the same terms
and conditions contained herein except that (A) the Rent
payable in the Extension Periods shall be adjusted to equal
one hundred percent (100%) of the then-prevailing fair market
rental rate for the Premises (the "New Rental Rate"), and
shall thereafter be subject to adjustment as provided in
Section 3(B) hereof, (B) Tenant shall have the right to adjust
the size of the Premises in accordance with Section 2(B)(ix)
hereof, (C) Tenant shall have no option to extend the
Expiration Date of the Lease Term beyond the last day of the
Second Extension Period, and (D) Tenant shall have no right to
exercise the Extension Option for the Second Extension Period
unless Tenant has properly exercised the Extension Option for
the First Extension Period.
(ii) Tenant may exercise an Extension Option only
by delivering binding written notice (the "Extension Option
Notice") to Landlord of Tenant's election to exercise such
Extension Option not later than twelve (12) months prior to
the commencement of the applicable Extension Period. Landlord
and Tenant agree to negotiate in good faith for a period of
thirty (30) days to attempt to reach agreement on the New
Rental Rate, promptly following delivery of Tenant's Extension
Option Notice. In the event the parties are unable to agree
on such New Rental Rate
2
within said thirty (30) day period, then Tenant's Extension
Option Notice shall be deemed null and void, unless within ten
(10) business days after the expiration of such thirty (30)
day period Tenant agrees, by means of giving the Landlord
written notice thereof (which notice shall name the Tenant's
selected broker), to submit the determination of the fair
market rental rate for the Premises to arbitration by brokers
as set forth below. In the event Tenant shall agree to submit
such determination to arbitration in the manner aforesaid,
Landlord shall, within ten (10) business days after receipt of
Tenant's written notice to submit such determination to
arbitration, designate the broker appointed by it.
(iii) Each broker shall render a separate written
report, within thirty (30) days after appointment of
Landlord's broker, of such broker's estimate of the
then-prevailing fair market rental rate for the Premises as of
the commencement of such Extension Period. If the values
contained in the written reports differ by five percent (5%)
or less of the greater of such values, the New Rental Rate
shall be one hundred percent (100%) of the arithmetic average
of such values. If the values contained in the written
reports differ to a greater extent than set forth above, the
brokers shall, within five (5) days after rendering their
reports, promptly jointly appoint a third broker. If the two
brokers so designated shall fail to agree upon the selection
of a third broker within ten (10) days after the expiration of
such 30-day period, then either party, upon written notice to
the other, may request such appointment by the American
Arbitration Association (or any organization successor
thereto). The parties shall cooperate to expedite such
appointment. Within twenty (20) days of his appointment, the
third broker shall render a written report of his opinion of
the value of the then-prevailing fair market rental rate for
the Premises as of the commencement of the applicable
Extension Period. One hundred percent (100%) of the
arithmetic average of the values in the three (3) evaluation
reports shall then be the New Rental Rate for the Extension
Period; provided, however, that if the lowest or highest of
the three (3) evaluations, or both, varies by more than ten
(10%) from the middle evaluation, such evaluation or
evaluations so varying shall be disregarded in computing said
average.
(iv) In the event the New Rental Rate has not been
determined on or before the commencement of an Extension
Period, the Rent payable by Tenant until such determination
shall be deemed equal to the Rent payable by Tenant pursuant
to Section 3(A) immediately prior to the commencement of such
Extension Period (as the same may be adjusted hereunder);
provided, however, within fifteen (15) days of such
determination, Tenant shall pay Landlord the excess of (i) the
initial monthly installments of monthly Rent calculated for
such Extension Period, above (ii) the monthly installments of
Rent actually paid by the Tenant, in respect of each month
commencing on or after the commencement of such Extension
Period but prior to such determination, or Landlord shall
credit Tenant for any excess rent paid by Tenant if the rental
rate has declined, and Tenant shall thereafter pay Rent for
the Extension Period at the New Rental Rate (as the same may
be increased in accordance with the terms hereof).
(v) All valuations of the fair market rental rate
of the Premises shall be in writing and shall be expressed in
terms of an annual rent. Each broker's determination shall be
based on all relevant factors affecting fair market rental
rate, including, but not limited to, other terms of this Lease
(excluding tenant concessions and/or construction allowances,
but including the provision of free parking and the roof and
signage rights granted hereunder), the fact that the
determination is for a renewal, and the fact that the
determination is for a renewal as of a future date. Each
broker shall use as a basis for comparison the base and
additional rent, abatements, construction allowances and other
tenant concessions for lease renewals entered into for
comparable space in the Fair Oaks/Fair Lakes submarket of
Fairfax County, Virginia, within the period which commences
twelve (12) months prior to the date of such determination,
which leases shall commence at approximately the same time as
the applicable Extension Period.
(vi) Each broker appointed hereunder shall be a
licensed commercial real estate broker in the Commonwealth of
Virginia, and shall be qualified by experience and ability to
appraise the fair market rental for the Premises. The party
appointing each broker shall be obligated, promptly after
receipt of the valuation report prepared by the broker
appointed by such party, to deliver a copy of
3
such valuation report to the other party in the manner
provided elsewhere in this Lease for the delivery of notices.
If a third broker is appointed, the third broker shall be
directed, at the time of his appointment, to deliver copies of
his valuation report, promptly upon its completion, to
Landlord and Tenant in the manner provided elsewhere in this
Lease for the delivery of notices. The fees and other costs
of each of the first two brokers shall be borne by the party
appointing each such broker, with the fees and other costs of
the third broker being shared equally by Landlord and Tenant;
provided that, each broker shall (i) acknowledge that such
broker's participation in the determination of the New Rental
Rate shall not entitle such broker to a brokerage commission
for the applicable Extension Period, and (ii) waive any lien
rights it may have or claim against the Property in respect of
the fees to be paid in connection with the determination of
the New Rental Rate.
(vii) It is understood that the New Rental Rate
shall be the initial Rent for the applicable Extension Period
(such Rent being subject thereafter to then-current market
escalations and adjustments as determined pursuant to Section
3(B)), and that Tenant shall continue to pay all Additional
Rent reserved under the Lease.
(viii) Tenant's failure to timely deliver Tenant's
Extension Option Notice with regard to an Extension Option
shall render such Extension Option null and void, and of no
further force or effect.
(ix) Tenant shall have the right to delete from
the Premises one (1) or more full floors of the Building, for
either the Second Extension Period or the First and Second
Extension Periods, subject to the following terms and
conditions:
(1) Tenant shall notify Landlord of its
election to decrease the Premises within the Tenant's
Extension Option Notice for the applicable Extension Period,
and shall designate in such notice the number of floors which
Tenant desires to delete from the Premises;
(2) Tenant may not decrease the size of
the Premises in either the First or Second Extension Period to
less than one hundred sixty thousand six hundred sixty-one
(160,661) rentable square feet;
(3) Landlord shall designate the floors
to be surrendered by Tenant pursuant to this Section 2(B)(ix)
(the "Early Surrender Space"); provided that, the Early
Surrender Space designated by Landlord shall result in the
remaining Premises constituting a single contiguous space;
(4) Landlord shall have no obligation to
restore, nor shall Tenant have any right to regain, possession
of any portion of the Early Surrender Space;
(5) Tenant shall surrender possession of
the Early Surrender Space not later than the last day of the
Initial Term or First Extension Period, as the case may be,
free and clear of all tenancies and occupancies, broom-clean
and otherwise in accordance with all terms and conditions of
this Lease applicable to the surrender of the Premises, as if
such day were the Expiration Date (Tenant hereby acknowledging
that such terms and conditions shall be independently applied
to the Early Surrender Space);
(6) Upon the surrender of the Early
Surrender Space, the Rent and the Tenant's Proportionate Share
(as herein defined) shall be recalculated to reflect the
deletion of the Early Surrender Space; and
(7) From and after the designation of
the Early Surrender Space, Tenant shall have no right, power
or authority to (i) assign any of the Tenant's interest in the
Lease with respect to any portion of the Early Surrender
Space, or to enter into any sublease or to permit any
occupancy of all or any portion of the Early Surrender Space
by any person or entity not
4
then in possession of all or a portion of the Early Surrender
Space (other than the Tenant's employees), or (ii) to make or
perform, or cause to be made or performed, any alteration,
addition, improvement or modification in or to such Early
Surrender Space. The Tenant further acknowledges and agrees
that, notwithstanding anything contained in this Lease to the
contrary, from and after the date of such designation, the
Landlord shall have no obligation to rebuild or undertake
major repairs of such Early Surrender Space in the event of
any condemnation, fire or other casualty.
3. RENT.
(A) Base Rent.
Tenant shall pay for the use and occupancy of the Premises a
base rental ("Rent") equal to the sum of the Phase I Rent and
the Phase II Rent. The "Phase I Rent" shall mean the product
of (i) the rentable area of the Phase I Premises multiplied by
(ii) Fourteen Dollars ($14.00) per rentable square foot per
year, payable in equal monthly installments. The "Phase II
Rent" shall mean the product of (i) the rentable area of the
Phase II Premises, multiplied by (ii) Fourteen Dollars
($14.00) per rentable square foot per year, payable in equal
monthly installments. Rent shall be paid on the first day of
each month in advance without demand, notice, deduction,
offset, or counterclaim (except as may be otherwise expressly
provided herein) during the Lease Term; provided that, (i)
Phase I Rent shall commence to accrue on that date (the "Phase
I Rent Commencement Date") which is the later of April 1, 1997
or the date which is the ninetieth (90th) day following the
Commencement Date, and (ii) Phase II Rent shall commence to
accrue on January 1, 1998 (the "Phase II Rent Commencement
Date"). Rent for any period during the Lease Term which is
less than one month shall be prorated on a daily basis, based
on the monthly installment, and shall be payable in advance.
Rent shall be payable in lawful money of the United States to
Landlord at the address stated herein or to such other persons
or at such other places as Landlord may designate in writing.
If Tenant occupies the Premises prior to the Commencement
Date, such occupancy shall be subject to all provisions hereof
and shall not advance the last day of the Lease Term. Tenant
and Tenant's Agents may enter upon the Premises at any time
after Landlord tenders possession thereof to complete the
Building Fit-Out (as defined in Exhibit B and including, but
not limited to, the installation of telephone equipment and
communications wiring and cabling, the placement of furniture
and equipment and other work in preparation for occupancy),
without advancing the Phase I or Phase II Rent Commencement
Dates or otherwise triggering any obligation to pay Rent
pursuant to this Section 3(A) or Additional Rent pursuant to
Section 6(A).
(B) Rent Schedule.
Effective January 1, 1998, the Rent payable pursuant to
Section 3(A) shall be increased to equal Three Million Five
Hundred Four Thousand Five Hundred Forty-One Dollars
($3,504,541.00) per annum. On each anniversary of the Phase I
Rent Commencement Date occurring after January 1, 1998 and
prior to the end of the Initial Term (each an "Adjustment
Date"), the Rent set forth in the preceding sentence shall be
increased to reflect increases in the cost of living in
accordance with the following procedure:
(1) The Consumer Price Index for Urban Wage Earners and
Clerical Workers (CPI-W), U.S. City Average, All
Items (1982-84=100) (herein referred to as the
"Index"), as published by the U.S. Department of
Labor, Bureau of Labor Statistics, which is published
for the bimonthly reporting period ending most
recently prior to the Adjustment Date (herein
referred to as the "Adjustment Index"), shall be
compared with the Index published for the same
reporting period twelve (12) months prior thereto
(herein referred to as the "Beginning Index"). If
the Adjustment Index has changed from the Beginning
Index, the percentage change between the Beginning
Index and the Adjustment Index shall be determined.
There shall be added to such percentage change
5
five (5) percentage points, and the resulting sum
shall be referred to herein as the "Escalation
Factor". For example, if the Adjustment Index is two
percent (2%) higher than the Beginning Index, then
the Escalation Factor for such adjustment shall equal
seven percent (7%), and if the Adjustment Index is
one percent (1%) lower than the Beginning Index, then
the Escalation Factor for such adjustment shall equal
four percent (4%).
(2) The Escalation Factor determined in Section 3(B)(1)
shall be multiplied by the Rent in effect immediately
prior to such Adjustment Date (as such rent may have
been escalated pursuant to the terms hereof) to
arrive at the amount (the "Escalation Amount") of the
increase in the Rent pursuant to this Section 3(B)
for the period commencing with such Adjustment Date
and ending on the day preceding the next Adjustment
Date (each an "Adjustment Year"). In no event,
however, shall any Escalation Amount for any
Adjustment Year exceed two and six/tenths percent
(2.6%) of the Rent in effect immediately prior to
such Adjustment Date.
(3) The Escalation Amount determined in Section 3(B)(2)
shall, subject to the limitation set forth in the
last sentence thereof, be added to the Rent in effect
immediately prior to such Adjustment Date to arrive
at the Rent payable for such newly commencing
Adjustment Year.
(4) In no event shall the Rent payable during any
Adjustment Year be less than the Rent in effect
immediately prior to the commencement of such
Adjustment Year.
(5) If the Index is changed so that a base year other
than 1982-84 is used, the Index used herein shall be
converted in accordance with the conversion factor
published by the U.S. Department of Labor, Bureau of
Labor Statistics. If the Index is discontinued or
otherwise revised during the Lease Term, such other
government index or computation with which the Index
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.
(6) Promptly after the adjustment of the Rent is
determined for each Adjustment Year, Landlord shall
submit to Tenant a statement setting forth the
Escalation Amount for such Adjustment Year and the
computations by which it was determined. Since the
actual increase in the Rent may not be determined
until after the start of a new Adjustment Year, until
the actual Escalation Amount is determined the Tenant
shall continue to make monthly payments of Rent in
the amount in effect immediately prior to the
Adjustment Date. In such event, Landlord's statement
shall, in addition to the actual Escalation Amount
for such Adjustment Year and the computations by
which it was determined, set forth the difference
between the monthly Rent payments theretofore paid by
Tenant for such Adjustment Year and the actual amount
of Rent determined to be owing for the period for
which such Rent has been paid (inclusive of the
Escalation Amount). If the actual amount determined
to be owing is greater than Tenant's payments for the
same period, the deficiency shall be paid by Tenant
together with the next monthly installment of Rent
due at least fifteen (15) days after the amount of
the deficiency is determined (but in all events not
later than forty-five (45) days after the amount of
such deficiency is determined).
The Rent payable for the First and Second Extension Periods
shall escalate on each anniversary of the Phase I Rent
Commencement Date occurring during such Extension Periods in
accordance with the then-current market escalation formula
(such current market escalation formula to be determined by
the brokers establishing the New Rental Rate, in accordance
with the procedure set forth in Section 2(B) (except that the
determination of the third broker, if any, shall be
controlling as to the constituent components of such current
market escalation formula, if the
6
brokers appointed by the parties shall fail to agree on such
components), at the time the New Rental Rate is determined).
(C) Place of Payment.
Rent, Additional Rent and other sums owed by Tenant shall be
paid to Landlord at the offices of Landlord's property manager
at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, or at such
place as Landlord may designate from time to time in writing.
(D) Late Charge.
Tenant hereby acknowledges that late payment by Tenant of
Rent, Additional Rent or other sums due hereunder will cause
Landlord to incur costs not contemplated by this Lease.
Therefore, if any installment of Rent, Additional Rent or any
other sum due from Tenant shall not be received by Landlord
when such amount is due, Tenant shall pay to Landlord a late
charge of four percent (4%) of such overdue amount.
Additionally, Tenant shall pay to Landlord the Default Rate
(as set forth in Section 29) on all sums in default.
Acceptance of such late charge and/or the Default Rate by
Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, or prevent
Landlord from exercising any other right or remedy available
to Landlord. Landlord agrees to waive the imposition of such
late charge and interest on one (1) occasion in any twelve
(12) month period provided that no such late charge waiver has
been granted or exercised in the preceding twelve (12) months,
and the overdue payment is paid within five (5) business days
after notice from Landlord that the payment was not paid when
due.
(E) Receipt.
The Phase I Rent for the first month of the Lease Term will be
paid by Tenant on the Commencement Date.
(F) Intentionally Omitted.
4. PERMITTED USE.
Tenant covenants that the Premises will be used solely for general and
executive office purposes in accordance with the terms hereof (the
"Permitted Use") and for no other purpose whatsoever. "General and
executive office purposes" shall be deemed to be limited to general
office use (which shall be deemed to include (a) laser and other types
of printing customarily employed in first-class business offices; (b)
data processing and word processing services; (c) telephone,
telecopier and other business communications systems; (d) storage of
files, papers, microfilm and other storage media as customarily
performed in first-class business offices; (e) video display,
screening and media rooms; (f) conference rooms; (g) classrooms for
training and presentations; (h) executive placement and travel agency
services; and (i) a messenger service), and the following incidental
and ancillary uses (each an "Ancillary Use" and collectively,
"Ancillary Uses"): (i) one or more cafeterias, dining rooms and
warming pantries (each of which may include facilities for the
refrigeration, preparation, cooking and service of food); (ii) the
sale, by vending machines, of items commonly sold in office vending
machines, including soft drinks, food, candy and cigarettes; (iii) an
exercise facility; (iv) shower and locker room facilities; and (v) in
portions of the Premises situated on the ground floor and/or lower
level of the Building, food service operations and other retail uses
approved by Landlord (such consent not to be unreasonably withheld or
delayed, but such consent may be made subject to Tenant's agreement to
such reasonable conditions and restrictions as Landlord may require
(including, but not limited to, those set forth on the attached
Exhibit H) . All such Ancillary Uses shall be subject to the terms of
this Lease and the applicable terms of the attached Exhibit H. Nothing
herein contained shall be deemed to grant Tenant the exclusive right
to engage in such Ancillary Uses at any time when Tenant leases less
than all of the Building and Tenant acknowledges that it has received
no written or oral inducements from Landlord or any of Landlord's
7
representatives that Tenant will be granted any such exclusive rights.
Tenant shall not use, store or dispose of any materials posing a
health or environmental hazard in or about the Building or the
Property; provided that, the foregoing shall not be deemed to prohibit
the storage and use of normal and reasonable quantities (not for
resale) of ordinary and customary office and cleaning supplies
utilized in first-class offices (collectively, "Permitted Materials").
All such storage and use covered by the preceding sentence shall be
made in accordance with all applicable Federal, state and local laws,
ordinances, rules and regulations, as the same may be amended from
time to time (Tenant hereby expressly agreeing to obtain all required
permits and pay any and all fees and provide any testing required by
any governmental agency in connection therewith), and shall be subject
to the following further conditions:
(i) in all events Tenant shall, upon the expiration or sooner
termination of this Lease, promptly remove all hazardous,
toxic, radioactive and/or carcinogenic substances, pollutants,
contaminants and/or materials (including, but not limited to,
any storage tanks or containers for the same) brought into or
upon the Property (including , but not limited to, the
Premises) by Tenant or any of Tenant's Agents or any third
party for or on behalf of Tenant or any of Tenant's Agents;
and
(ii) notwithstanding any provision hereof to the contrary, in the
event that any applicable Federal, state or local law,
ordinance, order, rule, regulation or other restriction shall,
at any time during the Term of this Lease or any renewal or
extension hereof, (a) require that Tenant discontinue the use
or storage, or otherwise restrict or regulate the use, of any
hazardous, toxic, radioactive and/or carcinogenic substances,
pollutants, contaminants and/or materials (including, but not
limited to, any storage tanks or containers for the same)
brought upon the Property (including, but not limited to, the
Premises) by or on behalf of Tenant or Tenant's Agents, or (b)
shall require that Landlord or Tenant or any of Tenant's
Agents remediate, clean-up or ▇▇▇▇▇ the effects of past use,
storage or disposal of substances brought into or upon the
Property (including, but not limited to, the Premises) by
Tenant or any of Tenant's Agents or any third party for or on
behalf of Tenant or any of Tenant's Agents, Tenant shall, at
Tenant's sole expense,
(1) where required, immediately remove such substances
(to the extent brought into or upon the Property
(including, but not limited to, the Premises) by
Tenant or any of Tenant's Agents or any third party
for or on behalf of Tenant or any of Tenant's Agents)
from the Property (including, but not limited to, the
Premises);
(2) promptly comply with all applicable laws, ordinances,
order, rules, regulations and restrictions; and
(3) promptly remediate, clean-up and ▇▇▇▇▇ the effects of
past use, storage and/or disposal by Tenant or any of
Tenant's Agents by any third party on behalf of
Tenant or any of Tenant's Agents as required by
applicable laws, ordinances, orders, rules,
regulations and restrictions.
(iii) Tenant shall defend, indemnify and hold Landlord and the
Property harmless from and against any claims, costs, damage,
expense and liability which may be asserted against Landlord
and/or the Property on account of such storage, use, disposal,
remediation, clean-up and/or abatement by Tenant or any of
Tenant's Agents or by any third party on behalf of Tenant or
any of Tenant's Agents.
Landlord shall bear the cost of removing from the Property any
hazardous materials that were not introduced by Tenant or any of
Tenant's Agents and that are hereafter reasonably required to be
removed to avoid a health or environmental hazard. Tenant further
covenants that the Premises will not be used or occupied for any
unlawful purposes. Tenant agrees to and shall use the Premises solely
for the purpose of conducting the Permitted Use and for no other
business or purpose. Tenant shall not commit or allow to be committed
any waste upon the Premises, or any public or private nuisance, or, at
any time when Tenant leases less than the entire Building, any other
act or thing which disturbs the quiet enjoyment of any other tenant in
the Property.
5. EXPENSES; SERVICES.
8
(A) Taxes.
Landlord shall pay all taxes applicable to the Property which
are payable during the Lease Term. As used herein, the term
"taxes" shall mean real estate taxes, assessments (whether
general or special), sewer rents, rates and charges, transit
and other special taxing district taxes, taxes based upon the
receipt of Rent or other payments hereunder which are in
substitution for, or in addition to, real estates taxes, and
any other federal, state or local governmental charge,
general, special, ordinary or extraordinary (but not including
income or franchise taxes, inheritance, estate or gift taxes,
net profit taxes or any other taxes imposed upon or measured
by Landlord's net income or profits), which may now or
hereafter be levied, assessed or imposed against the Property
or Premises (collectively, "Taxes"). Additionally, Landlord
shall have no obligation to protest Taxes, but if Landlord
does protest Taxes, the reasonable cost of such protest shall
also be deemed Taxes. In the event that Landlord elects not
to protest Taxes, Tenant shall have the right to challenge or
appeal such assessment in Landlord's name but at Tenant's sole
expense, and Landlord shall cooperate in such challenge or
appeal (including executing such forms as may be reasonably
necessary to institute and prosecute such action); provided
that, (i) Tenant shall have no right to challenge or appeal
any Tax assessment during the last two (2) years of the Lease
Term, and (ii) in the event Tenant then leases less than all
of the Building, Tenant shall pay one hundred percent (100%)
of any increase in Taxes resulting from any challenge or
appeal of Taxes filed by Tenant.
(B) Insurance.
Landlord shall provide insurance for the Property as set forth
in Section 9(A) ("Insurance"). So long as Principal Mutual
Life Insurance Company ("PMLIC") or another entity owned or
controlled by PMLIC or under common control with PMLIC, in
whole or part, is the Landlord hereunder, Landlord shall have
the right to self-insure (in which event, Operating Expenses
shall include the reasonable costs which would have been
incurred if Landlord had obtained the insurance set forth in
Section 9(A) from a third party, subject to the limitation set
forth in Section 5(G)).
(C) Services.
(1) Subject to the terms hereof, continually through the
Lease Term, Landlord will furnish to the Premises heating,
air-conditioning and ventilation during the seasons in which
they are required, in accordance with the standards set forth
in Exhibit F attached hereto. Continually through the Lease
Term, Landlord will provide: electricity; water; elevator
service; exterior and interior window-cleaning service; and,
in accordance with the standards set forth in Exhibit G
attached hereto, janitorial service after 6:00 p.m. on Monday
through Friday only (excluding holidays). Upon Tenant's
request, Landlord agrees to amend Exhibit G from time to time
to incorporate services which are commensurate with services
furnished in other first-class office buildings in the Fair
Oaks/Fair Lakes submarket of Fairfax County, Virginia. The
hours of operation of the Building will be 8:00 a.m. to 7:00
p.m. on Monday through Friday (except holidays) and 9:00 a.m.
to 2:00 p.m. on Saturday (except holidays) and such additional
hours, if any, as Landlord and Tenant from time to time
determine; provided that, at any time Tenant does not lease
the entire Building, Tenant's consent shall not be required
for any expansion of the hours of operation of the Building
which is consistent with the hours of operation for other
first-class office buildings in the Fair Oaks/Fair Lakes
submarket of Fairfax County, Virginia. Tenant shall pay for
after-hours HVAC service a reasonable charge reasonably
established by Landlord from time to time to compensate
Landlord for the reasonably estimated incremental wear on the
Building's HVAC system resulting from such after-hours usage
(it being understood that all personnel, electricity, water
and maintenance costs relating to both scheduled and
after-hours HVAC service are being included in the Operating
Expenses of the Building); provided that, for any period in
which Tenant does not lease the entire Building, such charge
shall also include the
9
reasonable cost of personnel, electricity, water and
maintenance charges incurred as a result of such after-hours
HVAC service (and such cost shall be excluded from Operating
Expenses of the Building). Additionally, at such times as
Tenant does not lease the entire Building, Landlord shall also
have the right to require a separate meter be installed to
meter Tenant's utility usage within the Premises, with the
cost of such meter to be borne by Landlord. In such event,
Tenant shall pay for such utility usage in a timely manner to
either Landlord or directly to the utility if required by
Landlord, and there shall be an equitable adjustment of
Operating Expenses to reflect such separate metering. As used
in this Section, the term "holidays" shall mean New Year's
Day, Presidents Day, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇.'s Birthday (in
even-numbered years only), Memorial Day, Independence Day,
Labor Day, Columbus Day (in odd-numbered years only),
Thanksgiving Day, the day after Thanksgiving, and Christmas,
as such list of holidays may be modified by Tenant from time
to time; provided that, at such time as Tenant leases less
than all of the Building, Tenant shall have no further right
to modify such list of holidays, and Landlord shall have the
right to modify such list of holidays to conform to the
building holidays generally recognized by first-class
buildings in the Fair Oaks/Fair Lakes submarket of Fairfax
County, Virginia. Subject to the terms hereof, at least two
(2) elevators in the Building shall be in service at all
times.
(2) In the event of (i) any interruption of essential
utilities or services due to Landlord's gross negligence or
willful misconduct or a failure of the base Building HVAC
System to meet the HVAC specifications set forth on Exhibit F,
which interruption or failure continues for more than two (2)
consecutive business days, or (ii) any interruption of
essential utilities or services not due to Landlord's gross
negligence or willful misconduct which continues for more than
five (5) consecutive business days, then, provided such
interruption or failure shall render a material portion of the
Premises untenantable, all Rent and Additional Rent payable
hereunder with respect to such portion of the Premises shall
thereafter be abated until such portion of the Premises is
tenantable. Landlord shall proceed with due diligence to
remedy any such interruption as promptly as reasonably
feasible.
(3) Throughout the Lease Term, the Building shall be
managed and operated in a manner commensurate with the
standards prevailing for other first-class office buildings of
comparable age, equipment and facilities in the Fair Oaks/Fair
Lakes sub-market of Fairfax County, Virginia (such standard
being referred to herein as "first-class").
(4) Landlord shall not employ any cleaning contractor for
the Building without Tenant's prior written approval (Tenant
hereby agreeing not to unreasonably withhold, condition or
delay such consent). In the event Tenant determines that the
janitorial services being furnished by Landlord are
unsatisfactory, in Tenant's reasonable judgment, Tenant shall
deliver written notice to Landlord specifying the manner in
which the services are deemed by Tenant to be deficient. If
the deficiencies are not, in Tenant's reasonable judgment,
substantially corrected during the next succeeding thirty (30)
days after delivery of such deficiency notice, then Tenant may
deliver a further notice to Landlord advising Landlord of such
fact and Landlord shall terminate the contract for janitorial
services to the Building. Promptly thereafter, Landlord shall
enter into a new contract for janitorial services to the
Building with a contractor approved by Tenant (Tenant hereby
agreeing not to unreasonably withhold, condition or delay such
approval).
(5) It is acknowledged that the initial management agent
for the Building will be ▇▇▇▇▇▇▇▇ ▇▇▇▇ Real Estate Services,
Inc. ("TC"). Landlord shall not employ any other management
agent for the Building who is not, in Landlord's reasonable
discretion, a first-class property management agent. In the
event Tenant determines that the manager of the Building
(whether TC or any other manager) is not operating the
Building in a first class manner, in Tenant's reasonable
judgment, then Tenant may deliver written notice to Landlord
specifying the manner in which the operation of the Building
is deemed deficient. Landlord agrees to consider, in good
faith, any bona fide complaint Tenant may have with regard to
the managing agent of the Property and, to the extent Landlord
in its reasonable business judgment agrees with Tenant's
complaint, Landlord
10
shall institute reasonable measures to cure such complaint.
(6) Landlord shall not adopt or materially modify an
annual operating budget for the Building without first
reviewing said budget with Tenant. Landlord agrees to consult
with Tenant at Tenant's request from time to time about the
services being furnished hereunder to the Building. In the
event Tenant at any time requests that Landlord adjust (either
to increase or to decrease) the level of services being
furnished to the Property, Landlord agrees to confer with
Tenant about such request and to make any reasonable
adjustment requested by Tenant that (i) does not materially
impair the overall operation of the Building, (ii) does not
prohibit Landlord from carrying out sound maintenance
practices in keeping with industry standards for comparable
properties, and (iii) does not otherwise adversely affect the
Building or Property or the value thereof; provided that, (x)
Tenant shall have no right to decrease the level of services
to be provided to the portions of the Property excluding the
Premises if Tenant is then leasing less than all of the
Building, and (y) if Tenant is leasing less than all of the
Building, Tenant shall pay all costs and expenses associated
with any increase in services (whether by addition of new
services or increase in the level of existing services, any
capital improvement costs associated therewith being amortized
over the shorter of the useful life of such capital
improvement(s) or the period constituting the remainder of the
Lease Term for which Tenant is obligated, with interest
thereon at the Prime Rate immediately prior to such costs
being incurred), if and then only to the extent, Landlord
reasonably determines (and so informs Tenant prior to
implementing the new or increased level of service) that the
level of services requested by Tenant exceeds the level of
services commonly provided in other first-class office
buildings in the Fair Oaks/Fair Lakes submarket of Fairfax
County, Virginia.
(7) Tenant shall have the right to participate in any
discussions or communications between Landlord and the local
electric power company concerning the designation of an
electricity rate schedule for the Building, and Landlord
agrees to use reasonable efforts to provide Tenant reasonable
prior notice of any planned meeting between Landlord and power
company representatives to discuss such issue.
(D) Utilities. Except for utilities for which Tenant contracts
directly, Landlord shall pay all utility bills incurred for
water, gas, electricity, fuel, light, heat and power. Except
as otherwise set forth in Section 5(C)(2), Landlord shall not
be liable for any failure to furnish, or for any loss, injury
or damage caused by or resulting from any variation,
interruption or failure of utilities or services.
(E) Compliance with Laws.
(1) Tenant, at Tenant's sole expense, shall
comply with all laws, rules, orders, ordinances, directions,
regulations and requirements of federal, state, county, and
municipal authorities now in force or which may hereafter be
in force, which shall impose any duty upon Landlord or Tenant
with respect to Tenant's particular use, occupancy or
alteration of the Premises (as distinct from office use
generally). Without limiting the foregoing, and
notwithstanding anything herein contained to the contrary,
Tenant shall be solely responsible for obtaining and
maintaining all necessary governmental and quasi-governmental
approvals, consents, licenses and permits (Tenant hereby
agreeing to provide copies thereof to Landlord upon receipt)
for all Ancillary Uses, and conducting such Ancillary Uses in
full compliance with all applicable laws, codes and
regulations at all times (including, but not limited to, the
requirements of any board of fire underwriters or other
similar body now or hereafter constituted, and health and
safety codes).
(2) Landlord agrees to comply with all laws,
rules, orders, ordinances, directions, regulations and
requirements of federal, state, county, and municipal
authorities now in force or which may hereafter be in force
and applicable to the Property, excluding, however, any such
law, rule, order, ordinance, direction, regulation or
requirement which shall impose any duty
11
upon Landlord or Tenant with respect to Tenant's particular
use, occupancy or alteration of the Premises (as distinct from
office use generally); provided that, (i) Landlord shall be
entitled to utilize any "grandfathering" or other exclusion or
exception from compliance which may be lawfully available,
(ii) Landlord shall have no obligation to cause any area of or
equipment in the Premises (or portion of either), which Tenant
intends to alter, modify, improve, demolish or remove as part
of the Building Fit-Out, to comply with such laws, rules,
orders, ordinances, directions, regulations or requirements,
and (iii) Tenant shall be solely responsible for compliance
with all laws, rules, orders, ordinances, directions,
regulations and requirements pertaining to the Ancillary Uses.
Except to the extent incurred in connection with the
performance of the Landlord's Work or incurred in order to
cure a violation of law which is required to be corrected
prior to the Commencement Date, all costs, expenses and fees
(including, but not limited to, reasonable attorneys' and
consultants' fees) incurred in connection with the performance
of Landlord's obligations pursuant to this Section 5(E)(2)
shall be included in Operating Expenses.
(F) Condition of Premises.
Notwithstanding anything to the contrary contained herein,
Tenant shall keep, maintain and preserve the Premises in a
first class condition at all times except for ordinary wear
and tear, and except for damage or destruction due to
casualty or condemnation which Landlord is required to repair;
provided that, this sentence shall not be deemed to require or
authorize Tenant to perform any repairs or alterations which
are Landlord's obligation hereunder. Except as otherwise set
forth herein, Landlord agrees to maintain and repair the
Building in accordance with Section 13 hereof.
(G) Operating Expenses Defined.
Operating Expenses shall mean all costs and expenses incurred
by Landlord in connection with the maintenance, repair,
management and operation of the Property (including, but not
limited to, the provision of the services required to be
provided by Landlord hereunder), determined in accordance with
sound accounting principles prevailing in the insurance and
real estate industries, consistently applied, including, but
not limited to, the following: (a) electricity, gas, water,
sewer and other utility charges; (b) commercially reasonably
premiums and other charges for insurance (including, but not
limited to, premiums for loss of rents insurance); (c)
management fees incurred in the management of the Property
(not to exceed the fair market value of the goods and services
provided in exchange therefor, and, during the first (1st)
three (3) years of the Initial Term, not to exceed two percent
(2%) of gross aggregate Rent and Additional Rent due
hereunder); (d) costs incurred in connection with service and
maintenance contracts; (e) maintenance and repair expenses
(including, but not limited to, landscaping and repairs and
maintenance to the Property); (f) amortization (calculated
over the useful life of the improvement, with interest at the
Prime Rate immediately prior to Landlord incurring such
capital expenditures) for capital expenditures made by
Landlord that are (i) required in order to comply with changes
in laws (exclusive of capital improvements to be performed by
Landlord pursuant to Exhibits B-2 and/or B-3), or (ii)
reasonably expected to result in a net decrease in Operating
Expenses; (g) salaries, wages, benefits and other expenses of
Building personnel (except as excluded below); (h) legal fees
(except as excluded below), administrative expenses and
accounting fees (except as excluded below); (i) costs of any
service not provided to the Property on the Commencement Date
but thereafter provided by Landlord in the prudent management
of the Property; (j) charges for janitorial, char and cleaning
services and supplies furnished to the Property; and (k) any
other expense reasonably incurred by Landlord in maintaining,
repairing, managing or operating the Property. Operating
Expenses shall not include (a) interest and amortization of
mortgages or any other encumbrances or debt; (b) ground rent;
(c) depreciation of the Property, any equipment (other than
personal property utilized in the operation, maintenance,
management or repair of the Property), or any other
improvements; (d) any capital expenditures (other than those
permitted above); (e) legal fees and
12
all other costs and expenses incurred in disputes with any
lenders or ground lessors, or in connection with the sale or
financing of all or any part of the Property or Landlord's
interest therein; (f) salaries, wages, fringe benefits or
other compensation paid or provided to executives of Landlord
or any personnel above the level of building manager (except
to the extent of their direct involvement in the management of
the Building, Landlord and Tenant hereby confirming their
intent that Operating Expenses shall exclude all salaries,
wages and fringe benefits or other compensation paid to
executives or other personnel to the extent attributable to
the performance of duties above the level of building
manager); (g) the cost of any goods or services purchased from
an individual or entity which is a parent, subsidiary or
affiliate which controls, is controlled by, or is under common
control with, Landlord to the extent such cost exceeds the
cost that would be incurred in an arm's-length transaction
with an unrelated party; (h) any cost to the extent reimbursed
by the proceeds of insurance, condemnation award, refund,
credit or warranty; (i) legal and other costs (including the
prepayment of any indebtedness) incurred in connection with
any mortgaging, financing, refinancing, or sale of the
Property or entering into or modifying any ground lease; (j)
original construction costs for the Property; (k) payments for
equipment rented under long-term leases which would constitute
capital expenditures if such equipment were purchased (except
to the extent the same would constitute a capital expenditure
permitted to be included in Operating Expenses pursuant to
this Section 5); (l) any fines or penalties incurred as a
result of a violation by Landlord of any legal requirements or
any of its obligations and duties hereunder (except to the
extent caused by Tenant or any of Tenant's Agents); (m)
interest or penalties arising by reason of Landlord's failure
to pay any Operating Expenses when due (except to the extent
caused by Tenant or any of Tenant's Agents); (n) reserves for
replacements or repairs; (o) accounting fees not incurred in
connection with the operation and management of the Property
or the preparation of any statements required under this
Lease; (p) the cost of any personnel, materials or services
shared by the Building and any other buildings owned or
operated by Landlord, to the extent reasonably allocable to
such other buildings; (q) any cost, expense or fee incurred
for any item included in Operating Expenses (other than
insurance premiums, utility charges, and goods and services
specifically purchased at Tenant's request), to the extent
such cost, expense or fee exceeds the range of fair market
value for the goods or services in question; and (r) at any
time that Tenant is not leasing the entire Building, the cost
of any service to the extent furnished without charge to any
other tenant of the Building to a materially greater extent
than is furnished to the Premises.
(H) Tenant's Audit Right.
(1) In the event Tenant desires to review or audit any
annual statement of actual Operating Expenses and/or Taxes,
Tenant shall notify Landlord in writing within one hundred
eighty (180) days of receiving such statement (failing which,
such statement shall be deemed conclusive). Not earlier than
twenty (20) days, nor later than one hundred twenty (120) days
after such notice is delivered to Landlord, Tenant shall have
the right to inspect and review, or to cause an independent,
certified public accountant employed by Tenant to inspect and
audit Landlord's books and records relating to the calendar
year to which the statement relates, at the Washington, D.C.
metropolitan area office of Landlord's managing agent during
regular business hours. In the event Tenant elects to employ
a certified public accountant for purposes of conducting such
inspection and review, such certified public account shall
have at least five (5) years experience as a certified public
accountant; provided that, no such certified public accountant
shall be compensated on a contingency fee basis.
(2) Tenant shall provide Landlord not less than twenty
(20) days notice of the date on which Tenant or Tenant's
accountant desires to examine Landlord's books and records
during regular business hours. Prior to the performance of
such examination, Tenant and, if applicable, Tenant's
certified public accountant each shall execute a reasonable
form of non-disclosure agreement providing that the
information disclosed in connection with such examination be
kept confidential. Tenant shall cause the results of such
examination to be communicated in writing to Landlord.
13
(3) If Landlord does not agree with the examination
results submitted by Tenant, Landlord's accountant and Tenant
(or, if applicable, Tenant's certified public accountant)
shall endeavor to resolve any differences. If such parties
are unable to resolve all differences within sixty (60) days,
Landlord and Tenant shall select an independent, certified
public accountant who satisfies the criteria set forth above
(but failing agreement, either party may request such
appointment be made by the American Arbitration Association or
any recognized successor thereto) to resolve the same. Such
jointly selected accountant, after executing a reasonable form
of non-disclosure agreement, shall make an independent audit
of the unresolved issue(s), the results of which shall be
binding on Landlord and Tenant.
(4) If such independent audit shows that the amounts paid
by Tenant to Landlord on account of Operating Expenses and/or
Taxes exceeded the amounts to which Landlord was entitled
hereunder, Landlord shall promptly credit the amount of such
excess against Tenant's next due Rent payment. If such audit
shows that the amounts paid by Tenant to Landlord on account
of Operating Expenses and/or Taxes were less than the amounts
to which Landlord was entitled hereunder, Tenant shall pay to
Landlord the amount of such shortfall within thirty (30) days
of the date Tenant is notified of the error. Except as
otherwise expressly provided below, all costs and expenses of
Tenant's audit (including, without limitation, reasonable
copying charges) shall be paid by Tenant. In addition, Tenant
shall be responsible for the costs incurred in connection with
the third accountant (including, without limitation,
reasonable copying charges) unless such audit discloses that
the amounts paid by Tenant to Landlord for the year in
question exceeded the amounts to which Landlord was entitled
by more than three percent (3%), in which event Landlord shall
promptly reimburse Tenant for the reasonable costs and
expenses incurred in connection with Tenant's audit and such
third accountant. Landlord shall pay any accountant employed
by it to act as Landlord's accountant.
6. ADDITIONAL RENT.
(A) It is understood that the Rent set forth in Section 3(A) (as
adjusted pursuant to Section 3(B)) was negotiated with the
agreement that Tenant will pay, in addition to the Rent
specified in Section 3(A) (as adjusted pursuant to Section
3(B)), Tenant's Proportionate Share (as herein defined) of all
Taxes and Operating Expenses pertaining to the Property from
and after the Phase II Rent Commencement Date. As used
herein, the term "Tenant's Proportionate Share" shall mean the
ratio of the total rentable square footage of Premises (as the
same may be decreased pursuant to Section 2(B)(ix)) to the
total rentable square footage of the Building (as such amounts
are calculated pursuant to the attached Exhibit A-14) (the
parties hereby acknowledging that, until an adjustment to the
rentable area of the Premises pursuant to Section 2(B)(ix),
Tenant's Proportionate Share shall mean one hundred percent
(100%)). On or before January 1st of each calendar year
commencing during the Lease Term or as soon as practicable
thereafter, Landlord shall furnish to Tenant a reasonable
estimate of the Taxes and Operating Expenses for the calendar
year in question. The estimate, and each annual statement of
Taxes and Operating Expenses, shall include a line item
expense for each category of Operating Expenses and Taxes.
Tenant shall pay to Landlord the Tenant's Proportionate Share
of the estimate of such Taxes and Operating Expenses in equal
monthly installments at the same time and place as Rent is to
be paid. Landlord will furnish a statement of the actual
Taxes and Operating Expenses for each year during the Lease
Term no later than April 1st of the following year. In the
event that Landlord is, for any reason, unable to furnish the
statement of the actual Taxes and Operating Expenses within
the time specified above, Landlord will furnish such statement
as soon thereafter as practicable (but no later than May 1st
of each year) and such statement shall have the same force and
effect as if delivered within the time specified above.
Tenant will pay to Landlord any excess of the Tenant's
Proportionate Share of the total amount of Taxes and Operating
Expenses for each year above the estimated payments made by
Tenant with respect thereto, as shown by such statement,
within thirty (30) days of receipt of such statement.
Landlord shall refund to Tenant any excess (as shown by such
statement) of the estimated
14
payments by Tenant above the Tenant's Proportionate Share of
the total Taxes and Operating Expenses within thirty (30) days
of the date of the statement; provided that, Landlord's
obligation to refund any such excess shall be suspended for
the duration of any default by Tenant hereunder. Landlord
will keep books and records showing the Taxes and Operating
Expenses in accordance with sound accounting principles
prevailing in the real estate and insurance industries,
consistently applied.
(B) For the period commencing on the Phase I Rent Commencement
Date, or any earlier date (the "Phase I Early Operation Date")
on which Tenant commences to operate its business in the
Premises, or subleases or otherwise utilizes all or a portion
of the Phase I Premises for purposes other than the Building
Fit-Out, and ending on December 31st of the calendar year in
which the Phase I Rent Commencement Date shall occur, Tenant
shall pay to Landlord the product (the "1997 Phase I Tax and
Operating Expense Payment") of (i) the rentable area of the
Phase I Premises, multiplied by (ii) Six and fifty/one
hundredths Dollars ($6.50) per annum (pro-rated on a daily
basis according to the number of days in such calendar year
which are included in the Lease Term), in equal monthly
installments; provided that, in the event the Phase I Early
Operation Date shall occur prior to the Phase I Rent
Commencement Date, the 1997 Phase I Tax and Operating Expense
Payment allocable to the period commencing on such Phase I
Early Operation Date and ending on the day preceding the Phase
I Rent Commencement Date shall be calculated (subject to daily
pro-ration as aforesaid, if applicable) by multiplying (i) the
sum of the entire rentable area of each floor of the Phase I
Premises on which Tenant has commenced to operate its
business, or has subleased or otherwise utilized all or a
portion of the floor for purposes other than the Building
Fit-Out (whether or not such entire floor is so utilized), by
(ii) Six and fifty/one hundredths Dollars ($6.50). Landlord
and Tenant hereby acknowledge that the foregoing amounts are
based on the parties' agreed estimate that the Taxes and
Operating Expenses for said calendar year will be
approximately Six and fifty/one hundred Dollars ($6.50) per
rentable square foot.
(C) In the event Tenant shall, prior to January 1, 1998, commence
to operate its business in the Phase II Premises or shall
sublease or otherwise utilize all or a portion of the Phase II
Premises for purposes other than the Building Fit-Out ("Early
Use"), Tenant shall, in addition to the 1997 Phase I Tax and
Operating Expense Payment, pay to Landlord, with respect to
the period commencing on the first (1st) day of such Early Use
and ending on December 31, 1997, the product (the "1997 Phase
II Tax and Operating Expense Payment") equal (subject to daily
pro-ration as aforesaid, if applicable) to (i) the sum of the
entire rentable area of each floor of the Phase II Premises on
which Tenant has commenced such Early Use (whether or not such
entire floor is being utilized for such Early Use), multiplied
by (ii) Six and fifty/one hundredths Dollars ($6.50) per
annum. Landlord and Tenant hereby acknowledge that the
foregoing amount is based on the parties' agreed estimate that
the Taxes and Operating Expenses for said calendar year will
be approximately Six and fifty/one hundred Dollars ($6.50) per
rentable square foot.
(D) Actual Taxes and Operating Expenses for calendar year 1997
shall be reconciled against estimated payment(s) pursuant to
the foregoing Section 6(B) and/or 6(C) in accordance with the
procedure set forth in Section 6(A).
(E) In addition to the foregoing, Tenant shall reimburse Landlord
upon demand for all reasonable costs, expenses and fees
incurred by or on behalf of Landlord as a result of the
Building Fit-Out during any period commencing after the Phase
I Rent Commencement Date (including, but not limited to, any
increase in Building utility costs).
(F) Any and all payments (other than Rent) required to be made by
Tenant pursuant to this Lease shall be deemed additional Rent
("Additional Rent"). Landlord shall have the same rights and
remedies for said payments as for Rent.
15
(G) In the event that, at any time when Tenant is leasing less
than the entire Building, Landlord furnishes any utility or
service which is included in Operating Expenses to less than
ninety-five percent (95%) of the rentable area of the Property
because (i) the average occupancy of the Property for the year
in question was not equal to or greater than ninety-five
percent (95%), (ii) such utility or service is not required by
or provided to one or more of the tenants of the Property, or
(iii) any tenant occupant is itself obtaining or providing any
such utility or services, then Operating Expenses for such
year shall be adjusted to include all additional costs,
expenses and disbursements that Landlord reasonably determines
would have been incurred if Landlord had provided such
utilities and services to all rentable areas of the Property.
The intent of this section is to ensure that the reimbursement
of Operating Expenses is fairly and equitably allocated among
the tenants receiving the utilities and services in question.
7. SORTING AND SEPARATION OF REFUSE AND TRASH.
(A) Tenant covenants and agrees, at Tenant's sole cost and
expense, to comply with all applicable present and future
laws, orders and regulations of all state, federal, municipal
and local governments, departments, commissions and boards
regarding the collection, sorting, separation and recycling of
waste products, garbage, refuse and trash. Without limiting
the generality of the foregoing, Tenant shall prepare and
submit for Landlord's approval (not to be unreasonably
withheld, conditioned or delayed) a recycling plan for the
Building which complies with applicable law, and Tenant shall
comply with the approved recycling plan. Neither Landlord's
review of the Tenant's recycling plan nor any coordination
therewith by Landlord shall constitute a warranty by Landlord
regarding the compliance of such recycling plan with
applicable laws, regulations, codes or governmental or
quasi-governmental requirements, nor shall Landlord have any
liability with regard to such recycling plan. Tenant shall
sort and separate waste products, garbage, refuge and trash
into such categories as provided by law. Each separately
sorted category of waste products, garbage, refuse and trash
shall be placed in separate receptacles provided by Tenant and
reasonably approved by the Landlord. Such separate
receptacles may, at Landlord's option, be removed from the
Premises in accordance with a collection schedule prescribed
by law or by Landlord.
(B) Landlord reserves the right to refuse to collect or accept
from Tenant any waste products, garbage, refuse or trash that
is not separated and sorted as required by law, and to require
Tenant to arrange for such collection at Tenant's sole cost
and expense, utilizing a contractor satisfactory to Landlord.
Tenant shall pay all costs, expenses, fines, penalties or
damages that may be imposed on Landlord or Tenant by reason of
Tenant's failure to comply with the provisions of this Section
7. Tenant, at Tenant's sole cost and expense, shall
indemnify, defend and hold Landlord harmless (including
reasonable legal fees and expenses) from and against any
actions, claims and suits arising from such noncompliance,
utilizing counsel reasonably satisfactory to Landlord.
8. HAZARDOUS SUBSTANCES.
(A) The term "Hazardous Substances" shall mean pollutants,
contaminants, toxic or hazardous wastes, chemicals or
materials, or any other substances, the use, storage,
manufacture, disposal and/or the removal of which is required
or the use of which is restricted, prohibited or penalized by
any "Environmental Law", which term shall mean any federal,
state or local law, regulation, order, ordinance or other
statute of a governmental or quasi-governmental authority
relating to pollution or protection of the environment.
Tenant hereby agrees that: (A) no activity will be conducted
by Tenant or any of Tenant's Agents on the Property or
Premises that will produce, utilize or otherwise involve the
manufacture, use, storage or disposal of any Hazardous
Substances, except for those Permitted Materials permitted
pursuant to Section 4 hereof; (B) no portion of the Property
or the Premises will be used by Tenant or any of Tenant's
Agents as a landfill or a dump; (C) neither Tenant nor any of
Tenant's Agents will install any underground tanks of any
type; (D) neither Tenant nor any of Tenant's Agents will cause
or authorize any
16
surface or subsurface conditions to exist or come into
existence that constitute, or with the passage of time may
constitute a public or private nuisance; and (E) neither
Tenant nor any of Tenant's Agents will cause or authorize any
Hazardous Substances to be brought onto the Property or
Premises, except for the Permitted Materials described above,
and if so brought or found located thereon, the same shall be
immediately removed, with proper disposal, and all required
cleanup procedures shall be diligently undertaken by Tenant
pursuant to all Environmental Laws. Landlord or Landlord's
representatives shall have the right (after reasonable advance
notice except in the event of an emergency (in which event no
notice shall be required)), but not the obligation, to enter
the Premises for the purpose of inspecting the storage, use
and disposal of Permitted Materials to verify compliance with
all Environmental Laws. Should it be determined, in
Landlord's reasonable opinion, that Permitted Materials are
being improperly stored, used, or disposed of, then Tenant
shall immediately take such corrective action as is reasonably
requested by Landlord. Should Tenant fail to commence to take
such corrective action within 24 hours, Landlord shall have
the right (but not the obligation) to perform such work and
Tenant shall promptly reimburse Landlord for any and all
reasonable costs associated with said work. If at any time
during or after the Lease Term, the Property is found to be
contaminated or subject to such surface or subsurface
conditions then, to the extent caused by the acts or omissions
of Tenant or any of Tenant's Agents or any third party on
behalf of Tenant or any of Tenant's Agents, Tenant shall
diligently institute proper and thorough cleanup procedures at
Tenant's sole cost. Tenant agrees to indemnify, defend and
hold harmless Landlord, its lenders, any managing agents and
leasing agents of the Property, and their respective agents,
partners, officers, directors and employees, from all claims,
demands, actions, liabilities, reasonable costs, reasonable
expenses, penalties (whether civil or criminal), damages
(actual or punitive) and obligations of any nature to the
extent arising from or as a result of any violation of this
Section 8(A). The foregoing indemnification and the
responsibilities of Tenant shall survive the termination or
expiration of this Lease.
(B) Except with regard to the use, storage and disposal of
Hazardous Substances utilized in the ordinary course of the
maintenance, repair and/or operation of the Property
("Landlord's Permitted Substances"), Landlord agrees that it
will be fully responsible for all costs, expenses, damages or
liabilities which may occur from the use, storage, disposal,
release, spill or discharge of Hazardous Substances by
Landlord or its agents, representatives, employees or
contractors and it shall indemnify, defend and hold harmless
Tenant and its agents, partners, officers, directors,
employees and contractors from all claims, demands, actions,
liabilities, reasonable costs, reasonable expenses, penalties
(whether civil or criminal), damages (actual or punitive) and
obligations of any nature to the extent arising from or as a
result of any violation of this Section 8(B). The foregoing
indemnification and the responsibilities of Landlord shall
survive the termination or expiration of this Lease.
(C) During and after the Lease Term, Tenant and Landlord shall
each promptly provide the other with copies of all summons,
citations, directives, information inquiries or requests,
notices of potential responsibility, notices of violation or
deficiency, orders or decrees, claims, complaints,
investigations, judgments, letters, notices of environmental
liens, and other communications, issued or threatened in
writing, from the United States Environmental Protection
Agency, Occupational Safety and Health Administration, the
Commonwealth of Virginia Department of Environmental Quality,
or other federal, state or local agency or authority, or any
other entity or individual, whether public or private,
concerning (i) any Hazardous Substance regarding the Property
or the Premises; (ii) the imposition of any environmental lien
on the Property or the Premises; or (iii) any alleged
violation of or responsibility under any Environmental Law.
9. INSURANCE.
(A) INSURANCE BY LANDLORD. Subject to the terms hereof, Landlord
shall, during the Lease Term, procure and keep in force the
following insurance, the cost of which (including, but not
limited to, all premiums and deductibles for loss of rents
coverage and all other premiums and
17
reasonable deductibles) will be deemed Operating Expenses
payable by Tenant pursuant to Section 5 and Section 6:
(1) Property insurance insuring the Property and
improvements and loss of rents insurance for perils covered by
the causes of loss - special form (all risk) and in addition
coverage for flood, earthquake and boiler and machinery (if
applicable). Such coverage (except for flood and earthquake)
shall be written on a replacement cost basis equal to ninety
percent (90%) of the full insurable replacement value of the
foregoing and shall not cover Tenant's equipment, trade
fixtures, inventory, fixtures, alterations or personal
property located on or in the Premises.
(2) Commercial general liability insurance
against any and all claims for bodily injury and property
damage occurring in or about the Property or the land. Such
insurance shall have the combined single limit of not less
than One Million Dollars ($1,000,000) per occurrence per
location with a Two Million Dollars ($2,000,000) aggregate
limit.
(3) Such other insurance as Landlord deems
necessary and prudent, or as required by Landlord's
beneficiaries or mortgagees of any deed of trust or mortgage
encumbering the Property.
(B) INSURANCE BY TENANT. Tenant shall, during the Lease Term,
procure and keep in force the following insurance:
(1) Commercial general liability insurance,
naming Landlord and Landlord's managing agent for the Property
as additional insureds against any and all claims for bodily
injury and property damage occurring in, or about the Property
arising out of Tenant's use and occupancy of the Property.
Such insurance shall have a combined single limit of not less
than Two Million Dollars ($2,000,000) per occurrence with Two
Million Dollars ($2,000,000) aggregate limit and excess
umbrella liability insurance in the amount of Ten Million
Dollars ($10,000,000). Such liability insurance shall be
primary and not contributing to any insurance available to
Landlord and Landlord's insurance shall be in excess thereto.
In no event shall the limits of such insurance be considered
as limiting the liability of Tenant under this lease.
(2) Personal property insurance insuring all
equipment, trade fixtures, inventory, fixtures and personal
property located on or in the Premises for perils covered by
the cause of loss - special form (all risk) and in addition,
coverage for flood, earthquake and boiler and machinery (if
applicable). Such insurance shall be written on a replacement
cost basis in an amount equal to one hundred percent (100%) of
the full replacement value of the aggregate of the foregoing.
(3) Workers' compensation insurance in accordance
with statutory law and employers' liability insurance with a
limit of not less than $100,000 per accident, $500,000 for a
disease policy limit, and $100,000 for disease limit for each
employee.
(4) Such other insurance as Landlord deems
necessary and prudent, or as required by Landlord's
beneficiaries or mortgagees of any deed of trust or mortgage
encumbering the Property, and customarily maintained by
comparable tenants engaged in comparable uses.
The policies required to be maintained by Tenant
shall be issued by companies rated AX or better (or
equivalent, from time to time) in the most current issue of
Best's Insurance Reports (or any recognized successor
thereto), and licensed to do business in the state in which
the Property is located and domiciled in the USA. Deductible
amounts under Tenant's insurance policies shall not exceed
Twenty-Five Thousand Dollars ($25,000.00). Certificates of
insurance (certified copies of the policies may be required)
shall be delivered to Landlord prior to the Commencement Date
and annually thereafter at least thirty (30) days prior to the
expiration date
18
of the old policy. Tenant shall have the right to provide
insurance coverage which it is obligated to carry pursuant to
the terms hereof in a blanket policy, provided such blanket
policy expressly affords coverage to the Property, the
Premises, and to Landlord as required by this Lease. Each
policy of insurance shall provide notification to Landlord at
least thirty (30) days prior to any cancellation or
modification to reduce the insurance coverage. Tenant hereby
agrees to pay to Landlord as liquidated damages an amount
equal to Two Hundred Fifty Dollars ($250.00) per day for each
day on which Tenant fails to deliver to Landlord a current
certificate(s) evidencing that the insurance required pursuant
to this Section is being maintained, after not less than
forty-eight (48) hours notice from Landlord that it has not
been provided a current certificate of insurance.
In the event Tenant does not purchase the insurance
required by this Lease or keep the same in full force and
effect, Landlord may (but shall not be obligated to) purchase
the required insurance and pay the premium. The Tenant shall
repay to Landlord promptly upon demand as Additional Rent, the
amount so paid. In addition, Landlord may recover from Tenant
and Tenant agrees to pay, as Additional Rent, any and all
reasonable expenses (including, but not limited to, reasonable
attorneys' fee) and damages which Landlord may sustain by
reason of the failure of Tenant to obtain and maintain such
insurance.
(C) SUBROGATION. Landlord and Tenant mutually waive their
respective rights of recovery against each other for any loss
of, or damage to, their respective property, to the extent
that such loss or damage is (or is required hereby to be)
insured against by an insurance policy at the time of such
loss or damage or, with respect to Landlord, is self-insured.
Each party shall obtain any special endorsements (if required
by its insurance policy) whereby the insurer waives its rights
of subrogation against the other party. This clause shall not
apply in those cases where waiver of subrogation would cause
either parties' insurance to be voided or otherwise made
uncollectible.
10. DAMAGE OR DESTRUCTION.
If the Premises shall be (i) materially damaged or destroyed during
the last year of the Lease Term (inclusive of any Extension Period for
which an Extension Option was exercised prior to such damage or
destruction), or (ii) damaged or destroyed to such extent that the
damage or destruction cannot be repaired within a period of three
hundred sixty-five (365) days of the date of such damage or
destruction, either Landlord or Tenant may terminate this Lease by
written notice delivered to the other within sixty (60) days of the
date of such damage or destruction (and in such event this Lease shall
terminate as of date of such damage or destruction as if such date
were the Expiration Date hereof). In addition, Landlord, at its sole
option, shall have the right to cancel and terminate this Lease, by
written notice delivered to Tenant not later than sixty (60) days
after the date of damage or destruction, in the event the Premises is
damaged or destroyed during the last five (5) years of the Lease Term
(inclusive of any Extension Period for which an Extension Option was
exercised prior to such damage or destruction) and Tenant shall fail
to execute and deliver to Landlord upon request an extension of the
Lease Term equal to the amount of time by which the remaining Lease
Term (exclusive of any Extension Period for which the applicable
Extension Option was not exercised prior to such damage or
destruction, and further excluding the estimated time to rebuild or
restore the Premises) is less than five (5) years, upon the same
terms and conditions set forth herein except that the Rent for the
period of such extension shall equal the then-escalated Rent in effect
immediately prior to the expiration of the Lease Term, subject to
escalation in the same manner in effect immediately prior to the
expiration of the Lease Term. If this Lease is not terminated, then
Landlord shall repair and restore the Premises (exclusive of Tenant's
equipment, trade fixtures, inventory, fixtures and personal property)
with all reasonable speed to substantially the same condition as
immediately prior to such damage or destruction, and the Rent or a
just and proportionate part thereof, according to Tenant's ability to
utilize the Premises in its damaged condition, shall be abated until
the Premises shall have been repaired and restored by Landlord.
11. INDEMNIFICATION.
19
Tenant shall defend, and hereby does indemnify and hold Landlord
harmless from and against any and all claims, costs, damages,
expenses, fees, liabilities, losses or suits arising from or out of,
or in connection with (i) injury or death to any person in, on or
about the Premises, (ii) damage to or loss of use of any property
arising out of any occurrence in, on or about the Premises, (iii) the
use, condition, occupational safety or occupancy of the Property or
Premises, to the extent attributable to the gross negligence or
willful misconduct of Tenant or any of Tenant's Agents, and/or (iv)
any default by Tenant in the performance of its obligations under this
Lease (including, but not limited to Exhibit H); provided that, Tenant
shall have no obligation to defend, indemnify or hold Landlord
harmless with regard to any matter to the extent caused by the
negligence or willful misconduct of Landlord or its agents or
employees. Such indemnifications shall, among other things, include
and apply to reasonable attorneys' fees, investigation costs, and
other costs actually incurred by or on behalf of Landlord. The
provisions of this Section 11 shall survive the expiration or
termination of this Lease with respect to any matter, circumstance or
event which occurred or relates to any period ending prior to such
expiration or termination. Except as otherwise expressly set forth
herein to the contrary, this Lease is made on the express conditions
that, to the fullest extent permitted by applicable law, Landlord
shall not be liable for, or suffer loss by reason of, injury to person
or property, from whatever cause, in any way connected with the
condition, use, occupational safety or occupancy of the Premises,
specifically including, without limitation, any liability for injury
to the person or property of Tenant or Tenant's Agents. Landlord
shall indemnify, defend and hold harmless Tenant from and against all
costs, damages, injury, claims, liabilities, expenses (including
reasonable attorneys' fees), losses and court costs arising from or as
a result of any breach of Landlord's duties or obligations hereunder
or of any gross negligence or willful misconduct of Landlord or its
agents, representatives employees or contractors acting within the
scope of their employment or engagement.
12. ASSIGNMENT AND SUBLETTING.
(A) Tenant shall not assign this Lease, or sublet all or any
portion of the Premises, or permit the use or occupancy of
the Premises by any party other than Tenant, without the prior
written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed. Tenant shall
not encumber, mortgage, pledge, license, hypothecate or
otherwise transfer the Premises or this Lease (except as set
forth in the preceding sentence) without the prior written
consent of Landlord, which may be granted or withheld in
Landlord's sole discretion.
(B) Tenant must request Landlord's consent to an assignment or
sublease in writing at least twenty (20) days prior to the
commencement date of the proposed sublease or assignment,
which request must include (a) the name and address of the
proposed assignee or subtenant, (b) the nature and character
of the business of the proposed assignee or subtenant, (c)
financial information (including financial statements, if
available) of the proposed assignee or subtenant, and (d) a
copy of the proposed sublet or assignment agreement, which
must be in substance and form reasonably acceptable to
Landlord. Tenant shall also provide any additional
information Landlord reasonably requests regarding such
proposed assignment or subletting. Within seven (7) business
days after Landlord receives Tenant's request (with all
required information included), Landlord shall notify Tenant
if it wishes to deny its consent to such proposed assignment
or subletting. In the event Landlord shall fail to respond to
Tenant within such period of time, Tenant may deliver to
Landlord a second (2nd) request for such consent, which notice
shall specifically state that the failure by Landlord to
respond within five (5) business days shall be deemed
Landlord's election to grant its consent thereto, and in the
absence of a response to such second (2nd) notice, Landlord
shall be deemed to have granted its consent thereto.
(C) Each sublease and/or assignment is also subject to all of the
following terms and conditions:
(1) If Landlord approves an assignment
or sublease as herein provided, Tenant shall pay to
Landlord as Additional Rent fifty percent (50%) of
the amount, if any, by which the rent, any additional
rent and any other sums paid by the assignee or
subtenant to Tenant under
20
such assignment or sublease (after deducting
therefrom the reasonable out-of-pocket costs incurred
by Tenant in the subject transaction, including, but
not limited to, brokerage commissions, hard and soft
construction expenses, tenant concessions (exclusive
of non-cash concessions, such as free rent), and
reasonable legal fees) exceeds the total of the Rent
plus any Additional Rent payable by Tenant hereunder
which is allocable to the portion of the Premises
which is the subject of such assignment or sublease.
The foregoing payments shall be made on not less than
a monthly basis by Tenant. The foregoing provisions
of this Section 12(C)(1) shall be inapplicable to any
subletting of the Phase II Premises prior to January
1, 1998, but shall apply to any continuation thereof
beyond January 1, 1998.
(2) No consent to any assignment or
sublease shall constitute a further waiver of the
provisions of this section, and all subsequent
assignments or subleases may be made only upon the
terms and conditions of this Section 12 and with the
prior written consent of Landlord in accordance
herewith. In no event shall any consent by Landlord
be construed to permit reassignment or resubletting
by a permitted assignee or sublessee.
(3) No sublease or assignment by Tenant
shall relieve Tenant of any liability hereunder.
(4) Any assignment or sublease without
Landlord's prior written consent shall be void, and
shall, at the option of the Landlord, constitute an
Event of Default under this Lease.
(5) No assignment or sublease shall be
granted for any term which extends beyond the Lease
Term, as it may have been theretofore renewed
hereunder, unless the portion of the term which
extends beyond the Lease Term shall be subject to
Tenant's exercise of the applicable Extension
Option(s).
(6) Tenant shall reimburse Landlord upon
demand for all reasonable costs, expenses and fees
incurred by or on behalf of Landlord in connection
with any proposed assignment or sublease by Tenant
(including, but not limited to, Landlord's reasonable
attorneys fees and out-of-pocket expenses incurred in
connection with Landlord's review of such sublease or
assignment (if any)).
(D) The following events shall constitute an "Assignment" which is
subject to the terms of this section and for which Landlord's
prior written consent is required: (i) if Tenant is a
corporation and any part or all of Tenant's shares of stock,
or the shares of stock or other ownership interests of any
corporation or other entity owning shares of Tenant's stock,
shall in any one or more instances be issued, or transferred
by sale, assignment, conveyance, operation of law (including,
but not limited to, transfer as a result of or in conjunction
with any merger, reorganization or recapitalization) or other
disposition, or otherwise changed, so as to result in less
than fifty-one (51%) of such shares, or other ownership
interests, or less than fifty-one percent (51%) of any class
of such shares or other ownership interests, being owned by
the present (i.e., as of the date hereof) owners thereof; (ii)
if Tenant is a partnership and any general partnership
interest(s), or the stock or other ownership interests of any
corporation or other entity owning any such general
partnership interests(s), in the partnership shall in any one
or more instances be issued, or transferred by sale,
assignment, conveyance, operation of law (including, but not
limited to, transfer as a result of or in conjunction with any
merger, reorganization or recapitalization) or other
disposition, or otherwise changed, so as to result in less
than fifty-one percent (51%) of such general partnership
interests(s), stock (or any class of such stock) or other
ownership interests being owned by the present (i.e., as of
the date hereof) owners thereof; (iii) if Tenant is a limited
liability company or any other type of entity, and any
interest(s) of any member or other equity owner, or the
ownership interests of any entity owning any membership
interest(s) or other equity interest in the Tenant, shall in
any one or more instances be issued, or transferred by sale,
assignment, conveyance, operation of law (including, but not
limited to, transfer as a result of or in conjunction with any
merger, reorganization or recapitalization) or other
disposition, or otherwise changed, so as to result in less
than fifty-one
21
percent (51%) of such membership interests or other such
equity and/or ownership interests being owned by the present
(i.e., as of the date hereof) owners thereof; or (iv) if
effective control of the corporation, partnership, limited
liability company or other form of Tenant shall be taken from
those exercising such control as of the date hereof; provided
that, this Section 12(D) shall not be deemed to apply to any
corporation the shares of which are traded on a
nationally-recognized exchange and which is required to make
public disclosures regarding ownership and financial
condition.
(E) Notwithstanding any other provision of this Lease to the
contrary, American Management Systems, Inc. ("AMS") shall have
the right to (1) assign this Lease or to sublet all or any
portion of the Premises, in either case without the consent of
Landlord, to any affiliate that is wholly-owned by or under
common ownership with AMS (as part of a single group of
interlocking companies), or to any wholly-owned and controlled
division or sub-entity of AMS, or (2) sublease up to one (1)
full floor of the Premises to any entity or user that is
partially-owned by AMS and in which AMS is an active
participant in management and operations, all subject to the
following conditions: (a) the proposed assignee or sublessee
(the "Transferee") and its business shall be of a type and
quality suitable for a first-class office building, (b) the
proposed Transferee shall not be a governmental or
quasi-governmental authority, a foreign government or
international agency or other organization entitled to
sovereign or other immunity, (c) neither the proposed
assignment or subtenancy, nor the proposed assignee or
subtenant, will impose an additional, material burden upon
Landlord in its operation of the Property which exceeds the
additional burden which Landlord would reasonably suffer if
the Building were multi-tenanted, (d) AMS shall notify
Landlord not less than ten (10) days in advance of the
effective date of such assignment or sublease of AMS' intent
to enter into such assignment or sublease (failing which,
Landlord shall be entitled (as Landlord's sole remedy for AMS'
failure to deliver such notice), and AMS shall pay to Landlord
as liquidated damages, the sum of Five Hundred Dollars
($500.00) for each failure to so notify Landlord), (e) such
Transferee is lawfully qualified to occupy the Premises, (f)
there will be no use of the Premises in violation of the terms
hereof, (g) with respect to an assignment, such Transferee
shall expressly assume all of the obligations of the Tenant
hereunder on a form acceptable to Landlord, and (h) no such
assignment or subletting shall relieve AMS of any agreement,
covenant, duty, liability or obligation hereunder.
(F) Tenant hereby assigns to the Landlord absolutely the rent due
from each assignee and subtenant and Tenant hereby authorizes
each such assignee and subtenant to pay said rent directly to
Landlord for credit, as and when collected by the Landlord
(and net of the Landlord's reasonable collection costs),
against the Rent and Additional Rent payable hereunder;
provided that, for all periods in which no Event of Default
shall be in existence hereunder, Landlord shall permit Tenant
to continue to collect the rent from such assignees and
subtenants.
13. CARE OF PREMISES.
(A) Except as otherwise expressly set forth herein to the
contrary, Tenant covenants and agrees that during the Lease
Term it will keep the Premises and every part thereof in
first-class order, condition and repair except for ordinary
wear and tear and casualty and condemnation damage which
Landlord is required to repair, and that it will in all
respects and at all times duly comply with all applicable
laws, and all covenants, conditions and restrictions
applicable to the Property.
(B) Subject to ordinary wear and tear and subject to Tenant's
obligation to pay Operating Expenses pursuant to Sections 5
and 6, Landlord shall keep the Property and the Building in a
first-class condition, and shall replace, repair and maintain
as and when necessary in Landlord's reasonable business
judgment: (A) the roof, exterior and core walls, floor slabs
and other structural components of the Building; (B) all
systems required for the elevator, plumbing, electrical, HVAC,
mechanical and other services of Landlord required hereunder;
(C) all exterior areas of the Building; (D) all common areas
of the Property; and (E) all exterior improvements and areas
of the Property (including, but not limited to, driveways,
parking areas and facilities, curbs, sidewalks, lighting,
landscaping and fencing). In furtherance of the foregoing,
Landlord shall
22
agree to maintain in stock one (1) compressor and one (1) fan
motor for the base Building HVAC System (as herein defined).
Landlord further agrees to utilize prudent management
practices in determining when an item is at the end of its
useful operating life and should be replaced rather than
repaired.
14. ALTERATION BY TENANT.
(A) Tenant is hereby given the right, at its sole cost and
expense, at any time during the Lease Term, to make
non-structural or cosmetic alterations or improvements to the
interior of the Premises which Tenant deems necessary or
desirable for its purposes; provided, however, that no
addition, alteration, improvement or modification which (i) is
not considered normal office build-out for office tenants of
all sizes, (ii) affects the structure or systems of the
Building or any other tenant of the Building (if any), (iii)
requires a permit or other governmental or quasi-governmental
approval, consent or license, or (iv) costs in excess of Ten
Thousand Dollars ($10,000.00), shall be made without the prior
written approval of Landlord (which written approval shall not
be unreasonably withheld, conditioned or delayed, except with
regard to work covered by clause (ii) which will or is likely
to materially and adversely affect any other occupant of the
Property). Landlord's approval of any plans, specifications
or work drawings shall create no responsibility or liability
on the part of the Landlord for their completeness, design
sufficiency or compliance with any laws, rules and regulations
of governmental agencies or authorities.
(B) All work by or for Tenant herein permitted shall be done and
completed by the Tenant in a good and workmanlike manner and
in compliance with all requirements of law and of governmental
rules and regulations (including, but not limited to, the
Americans with Disabilities Act). Tenant agrees to indemnify
the Landlord against all mechanics' or other liens arising out
of any of such work, and also against any and all claims for
damages or injury which may occur during the course of any
such work. Tenant shall notify Landlord in writing not less
than ten (10) days in advance of all work to be performed in
or on the Property by or on behalf of Tenant or any of
Tenant's Agents, for which Landlord's consent is required. For
the further security of Landlord, Tenant covenants and agrees
to give actual notice of the first (1st) two (2) sentences of
Section 20 in advance to each project manager, contractor and
subcontractor with whom Tenant contracts directly for the
performance of any addition, alteration, improvement or
modification in or to the Premises; provided that, Landlord
hereby acknowledges that Tenant's failure to give the notice
specified in this sentence shall not constitute an Event of
Default hereunder (whether or not notice of such failure is
delivered by Landlord to Tenant).
(C) Upon written notice to Tenant (not later than thirty (30) days
after expiration of the Lease Term), Landlord may require that
Tenant remove, after the expiration or sooner termination of
the Lease Term and at Tenant's sole cost and expense, any
and/or all alterations, improvements or additions to the
Premises, and restore the Premises to their prior condition;
provided that, Landlord shall have no right to require the
removal of (i) any additions, alterations or improvements that
are customarily considered normal office improvements for
office tenants of all sizes (including, but not limited to,
wiring or cabling which is customarily considered part of
normal office improvements for first-class office tenants of
all sizes), or (ii) any alterations, improvements or additions
to the Premises to which Landlord has consented, unless at the
time such consent was granted Landlord reserved the right to
require such removal. Tenant shall also repair any damage to
the Premises caused by the installation or removal of Tenant's
trade fixtures, furnishings and equipment, or any alterations
or other improvements made to the Premises by Tenant.
15. CONDEMNATION.
(A) If the Premises shall be wholly taken by exercise of right of
eminent domain, then this Lease shall terminate from the day
the possession of the whole of the Premises shall be required
under the exercise of such power of eminent domain.
23
(B) If a part of the Premises shall be condemned, then the Rent
payable hereunder shall be reduced in the proportion that the
remaining area of the Premises bears to the original area of
the Premises.
(C) Any award for the taking of all or part of the Premises
(including, but not limited to, the Tenant's leasehold
interest) under the power of eminent domain or any payment
made under threat of the exercise of such power shall be the
property of the Landlord. Tenant reserves such separate
rights as it may have against the condemning authority to
claim damages for loss of its trade fixtures and the cost of
removal and relocation expense, provided such Tenant rights do
not, in any way, diminish the award to which Landlord would
otherwise be entitled or reduce the amounts payable to
Landlord pursuant to this subsection.
16. SUBORDINATION.
This Lease is and shall at all times be and remain subject and
subordinate to the lien of any future mortgage (and to any and all
advances made thereunder) upon the Property or Premises, unless
Landlord requires this Lease to be superior to any such mortgage.
Tenant shall execute and return to Landlord any and all documentation
reasonably required by Landlord to evidence the subordination (or
superiority) of this Lease to any such mortgage. Tenant hereby agrees
to pay to Landlord as liquidated damages an amount equal to Two
Hundred Fifty Dollars ($250.00) per day for each day on which Tenant
fails to return any such documentation requested pursuant to the
preceding sentence, after not less than forty-eight (48) hours notice
from Landlord that Tenant has failed to return any such documentation
within ten (10) days after Landlord's written request therefor. In
the event of subordination of this Lease, Landlord will obtain a
written non-disturbance agreement in form reasonably satisfactory to
Tenant and such lender, providing, without limitation, that (A) in the
event of a foreclosure or other action taken under the mortgage by the
holder thereof, this Lease and the rights of Tenant hereunder shall
not be disturbed but shall continue in full force and effect so long
as there shall not be an Event of Default in existence hereunder, and
(B) such holder will agree that in the event it shall be in possession
of the Premises, that so long as Tenant shall observe and perform all
of the obligations of Tenant to be performed pursuant to this Lease,
such Mortgagee will perform all obligations of Landlord required to be
performed under this Lease. So long as such non-disturbance agreement
was delivered to Tenant, in the event any proceedings are brought for
foreclosure, or in the event of the exercise of the power of sale
under any mortgage made by the Landlord covering the Premises, Tenant
shall attorn to the purchaser at any such foreclosure, or to the
grantee of a deed in lieu of foreclosure, and recognize such purchaser
or grantee as the Landlord under this Lease. Tenant hereby agrees
that no mortgagee or its successor shall be (i) bound by any payment
of Rent or Additional Rent for more than one (1) month in advance,
(ii) bound by any amendment or modification of this Lease made without
the consent of Landlord's mortgagee or its successor, (iii) liable for
damages for any breach, act or omission of any prior landlord, (iv)
bound to effect or pay for any construction for Tenant's occupancy, or
(v) subject to any claim of offset or defenses that Tenant may have
against any prior landlord. The word "mortgage" as used herein
includes mortgages, deeds of trust and any sale-leaseback
transactions, or other similar instruments, and modifications,
extensions, renewals, and replacements thereof, and any and all
advances thereunder.
17. ACCESS TO PREMISES
Landlord and its authorized agents shall, upon reasonable prior verbal
or written notice (except in the event of an emergency, in which event
no notice shall be required), have free access to the Premises at any
and all reasonable times to inspect the same, to make any repair or
alteration to the Premises, to place and maintain a "For Rent" sign
thereon at any time within twelve (12) months prior to expiration of
the Lease Term and/or termination of this Lease and to exhibit and
show the Premises to prospective tenants during such time period, and
for other reasonable purposes pertaining to the rights of the Landlord
hereunder.
24
18. RULES AND REGULATIONS.
Tenant agrees to comply with all existing rules and regulations of the
Building, and all future rules and regulations reasonably promulgated
by Landlord concerning the Property and the Premises and made known to
Tenant in writing. The existing rules and regulations are set forth in
Exhibit D attached hereto and made a part hereof by reference.
Landlord shall have no liability for any failure by any other person
or entity to honor or observe the terms of said rules and regulations.
19. COVENANTS OF RIGHT TO LEASE.
Landlord covenants that it is the fee simple owner of the Property and
has good and sufficient right to enter into this Lease and that
Landlord alone has the right to lease the Premises for the Lease Term.
Landlord further covenants that upon Tenant performing the terms and
obligations of Tenant under this Lease, Tenant shall be entitled to
peaceably and quietly possess the Premises throughout the Lease Term
and any renewal or extension thereof, subject to the terms of this
Lease.
20. MECHANICS LIENS.
Neither Tenant nor anyone claiming by, through, or under Tenant or
this Lease, shall have the right to file or place any mechanics lien
or other lien of any kind or character whatsoever upon the Property or
Premises or upon any improvement thereon, or upon the leasehold
interest of Tenant therein. Notice is hereby given that no
contractor, subcontractor, or anyone else who may furnish any
material, service or labor for any Property improvements, alteration,
repairs or any part thereof, shall at any time be or become entitled
to any lien thereon. Tenant shall cause any such lien imposed to be
released of record by payment or posting of the proper bond acceptable
to Landlord within ten (10) business days after the earlier of Tenant
acquiring knowledge of such lien or written request by Landlord. If
Tenant fails to remove any lien within said ten (10) business day
period, then Landlord may (but shall not be obligated to) do so at
Tenant's expense, and Tenant shall reimburse Landlord upon demand for
such amount, including, but not limited to, reasonable attorneys fees
and costs, as Additional Rent.
21. EXPIRATION OF LEASE AND SURRENDER OF POSSESSION.
(A) Holding Over. Tenant will, at the expiration or termination
of this Lease by lapse of time or otherwise, yield up
immediate possession of the Premises to Landlord, free of all
tenancies and occupancies and otherwise in the condition
required under this Lease. If Tenant retains possession of
the Premises or any part thereof after such expiration or
termination, then Landlord may, at its option, serve written
notice upon Tenant that such holding over constitutes either
of (i) creation of a month-to-month tenancy, upon the terms
and conditions set forth in this Lease, or (ii) creation of a
tenancy at sufferance, in any case upon the terms and
conditions set forth in this Lease; provided, however, that
the monthly Rent (or daily Rent under (ii)) shall, in addition
to all other sums which are to be paid by Tenant hereunder,
whether or not as Additional Rent, be equal to the greater of
(x) the fair market rent for the Premises, or (y) one hundred
fifty percent (150%) of the sum of Rent plus Additional Rent
owed monthly to Landlord under this Lease immediately prior to
such expiration or termination (prorated in the case of (ii)
on the basis of a 365 day year for each day Tenant remains in
possession); provided that, with respect to the first (1st)
ninety (90) days of any such holdover, the amount calculated
under the foregoing clause (y) shall be based on one hundred
twenty-five percent (125%), rather than one hundred fifty
percent (150%). If no such notice is served, then a tenancy
at sufferance shall be deemed to be created at the Rent in the
preceding sentence. Tenant shall also pay to Landlord as
Additional Rent all damages sustained by Landlord resulting
from retention of possession by Tenant, including, but not
limited to, all brokerage commissions and reasonable legal
fees incurred in connection with any lease for all or a part
of the Premises to a replacement tenant which is canceled or
terminated as a result of such holdover, plus a reasonable
vacancy allowance equal to the period reasonably estimated by
Landlord to be necessary to identify another replacement
tenant, negotiate a lease with such replacement tenant, and
build-out the Premises (or such portion thereof as shall be
leased) for such replacement tenant;
25
provided that, except to the extent expressly enumerated in
the foregoing provisions of this sentence, Tenant shall not be
liable for any indirect, consequential or punitive damages as
a consequence of any holdover. The provisions of this section
shall not constitute a waiver by Landlord of any right of
re-entry as herein set forth; nor shall receipt of any Rent or
any other act in apparent affirmance of the tenancy operate as
a waiver of Landlord's right to terminate this Lease for a
breach of any of the terms, covenants, or obligations herein
on Tenant's part to be performed.
(B) Subject to Landlord's right to require their removal in
writing as hereinabove provided, all alterations, additions
and improvements which may be made in, on or to the Premises
shall become the property of Landlord upon their installation
in the Premises and shall remain upon and be surrendered with
the Premises. Subject to Section 14, upon the expiration of
this Lease, by lapse of time or otherwise, Tenant shall
surrender the Premises, together with any and all alterations,
improvements or additions erected in, on or to the Property or
Premises by Tenant (excluding Tenant's personalty), ordinary
wear and tear and casualty and condemnation damage which
Landlord is required to repair excepted.
(C) Tenant may install adequate equipment, fixtures, wiring,
cabling and machinery for the operation of its business and,
upon the expiration or termination of this Lease by lapse of
time or otherwise, Tenant shall remove such equipment,
fixtures, wiring and cabling (subject to the limitation set
forth in Section 14(C)), and machinery installed by it at
Tenant's sole cost. Upon removal of such equipment, fixtures,
wiring and cabling (subject to the limitation set forth in
Section 14(C)), and machinery, Tenant shall repair any damage
to the Property or Premises caused by such removal or
installation at Tenant's sole cost.
22. DEFAULT-REMEDIES.
(A) The occurrence of one or more of the following events shall
constitute a material default and breach of this Lease by
Tenant ("Event of Default"):
(1) Failure by Tenant to make payment of
any Rent, Additional Rent, or any other payment
required to be made by Tenant hereunder, as and when
due, and such a failure shall continue for a period
of more than ten (10) days after written notice of
such failure to Tenant; provided that, (i) Landlord
shall not be required to deliver more than two (2)
such notices in any period of twelve (12) consecutive
months , and (ii) following delivery of the second
(2nd) such notice, any subsequent failure by Tenant,
within twelve (12) months of the first (1st) such
notice, to make any payment when and as due shall be
deemed an Event of Default;
(2) The making by Tenant (or any
guarantor) of any general assignment or arrangement
for the benefit of creditors;
(3) The filing by Tenant (or any
guarantor) of a petition in bankruptcy or for any
other relief under Title 11 of the United States Code
("Bankruptcy Code"), or the insolvency laws of any
state, or any other applicable statute ("Insolvency
Laws");
(4) The levying of an attachment,
execution of other judicial seizure upon the Tenant's
property in or interest under this Lease, which is
not satisfied or released or the enforcement thereof
superseded by an appropriate proceeding within sixty
(60) days thereafter;
(5) The filing of an involuntary
petition in bankruptcy or for reorganization or
arrangement under the Bankruptcy Code or Insolvency
Laws against Tenant (or any guarantor) and such
involuntary petition is not withdrawn, dismissed, or
discharged within sixty (60) days from the filing
thereof,
26
(6) The appointment of a receiver or
trustee to take possession of the property of Tenant
(or any guarantor) or of Tenant's (or any
guarantor's) business or assets and the order or
decree appointing such receiver or trustee shall have
remained in force undischarged for sixty (60) days
after the entry of such order or decree;
(7) The vacating or abandonment of the
Premises; provided that, vacating the Premises shall
not be deemed an Event of Default if (i) Tenant shall
notify Landlord in writing (or Landlord's building
manager shall otherwise acquire actual knowledge) of
Tenant's intent to vacate not less than sixty (60)
days in advance, (ii) Tenant shall obtain and provide
to Landlord prior to vacating all necessary
endorsements required to ensure that Tenant's
insurance with respect to the Premises shall remain
in full force and effect notwithstanding such
vacancy, and (iii) Tenant shall take all commercially
reasonable steps to secure the Premises against
unauthorized entry during the period of such vacancy;
(8) The failure by Tenant to furnish to
Landlord any statement required herein within fifteen
(15) days (or such shorter period as may be expressly
set forth herein with respect to such delivery) after
its due date, which failure shall continue for more
than two (2) business days after Landlord delivers
written notice of such failure to deliver such
statement within the required time period;
(9) The failure by Tenant to maintain,
or provide to Landlord evidence that Tenant continues
to maintain, any insurance required herein, which
failure shall continue for more than two (2) business
days after Landlord delivers written notice of
Tenant's failure to deliver evidence of continued
insurance at least thirty (30) days prior to the
expiration of the then-current policy period;
(10) An assignment, subletting, pledge,
mortgage, or other transfer of this Lease or the
Premises by Tenant, or any transfer of any interest
in the Tenant, in violation of Section 12 of this
Lease; or
(11) The failure by Tenant to perform or
observe any other term, covenant, agreement or
condition to be performed or kept by the Tenant under
the terms, conditions, or provisions of this Lease,
which failure shall continue for more than fifteen
(15) days after written notice thereof from Landlord
(or such longer time as may be reasonably required to
cure such failure through the exercise of due
diligence, provided that (i) such failure is not a
willful repudiation of the Lease authorized by
Tenant's Board of Directors, (ii) such failure is
susceptible of cure, (iii) such failure does not
relate to the existence of a Hazardous Substance on
the Premises in violation of Section 8 hereof, (iv)
such failure does not subject Landlord to prosecution
or substantial civil or criminal fine or penalty, and
(v) Tenant promptly commences to cure such failure
within the aforesaid fifteen (15) day period and
thereafter diligently pursues the cure of such
failure to completion).
(B) If an Event of Default shall have occurred, Landlord shall
have (in addition to all other rights and remedies provided at
law or in equity or otherwise provided by this Lease) the
right, at the option of the Landlord, then or at any time
thereafter while such Event of Default shall continue, to
elect any one or more of the following:
(1) To continue this Lease in full force
and effect (so long as Landlord does not terminate
this Lease), and Landlord shall have the right to
collect Rent, Additional Rent and other charges when
due for the remainder of the Lease Term; and/or
(2) To cure such default or defaults,
upon ten (10) days' notice of Landlord's intention to
cure (but without notice in the event of an
emergency), at Tenant's expense and without prejudice
to any other remedies which Landlord might otherwise
have; and any reasonable payment made or reasonable
expenses incurred by Landlord in curing such default,
27
with interest thereon at the Default Rate (as herein
defined), shall be Additional Rent to be paid by
Tenant with the next installment of Rent falling due
thereafter; and/or
(3) To either (a) declare this Lease
terminated and the Lease Term ended, or (b) elect to
continue this Lease in full force and effect (but
with the right at any time thereafter to declare this
Lease terminated and the Lease Term ended), and in
either such event to re-enter the Premises, with or
without notice, and dispossess Tenant and anyone
claiming through or under Tenant by summary
proceedings or otherwise, and remove their effects,
and take complete possession of the Premises. In
such re-entry, Landlord may, with or without process
of law, remove all persons from the Premises, and
Tenant hereby covenants in such event, for itself and
all others occupying the Premises under Tenant, to
peacefully yield up and surrender the Premises to
Landlord. If Landlord elects to terminate this Lease
and/or elects to terminate Tenant's right of
possession, every obligation of Landlord contained in
this Lease shall cease without prejudice to Tenant's
liability for all Rent, Additional Rent, and other
sums owed by Tenant herein.
In the event Landlord declares this Lease terminated and the
Lease Term ended (pursuant to Section 22(B)(3)(a) above), the
Landlord shall be entitled to recover from Tenant the Rent,
Additional Rent, and all other sums due and owing by Tenant to
the date of termination, plus the reasonable costs of curing
all Tenant's defaults existing at or prior to the date of
termination, plus the reasonable costs of recovering
possession of the Premises, plus the reasonable costs of
reletting the Premises (including, but not limited to repairs
to the Premises, reasonable costs to prepare and refinish the
Premises for reletting, leasing commissions, rental
concessions, and reasonable legal fees and costs), plus other
actual damages suffered or incurred by Landlord due to all
Events of Default (including, without limitation, late fees or
other charges incurred by Landlord under any mortgage, but
excluding any indirect, consequential or punitive damages
arising from an Event of Default other than those expressly
enumerated in this sentence), plus the excess, if any, of the
Tenant's Rent and Additional Rent for the balance of the Lease
Term above the rent (if any) collected by Landlord during the
remainder of the scheduled Lease Term, net of Landlord's costs
to collect the same. Landlord agrees to exercise reasonable
efforts to relet the Premises in the event this Lease is
terminated, but Landlord shall have no obligation to give any
preference to leasing the Premises over leasing any other
space Landlord may have available.
Should Landlord elect to continue this Lease (pursuant to
Section 22(B)(3)(b) above), Landlord shall be entitled to
recover from Tenant the Rent, Additional Rent and all other
sums due and owing by Tenant up to the date of dispossession,
plus the reasonable costs of curing all Events of Default
existing at or prior to the date of dispossession, plus the
Rent, Additional Rent and all other sums owed by Tenant on a
continuing basis as said amounts accrue to the end of the
Lease Term, less the rental which Landlord receives during
such period, if any, with respect to the Premises, plus the
cost of recovering possession of the Premises, plus the costs
of reletting (including, but not limited to, repairs to the
Premises, costs to prepare and refinish the Premises for
reletting, leasing commissions, rental concessions, and
reasonable legal fees and costs). Any suit brought by
Landlord to enforce collection of such deficiency for any one
month shall not prejudice Landlord's right to enforce the
collection of any deficiency for any subsequent month in
subsequent separate actions, or Landlord may defer initiating
any such suit until after the expiration of the Lease Term (in
which event such deferral shall not be construed as a waiver
of Landlord's rights as set forth herein and Landlord's cause
of action shall be deemed not to have accrued until the
expiration of the Lease Term), and it being further understood
that if Landlord elects to bring suits from time to time prior
to reletting the Premises, Landlord shall be entitled to its
full damages through the date of the award of damages without
regard to any rent, additional rent or other sums that are or
may be projected to be received by Landlord upon a subsequent
reletting of the Premises. In the event that 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
against Landlord's damages any rent, additional rent or other
sums generated or projected to be generated by either such
other premises or the period extending beyond the scheduled
expiration of
28
the Lease Term. Landlord shall use commercially reasonable
efforts to relet and rent the Premises with or without
advertising for the remainder of the Lease Term, or for such
longer or shorter period as Landlord shall deem advisable.
In lieu of the amounts recoverable by Landlord pursuant to the
two immediately preceding paragraphs, but in addition to other
remedies and amounts otherwise recoverable by Landlord in this
Lease, Landlord may, in its sole election, (i) terminate this
Lease, (ii) collect all Rent, Additional Rent, and other sums
due and owing by Tenant up to the date of termination, and
(iii) collect, as liquidated damages, an amount equal to (a)
the present value (as of the date of termination) of the Rent
and Additional Rent which would have been paid by Tenant for
the remaining balance of the Lease Term (if this Lease were
not terminated), minus (b) the present value (as of the date
of termination) of the net revenue stream (e.g., after
deducting reasonable allowances for periods of vacancy and
anticipated legal fees, brokerage commissions, tenant
improvement allowances and other concessions required to relet
the Premises) Landlord reasonably expects to receive over the
remainder of the Lease Term (if this Lease were not
terminated) as a result of the reletting of the Premises. For
purposes of determining present value under the foregoing
clause (iii), the indicated amounts shall be discounted to
present value using an interest rate equal to five percent
(5.0%) per annum. In no event shall Landlord be liable for,
nor shall Tenant's obligations hereunder be diminished by
reason of, any failure by Landlord to relet all or any portion
of the Premises or to collect any rent due upon such
reletting, nor shall Tenant be entitled to share in, or to any
off-set against its liability under the foregoing clause
(iii), any proceeds from any reletting of the Premises.
Tenant further acknowledges and agrees that no election by
Landlord to seek liquidated damages pursuant to this paragraph
shall relieve Tenant of any liability for damages for any
failure by Tenant to surrender the Premises to Landlord in
accordance with the terms hereof.
(C) TENANT, ON ITS OWN BEHALF AND ON BEHALF OF ALL PERSONS
CLAIMING THROUGH OR UNDER TENANT, INCLUDING ALL CREDITORS,
DOES HEREBY SPECIFICALLY WAIVE AND SURRENDER ANY AND ALL
RIGHTS AND PRIVILEGES, SO FAR AS IS PERMITTED BY LAW, WHICH
TENANT AND ALL SUCH PERSONS MIGHT OTHERWISE HAVE UNDER ANY
PRESENT OR FUTURE LAW (1) TO THE SERVICE OF ANY NOTICE TO QUIT
OR OF LANDLORD'S INTENTION TO RE-ENTER OR TO INSTITUTE LEGAL
PROCEEDINGS, WHICH NOTICE MAY OTHERWISE BE REQUIRED TO BE
GIVEN, (2) TO REDEEM THE PREMISES, (3) TO RE-ENTER OR
REPOSSESS THE PREMISES, (4) TO RESTORE THE OPERATION OF THIS
LEASE, WITH RESPECT TO ANY DISPOSSESSION OF TENANT BY JUDGMENT
OR WARRANT OF ANY COURT OR JUDGE, OR ANY RE-ENTRY BY LANDLORD,
OR ANY EXPIRATION OR TERMINATION OF THIS LEASE, WHETHER SUCH
DISPOSSESSION, RE-ENTRY, EXPIRATION OR TERMINATION SHALL BE BY
OPERATION OF LAW OR PURSUANT TO THE PROVISIONS OF THIS LEASE,
OR (5) WHICH EXEMPTS PROPERTY FROM LIABILITY FOR DEBT OR FOR
DISTRESS FOR RENT. TENANT HEREBY CONSENTS TO THE EXERCISE OF
PERSONAL JURISDICTION OVER IT BY ANY FEDERAL OR LOCAL COURT IN
THE JURISDICTION IN WHICH THE PREMISES IS LOCATED.
23. RE-ENTRY BY LANDLORD
No re-entry by Landlord or any action brought by Landlord to remove
Tenant from the Premises shall operate to terminate this Lease unless
Landlord shall have given written notice of termination to Tenant, in
which event Tenant's liability shall be as above provided. No right
or remedy granted to Landlord herein is intended to be exclusive of
any other right or remedy, and each and every right and remedy herein
provided shall be cumulative and in addition to any other right or
remedy hereunder or now or hereafter existing in law or equity or by
statute. In the event of termination of this Lease, Tenant waives any
and all rights to redeem the Premises given by any statute now or
hereafter enacted.
29
24. ADDITIONAL RIGHTS TO LANDLORD.
(A) In addition to any and all other remedies, Landlord may
restrain any threatened breach of any covenant, condition or
agreement herein contained, but the mention herein of any
particular remedy or right shall not preclude the Landlord
from any other remedy or right it may have either at law or
equity, or by virtue of some other provision of this Lease;
nor shall the consent to one act, which would otherwise be a
violation hereof, nor the waiver of redress for one violation
of a covenant, promise, agreement, undertaking or condition,
constitute Landlord's consent to, or waiver of redress for,
any subsequent act in violation hereof.
(B) Receipt by Landlord of Rent or other payments from the Tenant
shall not be deemed to operate as a waiver of any rights of
the Landlord to enforce payment of any Rent, Additional Rent,
or other payments previously due or which may thereafter
become due, or of any rights of the Landlord to terminate this
Lease or to exercise any remedy or right which otherwise might
be available to the Landlord. The right of Landlord to
declare a forfeiture for each and every breach of this Lease
is a continuing one for the life of this Lease; provided that
Landlord shall have no right to declare a forfeiture of this
Lease with regard to any one instance of an Event of Default
after such Event of Default is cured.
25. SUCCESSORS, ASSIGNS AND LIABILITY.
The terms, covenants, conditions and agreements herein contained and
as the same may from time to time hereafter be supplemented, modified
or amended, shall apply to, bind, and inure to the benefit of the
parties hereto and their legal representatives, successors and
assigns, respectively, subject to Section 12 hereof. In the event
either party now or hereafter shall consist of more than one person,
firm or corporation, then and in such event all such persons, firms
and/or corporations shall be jointly and severally liable as parties
hereunder.
26. NOTICES.
All notices and demands required to be given to either party hereunder
shall be in writing and shall be sent by certified United States mail,
postage prepaid, return receipt requested, or by personal delivery, or
by a nationally recognized overnight delivery service, delivery
prepaid, addressed to the party to whom directed at the address set
forth below or at such other address as may be from time to time
designated in writing by the party changing such address. All such
notices and demands shall be deemed to have been received on the date
of delivery or the date of refusal of delivery (or inability to
deliver to the last known address) as evidenced in writing.
Landlord Tenant
-------- ------
Principal Mutual Life Insurance Company American Management Systems, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: CRE Equities/Mid-Atlantic Team Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇
With a copy to: With a copy of any default notices
(which shall not be required for
▇▇▇▇▇▇▇▇ ▇▇▇▇ Real Estate Services, Inc. an effective notice) to:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ Shaw, Pittman, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
Attn: Property Manager/One Fair Oaks ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇, Esq.
30
27. MORTGAGEE'S APPROVAL.
Tenant hereby agrees that, if Landlord's mortgagee shall require
modifications of the terms and provisions of this Lease, Tenant shall
not unreasonably withhold, condition or delay its execution and
delivery of the agreements required to effect such Lease modification
(it being understood that any such reasonable modification(s) shall be
executed and delivered within thirty (30) days after Landlord's
request therefor). In no event, however, shall Tenant be required to
agree to modify any provision of this Lease relating to the amount of
Rent, Additional Rent or other charges reserved herein, the size
and/or general location of the Premises, or the Lease Term, nor shall
any such modification diminish Landlord's obligations or Tenant's
rights hereunder.
28. ESTOPPEL CERTIFICATES.
Within twenty (20) days after delivery of a written request from the
other party hereto (the "Requesting Party"), the party receiving such
request (the "Receiving Party") agrees to execute, acknowledge and
deliver to the Requesting Party (or, if Landlord is the Requesting
Party, any proposed mortgagee or purchaser) a statement in writing, in
form reasonably satisfactory to the Requesting Party, certifying
whether this Lease is in full force and effect and, if it is in full
force and effect, what modifications (if any) have been made to this
Lease to the date of the certification, whether or not any defaults or
offsets exist with respect to this Lease and, if there are, what they
are claimed to be, and setting forth the date(s) to which Rent or
other charges have been paid in advance, if any. The failure of
Tenant to execute, acknowledge, and deliver to Landlord a statement as
above shall constitute an acknowledgment by Tenant that this Lease is
unmodified and in full force and effect and that the Rent and other
charges have been duly and fully paid to and including the respective
due dates immediately preceding the date of Landlord's notice to
Tenant and shall constitute as to any person, a waiver of any defaults
which may exist prior to such notice.
29. DEFAULT RATE OF INTEREST.
All amounts owed by Tenant to Landlord pursuant to any provision of
this Lease shall bear interest from the date due until paid at three
percent (3%) per annum above the Prime Rate reported immediately prior
to the due date for such amount(s), unless a lesser rate shall then be
the maximum rate permissible by law, in which event said lesser rate
shall be charged ("Default Rate").
30. EXCULPATORY PROVISIONS.
(A) It is expressly understood and agreed by and between the
parties hereto, anything herein to the contrary
notwithstanding, that each and all of the representations,
warranties, covenants, undertakings, indemnities and
agreements herein made on the part of Landlord, while in form
purporting to be the representations, warranties, covenants,
undertakings, indemnities and agreements of Landlord, are
nevertheless each and every one of them made and intended, not
as personal representations, warranties, covenants,
undertakings, indemnities and agreements by Landlord or for
the purpose or with the intention of binding Landlord
personally, but are made and intended for the purpose only of
subjecting Landlord's interest in the Property to the terms of
this Lease and for no other purpose whatsoever, and in case of
default hereunder by Landlord, Tenant shall look solely to the
interests of Landlord in the Property; provided that, subject
to the rights of Landlord's mortgagee(s) (if any), (i) in the
event of a sale of the Building, Tenant's recourse against the
assets of the selling Landlord to satisfy any claim by Tenant
which has been identified in writing to the selling Landlord
with particularity by Tenant prior to such sale shall be
deemed to extend to the Landlord's net proceeds from the sale
of the Building, and (ii) in the event of a condemnation or
casualty, Tenant's recourse against the assets of the Landlord
to satisfy any claim by Tenant which has been identified in
writing to Landlord with particularity by Tenant prior to such
casualty or condemnation shall be deemed to extend to
Landlord's net proceeds of the insurance settlement or
condemnation award, as applicable, to the extent that such net
proceeds exceed the cost of repairs and restoration incurred
by or on behalf of Landlord with respect to such casualty or
condemnation. Landlord shall not have any personal
31
liability to pay any indebtedness accruing hereunder or to
perform any covenant, either express or implied, herein
contained. All such personal liability of Landlord, if any,
is expressly waived and released by Tenant and by all persons
claiming by, through or under Tenant. Nothing herein
contained shall be deemed to constitute a waiver of any right
Tenant may have to seek injunctive relief (other than for the
payment of money) with regard to any default by Landlord
hereunder which is not cured within fifteen (15) days (or such
longer period as is reasonably required to cure such default
through the exercise of due diligence) after written notice
from Tenant specifying such default with particularity.
(B) Except with regard to repairs (which shall be governed by the
provisions of the following Section 30(C)), Tenant may,
following a default by Landlord which is not cured within
fifteen (15) days after delivery of written notice from Tenant
specifying the nature of such default in detail (or such
longer time as may be reasonably required to cure such failure
through the exercise of due diligence, provided that (i) such
failure is not a willful repudiation of the Lease authorized
by Landlord's Board of Directors, (ii) such failure is
susceptible of cure, (iii) such failure does not relate to the
existence of a Hazardous Substance on the Premises in
violation of Section 8 hereof, (iv) such failure does not
subject Tenant to prosecution or substantial civil or criminal
fine or penalty, and (v) Landlord promptly commences to cure
such failure within the aforesaid fifteen (15) day period and
thereafter diligently pursues the cure of such failure to
completion), make any payment or perform any act required of
Landlord, whereupon all reasonable costs and expenses
reasonably incurred by Tenant, plus interest at the Default
Rate from the date incurred until payment in full by Landlord,
shall be promptly reimbursed by Landlord (or, in the event
Tenant shall obtain a final, unappealable judgment therefor
which shall not be satisfied for more than thirty (30) days
after such judgment shall become final and unappealable,
offset by Tenant against future Rent due hereunder).
(C) In the event that at any time during the Term the Tenant
determines that repairs which are the responsibility of
Landlord as provided herein are required, Tenant shall
promptly so notify Landlord and Landlord's managing agent for
the Property. In the event that Tenant reasonably determines
that the existing situation constitutes an emergency which
either threatens imminent injury to persons or material damage
to property or materially impairs Tenant's then-current use of
the Premises or a material portion thereof, Tenant may give
such notice by any means including, without limitation, by
telephone. If initial notice is given by telephone
(hereinafter "Initial Notice"), such notice must be followed
immediately with written notice to Landlord and Landlord's
managing agent for the Property (hereinafter "Written
Notice"). If Tenant so notifies Landlord and Landlord's
managing agent of an emergency situation, Landlord or
Landlord's managing agent shall use reasonable efforts to
respond within three (3) hours of receipt of the Initial
Notice. Tenant shall have the right to immediately eliminate
the threat of imminent personal injury or property damage, but
Tenant shall not make any repairs except for those necessary
to eliminate the threat of imminent personal injury or
property damage. If the situation of which Tenant notifies
Landlord and Landlord's managing agent is not an emergency, or
if the threat of imminent personal injury or property damage
is eliminated as aforesaid, Landlord shall thereafter use
reasonable means to commence such repairs within ten (10)
business days of receipt of Tenant's Written Notice. If
Landlord fails to commence the repair within ten (10) business
days after receipt of Written Notice from Tenant, Tenant shall
have the right, but not the obligation, to commence such
repairs. In doing so, Tenant may hire repairman, purchase
materials, and generally perform any other act which would be
reasonably required of Landlord in making such repair. If the
repairs are deemed to be necessary, as well as the
responsibility of the Landlord, all reasonable costs incurred
by Tenant in effectuating such repairs shall be promptly
reimbursed by Landlord after Tenant has submitted to Landlord
reasonable documentation evidencing the costs of repair,
together with interest at the Default Rate from the date
incurred until payment in full by Landlord (failing which, in
the event Tenant shall obtain a final, unappealable judgment
therefor which shall remain unpaid for thirty (30) days after
such judgment shall become final and unappealable, such sums
may be offset by Tenant against future Rent due hereunder).
32
(D) Tenant hereby acknowledges and agrees that nothing contained
in the foregoing Sections 30(B) and 30(C) shall grant Tenant
any right to, and Tenant shall not, perform (or cause to be
performed) any addition, alteration, improvement, maintenance,
modification, repair or other act which will or is likely to
adversely affect any other occupant of the Property.
(E) Notwithstanding anything herein contained to the contrary, in
no event shall either party hereto be obligated to the other
to pay or reimburse such party for any indirect, consequential
or punitive damages; provided that, this Section 30(E) shall
not be deemed to relieve Tenant of any liability with regard
to indirect or consequential damages expressly enumerated in
Section 21(A) or Section 22(B) hereof.
31. MORTGAGE PROTECTION.
Tenant agrees to give any holder of any first mortgage or first trust
deed in the nature of a mortgage (both hereinafter referred to as a
"First Mortgage") against the Property, or any interest therein, by
registered or certified mail, a copy of any notice or claim of default
served upon Landlord by Tenant, provided that prior to such notice,
Tenant has been notified in writing of the address of such First
Mortgage holder. Tenant further agrees that if Landlord shall have
failed to cure any such default within twenty (20) days after such
notice to Landlord (or if such default cannot be cured or corrected
within that time, then such additional time as may be necessary if
Landlord has commenced within such twenty (20) days and is diligently
pursuing the remedies or steps necessary to cure or correct such
default), then the holder of the First Mortgage shall have an
additional twenty (20) days within which to cure or correct such
default (or if such default cannot be cured or corrected within that
time, then such additional time as may be necessary if such holder of
the First Mortgage has commenced with such twenty (20) days and is
diligently pursuing the remedies or steps necessary to cure or correct
such default, including the time necessary to obtain possession if
possession is necessary to cure or correct such default).
32. RECIPROCAL COVENANT ON NOTIFICATION OF ADA VIOLATIONS.
Within ten (10) days after receipt, Landlord and Tenant shall advise
the other party in writing, and provide the other with copies of (as
applicable), any notices alleging violation of the ADA relating to any
portion of the Property or the Premises; any claims made or threatened
in writing regarding noncompliance with the ADA and relating to any
portion of the Property or the Premises; or any governmental or
regulatory actions or investigations instituted or threatened
regarding noncompliance with the ADA and relating to any portion of
the Property or the Premises. Nothing in this Section 32 shall be
deemed to alter the allocation of responsibility for ADA compliance
set forth elsewhere in this Lease.
33. LAWS THAT GOVERN.
The terms and conditions of this Lease shall be governed by the laws
of the Commonwealth of Virginia, without regard to the conflict of
laws principles thereof.
34. FINANCIAL STATEMENTS.
Within ten (10) business days of Landlord's request, Tenant shall
deliver to Landlord the current financial statements of Tenant, and
financial statements for the two (2) years prior to the current year.
The financial statements shall include a balance sheet, profit and
loss statement, and statement of cash flows for each year, accompanied
by an opinion from a certified public accountant certifying that the
financial statements are prepared in accordance with generally
accepted accounting principles consistently applied. Tenant hereby
agrees to pay to Landlord as liquidated damages an amount equal to Two
Hundred Fifty Dollars ($250.00) per day for each day on which Tenant
fails to deliver such financial statements to Landlord, after not less
than forty-eight (48) hours notice from Landlord that Tenant has
failed to deliver to Landlord such financial statements within ten
(10) business days after Landlord's written request therefor.
Notwithstanding the foregoing, the provisions of this Section 34 shall
not be
33
deemed to apply to Tenant, so long as the stock of Tenant is publicly
traded on a nationally-recognized stock exchange and Tenant makes
public disclosures regarding its ownership and financial condition.
35. PARKING.
Tenant shall have the right to utilize Tenant's Proportionate Share of
all parking, parking structures and facilities on the Property at no
charge to Tenant during the Lease Term, subject to such reasonable
terms and conditions as may be established in writing by Landlord from
time to time. Tenant agrees to cooperate with Landlord and other
tenants in use of the parking facilities during such periods as Tenant
shall lease less than all of the entire Building. Landlord reserves
the right during such periods as Tenant shall lease less than the
entire Building, in its reasonable discretion, to allocate and assign
parking spaces among Tenant and other tenants, so long as Tenant shall
be entitled to utilize not less than Tenant's Proportionate Share
thereof. Landlord further reserves the right to reconfigure the
parking area and modify the existing ingress and egress from the
parking area as Landlord shall reasonably deem appropriate.
36. SIGNAGE.
Tenant shall have the exclusive right, at Tenant's sole cost and
expense (including, but not limited to, all costs of design,
construction and installation), to install one or more signs (which
may, at Tenant's election, be illuminated) on the Building, subject to
(i) the issuance of all necessary consents, licenses and approvals
from Fairfax County, and (ii) Landlord's prior written consent (which
consent shall not be unreasonably withheld, conditioned or delayed);
provided that, nothing herein contained shall be deemed to prohibit
Landlord from granting another occupant of the Building the right to
have monument signage or Building directory listings. All signs
erected by Tenant pursuant to the provisions hereof shall be erected
at Tenant's own risk and expense (including final electrical
connections and time clock), shall be in accordance with applicable
law, and shall only contain the Tenant's name and/or corporate logo.
Tenant shall maintain said signs in a good state of repair and save
the Landlord harmless from any loss, cost or damage as a result of the
construction, installation, maintenance, existence or removal of the
same, and Tenant shall repair any damage which may have been caused by
the construction, installation, operation, existence, maintenance or
removal of such signs. Upon vacating the Premises, Tenant shall
remove all such signs and repair all damage caused by the
installation, operation and/or removal thereof, at the Tenant's sole
expense. No third party shall have any signage rights whatsoever to
the Property at any time Tenant is leasing the entire Building.
37. RECORDATION.
Tenant shall not record this Lease among or in any public records.
38. FORCE MAJEURE.
This Lease and the obligations of the parties hereunder shall not be
affected or impaired because the Landlord or Tenant (as applicable) is
unable to fulfill any of its obligations hereunder or is delayed in
doing so, to the extent such inability or delay is caused by reason of
war, civil unrest, strike, labor troubles, unusually inclement
weather, governmental delays, inability to procure services or
materials despite reasonable efforts, third party delays, acts of God,
or any other cause(s) beyond the reasonable control of the Landlord or
Tenant (as applicable) (which causes are referred to collectively
herein as "Force Majeure"). The time specified for the performance of
an obligation of Landlord or Tenant (as applicable) in this Lease
shall be extended one day for each day of delay suffered by Landlord
or Tenant (as applicable) in the performance of such obligation as a
result of any Force Majeure cause. Notwithstanding the foregoing,
this Section 38 shall have no application to, nor shall the time for
the performance of Landlord's or Tenant's obligations hereunder be
extended with respect to, any obligation for the payment of money or
the surrender of the Premises upon the expiration of the Lease Term.
34
39. INTENTIONALLY OMITTED.
40. BROKERS.
Landlord and Tenant each represents and warrants to the other that
neither it nor its officers or agents nor anyone acting on its behalf
has dealt with any real estate broker other than ▇▇▇▇▇▇▇▇ ▇▇▇▇ COMPANY
and ▇▇▇▇▇▇▇ & WAKEFIELD in the negotiating or making of this Lease,
and Landlord and Tenant each agrees to indemnify and hold the other
(and its agents, employees, partners, directors, shareholders and
independent contractors) harmless from all liabilities, costs,
demands, judgments, settlements, claims and losses, including
reasonable attorneys fees and costs, incurred in conjunction with any
such claim or claims of any other broker or brokers with whom the
indemnifying party has dealt. Landlord shall be solely responsible
for all payments and commissions due to the above-named real estate
brokers pursuant to a separate agreement or agreements.
41. EFFECTIVENESS.
This Lease shall not be effective and binding unless and until (i)
this Lease is fully-executed and delivered by each of the parties
hereto, (ii) Landlord and ▇▇▇▇▇▇▇ International Service Company
("▇▇▇▇▇▇▇") and, as guarantor, Rockwell International Corporation,
shall execute and deliver a First Lease Amendment to the ▇▇▇▇▇▇▇ Lease
in form acceptable to Landlord (the "▇▇▇▇▇▇▇ Amendment"), (iii) the
First Amendment is formally approved by the Investment Committee of
Landlord, and (iv) ▇▇▇▇▇▇▇ has approved and has executed the lease on
new premises to which it is moving. In the event any of the aforesaid
conditions has not been met on or before December 11, 1996, either
party may, without liability or obligation to the other, terminate
this Lease upon written notice to the other, in which event this Lease
shall be null and void as if this Lease were never executed. Landlord
and Tenant each expressly acknowledges and agrees that neither party
shall have any liability to the other for the failure of any of the
conditions set forth in the preceding sentence for any reason
whatsoever.
42. LEASE/DEED OF LEASE.
To the extent required under applicable law to make this Lease legally
effective, this Lease shall constitute a deed of lease executed under
seal.
43. MISCELLANEOUS.
(A) In the event that Tenant desires to store or maintain the type
or character of goods or materials in the Premises which cause
an increase in insurance premiums, Tenant shall first obtain
the written consent of Landlord and Tenant shall reimburse
Landlord for any increase in premiums caused thereby.
(B) Unless the context clearly denotes the contrary, the words
"Rent" and "Additional Rent" as used in this Lease not only
includes cash rental for the Premises, but also all other
payments and obligations to pay assumed by the Tenant, whether
such obligations to pay run to the Landlord or to other
parties.
(C) In any litigation between the parties arising out of this
Lease, or in connection with any consultations with counsel
and other actions taken or notices delivered in relation to a
default by any party to this Lease, the non-prevailing party
shall pay to the prevailing party all reasonable expenses and
costs including reasonable attorneys' fees incurred by the
prevailing party in connection with the default and/or
litigation, as the case may be (including, but not limited to,
fees and costs in preparation for and at trial, and on appeal,
if applicable) ("Legal Costs"). The Legal Costs shall be
payable on demand, and, if the prevailing party is Landlord,
the Legal Costs shall be deemed Additional Rent, subject to
all of Landlord's rights and remedies provided herein.
35
(D) IT IS MUTUALLY AGREED BY AND BETWEEN LANDLORD AND TENANT THAT
THE RESPECTIVE PARTIES HERETO SHALL, AND THEY HEREBY DO, WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON
ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED
WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT,
TENANT'S USE OF OR OCCUPANCY OF THE PREMISES OR ANY CLAIM OF
INJURY OR DAMAGE AND ANY EMERGENCY STATUTORY OR ANY OTHER
STATUTORY REMEDY. IF LANDLORD COMMENCES ANY SUMMARY
PROCEEDING FOR NONPAYMENT OF RENT OR ADDITIONAL RENT, TENANT
WILL NOT INTERPOSE ANY NON-COMPULSORY COUNTERCLAIM OF WHATEVER
NATURE OR DESCRIPTION IN ANY SUCH PROCEEDING.
(E) If any term or provision of this Lease is declared invalid or
unenforceable, the remainder of this Lease shall not be
affected by such determination and shall continue to be valid
and enforceable.
(F) The parties executing this Lease warrant that this agreement
is being executed with full corporate authority and that the
officers whose signatures appear hereon are duly authorized
and empowered to make and execute this Lease in the name of
the corporation by appropriate and legal resolution of its
Board of Directors.
(G) This Lease contains the entire agreement between the parties
hereto. No representations, inducements, promises or
agreements, oral or otherwise, between the parties not
embodied herein shall be of any force or effect, and all
reliance by Tenant with respect to any representations,
inducements, promises or agreements is based solely on those
contained in this Lease. Any modification to this Lease must
be in writing and duly executed by the parties hereto.
44. ROOF-TOP RIGHTS.
In addition to Tenant's other rights hereunder, but subject to
Landlord's requirements for operation of the Building, Tenant shall
have the exclusive right (or, if Tenant is not leasing the entire
Building, the non-exclusive right) at no charge to access and utilize
the roof of the Building for purposes of installing, operating,
maintaining and repairing radio, microwave and satellite transmission
and reception equipment and HVAC equipment. Such rights shall be
subject to the terms and conditions of this Lease and to all of the
terms and conditions set forth on the attached Exhibit E. No third
party shall have any roof-top rights whatsoever at any time when
Tenant leases the entire Building.
45. EARLY TERMINATION FEE.
Notwithstanding anything herein contained, but in consideration of the
terms and conditions hereby granted in favor of Tenant, in the event
this Lease shall expire or be terminated for any reason whatsoever
(whether due to fire, casualty, condemnation, default by Landlord or
Tenant or any other reason or cause, and regardless of whether due to
the fault of Landlord or Tenant or arising without fault on the part
of either) prior to the day preceding the thirteenth (13th)
anniversary of the Commencement Date, Tenant agrees to pay to Landlord
the sum (the "Termination Payment") equal to the Termination Payment
set forth on the attached Exhibit I which corresponds to the month of
the Initial Term in which such expiration or termination shall occur.
By way of example of the foregoing, but not in limitation thereof, in
the event the Lease were terminated for any reason in the seventieth
(70th) month of the Initial Term, Tenant would pay to Landlord a
Termination Payment in the sum of $704,844.22. The Termination
Payment shall be paid by Tenant to Landlord not less than sixty (60)
days following the expiration or sooner termination of this Lease.
[signatures appear on following page]
36
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease under
seal on this _____ day of December, 1996.
LANDLORD:
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY,
an Iowa corporation
By: (Seal)
--------------------------------
Title:
----------------------------
Attest:
By: (Seal)
--------------------------------
Title:
----------------------------
TENANT:
AMERICAN MANAGEMENT SYSTEMS, INC., a
Delaware corporation
By: (Seal)
--------------------------------
Title:
----------------------------
Attest:
By: (Seal)
--------------------------------
Title:
----------------------------
37
EXHIBIT A
LEGAL DESCRIPTION OF THE LAND
[TO BE ATTACHED PRIOR TO EXECUTION]
EXHIBIT ▇-▇
▇▇▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇
▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT A-3
PREMISES (▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇
▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT A-5
PREMISES (▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇
▇▇▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇
▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT A-8
PREMISES (▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇
▇▇▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇▇
▇▇▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT ▇-▇▇
▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT A-12
PREMISES (TWELFTH FLOOR RENTABLE AREA)
EXHIBIT ▇-▇▇
▇▇▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇)
EXHIBIT A - 14
PREMISES RENTABLE AREAS
FLOOR RENTABLE SQUARE FEET
----- --------------------
First Floor 11,495
Second Floor 14,624
Third Floor 16,648
Fourth Floor 17,586
Fifth Floor 17,586
Sixth Floor 17,586
Seventh Floor 17,586
Eighth Floor 17,586
Ninth Floor 17,586
Tenth Floor 17,586
Eleventh Floor 17,633
Twelfth Floor 16,878
Lower Level 13,834
EXHIBIT B
WORK AGREEMENT
A. Subject to the terms hereof, Landlord shall be responsible, at
its cost and expense, for ensuring that the Landlord's Work
referenced on the attached Exhibit B-1 is substantially
completed in the Building prior to the Landlord's General Work
Deadline (as herein defined); provided that, Landlord shall be
responsible, at its cost and expense, for ensuring that the
Landlords' Critical HVAC Work and (provided that Tenant shall
advise Landlord, not later than December 13, 1996, of the
number of ADA strobes to be installed by Tenant on each floor
of the Premises) Landlord's Critical Fire/Life Safety Work are
substantially completed in the Building on or before the
Critical Path Deadline (as herein defined). Subject only to
the foregoing, Tenant shall be solely responsible for
compliance of the Premises with all applicable requirements
under the Americans with Disabilities Act and the regulations
and Accessibility Guidelines for Buildings and Facilities
promulgated pursuant thereto (collectively, the "ADA"),
including, but not limited to, ADA compliance with regard to
the Building Fit-Out (as defined below) and any subsequent
changes to the Premises made by or on behalf of Tenant.
B. Tenant shall cause the work (the "Building Fit-Out") defined
and described in the Approved Plans (as hereinafter defined)
to be performed by a general contractor (the "General
Contractor") reasonably approved by Landlord (and it shall not
be unreasonable for Landlord to deny its approval to any
general contractor which: (i) lacks demonstrable experience
in commercial construction, (ii) is not bonded or not
bondable; (iii) is not fully licensed under all applicable
laws; (iv) is not enjoying good labor relations as of the date
Landlord's approval is sought; or (v) lacks the ability to
perform, consistently, quality workmanship (as reasonably
evidenced by Landlord)). Landlord hereby approves ▇▇▇▇▇
Construction to act as the General Contractor.
C. Promptly after execution of this Lease, Tenant will cause to
be prepared and shall submit to Landlord for Landlord's
approval (which shall not be unreasonably withheld,
conditioned or delayed) construction drawings for the proposed
Building Fit-Out. Such construction drawings shall be
prepared by an architect ("Tenant's Architect") licensed in
the Commonwealth of Virginia, selected by Tenant and approved
by Landlord (which approval shall not be unreasonably
withheld). Landlord hereby approves ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
Architects to act as Tenant's Architect. Tenant shall, after
receipt of Landlord's approval, submit such construction
drawings for permitting with Fairfax County, Virginia. Within
ten (10) business days after Tenant's submission of
construction drawings to Landlord, Landlord will indicate to
Tenant in writing whether it approves such drawings, or if
not, specifying what aspects of such drawings are not
approved. If Landlord fails to notify Tenant of any
objections within the required time period, Landlord will be
deemed to have approved Tenant's submission. Grounds for
disapproval by Landlord shall include, but not be limited to,
the failure of such drawings to adhere to applicable laws,
codes or ADA requirements, or to integrate appropriately with
base Building structural, electrical, mechanical, plumbing,
and/or heating, ventilation and air conditioning ("HVAC")
systems (hereinafter "Systems"), and the inclusion of work
which may invalidate any existing warranty. If Landlord
disapproves any part of the drawings submitted by Tenant,
Landlord and Tenant will meet promptly to discuss the
objectionable items and will use commercially reasonable
efforts to resolve all objections promptly. Once approved by
Landlord, the final construction drawings, as revised to
reflect the resolution of all objections, shall constitute the
"Approved Plans" for all purposes of this Lease. Neither
Landlord's review of the proposed construction drawings or the
Approved Plans, nor any review or oversight of the Building
Fit-Out by Landlord's construction manager, shall constitute a
warranty by Landlord regarding the fitness of the Premises or
the Approved Plans for the Permitted Use of the Premises by
Tenant, the proper integration of the Building Fit-Out with
the Systems, nor of the compliance of the Approved Plans with
applicable codes or governmental or quasi-governmental
requirements, nor shall Landlord have any liability with
regard to such approval, review or oversight but, subject to
the foregoing, Landlord agrees to use reasonable efforts to
notify Tenant of any failure to comply with applicable laws of
which Landlord acquires actual knowledge.
D. Tenant shall promptly cause the General Contractor to commence
and diligently prosecute to completion the Building Fit-Out
upon receiving the necessary permits from Fairfax County,
Virginia. Subject to the terms hereof, Tenant will pay the
full cost associated with the preparation of the Approved
Plans and the construction of the Building Fit-Out. The
Building Fit-Out shall be completed by Tenant substantially in
accordance with the Approved Plans (and any Approved Change
Orders, as defined below). Tenant shall be solely responsible
for all matters necessary to commence, perform and complete
the Building Fit-Out, including, but not limited to, filing
plans and other required documentation with the proper
governmental authorities, securing all necessary permits for
the performance of any and all work required to be performed
under the Approved Plans (all of which will be deemed part of
the Building Fit-Out), and filing for and obtaining all
approvals and permits necessary for Tenant to occupy the
Premises (including, but not limited to, all final inspections
for issuance of Tenant's final non-residential use permit, or
its equivalent).
E. Tenant shall have the right, at its sole expense, to make
changes to the Approved Plans provided the same are approved
by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed. No such Landlord approval
shall be required for any change having a cost of less than
Ten Thousand Dollars($10,000.00), provided such change neither
requires a permit, permit modification or other governmental
or quasi-governmental approval, consent or license, nor
affects the structure or systems of or serving the Building.
Tenant assumes full responsibility for all additional costs
and delays in completion of the Building Fit-Out due to any
such change orders. Any change order approved by Landlord and
Tenant pursuant to the foregoing provision is referred to
herein as an "Approved Change Order".
F. Tenant agrees that the Building Fit-Out will be performed in a
good and workmanlike manner. The General Contractor and any
contractors of Landlord shall keep all construction areas
reasonably clean and free of trash and debris, and shall
police the activities of its contractors, subcontractors and
their respective employees with regard to keeping the Building
and Property clean.
G. The General Contractor(s) and any contractors of Landlord
shall be adequately insured, and shall carry worker's
compensation, liability and other insurance (including, but
not limited to, Builder's Risk Insurance) naming Landlord or
Tenant (as applicable) as an additional insured and loss payee
(as to Builder's Risk coverage) in amounts and in form and
substance reasonably satisfactory to Landlord. Tenant shall
provide Landlord and Landlord shall provide Tenant with
evidence that the requisite insurance has been obtained prior
to the commencement of any work by any contractor acting on
behalf of such party. Tenant's construction contract shall
indemnify Tenant and Landlord from damages, losses and
expenses associated with the acts and omissions of the General
Contractor, its agents, employees, contractors and
subcontractors.
H. Landlord and Tenant shall each provide to the other copies of
all applications for permits, copies of all governmental
inspection reports and/or certificates, and any and all
notices or violations communicated to them or their respective
contractors by applicable governmental authorities, promptly
upon receipt and/or submission thereof, as the case may be.
Each party agrees to comply (and to cause its contractor(s) to
comply) with all applicable federal, state and local laws,
regulations and ordinances in the performance of the Landlord
Work or the Building Fit-Out (as applicable), and to promptly
cause to be rectified any violations of such laws caused by
the acts or omission of the applicable party or its
contractor(s), or their respective employees, agents,
contractors and/or subcontractors, and each shall be
responsible for any non-compliance by them or their respective
contractor(s), or their respective employees, agents,
contractors and/or subcontractors.
I. The performance of Tenant's Work and Landlord's Work shall be
lien free. Except as specifically set forth herein, Tenant
shall be responsible for the payment of, and shall pay when
due, all hard and soft costs (collectively referred to herein
as the "Costs") associated with the design, permitting and
construction of the Building Fit-Out (such as, but not limited
to, design
and engineering costs, permitting costs, inspection fees,
demolition costs, and costs incurred to procure labor and
materials, and any other costs associated with modifications
needed to be made to the "as-is" condition of the existing
improvements within the Building to the extent the same are
not specifically required to be performed at Landlord's
expense as part of the Landlord's Work). Tenant shall pay all
Costs on a timely basis so as to avoid the assertion of any
statutory and/or common law lien against the Premises, the
Land or the Building, in whole or part. Landlord shall not
be entitled to any fee or ▇▇▇▇-up with respect to the Building
Fit-Out performed by Tenant and its contractors (but this
sentence shall not be deemed to prohibit Landlord from
recovering any sums to which Landlord is entitled pursuant to
Section 6(E) hereof).
J. In consideration of Tenant's fulfillment of all of its
obligations under this Exhibit B, Landlord agrees to provide
Tenant with the following allowances (collectively, the
"Allowances"):
1. An allowance (the "Construction Allowance") equal to
Six Million Four Hundred Twenty-Six Thousand Four Hundred
Twenty Dollars ($6,426,420.00) ($30.00 per square foot of
rentable area in the Premises). Tenant agrees that the
Construction Allowance shall be applied solely to pay Costs of
design and construction of the Building Fit-Out pursuant to
the Approved Plans (including, but not limited to, all hard
and soft costs associated with the Build-Out, including space
planning, interior design, construction drawings for both the
permit and bid set, permits, and mechanical, electrical and
plumbing drawings); provided that, upon completion of the
Building Fit-Out and payment of all costs, expenses and fees
associated therewith, Landlord agrees to allow Tenant to
utilize the unpaid portion of the Construction Allowance, up
to a maximum of One Million Seventy-One Thousand Seventy
Dollars ($1,071,070.00), for data wiring, cabling expenses,
relocation costs and other move-related expenses, subject to
the terms hereof; and
2. An allowance (the "Capital Improvement Allowance")
equal to Two Hundred Thousand Dollars ($200,000.00). Tenant
agrees that the Capital Improvement Allowance shall be applied
solely to pay Costs of design and construction of elevator
lobby renovations and other improvements to the common areas
of the Building mutually agreed by Landlord and Tenant (the
"Common Area Renovations"). The Common Area Renovations shall
be included as a part of the Building Fit-Out on all of the
terms and conditions applicable to the Building Fit-Out.
3. The Allowances shall be payable by Landlord to Tenant
on a percentage of completion basis, with draws to be payable
not more than once per month commencing at any time after the
Phase I Commencement Date, within fifteen (15) business days
after (1) the applicable percentage of construction of the
Premises has been substantially completed, (and subject to not
less than a ten percent (10%) holdback requirement on the
first (1st) fifty percent (50%) of the Building Fit-Out, which
holdback amount shall not be payable prior to final completion
of the Building Fit-Out and the tender of all required
deliveries by the General Contractor to Tenant and Landlord
under the terms of the general construction contract) and (2)
Tenant has provided Landlord with a written payment request
for the applicable portion of the Allowance, accompanied by
all of the following items:
a. A certificate from Tenant's Architect to Landlord
certifying that the Building Fit-Out (or the
applicable percentage thereof) has been substantially
completed in accordance with the Approved Plans, and
that the sums being requested by Tenant to be paid
out of the Allowance in such payment request have
been expended by Tenant for actual costs of the
construction of Tenant's Work;
b. A true and correct copy of the final non-residential
use permit (or its equivalent) issued to Tenant by
the applicable governmental authority (final payment
only);
c. A copy of as-built plans and specifications for the
Building Fit-Out incorporating all Approved Change
Orders (if any) (final payment only); and
d. A duly executed interim release of liens (for interim
payments) and a duly executed final release of liens
(for the final payment) executed (for all payments)
by Tenant's General Contractor and (for the final
payment only) by any and all subcontractors and/or
materialmen supplying labor and/or materials in
connection with the Building Fit-Out, in form and
substance reasonably satisfactory to Landlord,
acknowledging (as to the final payment) payment of in
full for all labor and/or materials associated with
the Building Fit-Out, and (as to interim payments)
acknowledging partial payment of the applicable
percentage of the Allowance plus any other sums
otherwise disbursed by Landlord and/or Tenant to the
General Contractor, as of the date of, and including,
such draw request, and fully and forever waiving any
and all statutory and/or common law liens which might
otherwise be asserted by them against the Property in
connection with the performance of the Building
Fit-Out (except, as to interim payments only, such
waiver may be limited by its terms to the disbursed
amounts); provided that, with respect to any
subcontractor and/or materialman supplying labor
and/or materials in connection with the Building
Fit-Out, who refuses to execute and deliver a duly
executed final release of liens, Landlord shall be
entitled to deduct from the final payment the full
amount of the contract price for such subcontractor
or materialman (net of any amounts for which partial
lien releases have previously been obtained from such
contractor or materialman with respect to the
Building Fit-Out) and hold the same as additional
retainage until such time as (i) such subcontractor
or materialman shall have executed and delivered to
Landlord such final release of liens, or (ii) the
applicable period within which such subcontractor or
materialman may assert a lien against the Property
shall have expired, and Landlord shall disburse the
remainder of the final payment to Tenant.
Landlord shall not be obligated to pay the Allowance (or any
portion thereof) to Tenant unless (and not until fifteen (15)
business days after) Landlord has received a payment request
with all required attachments properly supplied, and such
payment shall be (until the final payment) net of the holdback
requirement set forth above, and shall be utilized to
reimburse Tenant for (or, with respect to any work for which a
mechanics lien might be asserted against the Property, and
with respect to which work Tenant has not delivered evidence
of prior payment, to pay directly to the General Contractor)
the actual Costs of performing the Building Fit-Out or such
other costs for which such Allowance may be used in accordance
with the terms hereof. At Landlord's option, disbursements
with respect to any work for which a mechanics lien might be
asserted against the Property, and with respect to which
Tenant has not delivered evidence of prior payment, may be
made directly to the General Contractor, or jointly to the
Tenant and the General Contractor.
K. Tenant acknowledges that Landlord is delivering the Premises
and Building in "as-is" condition, except for the performance
of the Landlord's Work and as may otherwise be expressly set
forth herein. Tenant shall be solely responsible for ensuring
that the design and construction of the Building Fit-Out is in
compliance with ADA and with all other applicable laws,
building codes, ordinances and regulations applicable to the
construction of the Premises. Tenant shall also be solely
responsible for compliance of its operations and employment
practices with all applicable laws, including but not limited
to the ADA.
L. Landlord and Tenant acknowledge and agree that timely,
concurrent completion of the Building Fit-Out and the
Landlord's Work will require reasonable cooperation during the
plan preparation, permitting and construction process.
Accordingly, Landlord and Tenant agree to use commercially
reasonable efforts and due diligence to cooperate with each
other, to accommodate each other's interests as the
construction process progresses, and otherwise to expedite the
resolution of any disputes, problems or unforeseen
circumstances. Upon delivery of the final construction
drawings to Landlord for the Building Fit-Out, Tenant shall
also deliver to Landlord a construction schedule for the
performance of the Building Fit-Out, which construction
schedule shall provide for a reasonable phasing of the
Landlord's Work with the Building Fit-Out, and for reasonable
periods of time for completion of each portion of the
Landlord's Work. Such construction schedule shall be subject
to Landlord's review, comment
and approval, and revision by Tenant, in accordance with the
applicable provisions of Section (C) of this Exhibit B.
Landlord and Tenant each agree to negotiate with regard to
such construction schedule in good faith. After commencing
the Building Fit-Out, the Tenant shall not modify such
construction schedule in any respect which will alter the
agreed phasing of the Landlord's Work with the Building
Fit-Out or the agreed-upon times for the performance of the
Landlord's Work. In the event of any delay claimed to have
been occasioned by the other party (the "delaying party"), the
injured party shall deliver written notice of the claim of
delay within two (2) business days after the occurrence
thereof, and the delaying party shall have two (2) business
days to cure the cause of such delay. Failure to provide such
notice shall be deemed conclusive evidence that no such delay
has occurred.
M. Without limiting the generality or applicability of the other
provisions governing the Building Fit-Out under this Exhibit
B, or of any other applicable provision of this Lease, Tenant
agrees that the following provisions shall apply to the
performance of Building Fit-Out:
1. In conducting any portion of the Building Fit-Out
which involves construction work upon the exterior portions of
the Building, Tenant agrees that it shall, at Tenant's sole
expense, restore all areas of the Building's exterior,
including, without limitation, all adjacent planting areas,
sidewalks and parking areas affected by the execution of the
Building Fit-Out, to their condition immediately prior to
commencement of such portion of the Building Fit-Out.
2. Tenant shall protect and restore all work areas of
the Building (including without limitation any portions of the
common areas of the Building) required for access to the
Premises as part of the Tenant's Work, or otherwise utilized
or affected in performing the Building Fit-Out, including, but
not limited to, the Building HVAC System, Building roof,
common corridor floors, walls, and ceilings, second floor
penetrations and chase wall penetrations. Tenant shall
further ensure that all floor penetrations are properly
fire-stopped, in accordance with applicable building and fire
codes and prudent construction practices. Tenant's
construction schedule shall be updated promptly by Tenant to
reflect any material changes therein, and Tenant shall
promptly notify Landlord of any such change in Tenant's
construction schedule. Tenant shall notify Landlord at the
time Tenant commences any portion of the Building Fit-Out
involving the exterior of the Building, the Building roof, the
common corridors, and all floor to floor penetrations (which
notification shall be deemed given as to all such matters
reviewed at a regularly scheduled meeting with the General
Contractor if Landlord's representative is in attendance. All
Building Fit-Out shall be subject to the inspection and
approval of Landlord. In regard to the foregoing right of
inspection and approval, Tenant and its contractor shall
permit such construction manager and/or representatives
reasonable and timely notice of all meetings with the General
Contractor, and access to all affected areas of the Premises
and Building necessary for Landlord to conduct inspections
and/or supervision. Tenant shall also deliver to Landlord's
managing agent copies of all documents and document revisions
issued or received by Tenant pertaining to the payment, scope,
plans, permits, changes or schedule of, to or for the Building
Fit-Out sent by Tenant, Tenant's architect, the General
Contractor or any governmental agency which regulates the
Building Fit-Out in whole or part (collectively, the "Key
Parties") to another of the Key Parties.
3. Tenant and the General Contractor shall provide
copies of warranties for the Building Fit-Out and the
materials and equipment which are incorporated into the
Building and Premises in connection therewith, as well as
provide to Landlord copies of all operating and maintenance
manuals for all equipment and materials incorporated into the
Building and/or Premises as part of the Building Fit-Out.
Tenant shall either assign to Landlord, or enforce on
Landlord's behalf, all such warranties to the extent repairs
and/or maintenance on warranted items which are otherwise
Landlord's responsibility under this Lease would be covered by
such warranties. Without limitation, all aspects of the
Building Fit-Out in each of the Phase I Premises and the Phase
II Premises shall be warranted to be free from defects in
design and workmanship for a period of not less than one (1)
year from substantial completion of construction in such phase
(i.e., the Phase I Premises or the Phase II Premises, as the
case may be).
N. In the event that Tenant is unable to occupy or use the
Premises for its intended purpose on or before the Phase I
Rent Commencement Date (with regard to the Phase I Premises)
or the Phase II Rent Commencement Date (with regard to the
Phase II Premises) due to the failure to complete the Building
Fit-Out or other matters for which Tenant is responsible, Rent
shall, nonetheless, commence on the Phase I Rent Commencement
Date and Phase II Rent Commencement Date, respectively.
Notwithstanding the foregoing:
(1) To the extent substantial completion of the
Building Fit-Out is delayed due to the wrongful acts or
omissions of Landlord or its agents, employees,
representatives or contractors in violation of the terms
hereof which are not cured within twenty-four (24) hours after
notice thereof from Tenant to Landlord, or any failure to
substantially complete any of Landlord's Work by the
applicable deadline set forth in paragraph N(2) with respect
to the incomplete item(s) of Landlord's Work (without regard
to any extension available pursuant to paragraph N(2) for
delays occasioned by Force Majeure events or circumstances)
(collectively, "Landlord's Wrongful Acts"), and, as a result
of such delay, Tenant is unable to lawfully occupy the
Premises and in fact does not commence operation of its
business in the Premises on or before April 11, 1997 or such
later date on which the Building Fit-Out would have been
substantially completed and the Premises capable of lawful
occupancy by Tenant, but for Landlord's Wrongful Acts (as the
same may be extended as aforesaid, the "Target Completion
Date"), the Phase I Rent Commencement Date shall be extended
one (1) day for each day after the Target Completion Date on
which the Building Fit-Out is not substantially completed due
to Landlord's Wrongful Acts (but in no event beyond the date
on which Tenant is able to lawfully occupy any portion of the
Premises or in fact commences operation of its (or allows any
sublessee, licensee or other person or entity to commence
operation of their) business in any portion of the Premises).
Notwithstanding the foregoing provisions of this paragraph
N(1), in the event of any failure, which is not due to Force
Majeure events or circumstances, by Landlord to substantially
complete any of Landlord's Work by the applicable deadline set
forth in paragraph N(2) with respect to the incomplete item(s)
of Landlord's Work, the Phase I Rent Commencement Date shall
be extended one (1) day for each day after the Target
Completion Date on which such Landlord's Work is not
substantially completed, regardless of whether Tenant is or
lawfully may occupy the Premises;
(2) In the event that (i) any portion of the
Landlord's Critical Fire/Life Safety Work or the Landlord's
Critical HVAC Work is not substantially completed in the
Building on or before March 7, 1997 (the "Critical Path
Deadline"), or (ii) any other portion of the Landlord's Work
is not substantially completed in the Building on or before
April 11, 1997 (the "Landlord's General Work Deadline"), each
of the Critical Path Deadline and the Landlord's General Work
Deadline being subject to a day-for-day extension for each day
of delay in the substantial completion of the Landlord's Work
which is reasonably attributable to Force Majeure events or
circumstances or to the wrongful acts or omissions of Tenant
or Tenant's Agents in violation of the terms hereof which are
not cured within twenty-four (24) hours after notice thereof
from Landlord to Tenant, then in order to compensate Tenant
for costs and expenses that will likely be incurred by Tenant
on account of such delay, Landlord shall be obligated to pay
Tenant as liquidated damages the amount of Four Thousand Five
Hundred Eighty-Two and seventy-five/one hundredths Dollars
($4,582.75) per day for each day after the Critical Path
Deadline or the Landlord's General Work Deadline, as
applicable (or such later date on which Tenant would have been
able to lawfully occupy any portion of the Premises or in fact
commence operation of its business in any portion of the
Premises, but for the delay in the
substantial completion of the Landlord's Work), on which
Tenant is unable to lawfully occupy the Premises and in fact
does not commence operation of its (or allows any sublessee,
licensee or other person or entity to commence operation of
their) business in the Premises, together with any reasonable
increased cost of the Building Fit-Out proximately resulting
from such delay;
(3) To the extent Tenant is unable to obtain a
non-residential use permit due to the failure of the base
Building structure, systems or core facilities or any of the
Landlord's Work to comply with any applicable legal
requirements, then any delay in the issuance of such
non-residential permit beyond the date on which Tenant would
have been able to obtain such non-residential use permit, but
for such failure, shall be treated pursuant to paragraph
(N)(1) as a delay in the substantial completion of the
Building Fit-Out caused by Landlord's Wrongful Acts;
(4) In the event the Phase I Rent Commencement
Date shall be extended as a consequence of the failure by
Landlord to substantially complete any portion of the
Landlord's Work due to a Force Majeure event or circumstance,
the Expiration Date shall also be extended by a like amount;
and
(5) Tenant acknowledges and agrees that:
(i) nothing herein contained shall be
deemed to extend the Phase I Rent Commencement Date by more
than one (1) day for any one (1) day of delay for which
Landlord is responsible pursuant to paragraph N(1),
notwithstanding that more than one (1) provision of said
paragraph N(1) may apply to such one (1) day of delay;
(ii) nothing herein contained shall be
deemed to obligate Landlord to pay Tenant more than one (1)
days' liquidated damages pursuant to paragraph N(2) for any
one (1) day of delay in Tenant's ability to lawfully occupy
the Premises, notwithstanding that more than one (1) failure
to meet the Critical Path Deadline or the Landlord's General
Work Deadline has contributed to such day of delay;
(iii) nothing herein contained shall be
deemed to extend the Phase I Rent Commencement Date, or to
obligate Landlord to pay Tenant liquidated damages, with
respect to any delay in Tenant's ability to lawfully occupy
the Premises or obtain a non-residential use permit therefor
that does not extend beyond April 11, 1997; and
(iv) the remedies set forth in this
paragraph N shall be Tenant's exclusive monetary remedies
against Landlord in respect of any delay in the substantial
completion of the Landlord's Work or the Building Fit-Out, and
any delay in Tenant's ability to lawfully occupy the Premises
or obtain a non-residential use permit therefor, and Tenant
further waives any right of rescission with respect to any
such delays.
O. Landlord and Tenant shall, and shall each cause its respective
contractor(s) to, work in harmony with the other party hereto
and its contractor(s), and neither party shall, or shall
knowingly permit its contractor(s) to, interfere with the
performance of the other party's work hereunder (i.e., the
Building Fit-Out or the Landlord's Work, as applicable). Each
party's contractor(s) shall be permitted reasonable access to
the site, the loading docks, the elevators, any construction
lift or trash chute, and any other existing Building
facilities which are reasonably and customarily required in
the performance of their respective work (without damage
thereto). Tenant shall not be charged for the use of
elevators, loading docks, and similar facilities in the
construction of the Building Fit-Out.
P. On or about January 1, 1997, or any earlier date after the
existing tenant of the Building vacates the Building to which
Landlord and Tenant agree, Landlord and Tenant shall cause
their respective designated agents to conduct a joint
inspection of the Building HVAC System to determine the
condition thereof and to jointly prepare a report regarding
the condition of said Building HVAC System and a list of
reasonable steps to be taken by Tenant to safeguard the
Building HVAC System against damage thereto (including, but
not limited to, physical damage
to equipment, decreased operating efficiency due to abnormal
levels of dust or particulates, or improper balancing) arising
from or out of, or in connection with, the Building Fit-Out
(such list to include, but shall not necessarily be limited
to, Tenant's obligation to replace Building HVAC System
filters not less than once each ten (10) days). Promptly
following the substantial completion of any portion of the
Landlord's Work affecting the Building HVAC System, prior to
the completion of the Building Fit-Out, Landlord and Tenant
shall cause their respective designated agents to mutually
update such report and list (each agreeing to act reasonably)
to reflect any change to the Building HVAC System or the
condition thereof as a result of the completion of such
portion of the Landlord's Work. Each party agrees to act in
good faith in the preparation of such report and list (and any
supplement(s) thereto). Tenant agrees to comply (and to cause
its General Contractor, contractors and subcontractors to
comply) with the mutually agreed steps identified to safeguard
the Building HVAC System against such damage. Notwithstanding
anything contained in this Lease to the contrary, (i) Tenant
shall be solely liable for, and shall be responsible for the
correction of, any damage to the Building HVAC System
occasioned by the Building Fit-Out, and (ii) to the extent
reasonably attributable to any such damage, Landlord shall not
be liable for or obligated to grant (nor shall Tenant be
entitled to) any abatement of rent or liquidated damages
pursuant to paragraph N of this Exhibit B with regard to (a)
any failure to complete the Landlord's Work, (b) delay in the
substantial completion of the Building Fit-Out, or (c) failure
of the Building HVAC System to comply with any applicable
legal requirements.
EXHIBIT B-1
LANDLORD'S WORK
1. Landlord shall, at its sole cost and expense, cause the work set forth
on the attached Exhibits B-2 and B-3 (collectively, the "Landlord's
Work") to be substantially completed in the Building in a good and
workmanlike manner. All of the Landlord's Work shall be performed
utilizing Building standard materials; provided that, Landlord shall
have the right to make reasonable and comparable substitutions. No
allowance or credit shall be granted in connection with any unused
materials or any portion of the Landlord's Work which is waived by
Tenant. Except as expressly set forth in the Lease to the contrary
(including, but not limited to, Exhibits B-2 and B-3, and this Exhibit
B-1), Tenant acknowledges and agrees that (i) Tenant will accept
possession of the Premises in its "as is" condition as of January 1,
1997, and (ii) Landlord shall have no obligation to alter, improve or
modify the Premises.
2. To the extent that any delay in the performance of the Landlord's Work
is occasioned by the acts or omissions of Tenant or any of Tenant's
Agents and such delay shall result in any increase in the cost of the
performance of any portion of the Landlord's Work, Tenant shall
reimburse Landlord upon demand for such increased cost(s). Tenant
shall bear all costs of design and construction of all improvements
and alterations in excess of the Landlord's Work. No such delay in
the performance of the Landlord's Work occasioned by Tenant or any of
Tenant's Agents (nor any delay in the performance of the Landlord's
Work which does not result in a delay in the substantial completion of
the Building Fit-Out) shall defer or extend the Phase I Rent
Commencement Date or the Phase II Rent Commencement Date.
3. Landlord and Tenant shall examine the Landlord's Work upon substantial
completion thereof, and shall prepare a list of mutually-agreed
punch-list work. Preparation of such list shall be conclusive
evidence that the Landlord's Work has been completed in accordance
with the terms hereof, subject to the cure of the identified
"punch-list" items of the Landlord's Work, and further subject to the
cure of latent defects in the Landlord's Work identified by Tenant in
writing within one hundred eighty (180) days of the preparation of
said punch-list. Landlord shall exercise reasonable efforts to
complete all punch-list items of Landlord's Work within thirty (30)
days after preparation of said punch-list.
EXHIBIT B-2
LANDLORD'S ADA and BOCA WORK
Subject to the terms of Exhibit B-1, Landlord agrees to perform the
following work in compliance with the Americans With Disabilities Act ("ADA")
and the 1993 BOCA Code:
1. Landlord shall, at its own expense and not as an Operating Expense,
cause the base Building HVAC System (i.e., exclusive of any additions
thereto made by or for Tenant or any prior tenant of the Building) to
comply with all laws, orders, ordinances and regulations of Federal
and local authorities, and with directions of public rules,
requirement and regulations of the Board of Fire Underwriters,
pertaining to fresh air and/or heating and cooling capacity
(including, with respect to fresh air requirements, ASHRAE Standard
62-1989, and, with respect to heating and cooling capacity, 1993 BOCA
code), which are applicable to the Premises as of the date hereof.
Without limiting the foregoing, Landlord shall:
(a) ensure that the existing base Building HVAC System, (including
variable air volume ("VAV") boxes) is restored to fully-operational
condition (the "Landlord's Critical HVAC Work");
(b) ensure that the existing base Building HVAC System is capable
of providing not less than two thousand two hundred sixty (2,260)
cubic feet per minute (cfm) of outdoor air per floor of the Building;
(c) install such additional equipment or modify existing equipment
as is reasonably required in order to provide an additional ten (10)
tons of capacity to the existing cooling tower;
(d) install a ninety-eight (98) ton outside air roof-top unit;
(e) outside air system, including roof-top unit, shall be provided
with automated controls so that they operate in conjunction with the
occupied load of the HVAC system and are locked-out during the morning
warm-up and cool-down periods; and
(f) ensure that, subject to the qualifications and limitations set
forth in Exhibit F, the existing base Building HVAC System meets the
specifications set forth on the attached Exhibit F, and is capable,
subject to the qualifications and limitations set forth in said
Exhibit F, of providing conditioned air at a ratio of not less than
one (1) ton of air conditioning per three hundred twenty-five (325)
usable square feet in the Building.
2. With respect to the areas (the "common areas") comprising the main
lobby, elevators and elevator lobbies, fire stairwells and rest rooms
(including water fountains adjacent thereto) within the Building, and
all areas of the Property outside the Building, Landlord shall cause
the following items of work ("Landlord's ADA Work") to be performed in
compliance with the ADA as enforced by Fairfax County, Virginia:
(a) Provide directional signage identifying location of
handicapped parking spaces and the path to handicapped
entrances to the Building, at both front and rear lobby
locations;
(b) Provide two (2) handicap accessible van spaces on the
Property;
(c) Reconfigure four foot (4') ramp at curb adjacent to main
Building entrance, to remove existing two inch (2") lips;
(d) Replace knob type hardware with ADA lever sets on the second
(2nd) floor common areas, where necessary;
(e) Provide ADA-compliant signage indicating location of public
rest rooms (if any) on each floor of the Building;
(f) Reset elevator door "open wait" time from fourteen (14)
seconds to twenty (20) seconds;
(g) Provide (i) a readable Emergency Call symbol, non-voice call
options, pull loop call box (replace pincher pull), and
twenty-eight inch (28") cord length, for elevator call boxes.
(h) Install ADA-compliant signage on restrooms and fire
stairwells;
(i) Reset pull pressure on door closers in common areas, and on
mechanical closet doors;
(j) Provide paddle-type faucet handles on rest room sinks, and
cover exposed hot pipes and drains in rest rooms;
(k) Replace marble thresholds to rest rooms with ADA-compliant
beveled thresholds;
(l) Reset rest room flush valves to require five (5) pounds
maximum force;
(m) Replace drinking fountains with ADA-compliant "high-low"
units; and
(n) Provide ADA-compliant fire alarm system for all core and
common areas of the Building, which system shall have the
capability to be expanded to accommodate ADA strobes
throughout the Premises (the work set forth in this paragraph
2(n) being referred to as the "Landlord's Critical Fire/Life
Safety Work").
Notwithstanding the foregoing, Landlord hereby reserves the right to
add, delete, modify or replace all or any portion of the Landlord's
ADA Work provided that Landlord complies with the requirements of ADA
as enforced by Fairfax County, Virginia.
3. The foregoing is not intended, and shall not be construed, to impose
on Landlord any obligation to or liability for assuring that the
Building Fit-Out is in compliance with any applicable law, rule,
regulation or standard as set forth above, all of which are the sole
and absolute responsibility of Tenant, or to rectify or remedy any
such violation caused by the Building Fit-Out or any other acts,
omissions, use or occupancy of Tenant. Tenant further acknowledges
and agrees that, (i) Tenant shall be solely responsible for
installation and/or modification of any distribution ductwork or other
equipment required to distribute HVAC service throughout any floor of
the Premises, and for any balancing or rebalancing of the HVAC System
occasioned by the Building Fit-Out, and (ii) Landlord shall have no
obligation to perform any of Landlord's ADA Work in, for or to any
addition, alteration or improvement in the Premises, or to any area of
the Premises (or portion of either), which Tenant intends to demolish
or remove as part of the Building Fit-Out.
EXHIBIT B-3
LANDLORD'S BASE BUILDING IMPROVEMENTS
1. Remove existing turnstiles and security desks located in first (1st)
floor lobby;
2. Repair and/or replace as necessary (with stain-grade wood veneer
doors) fire stair doors damaged by previous tenant's security
equipment; and
3. Remove all security equipment installed by previous tenant (exclusive
of cabling) from all rentable areas and common areas.
EXHIBIT C
DECLARATION OF LEASE COMMENCEMENT
THIS DECLARATION is attached to and made a part of that certain Deed of Lease
dated the ____ day of December, 1996, ("Lease") by and between PRINCIPAL MUTUAL
LIFE INSURANCE COMPANY, an Iowa corporation ("Landlord", and AMERICAN
MANAGEMENT SYSTEMS, INC., a _____________________ corporation ("Tenant").
Landlord and Tenant are parties to the Lease. All capitalized terms
used herein shall have the same meaning as was ascribed to such terms in the
Lease, unless otherwise indicated.
Landlord and Tenant do hereby declare that (a) the Commencement Date
is hereby established to be _________, ____; and (b) the Lease Term shall
expire on ____________, ______ unless the Lease is earlier terminated as may be
provided therein. The Lease is in full force and effect as of the date hereof,
and Landlord has fulfilled all of its obligations under the Lease required to
be fulfilled by Landlord on or prior to such date.
IN WITNESS WHEREOF Landlord and Tenant have executed this Declaration
under seal on this ____ day of _____________________, 1997.
LANDLORD:
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY,
an Iowa corporation
By: (Seal)
--------------------------------
Title:
----------------------------
TENANT:
AMERICAN MANAGEMENT SYSTEMS, INC., a
Delaware corporation
By: (Seal)
--------------------------------
Title:
----------------------------
EXHIBIT D
RULES AND REGULATIONS
1. The sidewalks, halls, passages, courts, exits, vestibules, entrances,
public areas, elevators, escalators and stairways of the Property
shall not be obstructed by Tenant or used for any purpose other than
ingress to and egress from their respective Premises. The halls,
passages, exits, entrances, elevators, escalators and stairways are
not for the general public, and Landlord shall, in all cases, retain
the right, but not the obligation, to control and prevent access
thereto by all persons whose presence in the reasonable judgment of
Landlord would be prejudicial to the safety, character, reputation and
interests of the Property, provided that nothing herein contained
shall be construed to prevent such access to persons with whom any
Tenant normally deals in the ordinary course of its business, unless
such persons are engaged in illegal activities. Neither Tenant, nor
any of Tenant's Agents, shall enter or install equipment in mechanical
rooms, air conditioning rooms, electrical closets, janitorial closets
or similar areas without the prior written consent of Landlord (which
consent shall not be unreasonably withheld, conditioned or delayed).
2. The Premises shall not be used for the storage of merchandise held for
sale to the general public or for lodging. Except as may otherwise be
expressly set forth in the Lease to which this Exhibit D is attached
(if at all), no cooking shall be done or permitted by any Tenant on
the Premises except that the use by Tenant of Underwriter's
Laboratory-approved equipment for brewing coffee, tea, hot chocolate
and similar beverages, and the use by Tenant of underwriter's
laboratory approved microwave ovens for reheating food for on-premises
consumption by Tenant's employees, shall be permitted provided that
such use is in accordance with all applicable federal and State and
county laws, codes, ordinances, rules and regulations.
3. Tenant shall not employ any person or entity to provide services to
the Premises (whether janitorial service, towel service, water service
or other service), unless otherwise agreed to by Landlord in writing
(such agreement not to be unreasonably withheld). Tenant shall not
cause any unnecessary labor by reason of such Tenant's carelessness or
indifference in the preservation of good order and cleanliness.
Except as otherwise expressly set forth in the Lease, Landlord shall
not be responsible to Tenant for any loss of property on the Premises,
however occurring, or for any damage done to the effects of Tenant by
the cleaning service or any other employee or any other person.
4. Tenant shall not alter any lock or install a new or additional lock or
bolts on any door of its Premises unless Tenant shall also provide
Landlord with keys (or other means of access) for each such lock.
Tenant, upon the termination of its tenancy, shall deliver to Landlord
all keys which are in Tenant's possession to doors, safes, vaults and
other locks in the Premises and the Building.
5. Landlord shall have the right to prescribe the weight, size and
position of all equipment, materials, furniture or other property
brought into the Property to the extent necessary to protect the
Property. Heavy objects, if considered necessary by Landlord, shall
stand on wood strips of such thickness as is necessary to properly
distribute the weight. Landlord will not be responsible for loss of
or damage to any such property from any cause and all damage done to
the Property by moving or maintaining such property shall be repaired
at the expense of Tenant. Business machines and other equipment shall
be placed and maintained by Tenant at Tenant's expense in setting
sufficient, in Landlord's reasonable judgment, to absorb and prevent
unreasonable vibration.
6. Subject to any contrary provisions of Section 8 of the Lease, neither
Tenant nor any of Tenant's Agents shall use or keep in the Premises or
the Property any kerosene, gasoline or flammable or combustible fluid
or material other than limited quantities thereof reasonably necessary
for the operation or maintenance of office equipment, or, without
Landlord's prior written approval, use any method of heating or air
conditioning other than that supplied by Landlord. Neither Tenant nor
any of Tenant's Agents shall use or keep or permit to be used or kept
any hazardous or toxic materials or any foul or
noxious gas or substance in the Premises or permit or suffer the
Premises to be occupied or used in a manner offensive or objectionable
to Landlord in Landlord's reasonable discretion
7. Intentionally Omitted.
8. Landlord reserves the right to exclude from the Property, between the
hours of 6:00 p.m. and 7:00 a.m. and at all hours on Saturdays,
Sundays, and legal holidays all persons who do not present a pass to
the Building signed by Tenant or other evidence of authorization to
enter reasonably designated by Tenant. Tenant shall be responsible for
all persons for whom it authorizes entry to the Building and shall be
liable to Landlord for all acts of such persons. Landlord shall, in
no case, be liable for damages for any error with regard to the
admission to or exclusion from the Property of any person. In the
case of invasion, mob, riot, public excitement or other circumstances
rendering such action advisable in Landlord's opinion Landlord
reserves the right to prevent access to the Property during the
continuance of the same by such action as Landlord may deem
appropriate including closing doors.
9. In the event Tenant no longer leases the entire Building, no curtains,
draperies, blinds, shutters, shades, screens or other coverings,
hangings or decorations shall be attached to, hung or placed in, or
used in connection with any window of the Building without the prior
written consent of Landlord (such consent not to be unreasonably
withheld, conditioned or delayed). No files, cabinets, boxes,
containers or similar items shall be placed in, against or adjacent to
any window of the Building so as to create an unsightly condition
visible from the outside of the Building. No bottles, parcels or
other articles may be placed in the halls or in any other part of the
Property, nor shall any article be thrown out of the doors or windows
of the Premises.
10. Tenant shall ensure that the doors of its Premises are closed and
locked, that all water faucets, water apparatus and utilities are shut
off before Tenant or Tenant's employees leave the Premises, so as to
prevent waste or damage.
11. The lavatory rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed, no foreign substance of any kind whatsoever shall be
thrown therein and the expense of any breakage, stoppage or damage
resulting from the violation of this rule shall be borne by Tenant.
The Premises shall not be used for manufacturing of any kind, or any
business or activity other than that specifically permitted pursuant
to the Lease to which this Exhibit D is attached.
12. No air conditioning units or other projections shall be attached to
the outside walls or window ▇▇▇▇▇ of the Building or otherwise project
from the Building, without the prior written consent of Landlord.
Tenant shall not install or permit the installation of any awnings,
shades, mylar films or sun-filters on windows. Tenant shall cooperate
with Landlord in obtaining maximum effectiveness of the cooling system
of the Building by closing drapes and other window coverings when the
sun's rays fall upon windows of the Premises. Tenant shall not
obstruct, alter or in any way impair the efficient operation of
Landlord's heating, ventilation, air conditioning, electrical, fire,
safety or light systems, nor shall Tenant tamper with or change the
setting of any thermostat or temperature control valves in the
Building. Tenant shall cooperate with energy conservation by limiting
use of lights to areas occupied during non-business hours.
13. There shall not be used in any space or public halls of the Building,
either by any Tenant or any others, any hand trucks except those
equipped with rubber tires and side guards or such other material
handling equipment as Landlord may approve.
14. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the
ordinary and customary manner of removing and disposing of trash and
garbage in the jurisdiction where the Property is located without
being in violation of any law or ordinance governing such disposal.
15. Intentionally Omitted.
16. No cutting or boring for wires shall be allowed without Landlord's
consent (such consent not to be unreasonably withheld).
17. Tenant shall not lay linoleum, tile, carpet or floor covering so that
it is affixed to the floor of the Premises by the use of cement or
other similar adhesive material. Electric and telephone floor
distribution boxes must remain accessible at all times.
18. The requirements of Tenant will be attended to only upon written
request to the Landlord's managing agent at the Washington, D.C.
metropolitan area office of said managing agent. Employees of
Landlord shall not perform any work or do anything outside of their
regular duties unless under special instructions from Landlord.
19. These rules and regulations are in addition to the terms, covenants,
agreements and conditions of the Lease to which they are attached, but
in the event of a conflict between the express terms of the Lease to
which this Exhibit D is attached (exclusive of these rules and
regulations), and the terms of these rules and regulations, such other
terms of the Lease shall control.
20. Landlord reserves the right to make such other rules and regulations
as Landlord, in Landlord's reasonable discretion, may deem necessary
from time to time.
21. Landlord shall not be responsible to Tenant or to any other person for
the non-observance or violation of these rules and regulations by any
person. Tenant shall be deemed to have read these rules and to have
agreed to abide by them as a condition to its occupancy of the space
leased.
EXHIBIT E
ROOF-TOP RIGHTS
1. License. Subject to the terms hereof, Landlord hereby grants to
Tenant an exclusive license (the "License") to enter onto and utilize
the roof of the Building (the "License Area"), solely for the use
permitted pursuant to paragraph 3 hereof; provided that, such license
is subject to Landlord's right to enter (and to permit its
contractor(s) to enter) onto the roof and perform additions,
alterations, improvements, maintenance, modification and repairs in
connection with the operation of the Building.
2. Term. The License granted hereby shall commence upon January 1, 1997,
and shall, subject to the terms hereof, continue in full force and
effect until the expiration or sooner termination of the lease (the
"Lease") to which this Exhibit E is attached (the "License Term"), as
such lease may be renewed. Notwithstanding anything herein contained
to the contrary, (i) Landlord may revoke this License at any time
during the continuance of any default or breach of the terms of this
License or the Lease which remains uncured beyond the applicable
notice and cure period (if any), and (ii) in the event Tenant shall at
any time lease less than all of the Building, this License shall be
deemed a non-exclusive license and Landlord shall have the right to
grant to other tenants of the Building the right to use reasonable
quantities of space upon the roof provided that such use does not
interfere with Tenant's ability to utilize its Equipment. Upon the
expiration or sooner termination of the License, Tenant shall have no
right, title or interest with respect to the License Area.
3. Permitted Use: Subject to (i) Tenant's receipt of all applicable
governmental approvals and permits (the same to be obtained by the
Tenant and a copy thereof provided to Landlord, all at the Tenant's
sole expense), (ii) Landlord's structural and roofing requirements
(consistent with the structural limitations of the Building as
reasonably determined by the Landlord's structural engineer), and
(iii) the provisions of paragraph 4 hereof, Landlord agrees to permit
Tenant to utilize, for the purposes provided herein, suitable space on
the roof for installation and operation of radio, microwave and
satellite transmission and reception equipment and HVAC equipment
(collectively referred to as the "Equipment"), subject to all of the
terms of this License. Use of the Equipment shall be solely for the
convenience of Tenant in the normal conduct of Tenant's business. In
no event shall the Equipment be used for a commercial purpose separate
from Tenant's normal business as an independent means of producing
income separate from the Tenant's normal business. Without limiting
the preceding sentence, Tenant shall have no right to assign or
sublease any rights to utilize the License Area other than as part of
an assignment of the entire Lease.
4. Landlord's Prior Approval:
(a) The nature, type, weight and location of the Equipment and
plans and specifications for the installation thereof shall be subject
to the Landlord's prior written approval (which approval shall not be
unreasonably withheld, conditioned or delayed, provided Tenant is not
proposing to exceed the load bearing capacity of the affected
portion(s) of the roof or proposing any penetration of the roof
membrane or other alteration, addition, improvement or modification
which will void any existing roof warranty).
(b) Tenant agrees not to install or modify any of the Equipment in
any manner which will or may interfere with the operation of any
existing equipment installed on the roof from time to time by any
other person or entity. Tenant shall take all steps necessary to
ensure that the installation and operation of the Equipment does not
adversely affect the operation of the Building or its basic systems.
If the operation of any portion of the Equipment causes any such
adverse effect, Tenant, at its sole expense, shall immediately take
all steps necessary to eliminate such adverse effect(s). If such
adverse effect(s) cannot be eliminated by Tenant, Tenant shall, upon
Landlord's request and at Tenant's sole expense, remove the Equipment
in accordance with the terms hereof.
(c) After initial installation of the Equipment, Landlord may
require Tenant to relocate the Equipment, on reasonable Notice to
Tenant; provided, however, that no relocation shall be required to a
location which will not permit the Equipment to function properly or
which would not allow for necessary transmission paths. Landlord
shall bear the cost of any relocation of the Tenant's Equipment
required by Landlord, other than any relocation(s) required in order
to effect additions, alterations, improvements, maintenance,
modifications repairs or replacements to the roof or other portions of
the Building or the equipment serving the same or any of the
components of any of the foregoing (collectively, "Roof Alterations")
(in which event Landlord and Tenant shall each bear one-half (1/2) of
the reasonable cost of such relocation). To the extent the
installation, operation or relocation of the Tenant's Equipment shall
increase the cost of any such Roof Alterations, Tenant shall reimburse
Landlord upon demand for the amount of such increase. In no event
shall Landlord be liable for any loss, damage or injury to Tenant's
business occasioned by any required relocation of Tenant's Equipment.
5. Installation of Equipment:
(a) The Equipment shall be installed by a properly licensed and
insured contractor reasonably approved by Landlord, at Tenant's sole
expense, in compliance with all applicable codes, law and regulations.
Neither the aggregate live or dead load associated with the Equipment
(inclusive of all mounting structures) shall exceed the load bearing
capacity of the roof.
(b) No penetration of the roof surface of the Building will be
allowed except upon the prior written consent of the Landlord and the
written agreement of the entity (or, if more than one (1), all
entities) providing a warranty on the roof of the Building, that such
penetration will not invalidate, in whole or part, the warranty(ies)
provided by such entity(ies). The Equipment shall, to the extent
required by applicable law, be shielded from public view in a manner
acceptable to the Landlord. In no event shall Tenant permit the
Equipment to be visible from surrounding locations on the ground.
6. Assignment: Except as expressly permitted hereby, Tenant shall not
assign or otherwise transfer this License Agreement, or any of
Tenant's rights hereunder, nor permit the use or occupancy of the
License Area by any person or entity other than Tenant.
Notwithstanding the foregoing, Tenant shall have the right to assign
its rights under this License to any assignee of all of Tenant's
right, title and interest in and to the Lease.
7. Condition and Suitability of the Property: Landlord makes no
representations or warranties regarding the suitability or condition
of the roof for installation or operation of the Equipment, and
Landlord shall have no liability to Tenant on account thereof. The
installation and operation of the Equipment on the roof by Tenant
shall be at the Tenant's sole risk.
8. Repairs and Maintenance: Tenant shall repair and maintain the
Equipment throughout the Term in compliance with all applicable codes,
laws and regulations. Tenant and/or its contractor shall bear all
expenses in connection with the installation, operation, maintenance
and repair of the Equipment and the removal thereof. Tenant
acknowledges and agrees that all risk of loss or damage to the
Equipment, from any cause whatsoever, shall be borne solely by Tenant,
and Tenant undertakes to indemnify and hold Landlord harmless
therefrom.
9. Compliance with Laws.
(a) Tenant shall, at the Tenant's expense, comply with
all governmental laws, regulations or requirements and obtain and
maintain in full force and effect throughout the Term all permits and
other governmental approvals as may be required in connection with the
Equipment. Prior to installation of the Equipment, Tenant shall
provide Landlord with evidence that all such necessary permits and
approvals have been obtained. In addition, Tenant agrees that Tenant
shall, at Tenant's sole expense, comply with all other laws, statutes,
ordinances, and governmental rules, regulations and requirements now
in force or which may hereafter be in force, and with the requirements
of any board of fire underwriters or other similar body now or
hereafter constituted, relating to or affecting the Tenant's
Equipment, access to the roof, and/or the activities of Tenant or
Tenant's Agents in, on or upon the roof.
(b) Tenant acknowledges that, depending on the location,
nature and size of the Equipment, review by local planning or zoning
authorities may be required. In the event any review by or proceeding
before local planning or zoning authorities is required in order to
obtain approval for installation of the Equipment, the Landlord agrees
to cooperate in connection therewith, provided that the same is at no
cost, expense or risk to the Landlord. Upon installation of the
Equipment, the Tenant shall provide the Landlord with such evidence as
the Landlord may reasonably require of compliance with laws, including
(where applicable) regulations of the Federal Communications
Commission and Federal Aviation Administration.
10. Access to the License Area: Tenant and its contractors shall have
reasonable access during normal working hours (and, in the event of an
emergency, after normal working hours) to the License Area to
facilitate the installation, operation and maintenance of the
Equipment and the removal thereof. Access to and activities in, on or
upon the roof by Tenant and/or Tenant's Agents shall be subject to
such reasonable rules and regulations as Landlord may promulgate in
connection with such access and/or activities.
11. Termination of License: In the event (i) Tenant fails for more than
fifteen (15) days after written notice to comply with, fulfill or
observe any of the covenants, conditions, or obligations made by or
imposed on the Tenant pursuant to the terms of this License or, with
respect to the Equipment or the Licensed Area (or such longer time as
may be reasonably required to cure such failure through the exercise
of due diligence, provided that (i) such failure is not a willful
repudiation of the License authorized by Tenant's Board of Directors,
(ii) such failure is susceptible of cure, (iii) such failure does not
relate to the existence of a Hazardous Substance on the roof in
violation of Section 8 of the Lease, (iv) such failure does not
subject Landlord to prosecution or substantial civil or criminal fine
or penalty, and (v) Tenant promptly commences to cure such failure
within the aforesaid fifteen (15) day period and thereafter diligently
pursues the cure of such failure to completion) (each of the foregoing
being herein referred to as an "Roof-Top Breach"), or (ii) removal of
the Equipment shall be required by any governmental authority, this
License may, without demand or notice, be terminated by the Landlord
without payment of penalty or compensation to Tenant, and Tenant shall
promptly (immediately, if so required by a governmental authority)
remove the Equipment from the Building at the Tenant's expense;
provided that, Tenant shall not be required to remove its Equipment
from the roof pursuant to clause (ii) of this Section 11 so long as
(x) Tenant promptly, diligently and in good faith contests the removal
requirement by the applicable governmental authority, and (y) Tenant
indemnifies and holds Landlord and the Property harmless from and
against any and all costs, claims, damages, expenses, fees,
liabilities, losses or suits incurred by or on behalf of, or asserted
against, Landlord and/or the Property as a result of the continued
existence of Tenant's Equipment on the roof or such contest; and
provided further that, in the event that a final, unappealable
decision in any such contest shall require the removal of Tenant's
Equipment, Tenant shall promptly comply with such decision. In all
events, Tenant shall at its sole cost and expense remove the Equipment
and all screening therefor upon the expiration or sooner termination
of the License and restore the area affected by the installation,
operation and/or removal of the Equipment and/or such screening to its
original condition existing immediately prior to the installation of
the Equipment and/or such screening.
12. Indemnity: To the fullest extent permitted by applicable law, Tenant
hereby agrees to indemnify and hold Landlord and Landlord's agents,
contractors and employees (collectively, the "Indemnitees") harmless
from and against any and all costs, damages, claims, expenses, fees,
suits, awards and liabilities incurred or suffered by or claimed
against any Indemnitee (including, but not limited to, court costs and
reasonable attorneys fees), directly or indirectly, based on, arising
out of or resulting from (i) Tenant's use of the License Area, (ii)
any act or omission by Tenant or Tenant's Agents within the License
Area, or (iii) any breach or default by Tenant in the performance or
observance of its covenants or obligations under this License
Agreement. Without limiting the foregoing, Tenant shall be
responsible for, and shall defend, indemnify and hold Landlord
harmless from and against, any damage caused to the roof structure by
the installation, operation, maintenance, repair and/or removal of the
Equipment, and any injury or
death, or loss or damage to any of the Equipment or involving any such
equipment of any other Tenant or tenant.
13. Insurance: In furtherance of Tenant's indemnity of Landlord as
contained in the preceding paragraph 12, Tenant hereby agrees to
maintain, in full force and effect throughout the License Term,
policies of liability and property damage insurance as described in
the Lease (or endorsements to all policies maintained in accordance
with said Lease, extending coverage to the License Area and including
the Equipment as additional personal property to be insured) with
respect to personal injury, death or property damage arising out of or
in connection with Equipment, Tenant's right of access to the roof
pursuant to this License, and any activities conducted in, on or upon
the roof by the Tenant or the Tenant's Agents. In addition, Tenant
shall require the contractor engaged for installation of the Equipment
to provide to Landlord a certificate of insurance evidencing (i) a
minimum combined single limit general liability coverage of Two
Million Dollars ($2,000,000.00), with Landlord named as an additional
insured, and (ii) the statutorily required workmen's compensation
insurance coverage.
EXHIBIT F
HVAC SPECIFICATIONS
Landlord agrees that the air conditioning system in the Premises shall
be capable of providing (subject to the requirements of federal, state and
local governmental authorities) temperatures of not more than 75 degrees
Fahrenheit dry bulb and a relative humidity not in excess of fifty percent
(50%) with outside conditions of 95 degrees Fahrenheit dry bulb and 78 degrees
Fahrenheit wet bulb, except as otherwise provided in this Lease. Landlord
agrees that the heating system in the Premises will be capable of providing
(subject to the requirements of federal, state and local governmental
authorities) temperatures of not less than 70 degrees Fahrenheit whenever the
outdoor dry bulb temperature is lower than 65 degrees Fahrenheit, with indoor
relative humidity at such level as not to permit the formation of condensation
on the windows. Landlord shall not be responsible if the normal operation of
the Building HVAC System shall fail to provide conditioned air at reasonable
temperatures, pressures or degrees of humidity or in reasonable volumes or
velocities in any portions of the Premises which (i) shall have an electrical
load in excess of four (4) ▇▇▇▇▇ per rentable square foot of the Premises for
all purposes (including lighting and power) or which shall have a human
occupancy factor in excess of one person for each one hundred fifty (150)
rentable square feet of the Premises, or (ii) because of rearrangement of
partitioning or other Alterations made by or on behalf of Tenant or any person
claiming by, through or under Tenant.
EXHIBIT G
JANITORIAL SPECIFICATIONS
Landlord will furnish janitor service and cleaning services as set
forth below for the Premises, exclusive of stock rooms, xerox rooms, kitchens
and cafeterias (except as noted):
I. DAILY
1. Collect trash. (Private kitchens included)
2. Empty ash trays; damp wipe clean.
3. Dust furniture, desks, machines, phones, file cabinets, window
ledges, etc. (papers shall not be required to be disturbed.)
4. Vacuum carpets, sweep resilient tile and wood floors in
corridors and lobbies. (Private kitchens included.)
5. Wash water fountains.
6. Lavatories:
(a) Clean and disinfect all toilet bowls, urinals, and
wash basins.
(b) Clean mirrors.
(c) Resupply all dispensers and toilet paper.
(d) Damp wipe and disinfect all ledges, toilet stalls,
and doors.
(e) Damp mop and disinfect all floors.
(f) Empty and clean sanitary napkin disposal containers.
(g) Collect trash.
7. Turn off lights and check all doors on completion of work.
II. WEEKLY
1. Spot clean carpet stains.
2. Spot clean walls, doors, partitions.
3. Sweep all stair areas.
4. Dust wood wall paneling.
III. MONTHLY
1. Scrub and recondition resilient tile floors.
2. Wash all interior glass partitions on both sides.
3. Dust venetian blinds.
4. Dust picture frames, charts, etc.
IV. SEMI-ANNUALLY
Dust all horizontal and vertical surfaces not reached in nightly
cleaning (pipes, light fixtures, door frames, wall hangings, etc.).
V. ANNUALLY
Strip and refinish all resilient floor areas using buffable, non-slip
floor finish.
VI. AS NECESSARY
1. Clean venetian blinds.
2. Spot clean light switches, doors and walls.
3. Washing light fixtures, including light reflectors, globes,
diffusers and trim.
4. Wash walls in corridors, lobbies, and washrooms.
5. Spot clean all baseboards.
6. Wash windows, inside and outside, as required by Landlord.
7. Vacuum carpets in individual offices.
VII. EXTRAS - CHARGED TO THE TENANT
1. Daily buffing of hardwood floors in executive office areas.
2. Cleaning of kitchens, canteen, or coffee station areas,
including washing sink, washing ledge, cleaning cabinets
and/or appliances.
3. Dusting and sweeping of storage areas, closets, telephone
exchange areas.
4. Cleaning of shower stalls, or other similar non-standard
equipment in rest-rooms.
Should Tenant install any Alterations or specialty items which will
increase in any way the rate being charged by the cleaning contractor for the
Premises, Tenant shall be liable for such increases and shall reimburse
Landlord upon demand for any additional cost. All of the above services are to
be performed during those hours (after-business hours) as established between
Landlord and Landlord's cleaning contractor. Any special cleaning requests are
to be in writing and delivered to the management office by 3 p.m. The
foregoing specifications are subject to change from time to time in Landlord's
reasonable discretion.
EXHIBIT H
ANCILLARY USE RESTRICTIONS
1. Ancillary Uses: Each of the Ancillary Uses set forth in the Lease are
subject to the applicable provisions of this Exhibit H.
2. General Conditions:
(a) In no event shall any Ancillary Use (other than any
food service operation on the first (1st) floor of the Building) be
used for a commercial purpose separate from Tenant's normal business
as an independent means of producing income separate from the Tenant's
normal business. Without limiting the preceding sentence, Tenant
shall have no right to assign or sublease any rights to engage in any
of the Ancillary Uses on any floor above the ground level of the
Building, other than by the assignment of the entire Lease. In no
event shall any such Ancillary Uses be open to, or made available to,
the general public.
(b) The nature, type, weight, location and method of
installation of all equipment utilized in the Ancillary Uses or
required in connection with the Ancillary Uses (collectively,
"Ancillary Use Equipment") shall be subject to the Landlord's prior
written approval (which approval shall not be unreasonably withheld,
conditioned or delayed, provided Tenant is not proposing to exceed the
load bearing capacity of the affected portion(s) of the Premises or
the electrical capacity of the circuits to be so utilized, and further
provided that such Ancillary Use Equipment is installed in such manner
as will not materially interfere with the operation of the Building as
a multi-tenant building in the future. All Ancillary Use Equipment
installed in the Premises shall be Underwriters' Laboratory approved.
Tenant agrees not to install or modify any Ancillary Use Equipment in
any manner which will or may interfere with the operation of any
existing equipment installed in or on the Property. Tenant shall take
all steps necessary to ensure that the installation and operation of
the Ancillary Use Equipment does not adversely affect the operation of
the Building or its basic systems. If the operation of any portion of
the Ancillary Use Equipment causes any such adverse effect, Tenant, at
its sole expense, shall immediately take all steps necessary to
eliminate such adverse effect(s). If such adverse effect(s) cannot be
eliminated by Tenant, Tenant shall, upon Landlord's request and at
Tenant's sole expense, remove the Ancillary Use Equipment in
accordance with the terms hereof. Tenant shall be solely responsible
for the maintenance, repair and replacement of the Ancillary Use
Equipment, and Tenant agrees to maintain all Ancillary Use Equipment
in good working order and in compliance with all applicable laws at
all times.
(c) Landlord makes no representations or warranties
regarding the suitability or condition of the Premises for
installation of the Ancillary Use Equipment or operation of the
Ancillary Uses, and Landlord shall have no liability to Tenant on
account thereof. The installation of the Ancillary Use Equipment and
operation of the Ancillary Uses by Tenant shall be at the Tenant's
sole risk.
(d) Tenant shall be solely responsible for, and shall
promptly pay when due, all costs, expenses and fees arising from or
out of, or in connection with, the installation or operation of any
Ancillary Use or any Ancillary Use Equipment. It is the intent of the
parties hereto that Tenant shall pay all costs and expenses relating
to the Ancillary Uses, and that any amount or obligation relating to
the Ancillary Uses which is not expressly declared to be that of
Landlord shall be deemed to be any obligation of Tenant to be
performed by Tenant at Tenant's sole expense. Without limiting the
foregoing, Tenant shall be solely responsible for all cleaning,
security, utilities and increased insurance premiums arising from or
out of, or in connection with, the Ancillary Uses or the Ancillary Use
Equipment.
(e) Tenant shall be responsible at its sole expense for
providing and installing all furniture, trade fixtures and equipment
desired by the Tenant or otherwise required in connection with any
Ancillary Use. Without limiting the foregoing, Tenant shall be solely
responsible for the installation, operating, maintenance, repair,
replacement and removal of any and all HVAC and fire suppression
equipment in excess of the equipment being furnished by Landlord
pursuant to Exhibit B (including, but not limited to, additional
sprinkler heads or runs, fire suppression equipment, venting and
exhaust ductwork and equipment) required by this Lease or applicable
law, or desired by Tenant, in connection with any Ancillary Use.
Tenant expressly acknowledges and agrees that Landlord shall have no,
and is hereby relieved of, liability for any failure or inadequacy of
the base Building HVAC or fire suppression System to the extent such
failure or inadequacy is attributable to any Ancillary Use or any
Ancillary Use Equipment.
(f) The Tenant, at its sole cost and expense, shall be
responsible for maintaining all areas of the Premises utilized for
Ancillary Uses, and all Ancillary Use Equipment, in a clean, safe and
sanitary condition, and in compliance with all applicable laws,
ordinances, regulations, rules and other restrictions imposed by any
governmental or quasi-governmental agency or authority, at all times.
Without limiting the foregoing sentence, the Tenant shall be required
to regularly maintain and promptly repair when necessary all Ancillary
Use Equipment.
(g) The provisions set forth in this Exhibit "H" are in
addition to all other provisions of the Lease imposing a covenant,
duty, obligation or restriction upon the Tenant. Without limiting the
foregoing, nothing in this Exhibit "H" shall be deemed to authorize
the storage or use of any Hazardous Substance on the Premises other
than Permitted Materials.
3. Food Service Operations. In addition to the foregoing:
(a) In no event shall Tenant sell, or suffer or permit
any other person or entity to sell from the Premises any alcoholic
beverages for either on-Premises or off-Premises consumption.
(b) All garbage and refuse shall be removed from any food
service operation within the Premises prior to the close of business
each day. Tenant shall keep all garbage, refuse and trash from food
service operations in pest-safe closed containers, with appropriate
odor-eliminators, until removal. All garbage and refuse removal shall
be made through the loading dock of the Building without use of the
lobby area or common corridors of the Building, and, during such times
as Tenant leases less than the entire Building, no removal will be
made between the hours of 7:00 a.m. - 9:30 a.m. and 4 p.m. to 7 p.m.
(c) Tenant shall at its expense have all areas utilized
for food service operations, and all adjacent areas of the Premises,
regularly treated (not less than once each thirty (30) days throughout
the Lease Term) by a licensed and reputable pest control contractor or
exterminator for rats, mice, insects and other pests and vermin. The
Tenant's schedule for such treatment and the contractor providing the
treatment shall be reasonably acceptable to the Landlord.
(d) Tenant shall, at Tenant's sole expense:
(i) install, maintain and clean, on a regular
schedule (but not less often than once each thirty (30) days
throughout the Lease Term), and replace as necessary, all
exhaust ductwork and such grease traps as shall be required by
the Landlord to prevent the accumulation of grease or other
waste in the plumbing or venting facilities servicing food
service operation areas of the Premises;
(ii) prevent any obnoxious or objectionable odors
(as reasonably determined by the Landlord) from emanating from
the Premises, either from food preparation or garbage or
otherwise, and install, maintain and clean, on a regular
schedule, and replace as necessary, vents and exhausts or
other suitable devices to prevent the same, as reasonably
required by the Landlord or any legal authorities having
jurisdiction thereof, including, but not limited to, the
installation and/or replacement of filters and other devices
designed to control odors;
(iii) observe any reasonable rules or regulations
promulgated by the Landlord at any time and from time to time
relating to delivery vehicles and the delivery of food,
beverages or merchandise and the storage and removal of trash
and garbage; and not permit any deliveries to be made between
the hours of 7:00 a.m. - 9:30 a.m. and 4:00 p.m. - 7:00 p.m.;
(iv) not dispose of any foreign substances in the
plumbing facilities other than through utilization of
appropriate garbage disposal units; and
(v) carry products liability insurance with
respect to any food service operation of not less than One
Million Dollars ($1,000,000.00).
(e) Tenant expressly acknowledges and agrees that
Landlord shall have no liability for, and Tenant hereby expressly
relieves Landlord of all liability for, damages caused by spoilage of
food.
4. Printing. In addition to the foregoing, Tenant shall in no event
engage, or suffer or permit any other person or entity to engage in
the preparation of photographic reproductions or blueprints in the
Premises.
5. Exercise Facilities; Locker Rooms; Showers. In addition to the
foregoing:
(a) In the event the Tenant contracts with, employs or
otherwise retains an operator for any exercise facility, locker room
or shower in the Premises (each an "Exercise Facility"), Tenant shall
(i) require the operator to be properly licensed, (ii) require that
such operator expressly covenant to observe all of the applicable
terms and conditions of this Exhibit "H", and (iii) enforce the
applicable terms of this Exhibit "H" against such operator.
(b) No Exercise Facility shall be used to render medical
care to any person except for medical assistance rendered to an
employee or partner of Tenant or other user of the Exercise Facility
in the event of an emergency. Use of the Exercise Facility shall be
subject to such reasonable rules and regulations and such security
measures which Landlord and/or Tenant may promulgate from time to
time.
(c) Tenant shall (i) ensure that adequate soundproofing
(as reasonably determined by the Landlord) is installed in the
Exercise Facility so that no sounds inside the Exercise Facility may
be heard outside the Exercise Facility; (ii) ensure that no
objectionable odors emanate from the Exercise Facility; and (iii)
install all security measures necessary to deny unauthorized access to
the Exercise Facility. Landlord shall have no obligation to install,
maintain or operate in the Exercise Facility any devices and equipment
to ensure the safety and well-being of the users of the Exercise
Facility.
(d) Tenant shall post signage in the Exercise Facility
setting forth the rules and regulations governing the use of the same.
6. Ancillary Use Breach; Cessation; Removal.
(a) Upon the occurrence of an Event of Default with
regard to any Ancillary Use or Ancillary Use Equipment (an "Ancillary
Use Breach"), Landlord shall, in addition to (and without limitation
of) its other remedies at law, in equity and under this Lease, have
the right to require Tenant to cease the Ancillary Use in the course
of which such Ancillary Use Breach has arisen until such Ancillary Use
Breach shall be cured. In the event cessation of any Ancillary Use
and/or removal of any Ancillary Use Equipment shall be required by any
governmental authority, Tenant shall, without demand or notice,
promptly (immediately, if so required by a governmental authority)
cease such Ancillary Use and, if applicable, remove the Ancillary Use
Equipment from the Property at Tenant's expense; provided that, Tenant
shall not be required to cease any Ancillary Use or remove any
Ancillary Use Equipment from the Property pursuant to the foregoing
provision of this sentence, so long as (x) Tenant promptly, diligently
and in good faith contests the cessation and/or removal requirement
(as the case may be) by the applicable governmental authority, and (y)
Tenant indemnifies and holds Landlord and the Property
harmless from and against any and all costs, claims, damages,
expenses, fees, liabilities, losses or suits incurred by or on behalf
of, or asserted against, Landlord and/or the Property as a result of
the continued operation of such Ancillary Use and/or continue
existence of Ancillary Use Equipment on the Property or such contest;
and provided further that, in the event that a final, unappealable
decision in any such contest shall require the cessation of such
Ancillary Use and/or removal of Tenant's Equipment, Tenant shall
promptly comply with such decision.
(b) Upon written notice to Tenant (not later than thirty
(30) days after expiration of the Lease Term), Landlord may require
that Tenant remove, after the expiration or sooner termination of the
Lease Term and at Tenant's sole cost and expense, any and/or all
Ancillary Use Equipment installed by or on behalf of Tenant in the
Premises, and restore the Premises to their prior condition; provided
that, Landlord shall have no right to require the removal of (i) any
Ancillary Use Equipment that is customarily considered normal office
improvements for office tenants of all sizes (including, but not
limited to, wiring or cabling which is customarily considered part of
normal office improvements for first-class office tenants of all
sizes), or (ii) any Ancillary Use Equipment installed in the Premises
to which Landlord has consented, unless at the time such consent was
granted Landlord reserved the right to require such removal. Tenant
shall also repair any damage to the Premises caused by the
installation or removal of any Ancillary Use Equipment installed in
the Premises by or on behalf of Tenant.