1
EXHIBIT 10.16
================================================================================
DEED OF LEASE BY AND BETWEEN
JAYCOR
AND
ADVENT REALTY LIMITED PARTNERSHIP II
of
Tysons Dulles Plaza III
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
DATED
December 6, 1995
================================================================================
2
TABLE OF CONTENTS
PAGE
1. Basic Lease Provisions. ............................................1
2. Premises. ..........................................................2
2.1. Lease of Premises. ......................................2
2.2. Calculation of Size of Building and Premises. ...........2
2.3. Common Areas-Defined. ...................................2
3. Term. ..............................................................2
3.1. Term and Commencement Date. .............................2
3.2. Delay in Possession. ....................................2
3.3. Delays Caused by Tenant. ................................2
3.4. Tender of Possession. ...................................2
3.5. Early Possession. .......................................2
4. Rent. ..............................................................3
4.1. Base Rent. ..............................................3
4.2. Operating Expense Increases. ............................3
4.3. Base Rent Increase. .....................................4
5. Security Deposit. ..................................................4
6. Use. ...............................................................4
6.1. Use. ....................................................4
6.2. Compliance with Law. ....................................4
6.3. Condition of Premises. ..................................5
7. Maintenance, Repairs and Alterations.................................5
7.1. Landlord's Obligations. .................................5
7.2. Tenant's Obligations. ...................................5
7.3. Alterations and Additions. ..............................5
7.4. Failure of Tenant to Remove Property. ...................6
8. Insurance. .........................................................6
8.1. Insurance-Tenant. .......................................6
8.2. Insurance-Landlord. .....................................6
8.3. Insurance Policies. .....................................6
8.4. Waiver of Subrogation. ..................................6
8.5. Coverage. ...............................................7
9. Damage or Destruction. .............................................7
9.1. Effect of Damage or Destruction. ........................7
9.2. Definition of Material Damage. ..........................7
9.3. Abatement of Rent. ......................................7
9.4. Tenant's Negligence. ....................................7
9.5. Tenant's Property. ......................................7
9.6. Waiver. .................................................7
10. Real Property Taxes. ..............................................7
10.1. Payment of Taxes. ......................................7
10.2. Definition of "Real Property Tax." .....................7
10.3. Personal Property Taxes. ...............................8
11. Utilities. ........................................................8
11.1. Services Provided by Landlord. .........................8
11.2. Services Exclusive to Tenant. ..........................8
11.3. Hours of Service. ......................................8
11.4. Excess Usage by Tenant. ................................8
11.5. Interruptions. .........................................8
12. Assignment and Subletting. ........................................8
12.1. Landlord's Consent Required. ...........................8
12.2. Standard For Approval. .................................9
12.3. Additional Terms and Conditions. .......................9
12.4. Additional Terms and Conditions Applicable
to Subletting. .........................................9
12.5. Transfer Premium from Assignment or Subletting. ........9
12.6. Landlord's Option to Recapture Space. ..................10
12.7. Landlord's Expenses. ...................................10
i
3
TABLE OF CONTENTS
(Continued)
13. Default; Remedies. ................................................10
13.1. Default by Tenant. .....................................10
13.2. Remedies. ..............................................10
13.3. Default by Landlord. ...................................11
13.4. Late Charges. ..........................................11
13.5. Interest on Past-due Obligations. ......................11
13.6. Payment of Rent after Default. .........................11
14. Landlord's Right to Cure Default; Payments by Tenant. .............11
15. Condemnation. .....................................................12
16. Vehicle Parking. ..................................................12
16.1. Use of Parking Facilities. .............................12
16.2. Parking Charges. .......................................12
17. Broker's Fee. .....................................................12
18. Estoppel Certificate. .............................................12
18.1. Delivery of Certificate. ...............................12
18.2. Failure to Deliver Certificate. ........................12
18.3. Financial Information. .................................12
19. Landlord's Liability. .............................................13
20. Indemnity. ........................................................13
21. Exemption of Landlord from Liability. .............................13
22. Hazardous Material. ...............................................13
23. Medical Waste Disposal. ...........................................13
24. Tenant Improvements. ..............................................13
25. Subordination. ....................................................14
25.1. Effect of Subordination. ...............................14
25.2. Execution of Documents. ................................14
26. Options. ..........................................................14
26.1. Definition. ............................................14
26.2. Options Personal. ......................................14
26.3. Multiple Options. ......................................14
26.4. Effect of Default on Options. ..........................14
26.5. Limitations on Options. ................................14
27. Landlord Reservations. ............................................14
28. Changes to Project. ...............................................14
29. Substitution of Other Premises. ...................................15
30. Holding Over. .....................................................15
31. Landlord's Access. ................................................15
31.1. Access. ................................................15
31.2. Keys. ..................................................15
32. Security Measures. ................................................15
33. Easements. ........................................................15
34. Transportation Management. ........................................15
35. Severability. .....................................................15
ii
4
TABLE OF CONTENTS
(Continued)
36. Time of Essence. ..................................................15
37. Definition of Additional Rent. ....................................15
38. Incorporation of Prior Agreements. ................................15
39. Amendments. .......................................................16
40. Notices. ..........................................................16
41. Waivers. ..........................................................16
42. Covenants. ........................................................16
43. Binding Effect; Choice of Law. ....................................16
44. Attorneys' Fees. ..................................................16
45. Auctions. .........................................................16
46. Signs. ............................................................16
47. Merger. ...........................................................16
48. Quiet Possession. .................................................16
49. Authority. ........................................................16
50. Conflict. .........................................................16
51. Multiple Parties. .................................................16
52. Interpretation. ...................................................16
53. Prohibition Against Recording. ....................................17
54. Relationship of Parties. ..........................................17
55. Rules and Regulations. ............................................17
56. Right to Lease. ...................................................17
57. Security Interest. ................................................17
58. Security for Performance of Tenant's Obligations. .................17
59. Financial Statements. .............................................17
60. Attachments. ......................................................17
61. WAIVER OF JURY TRIAL. .............................................17
ADDENDUM.................................................................Add-1
EXHIBIT A................................................................A-1
EXHIBIT B................................................................B-1
EXHIBIT C................................................................C-1
EXHIBIT E................................................................E-1
EXHIBIT F................................................................F-1
SCHEDULE 1...............................................................Sch 1-1
iii
▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ III
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
STANDARD OFFICE DEED OF LEASE
BASIC LEASE PROVISIONS.
1.1. PARTIES: This Deed of Lease, dated for reference purposes only
December 6, 1995, is made by and between ADVENT REALTY LIMITED
PARTNERSHIP II, a Delaware limited partnership ("Landlord")
and JAYCOR, a California corporation, doing business under the
name of ____________________________________________
("Tenant").
1.2. PREMISES: Suite Number 300, as shown on Exhibit "A"
attached hereto (the "Premises").
1.3. RENTABLE AREA OF PREMISES: 27,219 square feet.
1.4. BUILDING ADDRESS: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
1.5. USE: General office use, subject to the requirements and
limitations contained in Section 6.
1.6. TERM: Seven (7) years.
1.7. COMMENCEMENT DATE: March 1, 1996, subject to adjustment in
accordance with Section 3 below.
1.8. BASE RENT: $43,096.75 per month.
1.9. BASE RENT PAID UPON EXECUTION: $43,096.75 for the first full
month's rent due under the Lease.
1.10. SECURITY DEPOSIT: $43,096.75.
1.11. TENANT'S SHARE: 17.40% (total square footage of Building is
156,407 square feet).
1.12. BASE YEAR: The calendar year 1996.
1.13. NUMBER OF PARKING SPACES: Total of Ninety-Eight (98): Up to
Twenty (20) spaces may be Reserved Parking, with the balance
being Unreserved Parking.
1.14. INITIAL MONTHLY PARKING RATES PER SPACE: Reserved: $30.00;
Unreserved: $-0-.
1.15. REAL ESTATE BROKER:
LANDLORD: Barnes, Morris, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, Inc.
TENANT: Barnes, Morris, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, Inc.
1.16. ATTACHMENTS TO LEASE: Addendum; Exhibit A - "Premises",
Exhibit B - "Verification Letter", Exhibit C - "Rules and
Regulations", Exhibit E - "Cleaning Specifications"; Exhibit F
- "License Agreement for Satellite Dish", and Schedule 1 "Work
Letter Agreement".
1.17. ADDRESS FOR NOTICES:
LANDLORD: Advent Realty Limited Partnership II
c/o Barnes, Morris, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
Management Services
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
WITH COPY TO: TA Associates Realty
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
TENANT: JAYCOR
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
WITH COPY TO: JAYCOR
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
1.18. AGENT FOR SERVICE OF PROCESS: If Tenant is a corporation, the
name and address of Tenant's registered agent for service of
process is:
CT Corporation System
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
6
2. PREMISES.
2.1. LEASE OF PREMISES. Landlord hereby leases to Tenant, and
Tenant hereby leases from Landlord, upon all of the conditions set forth herein
the Premises, together with certain rights to the Common Areas as hereinafter
specified. The Premises shall not include an easement for light, air or view.
Notwithstanding anything in this Lease to the contrary, the "Project" shall mean
the Building, the land under the Building, the Common Areas (as hereinafter
defined) and all parking facilities, and for purposes of calculating Operating
Expenses herein, the Project may, subject to the provisions of Section 4.2 of
this Lease, only include the Building's share of the following areas or items
within the Tysons Dulles Plaza complex: perimeter landscaping, line striping,
entrance features to Tysons Dulles Plaza complex, exterior parking and driveway
maintenance. The Building's share of the Operating Expenses referred to in the
immediately preceding sentence shall be calculated as a fraction, the numerator
of which is the rentable floor area of the Building and the denominator of which
is the total rentable floor area of all buildings in the Tysons Dulles Plaza
complex.
2.2 CALCULATION OF SIZE OF BUILDING AND PREMISES. All provisions
included in this Lease relating to the number of rentable square feet in the
Premises, including, but not limited to, Base Rent and Tenant's Share, shall be
adjusted to reflect the actual number of rentable square feet in the Premises.
The calculation of the number of rentable square feet in the Premises shall be
made by Landlord in accordance with the methods of measuring rentable square
feet, as that method is described by the Washington D.C. Association of
Realtors, Inc.
2.3 COMMON AREAS-DEFINED. The term "Common Areas" is defined as
all areas and facilities outside the Premises and within the exterior boundary
line of the Project that are designated by Landlord from time to time for the
general non-exclusive use of Landlord, Tenant and the other tenants of the
Project and their respective employees, suppliers, customers and invitees,
including, but not limited to, common entrances, lobbies, corridors, stairwells,
public restrooms, elevators, parking areas, loading and unloading areas,
roadways and sidewalks. Landlord may also designate other land and improvements
outside the boundaries of the Project to be a part of the Common Areas, provided
that such other land and improvements have a reasonable and functional
relationship to the Project.
3. TERM.
3.1 TERM AND COMMENCEMENT DATE. The Term and Commencement Date
of this Lease are as specified in Sections 1.6 and 1.7. The Commencement Date
set forth in Section 1.7 is an estimated Commencement Date. Subject to the
limitations contained in Section 3.3 below, the actual Commencement Date shall
be the date possession of the Premises is tendered to Tenant in accordance with
Section 3.4 below; provided, however, that the Term of this Lease shall be
computed from the first day of the calendar month following the Commencement
Date. When the actual Commencement Date is established by Landlord, Tenant
shall, within five (5) days after Landlord's request, complete and execute the
letter attached hereto as Exhibit "B" and deliver it to Landlord. Tenant's
failure to execute the letter attached hereto as Exhibit "B" within said five
(5) day period shall be a material default hereunder and shall constitute
Tenant's acknowledgement of the truth of the facts contained in the letter
delivered by Landlord to Tenant.
SEE ADDENDUM PARAGRAPH 1
3.2 DELAY IN POSSESSION. Notwithstanding the estimated
Commencement Date specified in Section 1.7, if for any reason Landlord cannot
deliver possession of the Premises to Tenant on said date, Landlord shall not be
subject to any liability therefor, nor shall such failure affect the validity of
this Lease or the obligations of Tenant hereunder or extend the Term hereof;
provided, however, in such a case, Tenant shall not be obligated to pay rent or
perform any other obligation of Tenant under this Lease, except as may be
otherwise provided in this Lease, until possession of the Premises is tendered
to Tenant, as defined in Section 3.4. If Landlord shall not have tendered
possession of the Premises to Tenant within one hundred twenty (120) days
following the estimated Commencement Date specified in Section 1.7, as the same
may be extended in accordance with Section 3.3 or under the terms of any work
letter agreement entered into by Landlord and Tenant, Tenant may, at Tenant's
option, by notice in writing to Landlord within ten (10) days after the
expiration of the one hundred twenty (120) day period, terminate this Lease. If
Tenant terminates this Lease as provided in the preceding sentence, the parties
shall be discharged from all obligations hereunder, except that Landlord shall
return any money previously deposited with Landlord by Tenant; and provided
further, that if such written notice by Tenant is not received by Landlord
within said ten (10) day period, Tenant shall not have the right to terminate
this Lease as provided above unless Landlord fails to tender possession of the
Premises to Tenant within two hundred forty (240) days following the estimated
Commencement Date specified in Section 1.7, as the same may be extended in
accordance with Section 3.3 or under any work letter agreement entered into by
Landlord and Tenant. If Landlord is unable to deliver possession of the Premises
to Tenant on the Commencement Date due to a "Force Majeure Event," the
Commencement Date shall be extended by the period of the delay caused by the
Force Majeure Event. A Force Majeure Event shall mean fire, earthquake, weather
delays or other acts of God, strikes, boycotts, war, riot, insurrection,
embargoes, shortages of equipment, labor or materials, delays in issuance of
governmental permits or approvals, or any other cause beyond the reasonable
control of Landlord.
3.3 DELAYS CAUSED BY TENANT. There shall be no abatement of
rent, and the one hundred twenty (120) day period and the two hundred forty
(240) day period specified in Section 3.2 shall be deemed extended, to the
extent of any delays caused by acts or omissions of Tenant, Tenant's agents,
employees and contractors, or for Tenant delays as defined in the work letter
agreement attached to this Lease, if any (hereinafter "Tenant Delays"). The
Commencement Date shall not be extended due to Tenant Delays.
3.4 TENDER OF POSSESSION. Possession of the Premises shall be
deemed tendered to Tenant when Landlord's architect or agent has determined that
(a) the improvements to be provided by Landlord pursuant to a work letter
agreement, if any, are substantially completed, (b) the Project utilities are
ready for use in the Premises, (c) Tenant has reasonable access to the Premises,
and (d) three (3) days shall have expired following advance written notice to
Tenant of the occurrence of the matters described in (a), (b) and (c) above of
this Section 3.4. If improvements to the Premises are constructed by Landlord,
the improvements shall be deemed "substantially" completed when the improvements
have been completed except for minor items or defects which can be completed or
remedied after Tenant occupies the Premises without causing substantial
interference with Tenant's use of the Premises.
3.5 EARLY POSSESSION. If Tenant occupies the Premises prior to
the Commencement Date, such occupancy shall be subject to all provisions of this
Lease, such occupancy shall not change the termination date, and Tenant shall
pay Base Rent and all other charges provided for in this Lease during the period
of such occupancy. Provided that Tenant does not interfere with or delay the
completion by Landlord or its agents or contractors of the construction of any
tenant improvements, Tenant shall have the right to enter the Premises prior to
the anticipated Commencement Date for the purpose of installing furniture, trade
fixtures, equipment, telecommunications and computer cabling and wiring and
similar items. Provided that Tenant has not begun operating its business
7
from the Premises, and subject to all of the terms and conditions of the Lease,
the foregoing activity shall not constitute the delivery of possession of the
Premises to or occupancy of the Premises by Tenant and the Lease Term shall not
commence as a result of said activities. Prior to entering the Premises Tenant
shall obtain all insurance it is required to obtain by the Lease and shall
provide certificates of said insurance to Landlord.
4. RENT.
4.1. BASE RENT. Subject to adjustment as hereinafter provided in
Section 4.3, Tenant shall pay to Landlord the Base Rent for the Premises set
forth in Section 1.8, without offset or deduction on the first day of each
calendar month. At the time Tenant executes this Lease it shall pay to Landlord
the advance Base Rent described in Section 1.9. Base Rent for any period during
the Term hereof which is for less than one month shall be prorated based upon
the actual number of days of the calendar month involved. Base Rent and all
other amounts payable to Landlord hereunder shall be payable to Landlord in
lawful money of the United States at the address stated herein or to such other
persons or at such other places as Landlord may designate in writing.
4.2. OPERATING EXPENSE INCREASES. Commencing on the first
anniversary of the Commencement Date, Tenant shall pay to Landlord during the
Term hereof, in addition to the Base Rent, Tenant's Share of the amount by which
all Operating Expenses for each Comparison Year exceeds the amount of all
Operating Expenses for the Base Year. If less than 95% of the rentable square
feet in the Project is occupied by tenants or Landlord is not supplying services
to 95% of the rentable square feet of the Project at any time during any
calendar year (including the Base Year), Operating Expenses for such calendar
year shall be an amount equal to the Operating Expenses which would normally be
expected to be incurred had 95% of the Project's rentable square feet been
occupied and had Landlord been supplying services to 95% of the Project's
rentable square feet throughout such calendar year. Tenant's Share of Operating
Expense increases shall be determined in accordance with the following
provisions:
(a) "TENANT'S SHARE" is defined as the percentage set forth in
Section 1.11, which percentage has been determined by dividing the number of
rentable square feet in the Premises by one hundred percent (100%) of the total
number of rentable square feet in the Project and multiplying the resulting
quotient by one hundred (100). In the event that the number of rentable square
feet in the Project or the Premises changes, Tenant's Share shall be adjusted in
the year the change occurs, and Tenant's Share for such year shall be determined
on the basis of the days during such year that each Tenant's Share was in
effect.
(b) "COMPARISON YEAR" is defined as each calendar year during
the Term of this Lease after the Base Year. Tenant's Share of the Operating
Expense increases for the last Comparison Year of the Lease Term shall be
prorated according to that portion of such Comparison Year as to which Tenant is
responsible for a share of such increase.
(c) "OPERATING EXPENSES" shall include all reasonable costs,
expenses and fees incurred by Landlord in connection with or attributable to the
Project, including but not limited to, the following items: (i) all costs,
expenses and fees associated with or attributable to the ownership, management,
operation, repair, maintenance, improvement, alteration and replacement of the
Project, or any part thereof, including but not limited to, the following: (A)
all surfaces, coverings, decorative items, carpets, drapes, window coverings,
parking areas, loading and unloading areas, trash areas, roadways, sidewalks,
stairways, landscaped areas, striping, bumpers, irrigation systems, lighting
facilities, building exteriors and roofs, fences and gates; (B) all heating,
ventilating and air conditioning equipment ("HVAC"), plumbing, mechanical,
electrical systems, life safety systems and equipment, telecommunication
equipment, elevators, escalators, tenant directories, fire detection systems
including sprinkler system maintenance and repair; (ii) the cost of trash
disposal, janitorial services and security services and systems; (iii) the cost
of all insurance purchased by Landlord and enumerated in Section 8 of this
Lease, including any deductibles; (iv) the amount of the real property taxes to
be paid by Landlord under Section 10.1 hereof; (v) the cost of water, sewer,
gas, electricity, and other utilities available at the Project and paid by
Landlord; (vi) the cost of labor, salaries and applicable fringe benefits
incurred by Landlord; (vii) the cost of materials, supplies and tools used in
managing, maintaining and/or cleaning the Project; (viii) the cost of accounting
fees, reasonable and customary management fees not to exceed four percent (4%)
of annual gross rents received, legal fees and consulting fees attributable to
the ownership, operation, management, maintenance and repair of the Project plus
the cost of any space occupied by the property manager and leasing agent (if
Landlord is the property manager, Landlord shall be entitled to receive a fair
market management fee) not to exceed four percent (4%) of annual gross rents
received; (ix) the cost of replacing and/or adding improvements mandated by any
law, statute, regulation or directive of any governmental agency and any repairs
or removals necessitated thereby; (x) the costs incurred in implementing and
operating any transportation management program, ride sharing program or similar
program including, but not limited to, the cost of any transportation program
fees, mass transportation fees or similar fees charged or assessed by any
governmental or quasi-governmental entity; (xi) payments made by Landlord under
any easement, license, operating agreement, declaration, restrictive covenant,
or instrument pertaining to the payment or sharing of costs among property
owners; (xii) personal property taxes imposed upon the fixtures, machinery,
equipment, furniture and personal property used in connection with the operation
of the Project; and (xiii) the cost of any other service provided by Landlord or
any cost that is elsewhere stated in this Lease to be an "Operating Expense."
SEE ADDENDUM PARAGRAPH 2
(d) Operating Expenses shall not include any expenses paid by
any tenant directly to third parties, or as to which Landlord is otherwise
reimbursed by any third party or by insurance proceeds.
(e) If the cost incurred in making an improvement or replacing
any equipment is not fully deductible as an expense in the year incurred in
accordance with generally accepted accounting principles, the cost shall be
amortized over the useful life of the improvement or equipment, as reasonably
determined by Landlord, together with an interest factor of twelve percent (12%)
per annum on the unamortized cost of such item.
(f) Landlord shall, from time to time, estimate what Tenant's
Share of Operating Expense increases will be, and the same shall be payable by
Tenant monthly during each Comparison Year of the Lease Term, on the same day as
the Base Rent is due hereunder. In the event that Tenant pays Landlord's
estimate of Tenant's Share of Operating Expense increases, Landlord shall use
its best efforts to deliver to Tenant within one hundred eighty (180) days after
the expiration of each Comparison Year a reasonably detailed statement showing
Tenant's Share of the actual Operating Expense increases incurred during such
year. Landlord's failure to deliver the statement to Tenant within said period
shall not constitute Landlord's waiver of its right to collect said amounts or
otherwise prejudice Landlord's rights hereunder. If Tenant's payments under this
Section 4.2(f) during said Comparison Year
3
8
exceed Tenant's Share as indicated on said statement, Tenant shall be entitled
to credit the amount of such overpayment against Tenant's Share of Operating
Expense increases next falling due. If Tenant's payments under this Section
4.2(f) during said Comparison Year were less than Tenant's Share as indicated on
said statement, Tenant shall pay to Landlord the amount of the deficiency within
thirty (30) days after delivery by Landlord to Tenant of said statement.
Landlord and Tenant shall forthwith adjust between them by cash payment any
balance determined to exist with respect to that portion of the last Comparison
Year for which Tenant is responsible for Operating Expense increases,
notwithstanding that the Lease Term may have terminated before the end of such
Comparison Year; and this provision shall survive the expiration or earlier
termination of the Lease.
SEE ADDENDUM PARAGRAPH 3
(g) The computation of Tenant's Share of Operating Expense
increases is intended to provide a formula for the sharing of costs by Landlord
and Tenant and will not necessarily result in the reimbursement to Landlord of
the exact costs it has incurred.
SEE ADDENDUM PARAGRAPH 4
4.3 BASE RENT INCREASE.
(a) The Base Rent shall be increased each year on the
anniversary of the first day of the calendar month in which the Commencement
Date occurs by one hundred fifty percent (150%) of the increase, if any, in the
Consumer Price Index of the Bureau of Labor Statistics of the Department of
Labor for All Urban Consumers, (1982-1984 = 100), "all items", for the
metropolitan area nearest the location of the Project, herein referred to as
"CPI-U".
(b) The monthly Base Rent payable pursuant to Section 4.3(a)
shall be calculated as follows: the Base Rent payable for the first month of the
Term of this Lease shall be multiplied by one hundred fifty percent (150%) of a
fraction the numerator of which shall be the CPI-U of the calendar month which
is three months prior to the month during which the adjustment is to take
effect, and the denominator of which shall be the CPI-U for the calendar month
which is three months prior to the calendar month in which the Commencement Date
occurs. The sum so calculated shall constitute the new monthly Base Rent
hereunder, but, in no event, shall such new monthly Base Rent be less than the
Base Rent payable for the month immediately preceding the date for the Base Rent
increase. Notwithstanding the foregoing, the Base Rent shall not be increased by
more than two and one-half percent (2.5%) in anylease year over the immediately
preceding lease year.
(c) If the 1982-1984 base period for the CPI-U is changed, the
conversion tables issued by the Bureau of Labor Statistics shall be used. In the
event the compilation and/or publication of the CPI-U shall be transferred to
any other governmental department or agency or shall be discontinued, then the
index most nearly the same as the CPI-U shall be used to make such calculations.
In the event that Landlord and Tenant cannot agree on such alternative index,
then the matter shall be submitted for decision to the American Arbitration
Association in the County in which the Premises are located, in accordance with
the then rules of said association and the decision of the arbitrators shall be
binding upon the parties, notwithstanding one party failing to appear after due
notice of the proceeding. The cost of said arbitrators shall be paid equally by
Landlord and Tenant.
(d) Tenant shall continue to pay the rent at the rate
previously in effect until the increase, if any is determined. Within ten (10)
days following the date on which the increase is determined, Tenant shall make
such payment to Landlord as will bring the increased Base Rent current,
commencing with the effective date of such increase through the date of such
determination. Thereafter the Base Rent shall be paid at the increased rate. No
delay by Landlord in making a CPI-U adjustment shall constitute the waiver by
Landlord of its right to make said adjustment.
5. SECURITY DEPOSIT. Tenant shall deliver to Landlord at the time it executes
this Lease the security deposit set forth in Section 1.10 as security for
Tenant's faithful performance of Tenant's obligations hereunder. If Tenant fails
to pay Base Rent or other charges due hereunder, or otherwise defaults with
respect to any provision of this Lease, which such default remains uncured after
all applicable notice and cure periods have expired, Landlord may use all or any
portion of said deposit for the payment of any Base Rent or other charge due
hereunder, to pay any other sum to which Landlord may become obligated by reason
of Tenant's default, or to compensate Landlord for any loss or damage which
Landlord may suffer thereby. If Landlord so uses or applies all or any portion
of said deposit, Tenant shall within ten (10) days after written demand therefor
deposit cash with Landlord in an amount sufficient to restore said deposit to
its full amount. Landlord shall not be required to keep said security deposit
separate from its general accounts. If Tenant performs all of Tenant's
obligations hereunder, said deposit, or so much thereof as has not heretofore
been applied by Landlord, shall be returned, without payment of interest or
other amount for its use, to Tenant (or, at Landlord's option, to the last
assignee, if any, of Tenant's interest hereunder) at the expiration of the Term
hereof, and after Tenant has vacated the Premises. No trust relationship is
created herein between Landlord and Tenant with respect to said security
deposit. Tenant acknowledges that the security deposit is not an advance payment
of any kind or a measure of Landlord's damages in the event of Tenant's default.
SEE ADDENDUM PARAGRAPH 5
6. USE.
6.1. USE. The Premises shall be used and occupied only for the
purpose set forth in Section 1.5 and for no other purpose. If Section 1.5 gives
Tenant the right to use the Premises for general office use, by way of example
and not limitation, general office use shall not include medical office use or
any similar use, laboratory use, classroom use, any use not characterized by
applicable zoning and land use restrictions as general office use, or any use
which would require Landlord or Tenant to obtain a conditional use permit or
variance from any federal, state or local authority. No exclusive use has been
granted to Tenant hereunder.
6.2 COMPLIANCE WITH LAW. Notwithstanding any permitted use
inserted in Section 1.5, Tenant shall not use the Premises for any purpose which
would violate the Project's certificate of occupancy, any conditional use permit
or variance applicable to the Project or violate any covenants, conditions or
other restrictions applicable to the Project. Tenant shall, at Tenant's expense,
promptly comply with all applicable laws, ordinances, rules, regulations,
orders, certificates of occupancy, conditional use permits, variances, covenants
and restrictions of record, and requirements of any fire insurance underwriters,
rating bureaus or government agencies, now in effect or which may hereafter come
into effect, whether or not they reflect a change in policy from that now
existing, during the Term or any part of the Term hereof, relating in any manner
to the Premises and the occupation and use by Tenant of the Premises provided
however that, except to the extent Tenant is otherwise obligated to pay its
Tenant's Share as Operating Expenses pursuant to this Lease, Tenant shall have
no obligation to construct or pay, at Tenant's sole cost and expense, for the
construction of any improvements to the Premises except to the extent due to
Tenant's Particular manner of use of the Premises. Tenant shall conduct its
business and use the Premises in a lawful manner and shall not use or permit the
use of the Premises or the Common Areas in any manner that will tend to create
waste or a nuisance or shall tend to disturb other occupants of the Project.
Tenant shall obtain, at its sole expense, any permit or other
4
9
governmental authorization required to operate its business from the Premises.
Landlord shall not be liable for the failure of any other tenant or person to
abide by the requirements of this Section or to otherwise comply with applicable
laws and regulations, and Tenant shall not be excused from the performance of
its obligations under this Lease due to such a failure.
SEE ADDENDUM PARAGRAPH 6
6.3 CONDITION OF PREMISES. Except as otherwise provided in this
Lease, Tenant hereby accepts the Premises and the Project in their condition
existing as of the date this Lease is executed by Landlord and Tenant, subject
to all applicable federal, state and local laws, ordinances, regulations and
permits governing the use of the Premises, the Project's certificate of
occupancy, any applicable conditional use permits or variances, and any
easements, covenants or restrictions of record affecting the use of the Premises
or the Project. Tenant shall comply with all federal, state and local laws and
regulations governing occupational safety and health at Tenant's sole cost and
expense. Tenant acknowledges that it has satisfied itself by its own independent
investigation that the Premises and the Project are suitable for its intended
use, and that neither Landlord nor Landlord's agents has made any representation
or warranty as to the present or future suitability of the Premises, or the
Project for the conduct of Tenant's business.
7. MAINTENANCE, REPAIRS AND ALTERATIONS.
7.1 LANDLORD'S OBLIGATIONS. Landlord shall keep the Project
(excluding the interior of the Premises and space leased to other occupants of
the Project) in good condition and repair. Except as provided in Section 9.3,
there shall be no abatement of rent or liability to Tenant on account of any
injury or interference with Tenant's business with respect to any improvements,
alterations or repairs made by Landlord to the Project or any part thereof.
Tenant expressly waives the benefits of any statute now or hereafter in effect
which would otherwise afford Tenant the right to make repairs at Landlord's
expense or to terminate this Lease because of Landlord's failure to keep the
Project in good order, condition and repair.
7.2 TENANT'S OBLIGATIONS.
(a) Except as otherwise provided in this Lease, subject to
the requirements of Section 7.3, Tenant shall be responsible for payment of the
cost of keeping the Premises in good condition and repair, reasonable wear and
tear and casualty (except as otherwise provided in Section 9) excepted, and if
Landlord makes any repairs to the Premises, the cost thereof shall be paid by
Tenant to Landlord. Tenant shall be responsible for the cost of painting,
repairing or replacing wall coverings, and the cost of repairing or replacing
any improvements made to the Premises by Landlord or Tenant. Landlord may, but
shall not be obligated to, enter the Premises at all reasonable times to make
such repairs, alterations, improvements and additions to the Premises or to any
equipment located therein as Landlord deems necessary, in its sole discretion.
(b) On the last day of the Term hereof, or on any sooner
termination, Tenant shall surrender the Premises to Landlord in the same
condition as received, ordinary wear and tear and casualty (except as otherwise
provided in Section 9) excepted, clean and free of debris and Tenant's personal
property. Tenant shall repair any damage to the Premises occasioned by the
installation or removal of Tenant's trade fixtures, furnishings and equipment.
Except as otherwise stated in this Lease, Tenant shall leave the power panels,
electrical distribution systems, lighting fixtures, HVAC, window coverings, wall
coverings, carpets, wall panelling, ceilings and plumbing at the Premises and in
good operating condition.
7.3 ALTERATIONS AND ADDITIONS.
(a) Tenant shall not, without Landlord's prior written
consent, which may be given or withheld in Landlord's sole discretion, make any
alterations, improvements, additions, utility installations or repairs
(hereinafter collectively referred to as "Alterations") in, on or about the
Premises or the Project. As used in this Lease, the term "utility installation"
shall mean carpeting or other floor covering, window and wall coverings, power
panels, electrical distribution systems, lighting fixtures, telephone or
computer system wiring, HVAC and plumbing. At the expiration of the Term,
Landlord may require the removal of any Alterations installed by Tenant (other
than the initial Improvements, as such term is defined in the Work Letter
Agreement)and the restoration of the Premises and the Project to their prior
condition, at Tenant's expense. If a work letter agreement is entered into by
Landlord and Tenant, Tenant shall not be obligated to remove the tenant
improvements constructed in accordance with the work letter agreement. Should
Landlord permit Tenant to make its own Alterations, Tenant shall use only such
contractor as has been expressly approved by Landlord, and Landlord may require
Tenant to provide to Landlord, at Tenant's sole cost and expense, a lien and
completion bond in an amount equal to one and one-half times the estimated cost
of such Alterations, to insure Landlord against any liability for mechanic's and
materialmen's liens and to insure completion of the work. Should Tenant make any
Alterations without the prior approval of Landlord, or use a contractor not
expressly approved by Landlord, Landlord may, at any time during the Term of
this Lease, require that Tenant remove all or part of the Alterations and return
the Premises to the condition it was in prior to the making of the Alterations.
In the event Tenant makes any Alterations, Tenant agrees to obtain or cause its
contractor to obtain, prior to the commencement of any work, "builders all risk"
insurance in an amount approved by Landlord and workers compensation insurance.
SEE ADDENDUM PARAGRAPH 7
(b) Any Alterations in or about the Premises that Tenant
shall desire to make shall be presented to Landlord in written form, with plans
and specifications which are sufficiently detailed to obtain a building permit.
If Landlord consents to an Alteration, the consent shall be deemed conditioned
upon Tenant acquiring a building permit from the applicable governmental
agencies, furnishing a copy thereof to Landlord prior to the commencement of the
work, and compliance by Tenant with all conditions of said permit in a prompt
and expeditious manner. Tenant shall provide Landlord with as-built plans and
specifications for any Alterations made to the Premises.
(c) Tenant shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Tenant at or for
use in the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or the Project, or any interest therein.
If Tenant shall, in good faith, contest the validity of any such lien, Tenant
shall furnish to Landlord a surety bond satisfactory to Landlord in an amount
equal to such contested lien claim or demand indemnifying Landlord against
liability arising out of such lien or claim. In addition, Landlord may require
Tenant to pay Landlord's reasonable attorneys' fees and costs in participating
in such action.
(d) Tenant shall give Landlord not less than ten (10) days'
advance written notice prior to the commencement of any work in the Premises by
Tenant, and Landlord shall have the right to post notices of non-responsibility
in or on the Premises or the Project as provided by law.
(e) All Alterations (whether or not such Alterations
constitute trade fixtures of Tenant) which may be made to the Premises by Tenant
shall be made and done in a good and workmanlike manner and with new materials
satisfactory to Landlord and shall be the property of Landlord and remain upon
and be surrendered with the Premises at the expiration of the
5
10
Lease Term, unless Landlord requires their removal pursuant to Section 7.3(a).
Provided Tenant is not in default, notwithstanding the provisions of this
Section 7.3(a), Tenant's personal property and equipment, other than that which
is affixed to the Premises so that it cannot be removed without material damage
to the Premises or the Project, shall remain the property of Tenant and may be
removed by Tenant subject to the provisions of Section 7.2(b).
7.4 FAILURE OF TENANT TO REMOVE PROPERTY. If this Lease is
terminated due to the expiration of its Term or otherwise, and Tenant fails to
remove its property as required by Section 7.2(b), in addition to any other
remedies available to Landlord under this Lease, and subject to any other right
or remedy Landlord may have under applicable law, Landlord may, with three (3)
days prior notice to Tenant, remove any property of Tenant from the Premises and
store the same elsewhere at the expense and risk of Tenant and at any time
(before or after Landlord stores said property), Landlord may sell any or all
such property at public or private sale, in such a manner and at such times and
places as Landlord, in its sole discretion, may deem proper, without notice to
or demand upon Tenant. Landlord shall apply the proceeds of such sale: first, to
the cost and expenses of the sale, including reasonable attorneys' fees actually
incurred; second, to the payment of the cost of or charges for storing any such
property; third, to the payment of any other sums of money which may then or
thereafter be due to Landlord from Tenant under this Lease; and fourth, the
balance, if any, to Tenant.
SEE ADDENDUM PARAGRAPH 8
8. INSURANCE.
8.1. INSURANCE-TENANT.
(a) During the Term of the Lease and at such other times as
Tenant occupies the Premises, Tenant shall keep in force at its expense
"commercial general liability" insurance including an ISO broad form
endorsement or its equivalent with respect to the Premises with limits of not
less than One Million Dollars ($1,000,000) combined single limit or such higher
amount as Landlord may reasonably require in writing from time to time. The
insurance shall cover liability arising out of Tenant's operations and liability
arising out of work performed at the Premises by other persons on behalf of
Tenant, and shall specifically include the contractual liability assumed by
Tenant under this Lease. Such coverage, if written on a claims-made basis, must
provide for a retroactive date which is prior to the date Tenant occupies the
Premises, and the same retroactive date shall continue during the entire Term of
this Lease.
(b) Tenant will also maintain "all risk" extended coverage
property insurance written on a one hundred percent (100%) replacement cost
basis on Tenant's personal property, all tenant improvements installed at the
Premises by Landlord or Tenant, Tenant's trade fixtures and other property. Such
policies shall provide protection against any peril included within the
classification "fire and extended coverage," against vandalism and malicious
mischief, theft and sprinkler leakage. If this Lease is terminated as the result
of a casualty in accordance with Section 9, the proceeds of said insurance
attributable to the replacement of all tenant improvements at the Premises shall
be paid to Landlord.
(c) Tenant shall, at all times during the Term hereof,
maintain in effect workers' compensation insurance as required by applicable law
and business interruption insurance.
8.2 INSURANCE-LANDLORD.
(a) Landlord shall obtain and keep in force a policy of
comprehensive general liability insurance with coverage against such risks and
in such amounts as Landlord deems advisable insuring Landlord against liability
arising out of the ownership, operation and management of the Project.
(b) Landlord shall also obtain and keep in force during the
Term of this Lease a policy or policies of "all risk" insurance covering loss or
damage to the Project in the amount of not less than eighty percent (80%) of the
full replacement cost thereof, as determined by Landlord from time to time. The
terms and conditions of said policies and the perils and risks covered thereby
shall be determined by Landlord, from time to time, in Landlord's sole
discretion. In addition, at Landlord's option, Landlord shall obtain and keep in
force, during the Term of this Lease, a policy of rental interruption insurance,
with loss payable to Landlord, which insurance shall, at Landlord's option, also
cover all Operating Expenses. Tenant will not be named as an additional insured
in any insurance policies carried by Landlord and shall have no right to any
proceeds therefrom. At Landlord's option, Landlord may obtain insurance
coverages and/or bonds related to the operation of the parking areas. At
Landlord's option, Landlord may obtain coverage for flood and earthquake
damages. In addition, Landlord shall have the right to obtain such additional
insurance as is customarily carried by owners or operators of other comparable
office buildings in the geographical area of the Project. The policies purchased
by Landlord shall contain such deductibles as Landlord may determine. In
addition to amounts payable by Tenant in accordance with Section 4.2, Tenant
shall pay any increase in the property insurance premiums for the Project over
what was payable immediately prior to the Commencement Date to the extent the
increase is specified by Landlord's insurance carrier as being caused by the
nature of Tenant's occupancy or any act or omission of Tenant.
SEE ADDENDUM PARAGRAPH 9
8.3. INSURANCE POLICIES. Tenant shall deliver to Landlord copies of
the insurance policies or certificates of insurance required under Section 8.1
within fifteen (15) days prior to the Commencement Date of this Lease. Tenant's
insurance policies or certificates of insurance shall not be cancelable or
subject to reduction of coverage or other modification except after thirty (30)
days prior written notice to Landlord. Tenant shall, at least thirty (30) days
prior to the expiration of such policies, furnish Landlord with evidence of
payment of premiums for renewals thereof and promptly forward renewals to
Landlord once available. Tenant's insurance policies shall be issued by
insurance companies authorized to do business in the state in which the Project
is located, with a general policyholders rating of not less than "A" and a
financial rating of not less than "Class X," as rated in the most recent edition
of "Best Insurance Reports." Tenant's insurance policies shall be issued as
primary policies and not contributing with and not in excess of coverage which
Landlord may carry. Landlord, and at Landlord's option the holder of any
mortgage or deed of trust encumbering the Project, shall be named as an
additional insured on all insurance policies Tenant is obligated to obtain by
Section 8.1 above. Tenant's insurance policies shall not include deductibles in
excess of Five Thousand Dollars ($5,000).
8.4. WAIVER OF SUBROGATION. Tenant and Landlord each hereby
release and relieve the other, and waive their entire right of recovery against
the other, for direct or consequential loss or damage arising out of or incident
to the perils covered by insurance carried by such party (or required to be
carried by such party by this Lease) to the extent of the insurance proceeds
paid under any such policy, whether due to the negligence of Landlord or Tenant
or their agents, employees, contractors and/or invitees. Landlord and Tenant
shall each cause the insurance policies they obtain in accordance with this
Section 8 to provide that the insurance company waives all right of recovery by
subrogation against either party in connection with any damage covered by any
policy.
6
11
8.5. COVERAGE. Landlord makes no representation to Tenant that the
limits or forms of coverage specified above or approved by Landlord are adequate
to insure Tenant's property or Tenant's obligations under this Lease, and the
limits of any insurance carried by Tenant shall not limit its obligations under
this Lease.
9. DAMAGE OR DESTRUCTION.
9.1 EFFECT OF DAMAGE OR DESTRUCTION. If all or part of the
Project is materially damaged (as defined in Section 9.2 below) by fire,
earthquake, flood, explosion, the elements, riot or any other casualty, Landlord
shall have the right in its sole and complete discretion to repair or to rebuild
the Project or to terminate this Lease provided that Landlord may terminate this
Lease only if it terminates all of the leases in the Building. Landlord shall
within ninety (90) days after the occurrence of such damage notify Tenant in
writing of Landlord's intention to repair or to rebuild or to terminate this
Lease. Tenant shall in no event be entitled to compensation or damages on
account of annoyance or inconvenience in making any repairs, or on account of
construction, or on account of Landlord's election to terminate this Lease.
Notwithstanding the foregoing, if Landlord shall elect to rebuild or repair the
Project, but in good faith determines that the Project cannot be rebuilt or
repaired within two hundred seventy (270) days after the date of the occurrence
of the damage, without payment of overtime or other premiums, and the damage to
the Project has rendered the Premises unusable in the ordinary course, Landlord
shall notify Tenant thereof in writing at the time of Landlord's election to
rebuild or repair, and Tenant shall thereafter have a period of fifteen (15)
days within which Tenant may elect to terminate this Lease, upon written notice
to Landlord. Tenant's termination right described in the preceding sentence
shall not apply if the damage was caused by Tenant's negligence or willful
misconduct. Failure of Tenant to exercise said election within said period shall
constitute Tenant's agreement to accept delivery of the Premises under this
Lease whenever tendered by Landlord, provided Landlord thereafter pursues
reconstruction or restoration diligently to completion, subject to delays beyond
Landlord's reasonable control.
SEE ADDENDUM PARAGRAPH 10
9.2 DEFINITION OF MATERIAL DAMAGE. The damage shall be deemed
material if, in Landlord's reasonable judgment, the uninsured cost of repairing
the damage will exceed One Hundred Thousand ($100,000). If insurance proceeds
are available to Landlord in an amount which is sufficient to pay the entire
cost of repairing all of the damage to the Project, the damage shall be deemed
material if the cost of repairing the damage exceeds Five Hundred Thousand
($500,000). Damage to the Project shall also be deemed material if (a) the
Project cannot be repaired to substantially the same condition it was in prior
to the damage due to laws or regulations in effect at the time the repairs will
be made, (b) the holder of any mortgage or deed of trust encumbering the Project
requires that insurance proceeds available to repair the damage in excess of One
Hundred Thousand ($100,000) be applied to the repayment of the indebtedness
secured by the mortgage or the deed of trust, or (c) the damage occurs during
the last twelve (12) months of the Lease Term, unless Tenant has exercised its
Option to Renew the Lease for the Extended Term, in which event this provision
shall apply to the last twelve (12) months of the Extended Term.
9.3. ABATEMENT OF RENT. If Landlord elects to repair damage to
the Project and all or part of the Premises will be unusable or inaccessible to
Tenant in the ordinary conduct of its business until the damage is repaired, and
the damage was not caused by the negligence or willful misconduct of Tenant or
its employees or agents(provided that Tenant shall in any event be entitled to
rent abatement to the extent of rent loss insurance received by Landlord),
Tenant's Base Rent and Tenant's Share of Operating Expense increases shall be
abated in proportion to the amount of the Premises which is unusable or
inaccessible to Tenant in the ordinary conduct of its business until the repairs
are completed.
9.4. TENANT'S NEGLIGENCE. If such damage or destruction occurs as
a result of the negligence or willful misconduct of Tenant or Tenant's employees
or agents, and the proceeds of insurance which are paid under any applicable
policy are not sufficient to repair all of the damage, Tenant shall pay, at
Tenant's sole cost and expense, to Landlord upon demand, the difference between
the cost of repairing the damage and the insurance proceeds received by
Landlord.
9.5. TENANT'S PROPERTY. Landlord shall not be required to repair
any injury or damage to, or to make any repairs or replacements of, any
fixtures, furniture, equipment or tenant improvements installed in the Premises,
and Tenant shall repair and restore all such property at Tenant's sole expense.
9.6. WAIVER. Landlord and Tenant hereby waive the provisions of
any statutes which relate to the termination of leases when leased property is
damaged or destroyed and agree that such event shall be governed by the terms of
this Lease.
10. REAL PROPERTY TAXES.
10.1. PAYMENT OF TAXES. Landlord shall pay the real property tax,
as defined in Section 10.2, applicable to the Project subject to reimbursement
by Tenant of Tenant's Share of such taxes in accordance with the provisions of
Section 4.2.
10.2. DEFINITION OF "REAL PROPERTY TAX." As used herein, the term
"real property tax" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than succession,
capital, levy, corporate franchise, recordation, transfer, mortgage,inheritance,
personal income or estate taxes) imposed on the Project or any portion thereof
by any authority having the direct or indirect power to tax, including any city,
county, state or federal government, or any school, agricultural, sanitary,
fire, street, drainage or other improvement district thereof, as against any
legal or equitable interest of Landlord in the Project or in any portion
thereof, as against Landlord's right to rent or other income therefrom, or as
against Landlord's business of leasing the Project. The term "real property tax"
shall also include any tax, fee, levy, assessment or charge (a) in substitution
of, partially or totally, any tax, fee, levy, assessment or charge hereinabove
included within the definition of "real property tax", or (b) the nature of
which was hereinbefore included within the definition of "real property tax", or
(c) which is imposed as a result of a change in ownership, as defined by
applicable local statutes for property tax purposes, of the Project or which is
added to a tax or charge hereinbefore included within the definition of real
property tax by reason of such change of ownership, or (d) which is imposed by
reason of this transaction, any modifications or changes hereto, or any
transfers hereof, or (e) transportation taxes, fees or assessments, including,
but not limited to, mass transportation fees, regional transportation district
fees, metrorail fees, trip fees and similar fees and assessments, or (f) fees
assessed by any air quality management district or other governmental or
quasi-governmental entity regulating pollution, or (g) parking fees or parking
7
12
taxes paid by Landlord, or (h) any reasonable expenses incurred by Landlord in
attempting to protest, reduce or minimize real property taxes.
SEE ADDENDUM PARAGRAPH 11
10.3. PERSONAL PROPERTY TAXES. Tenant shall pay prior to
delinquency all taxes assessed against and levied upon trade fixtures,
furnishings, equipment and all other personal property of Tenant contained in
the Premises or related to Tenant's use of the Premises. If any of Tenant's
personal property shall be assessed with Landlord's real property, Tenant shall
pay to Landlord the taxes attributable to Tenant within ten (10) days after
receipt of a written statement from Landlord setting forth the taxes applicable
to Tenant's property.
11. UTILITIES.
11.1. SERVICES PROVIDED BY LANDLORD. Subject to all governmental
rules, regulations and guidelines applicable thereto, Landlord shall provide
HVAC to the Premises for normal office use during the times described in Section
11.3, reasonable amounts of electricity for normal office lighting and
fractional horsepower office machines, water in the Premises or in the Common
Area for reasonable and normal drinking and lavatory use, replacement light
bulbs and/or fluorescent tubes and ballasts for standard overhead fixtures, and
building standard janitorial services.
11.2. SERVICES EXCLUSIVE TO TENANT. Tenant shall pay for all
water, gas, heat, electricity, telephone and other utilities and services
supplied and/or metered exclusively to the Premises or to Tenant, together with
any taxes thereon. If any such services are not separately metered to the
Premises, Tenant shall pay, at Landlord's option, either Tenant's Share or a
reasonable proportion to be determined by Landlord of all charges jointly
metered with other premises in the Project.
11.3. HOURS OF SERVICE. Building services and utilities shall be
provided Monday through Friday from 8:00 a.m. to 6:00 p.m. and Saturdays from
9:00 a.m. to 1:00 p.m. Janitorial services shall be provided Monday through
Friday. HVAC and other Building services shall not be provided at other times or
on nationally recognized holidays. Landlord shall use its best efforts to
provide HVAC to Tenant at times other than those set forth above subject to (a)
the payment by Tenant of Landlord's standard charge, as determined by Landlord
from time to time, in Landlord's sole discretion, for after hours HVAC and (b)
Tenant providing to Landlord at least one (1) business day's advance written
notice of Tenant's need for after hours HVAC. As of the date of this Lease, and
subject to future increases, the standard charge for after hours HVAC is Forty
Dollars ($40.00) per hour. Tenant shall pay all after hours HVAC charges to
Landlord within three (3) days after Landlord bills Tenant for said charges.
11.4. EXCESS USAGE BY TENANT. Notwithstanding the use set forth in
Section 1.5, Tenant shall not use Building utilities or services in excess of
those used by the average office building tenant using its premises for ordinary
office use. Tenant shall not install at the Premises office machines, lighting
fixtures or other equipment which will generate above average heat, noise or
vibration at the Premises or which will adversely effect the temperature
maintained by the HVAC system. If Tenant does use Building utilities or services
in excess of those used by the average office building tenant, Landlord shall
have the right, in addition to any other rights or remedies it may have under
this Lease, to (a) at Tenant's expense, install separate metering devices at the
Premises, and to charge Tenant for its usage, (b) require Tenant to pay to
Landlord all costs, expenses and damages incurred by Landlord as a result of
such usage, and (c) require Tenant to stop using excess utilities or services.
Tenant's electrical usage at the Premises shall be considered reasonable so long
as it does not exceed, on a monthly average, five (5) ▇▇▇▇▇ per usable square
foot of the Premises.
11.5. INTERRUPTIONS. Tenant agrees that Landlord shall not be
liable to Tenant for its failure to furnish utilities or other services when
such failure is occasioned, in whole or in part, by repairs, replacements, or
improvements, by any strike, lockout or other labor trouble, by inability to
secure electricity, gas, water, or other fuel at the Project after reasonable
effort to do so, by any accident or casualty whatsoever, by act or default of
Tenant or other parties, or by any other cause beyond Landlord's reasonable
control, and such failures shall never be deemed to constitute an eviction or
disturbance of Tenant's use and possession of the Premises or relieve Tenant
from paying rent or performing any of its obligations under this Lease.
Furthermore, Landlord shall not be liable under any circumstances for loss of
property or for injury to, or interference with, Tenant's business, including,
without limitation, loss of profits, however occurring, through or in connection
with or incidental to a failure to furnish any of the services or utilities as
set forth in this Section 11. Landlord may comply with voluntary controls or
guidelines promulgated by any governmental entity relating to the use or
conservation of energy, water, gas, light or electricity or the reduction of
automobile or other emissions without creating any liability of Landlord to
Tenant under this Lease.
SEE ADDENDUM PARAGRAPH 12
12. ASSIGNMENT AND SUBLETTING.
12.1. LANDLORD'S CONSENT REQUIRED. Tenant shall not voluntarily or
by operation of law assign, transfer, hypothecate, mortgage, sublet, or
otherwise transfer or encumber all or any part of Tenant's interest in this
Lease or in the Premises (hereinafter collectively a "Transfer"), without
Landlord's prior written consent, which shall not be unreasonably withheld.
Landlord shall respond to Tenant's written request for consent hereunder within
thirty (30) days after Landlord's receipt of the written request from Tenant.
Any attempted Transfer without such consent shall be void and shall constitute a
material default and breach of this Lease. Tenant's written request for
Landlord's consent shall include, and Landlord's thirty (30) day response period
referred to above shall not commence, unless and until Landlord has received
from Tenant, all of the following information: (a) financial statements for the
proposed assignee or subtenant for the past three (3) years prepared in
accordance with generally accepted accounting principles, (b) federal tax
returns for the proposed assignee or subtenant for the past three (3) years, (c)
a TRW credit report or similar report on the proposed assignee or subtenant, (d)
a detailed description of the business the assignee or subtenant intends to
operate at the Premises, (e) the proposed effective date of the assignment or
sublease, (f) a copy of the proposed sublease or assignment agreement which
includes all of the terms and conditions of the proposed assignment or sublease,
and (g) a detailed description of any ownership or commercial relationship
between Tenant and the proposed assignee or subtenant. Tenant shall have no
obligation to deliver the information described in subparagraph (a) or (b) above
in the case of a sublet. If the obligations of the proposed assignee or
subtenant will be guaranteed by any person or entity, Tenant's written request
shall not be considered complete until the information described in (a), (b) and
(c) of the previous sentence has been provided with respect to each proposed
guarantor. "Transfer" shall also include the transfer (a) if Tenant is a
corporation, and Tenant's stock is not publicly traded over a recognized
securities exchange, of more than twenty five percent (25%) of the voting stock
of such corporation during the Term of this Lease (whether or not in one or more
transfers) or the dissolution or merger of the corporation, or (b) if Tenant is
a partnership or other entity, of more than twenty five percent (25%) of the
profit and loss participation in such partnership or entity during the Term of
this Lease (whether or not in one or more transfers) or the dissolution or
liquidation of the partnership.
SEE ADDENDUM PARAGRAPH 13
8
13
12.2. STANDARD FOR APPROVAL. Landlord shall not unreasonably
withhold its consent to a Transfer provided that Tenant has complied with each
and every requirement, term and condition of this Section 12. Tenant
acknowledges and agrees that each requirement, term and condition in this
Section 12 is a reasonable requirement, term or condition. It shall be deemed
reasonable for Landlord to withhold its consent to a Transfer if any
requirement, term or condition of this Section 12 is not complied with or: (a)
the Transfer would cause Landlord to be in violation of its obligations under
another lease or agreement to which Landlord is a party; (b) in Landlord's
reasonable judgment, a proposed assignee has a smaller net worth
than Tenant had on the date this Lease was entered into with Tenant or is less
able financially to pay the rents due under this Lease as and when they are due
and payable; (c) a proposed assignee's or subtenant's business will impose a
burden on the Project's parking facilities, elevators, Common Areas or utilities
that is greater than the burden imposed by Tenant, in Landlord's reasonable
judgment; (d) the terms of a proposed assignment or subletting will allow the
proposed assignee or subtenant to exercise a right of renewal, right of
expansion, right of first offer, right of first refusal or similar right held by
Tenant; (e) a proposed assignee or subtenant does not, in Landlord's reasonable
judgment, have a good credit rating; (g) a proposed assignee or subtenant
refuses to enter into a written assignment agreement or sublease, reasonably
satisfactory to Landlord, which provides that it will abide by and assume all of
the terms and conditions of this Lease for the term of any assignment or
sublease and containing such other terms and conditions as Landlord reasonably
deems necessary; (h) the use of the Premises by the proposed assignee or
subtenant will not be for the use permitted by this Lease; (i) Landlord has ever
evicted or been involved in litigation with the proposed assignee or subtenant;
(j) any guarantor of this Lease refuses to consent to the Transfer or to execute
a written agreement reaffirming the guaranty; (k) Tenant is in default as
defined in Section 13.1 at the time of the request; or (l) if requested by
Landlord, the assignee or sublessee refuses to sign a non-disturbance and
attornment agreement in favor of Landlord's lender.
12.3. ADDITIONAL TERMS AND CONDITIONS. The following terms and
conditions shall be applicable to any Transfer:
(a) Regardless of Landlord's consent, no Transfer shall
release Tenant from Tenant's obligations hereunder or alter the primary
liability of Tenant to pay the rent and other sums due Landlord hereunder and to
perform all other obligations to be performed by Tenant hereunder or release any
guarantor from its obligations under its guaranty.
(b) Landlord may accept rent from any person other than Tenant
pending approval or disapproval of an assignment or subletting.
(c) Neither a delay in the approval or disapproval of a
Transfer, nor the acceptance of rent, shall constitute a waiver or estoppel of
Landlord's right to exercise its rights and remedies for the breach of any of
the terms or conditions of this Section 12.
(d) The consent by Landlord to any Transfer shall not
constitute a consent to any subsequent Transfer by Tenant or to any subsequent
or successive Transfer by an assignee or subtenant. However, Landlord may
consent to subsequent Transfers or any amendments or modifications thereto
without notifying Tenant or anyone else liable on the Lease and without
obtaining their consent, and such action shall not relieve such persons from
liability under this Lease.
(e) In the event of any default under this Lease, Landlord may
proceed directly against Tenant, any guarantors or anyone else responsible for
the performance of this Lease, including any subtenant or assignee, without
first exhausting Landlord's remedies against any other person or entity
responsible therefor to Landlord, or any security held by Landlord.
(f) Landlord's written consent to any Transfer by Tenant shall
not constitute an acknowledgment that no default then exists under this Lease
nor shall such consent be deemed a waiver of any then existing default.
(g) The discovery of the fact that any financial statement
relied upon by Landlord in giving its consent to an assignment or subletting was
materially false shall, at Landlord's election, render Landlord's consent null
and void.
(h) Landlord shall not be liable under this Lease or under any
assignment or sublease to any assignee or subtenant.
(i) No sublease may be modified or amended (if such
modification will have a material adverse effect to Landlord) without Landlord's
prior written consent.
12.4. ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING.
The following terms and conditions shall apply to any subletting by Tenant of
all or any part of the Premises and shall be deemed included in all subleases
under this Lease whether or not expressly incorporated therein:
(a) Tenant hereby absolutely and unconditionally assigns and
transfers to Landlord all of Tenant's interest in all rentals and income arising
from any sublease entered into by Tenant, and Landlord may collect such rent and
income and apply same toward Tenant's obligations under this Lease; provided,
however, that until a default shall occur in the performance of Tenant's
obligations under this Lease, Tenant may receive, collect and enjoy the rents
accruing under such sublease. Landlord shall not, by reason of this or any other
assignment of such rents to Landlord nor by reason of the collection of the
rents from a subtenant, be deemed to have assumed or recognized any sublease or
to be liable to the subtenant for any failure of Tenant to perform and comply
with any of Tenant's obligations to such subtenant under such sublease,
including, but not limited to, Tenant's obligation to return any security
deposit. Tenant hereby irrevocably authorizes and directs any such subtenant,
upon receipt of a written notice from Landlord stating that a default exists in
the performance of Tenant's obligations under this Lease, to pay to Landlord the
rents due as they become due under the sublease. Tenant agrees that such
subtenant shall have the right to rely upon any such statement and request from
Landlord, and that such subtenant shall pay such rents to Landlord without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Tenant to the contrary.
(b) In the event Tenant shall default in the performance of
its obligations under this Lease, Landlord at its option and without any
obligation to do so, may require any subtenant to attorn to Landlord, in which
event Landlord shall undertake the obligations of Tenant under such sublease
from the time of the exercise of said option to the termination of such
sublease; provided, however, Landlord shall not be liable for any prepaid rents
or security deposit paid by such subtenant to Tenant or for any other prior
defaults of Tenant under such sublease.
12.5. TRANSFER PREMIUM FROM ASSIGNMENT OR SUBLETTING. Landlord
shall be entitled to receive from Tenant (as and when received by Tenant) as an
item of additional rent fifty percent (50%) of all amounts received by Tenant
from such assignee or subtenant in excess of the amounts payable by Tenant to
Landlord hereunder (the "Transfer Premium"). "Transfer Premium" shall mean all
Base Rent, additional rent or other consideration of any type whatsoever payable
by the assignee or subtenant in excess of the Base Rent and additional rent
payable by Tenant under this Lease. If less than all of the Premises is
9
14
transferred, the Base Rent and the additional rent shall be determined on a per
rentable square foot basis. "Transfer Premium" shall also include, but not be
limited to, key money and bonus money paid by the assignee or subtenant to
Tenant in connection with such Transfer, and any payment in excess of fair
market value for services rendered by Tenant to the assignee or subtenant or for
assets, fixtures, inventory, equipment, or furniture transferred by Tenant to
the assignee or subtenant in connection with such Transfer.
SEE ADDENDUM PARAGRAPH 14
12.6. LANDLORD'S OPTION TO RECAPTURE SPACE. Notwithstanding
anything to the contrary contained in this Section 12, Landlord shall have the
option, by giving written notice to Tenant within twenty (20) days after receipt
of any request by Tenant to assign this Lease or to sublease space in the
Premises, to terminate this Lease with respect to said space as of the date
thirty (30) days after Landlord's election. In the event of a recapture by
Landlord, if this Lease shall be canceled with respect to less than the entire
Premises, the Base Rent, Tenant's Share of Operating Expense increases and the
number of parking spaces Tenant may use shall be adjusted on the basis of the
number of rentable square feet retained by Tenant in proportion to the number of
rentable square feet contained in the original Premises, and this Lease as so
amended shall continue thereafter in full force and effect, and upon request of
either party, the parties shall execute written confirmation of same. If
Landlord recaptures only a portion of the Premises, it shall construct and erect
at its sole cost such partitions as may be required to sever the space to be
retained by Tenant from the space recaptured by Landlord. Landlord may, at its
option, lease any recaptured portion of the Premises to the proposed subtenant
or assignee or to any other person or entity without liability to Tenant. Tenant
shall not be entitled to any portion of the profit, if any, Landlord may realize
on account of such termination and reletting. Tenant acknowledges that the
purpose of this Section 12.6 is to enable Landlord to receive profit in the form
of higher rent or other consideration to be received from an assignee or
sublessee, to give Landlord the ability to meet additional space requirements of
other tenants of the Project and to permit Landlord to control the leasing of
space in the Project. Tenant acknowledges and agrees that the requirements of
this Section 12.6 are commercially reasonable and are consistent with the
intentions of Landlord and Tenant.
SEE ADDENDUM PARAGRAPH 15
12.7. LANDLORD'S EXPENSES. In the event Tenant shall assign this
Lease or sublet the Premises or request the consent of Landlord to any Transfer,
then Tenant shall pay Landlord's reasonable costs and expenses incurred in
connection therewith, including, but not limited to, attorneys', architects',
accountants', engineers' or other consultants' fees, provided however, that said
costs and expenses shall not exceed Five Hundred Dollars ($500.00) in any one
transaction.
13. DEFAULT; REMEDIES.
13.1. DEFAULT BY TENANT. Landlord and Tenant hereby agree that the
occurrence of any one or more of the following events is a material default by
Tenant under this Lease and that said default shall give Landlord the rights
described in Section 13.2. Landlord or Landlord's authorized agent shall have
the right to serve any notice of default, notice to pay rent or quit or similar
notice.
(a) Tenant's failure to make any payment of Base Rent,
Tenant's Share of Operating Expense increases, parking charges, charges for
after hours HVAC, late charges, or any other payment required to be made by
Tenant hereunder, as and when due, where such failure shall continue for a
period of five (5) days after written notice thereof from Landlord to Tenant. In
the event that Landlord serves Tenant with a notice to pay rent or quit pursuant
to applicable unlawful detainer statutes, such notice shall also constitute the
notice required by this Section 13.1(a).
(b) The abandonment of the Premises by Tenant in which event
Landlord shall not be obligated to give any notice of default to Tenant.
(c) The failure by Tenant to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed by
Tenant (other than those referenced in Sections 13.1(a) and (b), above), where
such failure shall continue for a period of twenty (20) days after written
notice thereof from Landlord to Tenant; provided, however, that if the nature of
Tenant's non-performance is such that more than twenty (20) days are reasonably
required for its cure, then Tenant shall not be deemed to be in default if
Tenant commences such cure within said twenty (20) day period and thereafter
diligently pursues such cure to completion. In the event that Landlord serves
Tenant with a notice to quit pursuant to applicable unlawful detainer statutes,
said notice shall also constitute the notice required by this Section 13.1(c).
(d) (i) The making by Tenant or any guarantor of any general
arrangement or general assignment for the benefit of creditors; (ii) Tenant or
any guarantor becoming a "debtor" as defined in 11 U.S.C. 101 or any successor
statute thereto (unless, in the case of a petition filed against Tenant or
guarantor, the same is dismissed within sixty (60) days); (iii) the institution
of proceedings seeking the appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where possession is not restored to Tenant
within sixty (60) days or the institution of a foreclosure proceeding against
Tenant's real or personal property; or (iv) the attachment, execution or other
judicial seizure of substantially all of Tenant's assets located at the Premises
or of Tenant's interest in this Lease, where such seizure is not discharged
within sixty (60) days. In the event that any provision of this Section 13.1(e)
is contrary to any applicable law, such provision shall be of no force or
effect.
(e) The discovery by Landlord that any financial statement,
representation or warranty given to Landlord by Tenant, or by any guarantor of
Tenant's obligations hereunder, is or was materially false.
(f) If Tenant is a corporation or a partnership, the
dissolution or liquidation of Tenant, except as may be otherwise permitted in
Section 12.
13.2. REMEDIES.
(a) In the event of any default or breach of this Lease by
Tenant, Landlord may, at any time thereafter, after the notice and cure periods
set forth in Section 13.1 have expired, and without limiting Landlord in the
exercise of any right or remedy which Landlord may have by reason of such
default:
10
15
(i) terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease and the Term hereof shall
terminate and Tenant shall immediately surrender possession of the Premises to
Landlord. If Landlord terminates this Lease, Landlord may recover from Tenant
(A) the worth at the time of award of the unpaid rent which had been earned at
the time of termination; (B) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided; (C) the worth at the time of award of the amount
by which the unpaid rent for the balance of the Term after the time of award
exceeds the amount of such rental loss that Tenant proves could be reasonably
avoided; and (D) any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform its obligations
under the Lease or which in the ordinary course of things would be likely to
result therefrom, including, but not limited to, the cost of recovering
possession of the Premises, expenses of releasing, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, any real
estate commissions actually paid by Landlord and the unamortized value of any
free rent, reduced rent, tenant improvement allowance or other economic
concessions provided by Landlord. The "worth at time of award" of the amounts
referred to in Section 13.2(a)(i)(A) and (B) shall be computed by allowing
interest at the lesser of two percent (2%) per annum over the "prime rate" as
established by NationsBank of Virginia, N.A., or the maximum interest rate
permitted by applicable law. The worth at the time of award of the amount
referred to in Section 13.2(a)(i)(C) shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of Baltimore at the time
of award plus one percent (1%). For purposes of this Section 13.2(a)(i), "rent"
shall be deemed to be all monetary obligations required to be paid by Tenant
pursuant to the terms of this Lease.
(ii) maintain Tenant's right of possession in which
event Landlord shall have the remedy which permits Landlord to continue this
Lease in effect after Tenant's breach and abandonment and recover rent as it
becomes due.
(iii) collect sublease rents (or appoint a receiver
to collect such rent) and otherwise perform Tenant's obligations at the
Premises, it being agreed, however, that the appointment of a receiver for
Tenant shall not constitute an election by Landlord to terminate this Lease.
(iv) pursue any other remedy now or hereafter
available to Landlord under the laws or judicial decisions of the state in which
the Premises are located.
(b) No remedy or election hereunder shall be deemed exclusive,
but shall, wherever possible, be cumulative with all other remedies at law or in
equity.
(c) If Tenant abandons or vacates the Premises, Landlord may
re-enter the Premises and such re-entry shall not be deemed to constitute
Landlord's election to accept a surrender of the Premises or to otherwise
relieve Tenant from liability for its breach of this Lease. No surrender of the
Premises shall be effective against Landlord unless Landlord has entered into a
written agreement with Tenant in which Landlord expressly agrees to (i) accept a
surrender of the Premises and (ii) relieve Tenant of liability under the Lease.
The delivery of keys to Landlord or any employee or agent of Landlord shall not
constitute the termination of the Lease or the surrender of the Premises.
13.3 DEFAULT BY LANDLORD. Landlord shall not be in default under
this Lease unless Landlord fails to perform obligations required of Landlord
within thirty (30) days after written notice by Tenant to Landlord and to the
holder of any mortgage or deed of trust encumbering the Project whose name and
address shall have theretofore been furnished to Tenant in writing, specifying
wherein Landlord has failed to perform such obligation; provided, however, that
if the nature of Landlord's obligation is such that more than thirty (30) days
are required for its cure, then Landlord shall not be in default if Landlord
commences performance within such thirty (30) day period and thereafter
diligently pursues the same to completion. This Lease and the obligations of
Tenant and Landlord hereunder shall not be affected or impaired because Landlord
or Tenant are unable to fulfill any of their obligations hereunder or is delayed
in doing so (except with respect to Tenant's monetary obligations under this
Lease, including paying Base Rent and all additional rent, to which this
provision shall not apply), if such inability or delay is caused by reason of
strike or other labor problems, acts of God, riot, insurrection, governmental
actions or requirements, or any other cause beyond the reasonable control of
such party, and the time for such party's performance shall be extended for the
period of any such delay.
13.4. LATE CHARGES. Tenant hereby acknowledges that late payment
by Tenant to Landlord of Base Rent, Tenant's Share of Operating Expense
increases, parking charges, after hours HVAC charges, or other sums due
hereunder will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges and late
charges which may be imposed on Landlord by the terms of any mortgage or trust
deed encumbering the Project. Accordingly, if any installment of Base Rent,
Tenant's Share of Operating Expense increases, parking charges, after hours HVAC
charges or any other sum due from Tenant shall not be received by Landlord
within five (5) days of when such amount shall be due, then, without any
requirement for notice to Tenant, Tenant shall pay to Landlord a late charge
equal to six percent (6%) of such overdue amount. The parties hereby agree that
such late charge represents a fair and reasonable estimate of the costs Landlord
will incur by reason of late payment by Tenant. Acceptance of such late charge
by Landlord shall in no event constitute a waiver of Tenant's default with
respect to such overdue amount, nor prevent Landlord from exercising any of the
other rights and remedies granted hereunder including the assessment of interest
under Section 13.5.
SEE ADDENDUM PARAGRAPH 16
13.5. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein
provided, any amount due to Landlord that is not paid when due shall bear
interest at the lesser of two percent (2%) per annum over the "prime rate" as
established by NationsBank of Virginia, N.A., or the maximum rate permitted by
applicable law. Payment of such interest shall not excuse or cure any default by
Tenant under this Lease; provided, however, that interest shall not be payable
on late charges incurred by Tenant nor on any amounts upon which late charges
are paid by Tenant.
13.6. PAYMENT OF RENT AFTER DEFAULT. If Tenant fails to pay Base
Rent, Tenant's Share of Operating Expense increases, parking charges or any
other monetary obligation due hereunder on the date it is due, after Tenant's
third failure to pay any monetary obligation on the date it is due, at
Landlord's option, all monetary obligations of Tenant hereunder shall thereafter
be paid by cashiers check. If Landlord has required Tenant to make said payments
by cashiers check, Tenant's failure to make a payment by cashiers check shall be
a material default hereunder.
14. LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT. All covenants and
agreements to be kept or performed by Tenant under this Lease shall be performed
by Tenant at Tenant's sole cost and expense and without any reduction of rent.
If Tenant shall fail to perform any of its obligations under this Lease, within
a reasonable time after such performance is required by the terms of this Lease,
Landlord may, but shall not be obligated to, after three (3) days' prior written
notice to Tenant, make any such payment or perform any such act on Tenant's
behalf without waiving its rights based upon any default of Tenant and without
releasing Tenant from any obligations hereunder. Tenant shall pay to Landlord,
within ten (10) days after delivery by
11
16
Landlord to Tenant of statements therefor, an amount equal to the expenditures
reasonably made by Landlord in connection with the remedying by Landlord of
Tenant's defaults pursuant to the provisions of this Section 14.
15. CONDEMNATION. If any portion of the Premises or the Project are taken under
the power of eminent domain, or sold under the threat of the exercise of said
power (all of which are herein called "condemnation"), this Lease shall
terminate as to the part so taken as of the date the condemning authority takes
title or possession, whichever first occurs; provided that if so much of the
Premises or Project are taken by such condemnation as would substantially and
adversely affect the operation and profitability of Tenant's business conducted
from the Premises, and said taking lasts for ninety (90) days or more, Tenant
shall have the option, to be exercised only in writing within thirty (30) days
after Landlord shall have given Tenant written notice of such taking (or in the
absence of such notice, within thirty (30) days after the condemning authority
shall have taken possession), to terminate this Lease as of the date the
condemning authority takes such possession. If a taking lasts for less than
ninety (90) days, Tenant's rent shall be abated during said period but Tenant
shall not have the right to terminate this Lease. If Tenant does not terminate
this Lease in accordance with the foregoing, this Lease shall remain in full
force and effect as to the portion of the Premises remaining, except that the
rent and Tenant's Share of Operating Expenses shall be reduced in the proportion
that the usable floor area of the Premises taken bears to the total usable floor
area of the Premises. Common Areas taken shall be excluded from the Common Areas
usable by Tenant and no reduction of rent shall occur with respect thereto or by
reason thereof. Landlord shall have the option in its sole discretion to
terminate this Lease as of the taking of possession by the condemning authority,
by giving written notice to Tenant of such election within thirty (30) days
after receipt of notice of a taking by condemnation of any part of the Premises
or the Project provided that Landlord may terminate this Lease only if it
terminates all of the leases in the Building. Any award for the taking of all or
any part of the Premises or the Project under the power of eminent domain or any
payment made under threat of the exercise of such power shall be the property of
Landlord, whether such award shall be made as compensation for diminution in
value of the leasehold or for the taking of the fee, as severance damages, or as
damages for tenant improvements; provided, however, that Tenant shall be
entitled to any separate award for loss of or damage to Tenant's trade fixtures
and removable personal property and any award available for the relocation of
Tenant's business. In the event that this Lease is not terminated by reason of
such condemnation, and subject to the requirements of any lender that has made a
loan to Landlord encumbering the Project, Landlord shall to the extent of
severance damages received by Landlord in connection with such condemnation,
repair any damage to the Project caused by such condemnation except to the
extent that Tenant has been reimbursed therefor by the condemning authority.
Tenant shall pay any amount in excess of such severance damages required to
complete such repair. Except as set forth in this Section 15, Landlord shall
have no liability to Tenant for interruption of Tenant's business upon the
Premises, diminution of Tenant's ability to use the Premises, or other injury or
damage sustained by Tenant as a result of such condemnation.
16. VEHICLE PARKING.
16.1. USE OF PARKING FACILITIES. During the Term and subject to
the rules and regulations attached hereto as Exhibit "C" as modified by Landlord
from time to time (the "Rules"), Tenant shall be entitled to use the number of
parking spaces set forth in Section 1.13 in the parking facility of the Project
at the monthly rate applicable from time to time for monthly parking as set by
Landlord and/or its licensee. Landlord may, in its sole discretion, assign
tandem parking spaces to Tenant and designate the location of any reserved
parking spaces. Landlord reserves the right at any time to relocate Tenant's
reserved and unreserved parking spaces. If Tenant commits or allows in the
parking facility any of the activities prohibited by the Lease or the Rules,
then Landlord shall have the right, without notice, in addition to such other
rights and remedies that it may have, to remove or tow away the vehicle involved
and charge the cost to Tenant, which cost shall be immediately payable by Tenant
upon demand by Landlord. Tenant's parking rights are the personal rights of
Tenant and Tenant shall not transfer, assign, or otherwise convey its parking
rights separate and apart from this Lease.
16.2 PARKING CHARGES. The initial monthly parking rate per
parking space is set forth in Section 1.14 and is subject to change by Landlord
upon five (5) days' prior written notice to Tenant. Monthly parking fees shall
be payable in advance prior to the first day of each calendar month. Visitor
parking rates shall be determined by Landlord from time to time in Landlord's
sole discretion. The parking rates charged to Tenant may not be the lowest
parking rates charged by Landlord for the use of the parking facility.
Notwithstanding anything to the contrary contained herein, any tax imposed on
the privilege of occupying space in the parking facility, upon the revenues
received by Landlord from the parking facility or upon the charges paid for the
privilege of using the parking facility by any governmental or
quasi-governmental entity may be added by Landlord to the monthly parking
charges paid by Tenant at any time, or Landlord may require Tenant and other
persons using the parking facility to pay said amounts directly to the taxing
authority.
SEE ADDENDUM ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇. BROKER'S FEE. Tenant and Landlord each represent and warrant to the other
that neither has had any dealings or entered into any agreements with any
person, entity, broker or finder other than the persons, if any, listed in
Section 1.15, in connection with the negotiation of this Lease, and no other
broker, person, or entity is entitled to any commission or finder's fee in
connection with the negotiation of this Lease, and Tenant and Landlord each
agree to indemnify, defend and hold the other harmless from and against any
claims, damages, costs, expenses, attorneys' fees or liability for compensation
or charges which may be claimed by any such unnamed broker, finder or other
similar party by reason of any dealings, actions or agreements of the
indemnifying party.
18. ESTOPPEL CERTIFICATE.
18.1. DELIVERY OF CERTIFICATE. Tenant shall at any time upon not
less than ten (10) days' prior written notice from Landlord execute, acknowledge
and deliver to Landlord a statement in writing certifying such information as
Landlord may reasonably request including, but not limited to, the following:
(a) that this Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect) (b) the date to which the Base Rent and
other charges are paid in advance and the amounts so payable, (c) that there are
not, to Tenant's knowledge, any uncured defaults or unfulfilled obligations on
the part of Landlord, or specifying such defaults or unfulfilled obligations, if
any are claimed, and (d) that all tenant improvements to be constructed by
Landlord, if any, have been completed in accordance with Landlord's obligations
and Tenant has taken possession of the Premises. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Project.
18.2. FAILURE TO DELIVER CERTIFICATE. At Landlord's option, the
failure of Tenant to deliver such statement within such time shall constitute a
material default of Tenant hereunder (after expiration of all notice and cure
periods set forth in section 13.1 have expired), or (after expiration of all
notice and cure periods set forth in section 13.1 have expired) it shall be
conclusive upon Tenant that (a) this Lease is in full force and effect, without
modification except as may be represented by Landlord, (b) there are no uncured
defaults in Landlord's performance, (c) not more than one month's Base Rent has
been paid in advance, and (d) all tenant improvements to be constructed by
Landlord, if any, have been completed in accordance with Landlord's obligations
and Tenant has taken possession of the Premises.
18.3. FINANCIAL INFORMATION. If Landlord desires to finance,
refinance, or sell the Project, or any part thereof, Tenant hereby agrees to
deliver, and to cause any guarantor of Tenant's obligations to deliver, to any
lender or purchaser
12
17
designated by Landlord such financial statements of Tenant or any guarantor and
other information as may be reasonably required by such lender or purchaser. All
such financial statements shall be received by Landlord and such lender or
purchaser in confidence and shall be used only for the purposes herein set
forth.
19. LANDLORD'S LIABILITY. Tenant acknowledges that Landlord shall have the
right to transfer all or any portion of its interest in the Project and to
assign this Lease to the transferee. Tenant agrees that in the event of such a
transfer Landlord shall automatically be released from all liability under this
Lease provided Landlord's successor in interest assumes Landlord's obligations
under this Lease; and Tenant hereby agrees to look solely to Landlord's
transferee for the performance of Landlord's obligations hereunder after the
date of the transfer. Upon such a transfer, Landlord shall, at its option,
return Tenant's security deposit to Tenant or transfer Tenant's security deposit
to Landlord's transferee and, in either event, Landlord shall have no further
liability to Tenant for the return of its security deposit. Subject to the
rights of any lender holding a mortgage or deed of trust encumbering all or part
of the Project, Tenant agrees to look solely to Landlord's equity interest in
the Project (which for purposes herein shall include any applicable insurance or
condemnation proceeds) for the collection of any judgment requiring the payment
of money by Landlord arising out of (a) Landlord's failure to perform its
obligations under this Lease or (b) the negligence or willful misconduct of
Landlord, its partners, employees and agents. No partner, employee or agent of
Landlord shall be personally liable for the performance of Landlord's
obligations hereunder or be named as a party in any lawsuit arising out of or
related to, directly or indirectly, this Lease and the obligations of Landlord
hereunder. The obligations under this Lease do not constitute personal
obligations of the individual partners of Landlord and Tenant shall not seek
recourse against the individual partners of Landlord or their assets.
20. INDEMNITY. Except to the extent released pursuant to Section 8.4 herein,
Tenant shall indemnify, defend and hold harmless Landlord, its agents, partners,
and employees from and against any and all claims for damage to the person or
property of any person or entity arising from Tenant's use of the Project, or
from the conduct of Tenant's business or from any activity, work or things done,
permitted or suffered by Tenant in or about the Project and shall further
indemnify, defend and hold harmless Landlord, its agents, partners and employees
from and against any and all claims, costs and expenses arising from any breach
or default in the performance of any obligation of Tenant to be performed under
the terms of this Lease, or arising from any act or omission of Tenant, or any
of Tenant's agents or employees, and from and against all costs, reasonable
attorneys' fees, expenses and liabilities incurred by Landlord, its agents,
partners and employees as the result of any such use, conduct, activity, default
or negligence. In case any action or proceeding is brought against Landlord, its
agents, partners and employees, Tenant shall defend Landlord, and its agents,
partners and employees at Tenant's expense by counsel reasonably satisfactory to
Landlord and Landlord shall cooperate with Tenant in such defense. Landlord need
not have first paid any claim in order to be so indemnified. This indemnity
shall survive the expiration or sooner termination of this Lease.
21. EXEMPTION OF LANDLORD FROM LIABILITY. Except where caused by the grossly
negligent acts or willful misconduct of Landlord Tenant hereby agrees that
Landlord shall not be liable for injury to Tenant's business or any loss of
income therefrom or for loss of or damage to the goods, wares, merchandise or
other property of Tenant, Tenant's employees, invitees, customers, or any other
person in or about the Project, nor shall Landlord be liable for injury to the
person of Tenant, Tenant's employees, agents or contractors, whether such damage
or injury is caused by or results from any cause whatsoever including, but not
limited to, theft, criminal activity at the Project, negligent security
measures, bombings or bomb scares, hazardous waste, fire, steam, electricity,
gas, water or rain, breakage of pipes, sprinklers, plumbing, air conditioning or
lighting fixtures, or from any other cause, whether said damage or injury
results from conditions arising upon the Premises or upon other portions of the
Project, or from other sources or places, or from new construction or the
repair, alteration or improvement of any part of the Project, or of the
equipment, fixtures or appurtenances applicable thereto, and regardless of
whether the cause of the damage or injury arises out of Landlord's or its
employees or agents negligent or intentional acts. Landlord shall not be liable
for any damages arising from any act or neglect of any other tenant, occupant or
user of the Project, nor from the failure of Landlord to enforce the provisions
of the lease of any other tenant of the Project. Tenant, as a material part of
the consideration to Landlord hereunder, hereby assumes all risk of damage to
property of Tenant or injury to persons, in, upon or about the Project arising
from any cause, excluding Landlord's gross negligence or the gross negligence of
its agents, partners or employees, and Tenant hereby waives all claims in
respect thereof against Landlord, its agents, partners and employees.
22. HAZARDOUS MATERIAL. For purposes of this Lease, the term "Hazardous
Material" means any hazardous substance, hazardous waste, infectious waste, or
toxic substance, material, or waste which becomes regulated or is defined as
such by any local, state or federal governmental authority. Except for small
quantities of ordinary office supplies such as copier toners, liquid paper,
glue, ink and common household cleaning materials, Tenant shall not cause or
permit any Hazardous Material to be brought, kept or used in or about the
Premises or the Project by Tenant, its agents or employees. Tenant hereby agrees
to indemnify Landlord from and against any breach by Tenant of the obligations
stated in the preceding sentence, and agrees to defend and hold Landlord
harmless from and against any and all claims, judgments, damages, penalties,
fines, costs, liabilities, or losses (including, without limitation, diminution
in value of the Project, damages for the loss or restriction or use of rentable
space or of any amenity of the Project, damages arising from any adverse impact
on marketing of space in the Project, sums paid in settlement of claims,
attorneys' fees, consultant fees and expert fees) which arise during or after
the Term of this Lease as result of such breach. This indemnification of
Landlord by Tenant includes, without limitation, costs incurred in connection
with any investigation of site conditions and any cleanup, remedial removal, or
restoration work required due to the presence of Hazardous Material. Tenant
shall promptly notify Landlord of any release of a Hazardous Material in the
Premises or at the Project of which Tenant becomes aware, whether caused by
Tenant or any other person or entity. The provisions of this Section 22 shall
survive the termination of the Lease.
SEE ADDENDUM PARAGRAPH 18
23. MEDICAL WASTE DISPOSAL. If Tenant produces medical waste, Landlord may, at
its option, provide medical waste disposal services to Tenant. If Landlord
elects to provide such services, Landlord may require Tenant to use said
services. Landlord, at its option, may ▇▇▇▇ Tenant directly for such services,
which amounts shall then constitute additional rent hereunder, or Landlord may
include the cost of providing such services in Operating Expenses. Tenant waives
its right to the fullest extent allowed by law to assert any claim against
Landlord in connection with the negligent provision of medical waste disposal
services by Landlord. In the event Landlord is unable or chooses not to provide
such disposal services to Tenant, Tenant shall arrange for the disposal of its
medical waste and such disposal shall be done in compliance with all applicable
laws. Tenant hereby agrees to indemnify, defend and hold harmless Landlord
against any cost, loss, liability, action, suit or expense (including attorneys'
fees) arising out of or relating to the existence of or the disposal of medical
waste produced by Tenant at the Premises.
24. TENANT IMPROVEMENTS. Tenant acknowledges and agrees that Landlord shall not
be obligated to construct any tenant improvements on behalf of Tenant except as
set forth in the work letter agreement (the "Work Letter") is attached to this
Lease as Schedule 1. If a space plan is attached to the Work Letter, the space
plan shall not be effective unless separately initialed by Landlord. Except as
set forth in a Work Letter, it is specifically understood and agreed that
Landlord has no obligation and has made no promises to alter, remodel, improve,
renovate, repair or decorate the Premises, the Project, or any part thereof, or
to provide any allowance for such purposes, and that no representations
respecting the condition of the Premises or the Project have been made by
Landlord to Tenant.
SEE ADDENDUM PARAGRAPH 19
13
18
25. SUBORDINATION.
25.1. EFFECT OF SUBORDINATION. This Lease, and any Option (as
defined in Section 26 below) granted hereby shall be subordinate to any ground
lease, mortgage, deed of trust, or any other hypothecation or security now or
hereafter placed upon the Project and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof. Notwithstanding such subordination,
Tenant's right to quiet possession of the Premises shall not be disturbed if
Tenant is not in default and so long as Tenant shall pay the rent and observe
and perform all of the provisions of this Lease, unless this Lease is otherwise
terminated pursuant to its terms. At the request of any mortgagee, trustee or
ground lessor, Tenant shall attorn to such person or entity. If any mortgagee,
trustee or ground lessor shall elect to have this Lease and any Options granted
hereby prior to the lien of its mortgage, deed of trust or ground lease, and
shall give written notice thereof to Tenant, this Lease and such Options shall
be deemed prior to such mortgage, deed of trust or ground lease, whether this
Lease or such Options are dated prior or subsequent to the date of said
mortgage, deed of trust or ground lease or the date of recording thereof.
25.2. EXECUTION OF DOCUMENTS. Tenant agrees to execute and
acknowledge any documents reasonably required to effectuate an attornment, a
subordination, or to make this Lease or any Option granted herein prior to the
lien of any mortgage, deed of trust or ground lease, as the case may be.
Tenant's failure to execute such documents within ten (10) days after written
demand shall constitute a material default by Tenant hereunder or, at Landlord's
option, Landlord shall have the right to execute such documents on behalf of
Tenant as Tenant's attorney-in-fact. Tenant does hereby make, constitute and
irrevocably appoint Landlord as Tenant's attorney-in-fact and in Tenant's name,
place and stead, to execute such documents in accordance with this Section 25.2,
said appointment to be a power during the Term of this Lease coupled with an
interest and irrevocable.
SEE ADDENDUM PARAGRAPH 20
26. OPTIONS.
26.1. DEFINITION. As used in this Lease, the word "Option" has the
following meaning: (1) the right or option to extend the Term of this Lease or
to renew this Lease, and (2) the option or right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease other space within the Project or the right of first offer to
lease other space within the Project. Any Option granted to Tenant by Landlord
must be evidenced by a written option agreement attached to this Lease as a
rider or addendum or said option shall be of no force or effect.
26.2. OPTIONS PERSONAL. Each Option granted to Tenant in this
Lease, if any, is personal to the original Tenant (and each party to each
Permitted Transfer as defined in Paragraph 13 of the Addendum to this Lease) and
may be exercised only by the original Tenant while occupying the entire Premises
and may not be exercised or be assigned, voluntarily or involuntarily, by or to
any person or entity other than Tenant, including, without limitation, any
permitted transferee as defined in Section 12. The Options, if any, herein
granted to Tenant are not assignable separate and apart from this Lease, nor may
any Option be separated from this Lease in any manner, either by reservation or
otherwise. If at any time an Option is exercisable by Tenant, the Lease has been
assigned, or a sublease exists as to any portion of the Premises, the Option
shall be deemed null and void and neither Tenant nor any assignee or subtenant
shall have the right to exercise the Option.
26.3. MULTIPLE OPTIONS. In the event that Tenant has multiple
Options to extend or renew this Lease a later Option cannot be exercised unless
the prior Option to extend or renew this Lease has been so exercised.
26.4. EFFECT OF DEFAULT ON OPTIONS. Tenant shall have no right to
exercise an Option (i) during the time commencing from the date Landlord gives
to Tenant a notice of default pursuant to Section 13.1 and continuing until the
noncompliance alleged in said notice of default is cured, or (ii) if Tenant is
in default of any of the terms, covenants or conditions of this Lease after
expiration of the notice and cure periods set forth in Section 13.1. The period
of time within which an Option may be exercised shall not be extended or
enlarged by reason of Tenant's inability to exercise an Option because of the
provisions of this Section 26.4.
26.5. LIMITATIONS ON OPTIONS. Notwithstanding anything to the
contrary contained in any rider or addendum to this Lease, any options, rights
of first refusal or rights of first offer granted hereunder shall be subject and
secondary to Landlord's right to first offer and lease any such space to any
tenant who is then occupying or leasing such space at the time the space becomes
available for leasing and shall be subject and subordinated to any other
options, rights of first refusal or rights of first offer previously given to
any other person or entity.
SEE ADDENDUM PARAGRAPHS 21, 22, 23 AND 24
27. LANDLORD RESERVATIONS. Landlord shall have the right: (a) to change the
name and address of the Project or Building upon not less than ninety (90) days
prior written notice; (b) to, at Tenant's expense, provide and install Building
standard graphics on or near the door of the Premises and such portions of the
Common Areas as Landlord shall determine, in Landlord's sole discretion; (c) to
permit any tenant the exclusive right to conduct any business as long as such
exclusive right does not conflict with any rights expressly given herein; and
(d) to place signs, notices or displays upon the roof, interior, exterior or
Common Areas of the Project. Tenant shall not use a representation (photographic
or otherwise) of the Building or the Project or their name(s) in connection with
Tenant's business or suffer or permit anyone, except in an emergency, to go upon
the roof of the Building. Landlord reserves the right to use the exterior walls
of the Premises, and the area beneath, adjacent to and above the Premises
together with the right to install, use, maintain and replace equipment,
machinery, pipes, conduits and wiring through the Premises, which serve other
parts of the Project provided that Landlord's use does not materially and
adversely interfere with Tenant's use of the Premises.
28. CHANGES TO PROJECT. Landlord shall have the right, in Landlord's sole
discretion, provided such changes do not materially and adversely interfere with
Tenant's use and enjoyment of the Premises from time to time, to make changes to
the size, shape, location, number and extent of the improvements comprising the
Project (hereinafter referred to as "Changes") including, but not limited to,
the Project interior and exterior, the Common Areas, elevators, escalators,
restrooms, HVAC, electrical systems, communication systems, fire protection and
detection systems, plumbing systems, security systems, parking control systems,
driveways, entrances, parking spaces, parking areas and landscaped areas. In
connection with the Changes, Landlord may, among other things, erect scaffolding
or other necessary structures at the Project, limit or eliminate access to
portions of the Project, including portions of the Common Areas, or perform work
in the Building, which work may create noise, dust or leave debris in the
Building. Tenant hereby agrees that such Changes and Landlord's actions in
connection with such Changes shall in no way constitute a constructive eviction
of Tenant or entitle Tenant to any abatement of rent. Landlord shall have no
responsibility or for any reason be liable to Tenant for any direct or indirect
injury to or interference with Tenant's business arising from the Changes, nor
shall Tenant be entitled to any compensation or damages from Landlord for any
inconvenience or annoyance occasioned by such Changes or Landlord's actions in
connection with such Changes.
14
19
30. HOLDING OVER. If Tenant remains in possession of the Premises or any part
thereof after the expiration or earlier termination of the term hereof with
Landlord's consent, such occupancy shall be a tenancy from month to month upon
all the terms and conditions of this Lease pertaining to the obligations of
Tenant, except that the Base Rent payable shall be one hundred fifty percent
(150%) of the Base Rent payable immediately preceding the termination date of
this Lease, and all Options, if any, shall be deemed terminated and be of no
further effect. If Tenant remains in possession of the Premises or any part
thereof after the expiration of the Term hereof without Landlord's consent,
Tenant shall, at Landlord's option, be treated as a tenant at sufferance or a
trespasser. Nothing contained herein shall be construed to constitute Landlord's
consent to Tenant holding over at the expiration or earlier termination of the
Lease Term. Tenant hereby agrees to indemnify, hold harmless and defend Landlord
from any cost, loss, claim or liability (including attorneys' fees) Landlord may
incur as a result of Tenant's failure to surrender possession of the Premises to
Landlord upon the termination of this Lease.
31. LANDLORD'S ACCESS.
31.1. ACCESS. Landlord and Landlord's agents and employees shall
have the right to enter the Premises at reasonable times for the purpose of
inspecting the Premises, performing any services required of Landlord, showing
the Premises to prospective purchasers, lenders, or tenants, undertaking safety
measures and making alterations, repairs, improvements or additions to the
Premises or to the Project. In the event of an emergency, Landlord may gain
access to the Premises by any reasonable means, and Landlord shall not be liable
to Tenant for damage to the Premises or to Tenant's property resulting from such
access. Landlord may at any time place on or about the Building for sale or for
lease signs and Landlord may at any time during the last one hundred twenty
(120) days of the Term hereof place on or about the Premises for lease signs.
SEE ADDENDUM PARAGRAPH 25
31.2. KEYS. Landlord shall have the right to retain keys to the
Premises and to unlock all doors at the Premises, and in the case of emergency
to enter the Premises by any reasonably appropriate means, and any such entry
shall not be deemed a forcible or unlawful entry or detainer of the Premises or
an eviction. Tenant waives any claims for damages or injuries or interference
with Tenant's property or business in connection therewith. Tenant shall provide
Landlord with one key for each lock in the Premises.
32. SECURITY MEASURES. Tenant hereby acknowledges that Landlord shall have no
obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises or the Project, and Landlord shall have no liability
to Tenant due to its failure to provide such services. Tenant assumes all
responsibility for the protection of Tenant, its agents, employees, contractors
and invitees and the property of Tenant and of Tenant's agents, employees,
contractors and invitees from acts of third parties. Nothing herein contained
shall prevent Landlord, at Landlord's sole option, from implementing security
measures for the Project or any part thereof, in which event Tenant shall
participate in such security measures and the cost thereof shall be included
within the definition of Operating Expenses. Landlord shall have the right, but
not the obligation, to require all persons entering or leaving the Project to
identify themselves to a security guard and to reasonably establish that such
person should be permitted access to the Project.
33. EASEMENTS. Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Landlord deems necessary or
desirable, and to cause the recordation of parcel maps and restrictions, so long
as such easements, rights, dedications, maps and restrictions do not materially
and adversely interfere with the use of the Premises by Tenant. Tenant shall
sign any of the aforementioned documents within ten (10) days after Landlord's
request and Tenant's failure to do so shall, after expiration of the notice and
cure periods set forth in Section 13.1, constitute a material default by Tenant.
The obstruction of Tenant's view, air, or light by any structure erected in the
vicinity of the Project, whether by Landlord or third parties, shall in no way
affect this Lease or impose any liability upon Landlord.
34. TRANSPORTATION MANAGEMENT. Tenant shall fully comply with all present or
future programs implemented or required by any governmental or
quasi-governmental entity or Landlord to manage parking, transportation, air
pollution, or traffic in and around the Project or the metropolitan area in
which the Project is located.
35. SEVERABILITY. The invalidity of any provision of this Lease as determined
by a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof.
36. TIME OF ESSENCE. Time is of the essence with respect to each of the
obligations to be performed by Tenant under this Lease.
37. DEFINITION OF ADDITIONAL RENT. All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, but not limited to, Base
Rent, Tenant's Share of Operating Expenses, parking charges and charges for
after hours HVAC shall be deemed to be rent.
38. INCORPORATION OF PRIOR AGREEMENTS. This Lease and the attachments listed in
Section 1.16 contain all agreements of the parties with respect to the lease of
the Premises and any other matter mentioned herein. No prior or contemporaneous
agreement or understanding pertaining to any such matter shall be effective.
Except as otherwise stated in this Lease, Tenant
15
20
hereby acknowledges that no real estate broker nor Landlord or any employee or
agents of any of said persons has made any oral or written warranties or
representations to Tenant concerning the condition or use by Tenant of the
Premises or the Project or concerning any other matter addressed by this Lease.
39. AMENDMENTS. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification.
40. NOTICES. Any notice required or permitted to be given hereunder shall be in
writing and may be given by certified mail, return receipt requested, personal
delivery, Federal Express or other delivery service. If notice is given by
certified mail, return receipt requested, notice shall be deemed given three
(3) business days after the notice is deposited with the U.S. Mail, postage
prepaid, addressed to Tenant or to Landlord at the address set forth in Section
1.17. If notice is given by personal delivery, Federal Express or other delivery
service, notice shall be deemed given on the date the notice is actually
received by Landlord or Tenant. Either party may by notice to the other specify
a different address for notice purposes. Notwithstanding the address set forth
in Section 1.17 for Tenant, upon Tenant's taking possession of the Premises, the
Premises shall constitute Tenant's address for notice purposes. A copy of all
notices required or permitted to be given to Landlord hereunder shall be
concurrently transmitted to such party or parties at such addresses as Landlord
may from time to time designate by notice to Tenant.
41. WAIVERS. No waiver by Landlord of any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Tenant of
the same or any other provision. Landlord's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Landlord's consent to
or approval of any subsequent act by Tenant. The acceptance of rent hereunder by
Landlord shall not be a waiver of any preceding breach by Tenant of any
provision hereof, other than the failure of Tenant to pay the particular rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent. No acceptance by Landlord of partial payment of
any sum due from Tenant shall be deemed a waiver by Landlord of its right to
receive the full amount due, nor shall any endorsement or statement on any check
or accompanying letter from Tenant be deemed an accord and satisfaction. Tenant
hereby waives for Tenant and all those claiming under Tenant all rights now or
hereafter existing to redeem by order or judgment of any court or by legal
process or writ, Tenant's right of occupancy of the Premises after any
termination of this Lease.
42. COVENANTS. This Lease shall be construed as though the covenants contained
herein are independent and not dependent and Tenant hereby waives the benefit of
any statute to the contrary.
43. BINDING EFFECT; CHOICE OF LAW. Subject to any provision hereof restricting
assignment or subletting by Tenant, this Lease shall bind the parties, their
heirs, personal representatives, successors and assigns. This Lease shall be
governed by the laws of the state in which the Project is located and any
litigation concerning this Lease between the parties hereto shall be initiated
in the county in which the Project is located.
44. ATTORNEYS' FEES. If Landlord or Tenant brings an action to enforce the
terms hereof or declare rights hereunder, the prevailing party in any such
action, or appeal thereon, shall be entitled to its reasonable attorneys' fees
and court costs to be paid by the losing party as fixed by the court in the same
or separate suit, and whether or not such action is pursued to decision or
judgment. The attorneys' fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
and court costs reasonably incurred in good faith. Landlord shall be entitled to
reasonable attorneys' fees and all other costs and expenses incurred in the
preparation and service of notices of default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in connection
with such default.
45. AUCTIONS. Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas.
The holding of any auction on the Premises or Common Areas in violation of this
Section 45 shall constitute a material default hereunder.
46. SIGNS. Tenant shall not place any sign upon the Premises (including on the
inside or the outside of the doors or windows of the Premises) or the Project
without Landlord's prior written consent, which may be given or withheld in
Landlord's sole discretion. Landlord shall have the right to place any sign it
deems appropriate on any portion of the Project except the interior of the
Premises.
SEE ADDENDUM PARAGRAPH 26
47. MERGER. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, or a termination by Landlord, shall not result in
the merger of Landlord's and Tenant's estates, and shall, at the option of
Landlord, terminate all or any existing subtenancies or may, at the option of
Landlord, operate as an assignment to Landlord of any or all of such
subtenancies.
48. QUIET POSSESSION. Provided Tenant is not in default after expiration of the
notice and cure periods set forth in Section 13.1 hereunder, Tenant shall have
quiet possession of the Premises for the entire term hereof subject to all of
the provisions of this Lease.
49. AUTHORITY. If Tenant or Landlord is a corporation, trust, or general or
limited partnership, Tenant and Landlord, and each individual executing this
Lease on behalf of such entity, represents and warrants to the other that such
individual is duly authorized to execute and deliver this Lease on behalf of
said entity, that said entity is duly authorized to enter into this Lease, and
that this Lease is enforceable against said entity in accordance with its terms.
If Tenant or Landlord is a corporation, trust or partnership, Tenant and
Landlord shall deliver to the other upon demand evidence of such authority
satisfactory to Landlord and Tenant.
50. CONFLICT. Except as otherwise provided herein to the contrary, any conflict
between the printed provisions, Exhibits, Addenda or Riders of this Lease and
the typewritten or handwritten provisions, if any, shall be controlled by the
typewritten or handwritten provisions.
51. MULTIPLE PARTIES. If more than one person or entity is named as Tenant
herein, the obligations of Tenant shall be the joint and several responsibility
of all persons or entities named herein as Tenant. Service of a notice in
accordance with Section 40 on one Tenant shall be deemed service of notice on
all Tenants.
52. INTERPRETATION. This Lease shall be interpreted as if it was prepared by
both parties and ambiguities shall not be resolved in favor of Tenant because
all or a portion of this Lease was prepared by Landlord. The captions contained
in this Lease are for convenience only and shall not be deemed to limit or alter
the meaning of this Lease. As used in this Lease the words tenant and landlord
include the plural as well as the singular. Words used in the neuter gender
include the masculine and feminine gender.
16
21
53. PROHIBITION AGAINST RECORDING. Neither this Lease, nor any memorandum,
affidavit or other writing with respect thereto, shall be recorded by Tenant or
by anyone acting through, under or on behalf of Tenant. Landlord shall have the
right to record a memorandum of this Lease, and Tenant shall execute,
acknowledge and deliver to Landlord for recording any memorandum prepared by
Landlord.
54. RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.
55. RULES AND REGULATIONS. Tenant agrees to abide by and conform to the Rules
and to cause its employees, suppliers, customers and invitees to so abide and
conform. Landlord shall have the right, from time to time, to modify, amend and
enforce the Rules. Landlord shall not be responsible to Tenant for the failure
of other persons including, but not limited to, other tenants, their agents,
employees and invitees to comply with the Rules.
SEE ADDENDUM PARAGRAPH 27
56. RIGHT TO LEASE. Landlord reserves the absolute right to effect such other
tenancies in the Project as Landlord in its sole discretion shall determine, and
Tenant is not relying on any representation that any specific tenant or number
of tenants will occupy the Project.
57. SECURITY INTEREST. In consideration of the covenants and agreements
contained herein, and as a material consideration to Landlord for entering into
this Lease, Tenant hereby unconditionally grants to Landlord a continuing
security interest in and to all property of any kind or description,
including, without limitation, any personal property left by Tenant at the
Premises, the security deposit, if any, and any advance rent payment or other
deposit, now in or hereafter delivered to or coming into the possession, custody
or control of Landlord, by or for the account of Tenant, in any manner and for
any purpose, together with any increase in profits or proceeds from such
property. The security interest granted to Landlord hereunder secures payment
and performance of all obligations of Tenant under this Lease now or hereafter
arising or existing, whether direct or indirect, absolute or contingent, or due
or to become due. In the event of a default under this Lease which is not cured
within the applicable grace period, if any, Landlord is and shall be entitled to
all the rights, powers and remedies granted a secured party under the
Commonwealth of Virginia Commercial Code and otherwise available at law or in
equity, including, but not limited to, the right to retain as damages the
personal property, security deposit and other funds held by Landlord, without
additional notice or demand regarding this security interest. Tenant agrees that
it will execute such other documents or instruments as may be reasonably
necessary to carry out and effectuate the purpose and terms of this Section, or
as otherwise reasonably requested by Landlord, including without limitation,
execution of a UCC-1 financing statement. Landlord's rights under this Section
are in addition to Landlord's rights under Sections 5 and 13. Notwithstanding
anything to the contrary contained in Section 57 of the Lease, the security
interest granted by Tenant to Landlord shall be subordinate to the security
interest, if any, granted to Tenant's lenders in the ordinary course of Tenant's
business. At Tenant's request, Landlord shall execute a lien waiver, the form of
which shall be reasonably satisfactory to Landlord, waiving Landlord's security
interest in the collateral described in any such lien waiver.
58. SECURITY FOR PERFORMANCE OF TENANT'S OBLIGATIONS. Notwithstanding any
security deposit held by Landlord pursuant to Section 5 and any security
interest held by Landlord pursuant to Section 57, Tenant hereby agrees that in
the event of a default by Tenant, Landlord shall be entitled to seek a writ of
attachment and/or a temporary protective order.
59. FINANCIAL STATEMENTS. From time to time, at Landlord's request, Tenant
shall cause the following financial information to be delivered to Landlord, at
Tenant's sole cost and expense, upon not less than ten (10) days' advance
written notice from Landlord: (a) a current financial statement for Tenant and
Tenant's financial statements for the previous two accounting years, (b) a
current financial statement for any guarantor(s) of this Lease and the
guarantor's financial statements for the previous two accounting years and (c)
such other financial information pertaining to Tenant or any guarantor as
Landlord or any lender or purchaser of Landlord may reasonably request. All
financial statements shall be prepared in accordance with generally accepted
accounting principals consistently applied and, if such is the normal practice
of Tenant, shall be audited by an independent certified public accountant.
60. ATTACHMENTS. The items listed in Section 1.16 are a part of this Lease and
are incorporated herein by this reference.
SEE ADDENDUM ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇. WAIVER OF JURY TRIAL. LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE
RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR
CROSS-COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER
LANDLORD AGAINST TENANT OR TENANT AGAINST LANDLORD ON ANY MATTER WHATSOEVER
ARISING OUT OF, OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF
INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, OR
REGULATION, EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT.
17
22
LANDLORD AND TENANT ACKNOWLEDGE THAT THEY HAVE CAREFULLY READ AND REVIEWED THIS
LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS
LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY
AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND
TENANT WITH RESPECT TO THE PREMISES. TENANT ACKNOWLEDGES THAT IT HAS BEEN GIVEN
THE OPPORTUNITY TO HAVE THIS LEASE REVIEWED BY ITS LEGAL COUNSEL PRIOR TO ITS
EXECUTION. PREPARATION OF THIS LEASE BY LANDLORD OR LANDLORD'S AGENT AND
SUBMISSION OF SAME TO TENANT SHALL NOT BE DEEMED AN OFFER BY LANDLORD TO LEASE
THE PREMISES TO TENANT OR THE GRANT OF AN OPTION TO TENANT TO LEASE THE
PREMISES. THIS LEASE SHALL BECOME BINDING UPON LANDLORD AND TENANT ONLY WHEN
FULLY EXECUTED BY BOTH PARTIES AND WHEN LANDLORD HAS DELIVERED A FULLY EXECUTED
ORIGINAL OF THIS LEASE TO TENANT.
LANDLORD TENANT
ADVENT REALTY LIMITED PARTNERSHIP II, JAYCOR,
a Delaware limited partnership a California corporation
By:Advent Realty ▇.▇. ▇▇ Limited Partnership,
General Partner
By:Advent Realty, Inc.,
General Partner
By: /s/ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------- ----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------- ----------------------------
(print name) (print name)
Its: Its:President & CEO
--------------------------------- ----------------------------
(print title) (print title)
23
ADDENDUM
THIS ADDENDUM (the "Addendum") is attached to the Lease dated as of
December 6, 1995, by and between ADVENT REALTY LIMITED PARTNERSHIP II, a
Delaware limited partnership ("Landlord") and JAYCOR, a California corporation
("Tenant") and incorporated herein by reference thereto. To the extent that
there are any conflicts between the provisions of the Lease and the provisions
of this Addendum, the provisions of this Addendum shall supersede the
conflicting provisions of the Lease.
1. TERM AND COMMENCEMENT DATE. Section 3.1 of the Lease is hereby
modified by adding the following at the end of such Section 3.1: "Landlord shall
provide Tenant with thirty days (30) prior notice of the anticipated
Commencement Date."
2. OPERATING EXPENSES EXCLUSIONS. Notwithstanding anything to the
contrary in the definition of Operating Expenses set forth in Section 4.2 (c) of
the Lease, Operating Expenses shall be defined so as to exclude the following:
(a) Legal expenses incurred in the enforcement of leases;
(b) Costs and expenses which are attributable to repairs or
replacements to the extent such expenses are reimbursed to Landlord by virtue of
(i) warranties from contractors or suppliers, (ii) insurance proceeds (except
with respect to any deductibles which shall be included in Operating Expenses),
or (iii) reimbursement from third parties;
(c) Costs of repairs or replacements incurred by reason of the gross
negligence or willful misconduct of Landlord or its agents;
(d) Costs in connection with correcting defects in the initial design
or construction of the Building;
(e) Advertising, legal and space planning expenses incurred in
procuring tenants for the Building including, but not limited to, tenant
allowances, promotional expenses, legal fees for preparation of leases, rent
abatements and lease takeover expenses;
(f) Charges specifically charged to other tenants or occupants of the
Building;
(g) Costs incurred to correct violations by Landlord of any law,
rule, order or regulation which was in effect as of the Commencement Date;
(h) Fines or penalties resulting from violations of laws or
governmental rules, regulations or agreements if Landlord intentionally violated
the law, rule or regulation;
(i) Late charges for property taxes or other items incurred as a
result of Landlord's failure to pay bills in a timely manner;
(j) Depreciation of the Building;
(k) Legal fees and leasing commissions;
(l) Painting, redecorating or other work which Landlord performs for
specific tenants within the tenant's premises;
(m) Interest and amortization of funds borrowed by Landlord, whether
secured or unsecured (except as specifically provided in Section 4.2(e) of the
Lease);
(n) Costs or expenses incurred by Landlord in financing, refinancing,
selling or otherwise transferring or encumbering ownership rights in the
Building, land, or Property;
(o) Costs relating to maintaining Landlord's existence, either as a
corporation, partnership or other entity, such as trustee's fees, annual fees,
partnership, organization or administration expenses, deed recordation expenses,
legal and accounting fees (other than with respect to Building operations);
(p) Costs incurred to contain, ▇▇▇▇▇, remove or otherwise clean up
the Building or Project required as a result of the presence of any hazardous
substances on or about the Building or Project caused by the Landlord or another
tenant;
(q) Costs incurred for capital improvements unless made with the
reasonable expectation to reduce Operating Expenses or as required by law;
(r) Reserves for replacements or repairs; and
(s) Salaries, wages or other compensation paid to officers or
executives of Landlord in their capacities as officers and executives or to
employees of Landlord who are not involved in the operation, management,
maintenance or repair of the Building.
3. RIGHT TO AUDIT. Section 4.2(f) of the Lease is hereby modified by
adding the following at the end of such Section 4.2(f):
"Tenant, at its expense, shall have the right at all reasonable times upon
prior notice to Landlord, to inspect Landlord's books and records which directly
relate to the Operating Expenses; provided, however, that Tenant's right to
inspect shall be limited to the ninety (90) day period following the date that
Landlord gives Tenant written notice of the detailed statement of actual
expenses and such audit shall take place in Landlord's offices. If Tenant
disputes Landlord's calculations or determination (Tenant's notice must be given
within ten (10) days after the ninety (90) day period referred to herein), such
dispute shall be resolved by a public accountant firm reasonably acceptable to
each party. If such audit determines that an error has been made in Landlord's
determination and calculation which results in an adjustment to the amounts
determined and calculated by Landlord in the amount of seven percent (7%) or
more, Landlord shall pay for the fees and expenses of such firm, but if such
adjustment is less than seven percent (7%), Tenant shall pay for such fees and
expenses.
Add-1
24
4. OPERATING EXPENSES INCREASES. Section 4.2 of the Lease is hereby
further modified by adding the following new subsection (h) therein:
"(h) Notwithstanding anything to the contrary in this Section 4.2, Tenant
shall not be obligated to pay to Landlord its share of increases in Operating
Expenses to the extent that such increases exceed seven percent (7%) of the
previous calendar year's Operating Expenses provided, however, that there shall
be no limitation on the payment by Tenant of increases in Operating Expenses
that cannot be controlled by Landlord (which for purposes of this paragraph
shall include utility costs, insurance costs, real property tax increases and
Force Majeure Events). The foregoing limitations shall be applied separately
during each year of the Lease Term."
5. SECURITY DEPOSIT. Notwithstanding anything to the contrary in Section
5 of the Lease, in the event that Tenant is not in default beyond any applicable
cure period as defined in Section 13 of the Lease at any time during the term of
this Lease and provided further that Tenant has not exercised its option to
terminate as provided for in Paragraph 23 of this Addendum, Landlord shall
return the Security Deposit to Tenant upon the expiration of the forty-eighth
(48th) month of the term of the Lease.
6. COMPLIANCE WITH LAW. Section 6.2 of the Lease is hereby modified by
inserting the following at the end of Section 6.2:
"Landlord warrants to Tenant that, to the best of Landlord's
knowledge, the Building, in the state existing on the date this Lease is
executed by Landlord and Tenant, but without regard to alterations or
improvements to be made by Tenant or the use for which Tenant will occupy
the Premises, does not violate any covenants or restrictions of record, or
any applicable building code, regulation or ordinance in effect on such
date. To the extent that the Landlord receives any notice from a
governmental entity that the common areas of the Building are in violation
of any requirement of the Americans with Disabilities Act ("ADA") and the
Landlord is obligated to undertake action in order to comply with ADA, then
in such event Landlord agrees to undertake such remedial action. If such
requirement was in effect as of the date hereof and such violation existed
as of the date hereof, Landlord shall be responsible for the cost of curing
such violation. If such requirement was not in effect as of the date hereof
or such violation did not exist as of the date hereof, then the cost of
curing such violation shall be included in Operating Expenses, except to
the extent such costs would otherwise be excluded from Operating Expenses
pursuant to the terms of Section 4.2 hereof. To the extent that such notice
requires action with regard to Tenant's particular use of the Premises,
Tenant shall be obligated to undertake such action at Tenant's sole cost
and expense."
To the best of Landlord's knowledge, the Building, in the state existing on
the date this Lease is executed by Landlord and Tenant, but without regard to
alterations or improvements to be made by Tenant or the use for which Tenant
will occupy the Premises, complies with all existing fire and life safety
requirements of Fairfax County, Virginia."
7. ALTERATIONS AND ADDITIONS. Notwithstanding anything to the contrary in
the Lease, Tenant shall have the right to make non-structural, cosmetic
Alterations to the Premises (e.g., paint and carpet) that do not require a
building permit or other governmental permit or authorization; provided that
Tenant gives Landlord ten (10) days advance written notice of its intention to
make the Alterations (said written notice shall include a brief description of
the Alteration) and the cost of the Alterations does not exceed $15,000 in any
one instance. In addition, to the extent Landlord's consent is required pursuant
to the Lease, Landlord agrees to notify Tenant concurrently with Landlord's
consent of any such Alterations whether Landlord will require Tenant to remove
such Alterations at the end of the Lease Term. For purposes of the Lease, it
shall be deemed reasonable for Landlord to require Tenant to perform Alterations
during non-business hours if such Alterations will create unreasonable noise,
noxious fumes or otherwise interfere with the quiet enjoyment of the other
tenants in the Building.
8. FAILURE OF TENANT TO REMOVE PROPERTY. Notwithstanding anything to the
contrary in Section 7.4 or Section 57 of the Lease in no event, however, shall
Landlord have a security interest or lien or right of any nature in, nor may
Landlord sell, any of Tenant's files, computer disks, books, records, or any
confidential, privileged or protected information, property or material, or
information, property or material subject to governmental requirements or
regulations or security clearances.
9. INSURANCE. Landlord hereby acknowledges that the use of the Premises
by Tenant for the purposes permitted by Section 1.5 hereof, if conducted in
accordance with all applicable governmental laws and regulations and in
accordance with the requirements of this Lease, shall not be considered a basis
for increase in insurance premiums pursuant to this Section 8.2.
10. DAMAGE OR DESTRUCTION. Section 9.1 of the Lease is hereby modified by
inserting the following at the end of Section 9.1:
"Notwithstanding the foregoing sentence, in the event Landlord elects
to restore but is unable to completely restore the Premises such that the
Premises are available for use by Tenant in the ordinary course, within two
hundred seventy (270) days after the date of the occurrence of the damage,
Tenant shall have the right to terminate the Lease, provided any such
termination by Tenant occurs prior to delivery of the Premises to Tenant. "
11. REAL PROPERTY TAXES. Section 10.2 of the Lease is hereby modified by
inserting the following at the end of Section 10.2:
"From time to time Landlord may challenge the assessed value of the Project
as determined by applicable taxing authorities and/or Landlord may attempt
to cause the real property taxes to be reduced on other grounds. If
Landlord is successful in causing the real property taxes to be reduced or
in obtaining a refund, rebate, credit or similar benefit (hereinafter
collectively referred to as a "reduction") Landlord shall, to the extent
practicable, credit the reductions to real property taxes for the calendar
year to which the reduction applies and to recalculate the real property
taxes owed by Tenant for the years after the year in which the reduction
applies based on the reduced real property taxes (if a reduction applies to
Tenant's Base Year, the Base Year real property taxes shall be reduced by
the amount of the reduction and Tenant's Share of real property tax
increases shall be recalculated for all comparison years following the year
of the reduction based on the lower Base Year amount). All reasonable costs
incurred by Landlord in obtaining the real property tax reductions shall be
considered an Operating Expense and Landlord shall determine, in its sole
discretion, to which years any reductions will be applied. In addition, all
accounting and related costs incurred by Landlord in calculating new Base
Years for tenants and in making all other adjustments shall be an Operating
Expense. Further, to the extent Tenant is required to pay any assessment of
real property taxes, each assessment shall be deemed to be payable in as
many installments as is lawful and only the installments that become due
during the term of this Lease and before any fine, penalty, further
interest or cost may be added to them shall be paid by Tenant."
12. INTERRUPTION IN SERVICES. Notwithstanding anything contained in
Section 11 of the Lease to the contrary, if any interruption of utilities or
services shall continue for more than five (5) consecutive business days and
shall render any portion of the Premises unusable for the normal conduct of
Tenant's business, and if Tenant does not in fact use or occupy such portion of
the Premises, then all Base Rent and Additional Rent payable hereunder with
respect to such portion of the Premises
Add-2
25
which Tenant does not occupy shall be abated retroactively to the first business
day of such interruption, and such abatement shall continue until full use of
such portion of the Premises is restored to Tenant. Except in the case of an
emergency, the Landlord will give Tenant at least one (1) business day prior
notice if Landlord intends to interrupt any services required to be furnished by
the Landlord.
13. ASSIGNMENT AND SUBLEASING TO AFFILIATED ENTITY. Notwithstanding
anything to the contrary contained in Section 12 of the Lease, Tenant shall have
the right, without Landlord's consent, upon advance written notice to Landlord,
to assign the Lease or sublet the whole or any part of the Premises (a) to any
entity or entities which are owned by Tenant, or which owns Tenant, (b) in
connection with the sale or transfer of substantially all of the assets of the
Tenant or the sale or transfer of substantially all of the outstanding ownership
interests in Tenant, or (c) in connection with a merger, consolidation or other
corporate reorganization of Tenant (each of the above subparagraphs (a), (b) and
(c) are hereinafter referred to as a "Permitted Transfer"); provided, that such
assignment or sublease is subject to the following conditions:
(a) Tenant shall remain fully liable under the terms and conditions
of the Lease;
(b) Any such assignment, sublease or transfer shall be subject to all
of the terms, covenants and conditions of the Lease;
(c) In the event of an assignment of the Lease, the assignee shall
expressly assume the obligations of Tenant under the Lease by a document
reasonably satisfactory to Landlord; and
(d) If a Permitted Transfer (other than a sublet) occurs under
subsections (a), (b) or (c) above, any new tenant under the Lease shall have a
net worth at least equal to the net worth of Tenant as of the date of the Lease.
Notwithstanding the foregoing, each transfer of an interest in Tenant pursuant
to Tenant's employee stock option plan shall not constitute a Transfer herein
provided there is no material adverse change to the net worth of Tenant as a
result of such transfers.
14. ASSIGNMENT AND SUBLETTING - CALCULATION OF TRANSFER PREMIUM. For
purposes of calculating the Transfer Premium pursuant to Section 12.5 of the
Lease, the Transfer Premium shall be reduced by the reasonable documented
third-party expenses incurred by Tenant for (a) any out-of-pocket monetary
concessions reasonably provided in connection with the assignment or sublease;
(b) any brokerage commissions in connection with the assignment or sublease (not
to exceed the amount of a commission customarily paid in connection with similar
transactions consummated in the vicinity of the Building); (c) reasonable legal
fees incurred in connection with the assignment or sublease; and (d) documented
marketing costs. Landlord shall not be entitled to a Transfer Premium in the
event of a Permitted Transfer.
15. LANDLORD'S OPTION TO RECAPTURE SPACE. Notwithstanding anything to the
contrary in Section 12.6 of the Lease, in the event Landlord elects to recapture
the Premises following a request from Tenant to assign this Lease or to sublease
space in the Premises, Tenant shall be given three (3) business days within
which to send written notice to Landlord withdrawing its request to assign or to
sublease such space in the Premises. Additionally, the terms and conditions of
Section 12.6 of the Lease shall not apply in the case of Permitted Transfers.
16. LATE CHARGES. Notwithstanding anything to the contrary in Section 13.4
of the Lease, Landlord agrees to waive imposition of such late charge on up to
one occasion in any twelve (12) month period provided the overdue payment is
made within five (5) business days after Landlord gives Tenant written notice
that the payment was not made when due.
17. PARKING. Notwithstanding anything to the contrary contained in Section
16 of the Lease, during the initial term of this Lease, Tenant shall have the
right to one (1) reserved parking space for the use of Tenant's service vehicle
at no charge. On or before the Commencement Date, the location of the reserved
parking space shall be mutually agreed upon by both Tenant and Landlord. Tenant
hereby agrees that within thirty (30) days of execution of this Lease, Tenant
will notify Landlord in writing of the number of parking spaces it wishes to
designate as "reserved" spaces which such number shall in no event exceed twenty
(20) and provided further that the location of any such reserved space shall be
determined in accordance with Section 16.1 of the Lease.
18. HAZARDOUS MATERIAL. Landlord acknowledges that to the best of its
actual knowledge, without independent investigation, Landlord has no reason to
believe that the environmental site assessment update prepared by ECS, Ltd.
dated November 30, 1993 (the "Environmental Report") delivered to Tenant under
separate cover is inaccurate.
19. TENANT IMPROVEMENTS. Landlord shall provide Tenant with an Improvement
Allowance equal to thirteen Dollars ($13.00) per rentable square foot of the
Premises (i.e., 27,219 square feet times $13.00 = $353,847.00) for construction
of Improvements to the Premises in accordance with the Work Letter Agreement
attached hereto and incorporated herein as Schedule 1. Notwithstanding the
foregoing, Tenant may use up to twenty percent (20%) of the Improvement
Allowance (i.e., actually spent (the "Fixture Allowance") for documented third
party costs related to Tenant's cost of occupancy of the Premises, including the
purchase of the existing systems furniture currently located in the Premises,
the purchase of similar systems furniture, the purchase and installation of
Tenant's telecommunications cabling and wiring, and other related items approved
by Landlord. If any of the Fixture Allowance is used to purchase furniture, then
there shall be a lien placed on the furniture in favor of Landlord. Any
improvements other than the Improvements shall be subject to Landlord's prior
written approval and shall be at Tenant's sole expense. Tenant's initial
occupancy of the Premises shall be deemed an acknowledgment that (except with
respect to latent defects for which Tenant shall have one hundred eighty (180)
days from occupancy to notify Landlord in writing of such defect) the Premises
are in good and tenantable order and that Landlord has provided or constructed
all Improvements to be provided or constructed by Landlord except those items,
if any, specified on a punch list delivered by Tenant pursuant to Schedule 1.
20. NON-DISTURBANCE AGREEMENT. Notwithstanding anything to the contrary
contained in the Lease, Tenant's subordination to any future mortgage, deed of
trust, ground lease or other security shall be conditioned upon the delivery by
Landlord to Tenant of a commercially reasonable non-disturbance agreement from
the third party in question signed by the Landlord and such third party. For
purposes herein, a "commercially reasonable" non-disturbance agreement shall
include an agreement substantially similar to the subordination and
non-disturbance agreement executed concurrently with execution of this Lease
between Tenant and Fleet Bank.
21. OPTION TO RENEW.
(a) Subject to the provisions of Section 26 of the Lease, and
provided that Tenant is not in default at the time of Tenant's exercise of the
Option and at the commencement of the extended term after expiration of the
notice and cure periods provided in Section 13.1, Tenant shall have one (1) five
(5) year Option to renew this Lease (the "Extended Term"). Tenant shall provide
to Landlord on a date which is prior to the date that the option period would
commence (if exercised) by at least one hundred eighty (180) days and not more
than two hundred seventy (270) days, a written notice of the exercise of the
option to extend the Lease for the Extended Term, time being of the essence.
Such notice shall be given in accordance with Section 40 of the Lease. If
notification of the exercise of this Option is not so given and received, the
option granted hereunder shall
Add-3
26
automatically expire. Base Rent applicable to the Premises for the Extended Term
shall be equal to the fair market rental, taking into account all market
concessions, for the like buildings in the Northern Virginia market. The Base
Year during the Extended Term shall be the calendar year 2003. All other terms
and conditions of the Lease shall remain the same.
(b) If the Tenant exercises the Option, the Landlord shall determine
the fair market rental by using its good faith judgment. Landlord shall provide
Tenant with written notice of such amount within fifteen (15) days after Tenant
exercises its Option. Tenant shall have fifteen (15) days ("Tenant's Review
Period") after receipt of Landlord's notice of the new base rent within which to
accept such rental. In the event Tenant fails to accept in writing such rental
proposal by Landlord, then such proposal shall be deemed rejected and Landlord
and Tenant shall attempt to agree upon such fair market rental, using their best
good faith efforts. If Landlord and Tenant fail to reach agreement within
fifteen (15) days following Tenant's Review Period ("Outside Agreement Date")
then the parties shall each within ten (10) days following the Outside Agreement
Date appoint a real estate broker who shall be licensed in the Commonwealth of
Virginia and who specializes in the field of commercial office space leasing in
the Northern Virginia market, has at least five (5) years of experience and is
recognized within the field as being reputable and ethical. If one party does
not timely appoint a broker, then the broker appointed by the other party shall
promptly appoint a broker for such party. Such two individuals shall each
determine within ten (10) days after their appointment such base rent. If such
individuals do not agree on base rent, then unless each determination is within
five percent (5%) of the other determination in which event the parties shall
take the average of their two determinations, the two individuals shall, within
five (5) days, render separate written reports of their determinations and
together appoint a third similarly qualified individual having the
qualifications described above. If the two brokers are unable to agree upon a
third broker, the third broker shall be appointed by the President of the
Northern Virginia Board of Realtors. In the event the Northern Virginia Board of
Realtors is no longer in existence, the third broker shall be appointed by the
President of its successor organization. If no successor organization is in
existence, the third broker shall be appointed by the Chief Judge of the Circuit
Court of Fairfax County, Virginia. The third individual shall within ten (10)
days after his or her appointment make a determination of such base rent. The
third individual shall determine which of the determinations of the first two
individuals is closest to his own and the determination that is closest shall be
final and binding upon the parties, and such determination may be enforced in
any court of competent jurisdiction. Landlord and Tenant shall each bear the
cost of its broker and shall share equally the cost of the third broker. Upon
determination of the base rent payable pursuant to this Section, the parties
shall promptly execute an amendment to this Lease stating the rent so
determined.
22. RIGHT OF FIRST OFFER. Subject to the provisions of Section 26 of this
Lease, and provided that Tenant is not in default after expiration of the notice
and cure periods set forth in Section 13.1 hereunder at the time of Tenant's
exercise of the Option, and subject to all other options held on or before the
date this Lease is executed by existing tenants of the Building, Tenant shall
have a right of first offer at any time after the space which Landlord is
currently marketing in the Building (namely the entire second, third and fifth
floors of the Building plus an additional 3,992 square feet on the first floor)
is ninety-five percent (95%) leased, on any space that becomes available on the
fourth floor of the Building (the "Option Space"). Prior to leasing the Option
Space, Landlord shall give Tenant written notice of its intent to lease the
Option Space. Tenant may exercise such right only as to all of the Option Space
described in the Landlord's notice, and not to merely a part of such Option
Space. Tenant shall have five (5) business days in which to provide Landlord
with written notice of its election to exercise such right. Terms and conditions
pertaining to the lease of the Option Space shall be negotiated between Landlord
and Tenant within thirty (30) days of Landlord receiving written notice of
Tenant's intention to exercise this right. The Base Rent payable for the Option
Space shall be at the "fair market rent" of the Option Space. If Tenant does not
give Landlord written notice of its election to lease such Option Space within
the aforesaid five (5) business day period or terms and conditions are not
agreed upon within the aforesaid thirty (30) day period, Landlord shall
thereafter be free to lease such Option Space to a third party on any terms and
conditions that Landlord shall select, with no further obligation to Tenant. In
the event that Landlord offers any space to Tenant pursuant to this right of
first offer, and Tenant elects not to lease the space, the space so offered
shall no longer be subject to this right of first offer, and thereafter Landlord
shall not be obligated to offer said space to Tenant.
23. TENANT'S OPTION TO TERMINATE. The following section is hereby inserted
at the end of Section 26 of the Lease:
"26.6 TENANT'S OPTION TO TERMINATE. Subject to the provisions of
Section 26 of the Lease, Tenant shall have the option to terminate this
Lease effective on the last day of the Sixtieth (60th) month of the initial
Term of the Lease, or if not exercised, on the last day of the
Seventy-Second (72nd) month of the initial Term of the Lease, or if not
exercised, on the last day of the Seventy-Eighth (78th) month of the
initial Term of the Lease. Tenant shall provide to Landlord on a date which
is prior to the applicable aforesaid termination dates by at least three
hundred sixty-five (365) days (i.e., the last day of the Forty-Eighth
(48th) month of the initial Term of the Lease, the last day of the Sixtieth
(60th) month of the initial Term of the Lease, and the last day of the
Sixty-Sixth (66th) month of the initial Term of the Lease, respectively) a
written notice of the exercise of the Option to terminate the Lease, time
being of the essence. Such notice shall be given in accordance with Section
40 of the Lease. If notification of the exercise of any of the Options to
terminate is not so given and received, that Option shall automatically
expire. As a condition to the effectiveness of the Option, Tenant shall pay
to Landlord no later than sixty (60) days prior to the applicable early
termination date of the Lease an amount equal to one hundred percent (100%)
of the unamortized portion of the following itemized costs (the
"Termination Payment") (as amortized on a straight-line basis over the
initial Term of the Lease): construction costs, engineering expenses, legal
fees and brokerage fees incurred by Landlord in connection with the Lease,
which total cost as of the date of execution of this Lease is deemed to be
Five Hundred Fifty-Nine Thousand Eight and 83/100 Dollars ($559,008.83).
The Termination Payment is in addition to payment by the Tenant of all
other amounts payable by Tenant to Landlord pursuant to the Lease prior to
the early termination date of the Lease."
24. OPTIONS. Section 26.2 of this Lease is hereby modified to provide that
so long as in excess of fifteen percent (15%) of the Premises is not sublet at
any one time, Tenant shall not lose the options granted hereunder.
25. RESTRICTED AREAS. Notwithstanding anything in the Lease, including
without limitation the provisions of Section 31 thereof to the contrary,
Landlord, and Landlord's agents and employees, shall not enter, and shall not
retain keys to unlock doors to any portion of the Premises designated to
Landlord as a restricted area containing any confidential, privileged or
protected information or property or material or information subject to
governmental requirements or regulations or security clearances (collectively
the "Restricted Areas"). In the event of an emergency involving the immediate
threat of material injury to person or substantial damage to property, however,
Landlord, and Landlord's agents and employees, may enter the affected Restricted
Areas only if (a) Landlord has promptly contacted a Tenant's Representative (as
hereinafter defined) and a Tenant's Representative promptly accompanies
Landlord, and Landlord's agents and employees, in the affected Restricted Area,
or (b) Landlord has promptly, but unsuccessfully, sought to contact the Tenant's
Representatives or Landlord has promptly contacted a Tenant's Representative but
the Tenant's Representative fails to promptly meet the Landlord at the Premises.
In all instances that Landlord, or Landlord's agents or employees, enter any
Restricted Areas, such parties shall not disturb or examine any of the
information, property or materials located therein. The term "Tenant's
Representative" is hereby defined as such person(s), as may be designated, at
any time and from time to time, in a writing delivered by Tenant to Landlord. On
the date hereof, each of the following shall be a Tenant's Representative: Ms.
▇▇▇▇▇ ▇▇▇▇▇▇ (home telephone: (▇▇▇) ▇▇▇-▇▇▇▇) (office telephone: (703)
▇▇▇-▇▇▇▇); and ▇▇▇▇▇ DePietrantio (home telephone: (▇▇▇) ▇▇▇-▇▇▇▇) (office
telephone (▇▇▇) ▇▇▇-▇▇▇▇).
Add-4
27
26. SIGNS. Section 46 of the Lease is hereby modified by adding the
following sentence to the end of Section 46. "Landlord will provide, at its sole
cost and expense, suite entry signage and building directory signage. The
design, size, location and materials of such signage shall be in accordance with
Landlord's standard building signage package. In addition, provided Tenant is
the single largest tenant in the Building at the time the Building reaches
ninety-five percent (95%) occupancy, and Tenant is not subleasing more than
fifteen percent (15%) of the Premises, then Tenant shall have the right, at
Tenant's sole cost and expense, to erect an illuminated sign on the Building,
the size, location, design and installation of which shall be mutually agreed
upon by Landlord and Tenant and which shall meet all applicable codes and
regulations. Tenant shall be responsible for obtaining all applicable
governmental approvals and permits."
27. RULES AND REGULATIONS. Landlord agrees that the rules and regulations
shall not be changed or revised or enforced in any way by Landlord that (a) is
inconsistent with the terms of the Lease, (b) reduces Landlord's obligations
under the Lease, or (c) increases Tenant's monetary obligations or materially
increases nonmonetary obligations. In the event of any inconsistency between any
provision of this Lease and the rules, the applicable Lease provision shall
control. Landlord shall enforce the rules in a consistent and uniform fashion.
28. ROOF-TOP ACCESS. Landlord hereby agrees that Tenant shall have,
subject to the rights of other tenants in the Building, non-exclusive access to
and use of a portion of the Building roof for Tenant's communication equipment,
the location of which shall be determined by Landlord, in Landlord's sole
discretion. In the event Tenant wishes to place communication equipment on the
roof, Tenant shall execute a license agreement substantially in the form
attached to this Lease as Exhibit F. There shall be no cost to Tenant during the
initial Term of the Lease and any extensions thereof for the use of the roof-top
for the installation of one (1) antenna.
Add-5
28
EXHIBIT A
FLOOR PLAN
A-1
29
EXHIBIT B
VERIFICATION LETTER
JAYCOR, a California corporation, ("Tenant") hereby certifies that it has
entered into a lease with ADVENT REALTY LIMITED PARTNERSHIP II, a Delaware
Limited Partnership ("Landlord") and verifies the following information as of
the _____ day of ___________, 19__:
Number of Rentable Square Feet in Premises:
------------------------------
Commencement Date:
------------------------------
Lease Termination Date:
------------------------------
Tenant's Share:
------------------------------
Initial Base Rent:
------------------------------
Billing Address for Tenant:
------------------------------
------------------------------
------------------------------
Attention:
------------------------------
Telephone Number:
------------------------------
Federal Tax I.D. No.:
------------------------------
Tenant acknowledges and agrees that all tenant improvements Landlord is
obligated to make to the Premises, if any, have been completed and that Tenant
has accepted possession of the Premises (except with respect to latent defects
for which Tenant shall have one hundred eighty (180) days from occupancy to
notify Landlord in writing of such defect) and that as of the date hereof, there
exist no offsets or defenses to the obligations of Tenant under the Lease.
Tenant acknowledges that it has inspected the Premises and found them suitable
for Tenant's intended commercial purposes.
TENANT
JAYCOR
By:
-------------------------------------------
-------------------------------------------
(print name)
Its:
------------------------------------------
------------------------------------------
(print title)
B-1
30
EXHIBIT C
RULES AND REGULATIONS
GENERAL RULES
Tenant shall faithfully observe and comply with the following Rules and
Regulations.
1. EXCEPT AS OTHERWISE PERMITTED IN THE LEASE, Tenant shall not alter any locks
or install any new or additional locks or bolts on any doors or windows of the
Premises without obtaining Landlord's prior written consent. Tenant shall bear
the cost of any lock changes or repairs required by Tenant. Keys required by
Tenant must be obtained from Landlord at a reasonable cost to be established by
Landlord.
2. All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises. Tenant shall assume any
and all responsibility for protecting the Premises from theft, robbery and
pilferage, which includes keeping doors locked and other means of entry to the
Premises closed.
3. Landlord reserves the right to close and keep locked all entrance and exit
doors of the Project except during the Project's normal hours of business as
defined in Section 11.3 of the Lease. Tenant, its employees and agents must be
sure that the doors to the Project are securely closed and locked when leaving
the Premises if it is after the normal hours of business of the Project. Tenant,
its employees, agents or any other persons entering or leaving the Project at
any time when it is so locked, or any time when it is considered to be after
normal business hours for the Project, may be required to sign the Project
register. Access to the Project may be refused unless the person seeking access
has proper identification or has a previously received authorization for access
to the Project. Landlord and its agents shall in no case be liable for damages
for any error with regard to the admission to or exclusion from the Project of
any person. In case of invasion, mob, riot, public excitement, or other
commotion, Landlord reserves the right to prevent access to the Project during
the continuance thereof by any means it deems appropriate for the safety and
protection of life and property.
4. No furniture, freight or equipment of any kind shall be brought into the
Project without Landlord's prior authorization. All moving activity into or out
of the Project shall be scheduled with Landlord and done only at such time and
in such manner as Landlord designates. Landlord shall have the right to
prescribe the weight, size and position of all safes and other heavy property
brought into the Project and also the times and manner of moving the same in and
out of the Project. Safes and other heavy objects shall, if considered necessary
by Landlord, stand on supports of such thickness as is necessary to properly
distribute the weight, and Tenant shall be solely responsible for the cost of
installing all supports. Landlord will not be responsible for loss of or damage
to any such safe or property in any case. Any damage to any part of the Project,
its contents, occupants or visitors by moving or maintaining any such safe or
other property shall be the sole responsibility and expense of Tenant.
5. The requirements of Tenant will be attended to only upon application at the
management office for the Project or at such office location designated by
Landlord. Tenant shall not ask employees of Landlord to do anything outside
their regular duties without special authorization from Landlord.
6. Tenant shall not disturb, solicit, or canvass any occupant of the Project and
shall cooperate with Landlord and its agents to prevent the same. Tenant, its
employees and agents shall not loiter in or on the entrances, corridors,
sidewalks, lobbies, halls, stairways, elevators, or any Common Areas for the
purpose of smoking tobacco products or for any other purpose, nor in any way
obstruct such areas, and shall use them only as a means of ingress and egress
for the Premises. Smoking shall not be permitted in the Common Areas.
7. The toilet rooms, urinals and wash bowls shall not be used for any purpose
other than that for which they were constructed, and no foreign substance of any
kind whatsoever shall be thrown therein. The expense of any breakage, stoppage
or damage resulting from the violation of this rule shall be borne by the tenant
who, or whose employees or agents, shall have caused it.
8. Except for vending machines intended for the sole use of Tenant's employees
and invitees, no vending machine or machines other than fractional horsepower
office machines shall be installed, maintained or operated upon the Premises
without the written consent of Landlord.
9. Tenant shall not use or keep in or on the Premises or the Project any
kerosene, gasoline or other inflammable or combustible fluid or material. Tenant
shall not bring into or keep within the Premises or the Project any animals,
birds, bicycles or other vehicles.
10. Tenant shall not use, keep or permit to be used or kept, any foul or noxious
gas or substance in or on the Premises, or permit or allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Project by reason of noise, odors, or vibrations, or to
otherwise interfere in any way with the use of the Project by other tenants.
11. No cooking shall be done or permitted on the Premises, nor shall the
Premises be used for the storage of merchandise, for loading or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' Laboratory approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors of Tenant, provided that such use is in
accordance with all applicable federal, state and city laws, codes, ordinances,
rules and regulations; and provided further that such cooking does not result in
odors escaping from the Premises.
12. Landlord shall have the right to approve where and how telephone wires are
to be introduced to the Premises. No boring or cutting for wires shall be
allowed without the consent of Landlord. The location of telephone call boxes
and other office equipment affixed to the Premises shall be subject to the
approval of Landlord. Tenant shall not ▇▇▇▇, drive nails or screws, or drill
into the partitions, woodwork or plaster contained in the Premises or in any way
deface the Premises or any part thereof without Landlord's prior written
consent. Tenant shall not install any radio or television antenna, satellite
dish, loudspeaker or other device on the roof or exterior walls of the Project.
Tenant shall not interfere with broadcasting or reception from or in the Project
or elsewhere.
13. Landlord reserves the right to exclude or expel from the Project any person
who, in the judgment of Landlord, is intoxicated or under the influence of
liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.
14. Tenant shall not waste electricity, water or air conditioning and agrees to
cooperate fully with Landlord to ensure the most effective operation of the
Project's heating and air conditioning system, and shall refrain from attempting
to adjust any controls.
C-1
31
Tenant shall not without the prior written consent of Landlord use any method of
heating or air conditioning other than that supplied by Landlord.
15. Tenant shall store all its trash and garbage within the interior of the
Premises. 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 in the vicinity of the
Project without violation of any law or ordinance governing such disposal. All
trash, garbage and refuse disposal shall be made only through entry-ways and
elevators provided for such purposes at such times as Landlord shall designate.
16. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
17. No awnings or other projection shall be attached to the outside walls or
windows of the Project by Tenant. No curtains, blinds, shades or screens shall
be attached to or hung in any window or door of the Premises without the prior
written consent of Landlord. All electrical ceiling fixtures hung in the
Premises must be fluorescent and/or of a quality, type, design and bulb color
approved by Landlord. Tenant shall abide by Landlord's regulations concerning
the opening and closing of window coverings which are attached to the windows in
the Premises. The skylights, windows, and doors that reflect or admit light and
air into the halls, passageways or other public places in the Project shall not
be covered or obstructed by Tenant, nor shall any bottles, parcels or other
articles be placed on the windowsills.
18. Tenant shall not employ any person or persons other than the janitor of
Landlord for the purpose of cleaning the Premises unless otherwise agreed to in
writing by Landlord. Except with the prior written consent of Landlord, no
person or persons other than those approved by Landlord shall be permitted to
enter the Project for the purpose of cleaning same. Landlord shall in no way be
responsible to Tenant for any loss of property on the Premises, however
occurring, or for any damage done to the effects of Tenant or any of its
employees or other persons by the janitor of Landlord. Janitor service shall
include ordinary dusting and cleaning by the janitor assigned to such work and
shall not include cleaning of carpets or rugs, except normal vacuuming, or
moving of furniture and other special services. Window cleaning shall be done
only by Landlord at reasonable intervals and as Landlord deems necessary.
PARKING RULES
1. Parking areas shall be used only for parking by vehicles no longer than full
size, passenger automobiles herein called "Permitted Size Vehicles".
2. Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, suppliers, shippers, customers, or
invitees to be loaded, unloaded, or parked in areas other than those designated
by Landlord for such activities. Users of the parking area will obey all posted
signs and park only in the areas designated for vehicle parking.
3. Parking stickers or identification devices shall be the property of Landlord
and shall be returned to Landlord by the holder thereof upon termination of the
holder's parking privileges. Tenant will pay such replacement charges as is
reasonably established by Landlord for the loss of such devices. Loss or theft
of parking identification stickers or devices from automobiles must be reported
to the parking operator immediately. Any parking identification stickers or
devices reported lost or stolen found on any unauthorized car will be
confiscated and the illegal holder will be subject to prosecution.
4. Landlord reserves the right to relocate all or a part of parking spaces from
floor to floor, within one floor, and/or to reasonably adjacent off site
locations(s), and to allocate them between compact and standard size and tandem
spaces, as long as the same complies with applicable laws, ordinances and
regulations.
5. Unless otherwise instructed, every person using the parking area is required
to park and lock his own vehicle. Landlord will not be responsible for any
damage to vehicles, injury to persons or loss of property, all of which risks
are assumed by the party using the parking area.
6. Validation of visitor parking, if established, will be permissible only by
such method or methods as Landlord may establish at rates determined by
Landlord, in Landlord's sole discretion.
7. The maintenance, washing, waxing or cleaning of vehicles in the parking
structure or Common Areas is prohibited.
8. Tenant shall be responsible for seeing that all of its employees, agents and
invitees comply with the applicable parking rules, regulations, laws and
agreements. Garage managers or attendants are not authorized to make or allow
any exceptions to these Parking Rules and Regulations. Landlord reserves the
right to terminate parking rights for any person or entity that willfully
refuses to comply with these rules and regulations.
9. Every driver is required to park his own car. Where there are tandem spaces,
the first car shall pull all the way to the front of the space leaving room for
a second car to park behind the first car. The driver parking behind the first
car must leave his key with the parking attendant. Failure to do so shall
subject the driver of the second car to a Fifty Dollar ($50.00) fine. Refusal of
the driver to leave his key when parking in a tandem space shall be cause for
termination of the right to park in the parking facilities. The parking
operator, or his employees or agents, shall be authorized to move cars that are
parked in tandem should it be necessary for the operation of the garage. Tenant
agrees that all responsibility for damage to cars or the theft of or from cars
is assumed by the driver, and further agrees that Tenant will hold Landlord
harmless for any such damages or theft.
10. No vehicles shall be parked in the parking garage overnight. The parking
garage shall only be used for daily parking and no vehicle or other property
shall be stored in a parking space.
Landlord reserves the right at any time to change or rescind any one or
more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Project,
and for the preservation of good order therein, as well as for the convenience
of other occupants and tenants therein. Landlord may waive any one or more of
these Rules and Regulations for the benefit of any particular tenant, but no
such waiver by Landlord shall be construed as a waiver of such Rules and
Regulations in favor of any other tenant, nor prevent Landlord from thereafter
enforcing any such Rules or Regulations against any or all tenants of the
Project. Tenant shall be deemed to have read these Rules and Regulations and to
have agreed to abide by them as a condition of its occupancy of the Premises.
C-2
32
EXHIBIT E
CLEANING SPECIFICATIONS
DAILY SERVICES
RESTROOMS AND LOCKER AREAS
Restrooms will receive complete cleaning and sanitation each night according to
the specification listed below:
Commodes and Urinals: Commodes will be inside and outside including
under the lips of each bowl. This work will be performed using an
approved disinfectant cleanser. All bright metal will be cleaned and
dry polished. Deodorant blocks will not be used in the urinals.
Washbasins: Washbasins will be washed inside and outside using an
approved disinfectant cleanser. All bright metal fixture units and
plumbing will be dry polished.
Stall Partitions: All stall partitions will be damp cleaned using an
approved disinfectant cleanser. Special attention will be given to
urinal partitions.
Entrance door: All entrance doors, including stops, jambs, and frames
will be cleaned. Stainless steel kickplates will be polished nightly.
Mirrors and Lights: All mirrors and lights immediately above mirrors
will be cleaned. Burned out lights will be reported to the maintenance
department.
Couches and Chairs: Leather or vinyl couches and chairs will be damp
cleaned. All vanity chairs, stools and other furniture will be treated
in a like manner. Any cloth chairs or couches will be vacuumed not less
than weekly.
Sanitary Napkin Disposal Containers: All sanitary napkin containers
will be emptied, damp cleaned with an approved disinfectant cleanser
and provided with a new paper bag liner daily.
Installation of Supplies: All supplies such as toilet tissue, paper
towels, liquid hand soap and bar soap will be restocked. Insure that
proper liquid soap is used in dispenser to avoid malfunctions.
Mosaic Floors:
- Pick up all loose paper and trash.
- Sweep all floors.
- Wet mop floors, using an approved disinfectant cleanser.
Walls: Wash/clean walls around soap dispenser, towel containers, and
light switches as required to maintain clean/bright appearance.
Traps and Floor Drains: Must be maintained free from odor at all times.
Periodically, water will be poured down through these traps/floor
drains to insure vapor seal.
Showers and Locker Rooms: Showers will washed inside and outside
including door, frame and wall using an approved disinfectant cleanser.
All bright metal will be cleaned and dry polished. All lockers will be
dusted and damp cleaned.
NOTE: No harsh or abrasive cleanser will be used without consulting the
Property Manager.
OFFICE CLEANING
Executive Offices, Private Offices, Semi-Private Offices, Reception Area,
Conference Rooms, and General Offices.
The areas stated above will receive complete general cleaning daily according to
the specifications listed below.
Wastepaper and Trash Containers: All trash containers will be emptied
and returned to original locations. Plastic liners will be used in
trash containers and changed as necessary for appearance and
sanitation. Trash containers will be periodically washed, for
appearance and sanitation. All trash collected will be deposited in the
exterior bulk trash containers provided by the Property Manager. Doors
on these containers will be kept closed when not in use. Any spills
occurring during emptying of trash will be cleaned up immediately
(inside or outside), and related stains will be washed/shampooed as
required.
Entrances to Executive Offices and Entrances of Office Areas on Various
Floors: All glass doors, plate glass and jambs will be cleaned as
necessary.
Ash Tray: All ash trays will be emptied. Ash trays will then be wiped
with a damp cloth to remove stains and odors.
Desks and Chairs: Wood desks will be thoroughly dusted with a treated
dust cloth and oiled/waxed as required. Metal desks will be damp wiped
as necessary to remove spots and stains, including front and side
vertical surfaces. All glass desk tops will be damp cleaned. Paper on
desks will not be disturbed. All chairs will be dusted as required (see
weekly services).
File and Storage Cabinets: All file and storage cabinets will be dusted
thoroughly, using a treated dust cloth. Cabinets lined in a row will be
dusted along the horizontal and vertical surface of each cabinet. Spill
stains will be damp cleaned when required.
Tables and Lamps: Tables will be treated in like manner as desks. Lamps
will be dusted thoroughly, using a treated dust cloth.
Hand Dust/Clean the following using a treated dust cloth:
- Window ▇▇▇▇▇
- Pictures and Frames
- Counter
- Radiator and Fan Coil Unit enclosures (damp clean as
required)
- Ledges and Shelves under six feet
▇-▇
▇▇
- ▇▇▇▇▇, ▇▇▇▇▇ and Stops (particularly along top/horizontal
surface)
- Pushplates and Kickplates
- Coat racks and trees
- Telephones, all type including office and pay phones
- Panel boxes, Fire extinguishers and cabinets, and fire
hose cabinets/enclosures
Vinyl (Resilient) Tile Floors: All resilient tile floors will be dusted
with a treated dust mop. All spillage will be removed, including damp
mop cleaning when required. Spray buff floor, using a commercial floor
polishing machine, synthetic fiber pad and an approved high gloss, slip
resistant floor finish as needed.
Carpets: All carpets will be thoroughly vacuumed (with edges vacuumed
monthly). Special attention will be paid to all spills, spots and
adherents for removal. Spot clean carpeting as required.
Glass Partitions: All glass partitions will be washed to remove finger
marks and smudges.
OTHER CLEANABLE AREAS
Main Entrance Lobby, Elevators, Corridors, Snack Bars, Stairways, Landings,
Loading Platforms, and Receiving Rooms
The areas listed above will receive complete daily cleaning as prescribed in
paragraphs A 1 and 2 above and specialty cleaning according to the
specifications listed below:
Main Entrance Lobby: All hard surface floors will be thoroughly cleaned
and non-slip floor finish applied as necessary. Will spray buff floor,
using a commercial floor polishing machine, synthetic fiber pad and an
approved high gloss, slip resistant floor finish as needed. All
entrance door glass will be cleaned. Area mats will be thoroughly
vacuumed and returned to their original location.
Carpeted areas will be vacuumed and stains removed as needed.
Corridors/Snack Bars: Carpeted areas will be vacuumed and all stains
removed. Resilient flooring will be swept and damp mopped to remove
spillage. Will spray buff floor, using a commercial floor polishing
machine, synthetic fiber pad and an approved high gloss, slip resistant
floor finish as needed.
All refuse, trash and garbage from snack bars and vending machine areas
will be collected and remove from the building. Cans used for
collection of food remnants will be periodically washed, sanitized and
polished.
Water Fountains: The dispensing area will be washed, sanitized and
polished.
Stairways: Stair landings and steps will be checked. Spills will be
wiped up daily. Will spray buff resilient flooring as required to
maintain gloss. Carpeted stairwells will be vacuumed nightly. All hard
floor stairwells will be swept twice weekly and mopped not less than
twice monthly.
Outside Entrances: Landings and steps will be swept. Both sides of
entrance glass will be cleaned. Kick plates and push bars will be
cleaned and polished.
Assembly Area/Loading Platforms/Receiving Rooms: Assembly area, loading
dock, platforms and receiving rooms will be swept daily and damp mopped
as required.
WEEKLY SERVICES
OFFICE CLEANING
Vertical Surfaces:
Wood wall paneling in Executive Offices will be dusted using a treated
dust cloth.
Will dust vertical surfaces of file cabinets, etc.
All woodwork, doors, walls (including stairwells) will be spot cleaned
to remove smudges/spills, etc.
Other:
Air conditioning return air grilles will be cleaned (vacuumed if
necessary).
MONTHLY SERVICES
RESTROOM CLEANING
Will damp clean walls and dry polish tile areas.
Will machine scrub floor using a disinfectant cleaner.
Will dust all high areas and vacuum exhaust grilles.
OFFICE CLEANING
Vertical surfaces and under surfaces (knee ▇▇▇▇▇, chair rungs, table
legs, etc.) will be thoroughly dusted and all glass in doors,
partitions, pictures, and bookcases will be damp-wiped. Dust walls and
horizontal surfaces over six feet high.
Venetian Blinds: Venetian blinds will be dusted in place with a treated
dust cloth or venetian blind tool.
OTHER CLEANABLE AREAS
Flooring: All resilient/vinyl floor tiles throughout the building will
be thoroughly cleaned (scrub) and recoat using a high gloss, slip
resistant floor finish to restore gloss.
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
LICENSE AGREEMENT FOR SATELLITE DISH
THIS LICENSE AGREEMENT FOR SATELLITE DISH (the "Agreement") is made as
of this ______ day of _________________________, 19__, by and between
_____________________________________ ____________________ limited partnership
(the "Licensor"), and _________________________________________ (the
"Licensee"), a ______________.
RECITALS
A. This Agreement is attached to and made a part of that certain Lease
Agreement dated _____________________________ ("Lease") by and between
Licensee, as tenant, and Licensor, as landlord, for the lease by
Licensee of approximately __________________ rentable square feet of
office space (the "demised premises") in the building located at
______________________________ (the "Building"), all as more
particularly described in the Lease.
B. Under the terms of the Lease, Licensor has the exclusive right to use
or permit the use of all or any portion of the roof of the Building for
any purpose; Licensee desires to use a portion of the roof space to
maintain and operate thereon a satellite dish and/or related microwave
facilities, antennas and related equipment, all as more particularly
described in Exhibit A and Exhibit B attached hereto and incorporated
herein by this reference (the "Equipment Location and Specifications").
C. Licensor and Licensee desire to provide the terms and conditions for
Licensee's use of the roof space as a location for an antenna and the
equipment required for the operation thereof.
NOW, THEREFORE, in consideration of the foregoing, the sum of Ten
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Licensor and Licensee, intending
legally to be bound, hereby agree as follows:
1. The foregoing recitals are hereby incorporated herein and made
a part hereof by this reference.
2. Satellite Dish Equipment: Permitted Uses. Provided Licensee is
not in default under the terms and conditions of the Lease, Licensee's agent, as
approved by Licensor, in Licensor's sole discretion, will install and maintain,
at the sole cost of Licensee and Licensee may, at its own expense, operate on
the roof of the Building, a satellite dish and/or related microwave facilities
and an antenna as specified in Exhibit A attached hereto, to be located as
designated on Exhibit B attached hereto (said equipment is collectively referred
to hereinafter as the "Satellite Dish"). The Satellite Dish shall be deemed to
be the Licensee's Personal Property (as defined in the Lease) and to the extent
not inconsistent with this Agreement, the ownership, installation, use and
removal thereof shall be governed by the terms of the Lease applicable to
Licensee's Personal Property.
3. Licensor's Prior Approval. Licensor may approve or reject the
installation and operation of the Satellite Dish within a reasonable time after
Licensee submits (i) plans and specifications for the Satellite Dish (including
size, location, height, weight and color); (ii) copies of all required
governmental and quasi-governmental permits, licenses, special zoning variances,
and authorizations, all of which Licensee shall obtain at its own cost and
expense; and (iii) a policy or certificate of insurance evidencing such
insurance coverage as may reasonably be required by Licensor for the
installation, operation and maintenance of the Satellite Dish and sufficient to
cover, among other things, the indemnities from Licensee to Licensor as
hereinafter provided. Licensor may withhold approval if the installation,
operation or removal of the Satellite Dish may (a) damage the structural
integrity of the Building; (b) unreasonably interfere with any service provided
by Licensor; (c) interfere with any zoning ordinances or other governmental
regulation applicable to the Building; or (d) reduce the amount of leasable
space in the Building. Licensee shall not be entitled to rely on any such
approval as being a representation by Licensor that such installation and
operation is permitted by or in accordance with any governmental or
quasi-governmental entity, authority or regulation.
4. Installation.
(a) Installation and maintenance of the Satellite Dish
shall be performed solely by Licensee's agent or its contractors, as approved by
Licensor, in Licensor's reasonable discretion. The Satellite Dish shall not be
located on top of any existing structure on the roof of the building.
(b) Licensee shall bear all costs and expenses incurred
in connection with the installation, operation and maintenance of the Satellite
Dish. If operation of the Satellite Dish shall require electrical power Licensor
may, at its sole option, install a separate meter, at Licensee's sole expense.
Licensee shall pay the actual cost of all electricity used in the operation of
the Satellite Dish, all as determined by Licensor.
5. Rental Payments. Licensee shall pay, as additional rent, a fee
to Licensor for the use of the rooftop space. Such fee shall be _____ per month
____________ per year) due in advance, on or before the first of each month.
Such fee shall commence ________________________, 19__. In addition, if
Licensor's insurance premium or real estate tax assessment increases as a result
of the Satellite Dish, or if any governmental or quasi-governmental authority
shall levy, assess or impose any tax, license fee, use fee or other sum against
Licensor, as owner of the Building, as a result of the Satellite Dish, Licensee
shall pay all such amounts as additional rent (as defined in the Lease),
promptly upon receipt of a ▇▇▇▇ from Licensor for any such amount. Licensee will
have no right to an abatement or reduction in the amount of basic monthly rent,
additional rent or any other sums due and payable under the Lease if for any
reason Licensee is unable to obtain any required approval for installation of
the Satellite Dish, or is thereafter unable to use the Satellite Dish for any
reason, but Licensee shall not be obligated to pay the fee specified in this
Section 5 during any month or portion thereof during which Licensee is unable to
use the Satellite Dish.
6. Indemnification. Licensee covenants and agrees that the
installation, operation, maintenance and removal of the Satellite Dish, or the
demised premises with respect thereto, shall be solely at its own risk. Licensee
covenants and agrees absolutely and unconditionally to indemnify, defend and
hold Licensor harmless against all claims, actions, damages, judgments,
settlements, liability, costs and expenses (including reasonable attorneys' fees
and expenses) in connection with death, bodily or personal injury, damage to
property or business or any other loss or injury arising out of or related to
the installation, operation, maintenance or removal of the Satellite Dish.
7. Termination Rights. Licensor may require Licensee, at any time
prior to the expiration of the Lease, to terminate the operation of the
Satellite Dish if it is causing physical damage to the structural integrity of
the Building, unreasonably interfering with any other service provided by the
Building, unreasonably interfering with any prior licensee of the roof, or
causing the violation of any condition or provision of the lease or any law,
regulation or ordinance promulgated by any governmental or quasi-governmental
authority now or hereafter permitted to continue any similar use or operation.
If, however, Licensee can correct the damage or prevent said interference caused
by the
F-1
35
Satellite Dish to Licensor's satisfaction within thirty (30) days, Licensee may
restore its operation so long as Licensee promptly commences to cure such damage
and diligently pursues such cure to completion. If the Satellite Dish is not
completely corrected and restored to operation within thirty (30) days,
Licensor, at its sole option, may require that the Satellite Dish be removed at
Licensee's expense. If Licensor shall require that the Satellite Dish be moved
to another location on the roof, Licensor shall have the right, at its sole
expense, to relocate the Satellite Dish to another place on the roof.
8. Removal of the Satellite Dish. At the expiration or earlier
termination of the Lease or upon termination of the operation of the Satellite
Dish as provided hereinabove in Section 7, the Satellite Dish and all cabling
and other equipment relating thereto shall be removed from the Building at
Licensee's sole cost. Licensee hereby authorizes Licensor to remove and dispose
of the Satellite Dish and charge Licensee for all costs and expenses incurred.
Licensee agrees that Licensor shall not be liable for any property disposed of
or removed by Licensor. Licensee's obligation to perform and observe this
covenant shall survive the expiration or earlier termination of the Term of this
Agreement.
9. Time of the Essence. Time shall be of the essence of the
Licensee's obligations hereunder.
10. Entire Agreement. This Agreement contains the entire agreement
of the parties hereto and neither Licensor nor any agent or representative of
Licensor has made or is making, and Licensee, in executing and delivering this
Agreement, is not relying upon any warranties, representations, promises or
statements whatsoever. No waiver or modification of any provision of this
Agreement shall be effective unless expressed in writing and signed by all
parties hereto.
11. Successors and Assigns. The obligations of this Agreement
shall bind and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
12. Notices. All notices hereunder shall be given by hand delivery
or by certified mail, return receipt requested, and shall be deemed delivered
upon receipt or refusal to accept delivery, if addressed as noted in the Lease.
13. Governing Law. This Agreement shall be construed and enforced
in accordance with the laws of the Commonwealth of Virginia.
IN WITNESS WHEREOF, Licensor and Licensee have duly executed this
Agreement under seal as of the day and year first above written.
LICENSOR:
---------------------------------------
By:
------------------------------------
Date:
----------------------------------
LICENSEE:
WITNESS/ATTEST:
---------------------------------------
By:
----------------------- ------------------------------------
Seal Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
F-2
36
SCHEDULE 1
WORK LETTER AGREEMENT
(Improvement Allowance)
1. BASE BUILDING WORK. Landlord and Tenant understand and acknowledge that
this Agreement relates only to "non-base building" work in the Premises. The
"base building work" has been or will be performed by Landlord at Landlord's
sole cost and expense. The term "base building work" means and refers to the
following elements of the Premises: concrete floors (without floor covering);
unfinished perimeter walls; unfinished ceilings (without acoustical ceilings,
ceiling tiles, suspension system, insulation or light fixtures); closets for
telephone and electrical systems (but not the systems themselves); building
systems within the building core only as follows: mechanical (including heating,
ventilating and air conditioning systems), electrical and plumbing systems; and
primary fire sprinkler distribution loop connected to core (secondary branch
distribution to the Premises to accommodate Tenant's specific tenant
improvements shall not be considered base building work).
2. PLANS AND SPECIFICATIONS.
2.1. SPACE PLAN. Within five (5) business days after the execution
of the Lease, Landlord shall submit to Tenant for approval a detailed space plan
("Space Plan") for the Premises prepared by Landlord's architects and
consultants, which shall include without limitation, the location of doors,
partitions, electrical and telephone outlets, plumbing fixtures, heavy floor
loads and other special requirements. If applicable, Landlord reserves the right
to approve Tenant's architect and/or space planner. Tenant agrees to cooperate
with Landlord and its design representatives in connection with the preparation
of the Space Plan. Within five (5) business days after receipt by Tenant of the
Space Plan, Tenant (i) shall give its written approval with respect thereto, or
(ii) shall notify Landlord in writing of its disapproval and state with
specificity the grounds for such disapproval and the revisions or modifications
necessary in order for Tenant to give its approval. Within three (3) business
days following Landlord's receipt of Tenant's disapproval, Landlord shall submit
to Tenant for approval the requested revisions or modifications. Within three
(3) business days following receipt by Tenant of such revisions or
modifications, Tenant shall give its written approval with respect thereto or
shall request other revisions or modifications therein, and any time delay
incurred in the approval of the Space Plan from the date of this second notice
of disapproval shall constitute Tenant Delay (as that term is defined in Section
7 hereof).
2.2. PLANS. Based on the approved Space Plan, Landlord shall cause
its architects and engineers to prepare and submit to Tenant for approval
detailed plans, specifications and working drawings ("Plans") for the
construction of Tenant's leasehold improvements to the Premises
("Improvements"). Landlord reserves the right to approve any space planner,
architect or engineer if employed by Tenant. As used herein, the term
"Improvements" shall include all non-base building work to be done in the
Premises pursuant to the Plans, including, but not limited to: demolition work,
partitioning, doors, ceiling, floor coverings, wall finishes (including paint
and wall coverings), window coverings, electrical (including lighting,
switching, telephones, outlets, computer and special electrical equipment,
etc.), plumbing, heating, ventilating and air conditioning, fire protection,
cabinets and other millwork. If Tenant has leased an entire floor, the
Improvements shall include finished toilet rooms, corridors and elevator
vestibules. Landlord shall submit the Plans to Tenant for approval within ten
(10) business days following Tenant's approval of the Space Plan. Within three
(3) business days after receipt by Tenant of the Plans, Tenant (i) shall give
its written approval with respect thereto, or (ii) shall notify Landlord in
writing of its disapproval and state with specificity the grounds for such
disapproval and the revisions or modifications necessary in order for Tenant to
give its approval. Within five (5) business days following Landlord's receipt of
Tenant's disapproval, Landlord shall submit to Tenant for approval the requested
revisions or modifications. Within three (3) business days following receipt by
Tenant of such revisions or modifications, Tenant shall give its written
approval with respect thereto or shall request other revisions or modifications
therein, and any time delay incurred in the approval of the Plans from the date
of this second notice of disapproval shall constitute Tenant Delay. After
approval of the Plans by Tenant, no further changes to the Plans shall be made
without the prior written approval of Landlord and only after Tenant agreeing
that any delays in design and/or construction resulting from such change shall
constitute a Tenant Delay.
3. SPECIFICATIONS FOR BUILDING STANDARD IMPROVEMENTS. Specifications and
details for building standard improvements ("Standards") are available in the
office of the Building. Except as specified in Section 4 below, the Space Plan
and Plans shall be consistent with the Standards, and no deviations shall be
permitted from the Standards without Landlord's consent as set forth in Section
4 below.
4. GROUNDS FOR DISAPPROVAL. Tenant may request deviations from the
Standards for Improvements provided that the deviations ("Non-Standards") shall
not be of lesser quality than the Standards. Landlord shall not be required to
approve any item of the Space Plan, the Plans or the Non-Standards that (a) does
not conform to applicable governmental regulations or is disapproved by any
governmental agency; (b) requires building service (including electrical power)
beyond the level normally provided to other tenants in the Building; or (c)
overloads the floors.
5. IMPROVEMENT COST AND ALLOWANCE.
5.1. COST BREAKDOWN. Within a reasonable period following approval
of the Plans, Landlord shall provide Tenant with a breakdown of the estimated
total cost of the Improvements ("Cost Breakdown"), including, without
limitation: construction cost of the Improvements; architectural and engineering
fees relating to the preparation and review of the Space Plan and the Plans
(inclusive of all design work above and below the ceiling); governmental agency
plan check, permit and other fees; sales and use taxes; testing and inspection
costs; and construction fees (including general contractor's overhead and
supervision fees and the construction supervisory fee referred to in Section 6.3
hereof). Within five (5) business days after receipt by Tenant of the Cost
Breakdown, Tenant shall either approve the same in writing or shall provide
Landlord with a detailed list of revisions to the approved Plans, and any time
delay incurred in the approval of the Cost Breakdown from the date of Landlord's
receipt of Tenant's list of revisions to the approved Plans shall constitute
Tenant Delay. Upon approval of the Plans by Tenant, Landlord shall obtain bids
from at least three (3) qualified general contractors (one of whom shall be
selected by Tenant). Further, Landlord shall provide Tenant with copies of all
bid estimates and final bids, including the final bid and contract of the
selected general contractor. Landlord and Tenant shall mutually approve the
final construction contract. Tenant and its consultants shall have the right to
review and approve the complete set of construction documents, including
architectural, mechanical, electrical, plumbing and structural drawings,
provided Tenant's approval shall not be unreasonably withheld and shall be
deemed given if Tenant does not respond to Landlord within three (3) business
days from receipt of such documents.
Sch 1-1
37
5.2. IMPROVEMENT ALLOWANCE. Landlord hereby grants to Tenant an
"Improvement Allowance", of Thirteen and 00/100 Dollars ($13.00) per square foot
(i.e., 27,219 square feet times $13.00 = $353,847.00) which Improvement
Allowance shall be used only for the items specified in the Cost Breakdown. In
the event that the Cost Breakdown exceeds the Improvement Allowance, Tenant
shall pay to Landlord the sum in excess of the Improvement Allowance by
cashier's check, which payment shall be made within five (5) days of Landlord's
notice to Tenant that Landlord is prepared to commence construction.
5.3. COST INCREASES. In the event that the cost of the Improvements
increases subsequent to Tenant's approval of the Cost Breakdown due to the
requirements of any governmental agency imposed with respect to the construction
of the Improvements or due to any other unforeseeable circumstances, Tenant
shall pay to Landlord the amount of such increase within five (5) days of
Landlord's written notice; provided, however, that Landlord shall first apply
toward such increase any remaining balance in the Improvement Allowance.
5.4. CHANGE IN PLANS. In the event that Tenant requests a change in
the Plans subsequent to approval of the Cost Breakdown, Landlord shall advise
Tenant as to any increases in the cost of the Improvements and as to any delay
such change would cause in the construction of the Improvements, which delay
would constitute a Tenant Delay. Tenant shall approve or disapprove such change
within five (5) business days of written notice. In the event that Tenant
approves such change, Tenant shall accompany its approval with payment in the
amount of the increase; provided, however, that Landlord shall first apply
toward such increase any remaining balance in the Improvement Allowance.
Landlord shall have the right to decline Tenant's request for a change in the
approved Plans if the change is inconsistent with Sections 2, 3 or 4 above, or
if the change would, in Landlord's sole opinion, unreasonably delay construction
of the Improvements.
5.5. NO REFUND. If the actual cost of the Improvements does not
exceed the Improvement Allowance, the unused portion of the Improvement
Allowance shall be amortized over the initial Term of the Lease and credited
against installments of Base Rent as follows: one-eighty-fourth (1/84th) of the
unused portion of the improvement allowance shall be credited each month against
installments of Base Rent next coming due under the Lease. For example, assume
that the unused portion of the Improvement Allowance is $84,000. In such event,
each monthly installment of Base Rent coming due during the initial Term of the
Lease would be credited by $1,000.00.
6. CONSTRUCTION OF IMPROVEMENTS.
6.1. CONSTRUCTION. Within a reasonable period following approval of
the Cost Breakdown by Tenant, and upon payment of any sum required under Section
5.2 above, Landlord shall instruct its contractor to secure a building permit
and commence construction. Tenant shall have the right to monitor the
construction progress provided Tenant does not unreasonably interfere with such
construction.
6.2. COMPLETION. Landlord shall endeavor to cause the contractor to
substantially complete construction of the Improvements in a diligent manner,
but Landlord shall not be liable for any loss or damage as a result of delays in
construction or delivery of possession of the Premises.
6.3. CONSTRUCTION SUPERVISORY FEE. The cost of the Improvements
shall include a construction supervisory fee for the supervision of the
construction of the Improvements by Landlord. Said construction supervisory fee
shall not exceed three percent (3%) of the actual "hard costs" incurred in
completing the Improvements.
7. COMMENCEMENT DATE. The Commencement Date and Tenant's obligation to pay
rent under the Lease shall be governed by Section 3 of the Lease. However, if
there shall be a delay ("Tenant Delay") beyond the scheduled Commencement Date
in the substantial completion of the Improvements as a result of:
7.1. Tenant's failure to submit or revise the Space Plan within the
time limits provided herein;
7.2. Tenant's failure to submit or revise the Plans within the time
limits provided herein;
7.3. Tenant's failure to approve the Cost Breakdown or to pay the
sum specified in Section 5.2 above within the time limits provided herein;
7.4. Tenant's request for Non-Standards, whether as to materials or
installation, that extend the time it takes to obtain necessary building permits
or other governmental authorizations or extends the time for the construction
period;
7.5. Insufficiency of the Plans that extends the time it takes to
obtain necessary building permits or other governmental authorizations or
changes in the Plans required by the applicable governmental regulatory agencies
reviewing the Plans;
7.6. Tenant's changes in the Plans after the approval by Landlord;
or
7.7. Any other act or omission of Tenant constituting a Tenant
Delay under the terms of this Agreement; then the Commencement Date of the Lease
shall be accelerated one day for each day of Tenant Delay that delays the
commencement date, calculated as follows: Upon substantial completion of the
Improvements, Landlord shall notify Tenant of the accelerated Commencement Date,
which date shall represent the date upon which the substantial completion of the
Improvements (as defined in Section 3.4 of the Lease) would have occurred but
for Tenant Delays.
8. INCORPORATION. This Agreement is and shall be incorporated by reference
in the Lease, and all of the terms and conditions of the Lease are and
shall be incorporated herein by this reference.
Sch 1-2
38
[MANAGEMENT SERVICES, LLC LETTERHEAD]
October 3, 1996
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
JAYCOR
Corporate ▇▇▇▇▇▇ #▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Tenant Improvement Allowance - Tysons Dulles Plaza III
Dear ▇▇. ▇▇▇▇▇▇▇:
Pursuant to the Lease dated December 6, 1995, by and between Advent Realty
Limited Partnership II ("Landlord") and JAYCOR ("Tenant"), if the actual cost
of the Improvement does not exceed the Improvement Allowance, the unused
portion of the Improvement Allowance shall be credited toward the monthly
installments of Base Rent.
The total Improvement Allowance per the Work Letter Agreement totals
$353,847.00 and the total construction improvement cost was $239,991.65.
Therefore, $113,855.35 remains to be disbursed in the manner stated above.
Since there are seventy six (76) months remaining in the term, Tenant shall
receive a monthly credit of $1,498.10 for the period November 1, 1996 through
February 28, 2003. The calculation is as follows:
$353,847.00 Improvement Allowance
- $239,991.65 Improvement Cost
-----------
$113,855.35 Remaining Allowance
divided by 76 Monthly Remaining
-----------
$ 1,498.10/month Reimbursement
Please feel free to call me with any questions.
Sincerely
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Lease Administrator
cc: ▇▇▇▇▇▇ ▇▇▇