EXHIBIT 10.6
LEASE AGREEMENT
BY AND BETWEEN
BOSTON PROPERTIES LIMITED PARTNERSHIP
AND
ORBITAL SCIENCES CORPORATION
TABLE OF CONTENTS
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Page
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ARTICLE I 1
THE PREMISES
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ARTICLE II
TERM 2
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ARTICLE III
BASE RENT 4
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ARTICLE IV
ADDITIONAL RENT 5
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ARTICLE V
SECURITY DEPOSIT 14
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ARTICLE VI
USE OF PREMISES 17
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ARTICLE VII
ASSIGNMENT AND SUBLETTING 20
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ARTICLE VIII
MAINTENANCE AND REPAIRS 23
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ARTICLE IX
ALTERATIONS 24
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ARTICLE X
SIGNS, EQUIPMENT AND FURNISHINGS 27
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ARTICLE XI
INSPECTION BY LANDLORD 29
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ARTICLE XII
INSURANCE 29
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ARTICLE XIII
SERVICES AND UTILITIES 31
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ARTICLE XIV
LIABILITY OF LANDLORD 35
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ARTICLE XV
RULES AND REGULATIONS 38
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ARTICLE XVI
DAMAGE OR DESTRUCTION 39
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ARTICLE XVII
CONDEMNATION 41
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ARTICLE XVIII
DEFAULT 41
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ARTICLE XIX
BANKRUPTCY 46
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ARTICLE XX
SUBORDINATION; MORTGAGES 47
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ARTICLE XXI 49
HOLDING OVER
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ARTICLE XXII 49
COVENANTS OF LANDLORD
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ARTICLE XXIII
PARKING 50
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ARTICLE XXIV
REPRESENTATIONS AND WARRANTIES 50
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ARTICLE XXV
RENEWAL 51
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ARTICLE XXVI
COMMUNICATIONS EQUIPMENT 54
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ARTICLE XXVII
TENANT'S PURCHASE OPTION 55
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ARTICLE XXVIII
RIGHT OF FIRST OFFER 58
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ARTICLE XXIX
GENERAL PROVISIONS 61
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ARTICLE XXX
DIRECTORY OF DEFINED TERMS 66
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EXHIBIT A - Survey Depicting the Land
EXHIBIT A-1 - Diagram of the Premises
EXHIBIT A-2 - Survey of the Complex
EXHIBIT B - Form of Estoppel Certificate
EXHIBIT C - Brokerage Agreement
EXHIBIT D - Form of Letter of Credit
EXHIBIT E - Rules and Regulations
EXHIBIT F - Form of Management Agreement
DEED OF LEASE AGREEMENT
THIS DEED OF LEASE AGREEMENT (this "LEASE") is made as of the
1st day of December, 1999 (the "Effective Date"), by and between BOSTON
PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (hereinafter
referred to as "LANDLORD"), and ORBITAL SCIENCES CORPORATION, a Delaware
corporation (hereinafter referred to as "TENANT" or "ORBITAL").
RECITALS:
A. Landlord is the fee simple owner of that certain real property
containing approximately 11.907 acres of land known or to be known as ▇▇▇ ▇▇,
▇▇▇ ▇▇▇ and Lot 10D of Steeplechase, Section 1 ("Steeplechase"), Loudoun
County, Virginia (the "Land"), which Land is more particularly depicted on or
described on Exhibit A-1 attached hereto which Land is part of the office
complex development known as the Orbital Campus (the "Complex").
B. Concurrently with the execution of this Lease, Landlord and
Tenant have entered into that certain Build to Suit Agreement and Agreement to
Lease dated of even date herewith (the "PHASE II DEVELOPMENT AGREEMENT") with
respect to, among other things, the financing, design and construction by
Landlord of one (1) building on the Land containing approximately 165,342
gross square feet of space (the "BUILDING"), including all necessary or
appropriate loading, landscaping, site work, parking area and other
infrastructure. The Phase II Development Agreement contains terms, conditions
and agreements governing the development of the Land, the construction of the
Building and additional buildings on other parcels of land in the Complex, and
Landlord's and Tenant's respective options with regard to same.
C. Landlord and Tenant wish to set forth herein the terms and
conditions upon which Landlord (i) shall lease the Land and the Building to
Tenant and (ii) shall grant to Tenant an option to purchase the Land and the
Building.
NOW, THEREFORE, the parties hereto, intending to be legally
bound, hereby covenant and agree as follows:
ARTICLE I
THE PREMISES
1.1 Landlord hereby leases and demises to Tenant and Tenant hereby
leases and accepts from Landlord, for the term and upon the terms and
conditions hereinafter set forth, the Land and the Building (collectively, the
"PREMISES"). Upon the design of the Building and completion of construction
documents, a diagram of each floor of the Building, which together with the
Land, comprise the Premises, shall be added to this Lease as Exhibit A-1.
1.2 The Lease of the Premises includes the right to use the
adjacent parking areas which shall be generally described on the Site Plan, as
defined in the Phase II Development Agreement, and the right to use any common
areas and facilities (including the Building's loading docks, doors,
platforms, staging areas and service elevators) and all other facilities and
areas that are located in and adjacent to the Building, unless specifically
excluded in this Lease.
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The lease of the Premises also is subject to all covenants, conditions and
restrictions of record as of the date hereof or recorded hereafter with the
agreement of Tenant.
1.3 The area of the Building is expected to be approximately
165,342 square feet of Gross Floor Area and approximately 160,502 square feet
of "net rentable" area. The parameters for the size and design of the
Building, and other terms and conditions upon which the Land will be developed
and the Building will be constructed are set forth in the Phase II Development
Agreement. The number of rentable square feet in the Building shall be
determined by Ai, the Project Architect, as defined in the Phase II
Development Agreement, upon design and construction of the Building, and shall
be confirmed in the declaration described in Section 2.3 below. For the
purposes hereof, rentable area shall be calculated in accordance with the 1996
Building Owners and Managers Associated Standard Method of Measurement, as in
effect as of the date of this Lease. The Project Architect shall provided
Landlord and Tenant with its calculations for the measurement of the Building.
1.4 Landlord and Tenant agree that the legal description of the
Land may be adjusted as a result of the legal resubdivision of the Land as
described in Section 3(d) of the Phase II Development Agreement. In the event
such adjustment occurs, Landlord and Tenant agree to execute an amendment to
this Lease, or such other documentation, reflecting such adjustment.
ARTICLE II
TERM
2.1 The term of this Lease (hereinafter referred to as the "LEASE
TERM") shall commence on the Lease Commencement Date, as determined pursuant
to Section 2.2 below, and continue for a period of fifteen (15) years
thereafter, unless such Lease Term shall be extended, renewed or terminated
earlier in accordance with the provisions hereof. Notwithstanding the
foregoing, if the Lease Commencement Date shall occur on a day other than the
first day of a month, the Lease Term shall commence on such date and continue
for the balance of such month and for a period of fifteen (15) years
thereafter. The term "Lease Term" shall include any and all renewals and
extensions of the term of this Lease.
2.2 (a) The "LEASE COMMENCEMENT DATE" shall be the earlier of
(i) the date on which the Building is, or is deemed to be, substantially
complete as determined pursuant to Section 7 of the Phase II Development
Agreement and (ii) the date on which Tenant commences the conduct of its
business upon any portion of the Premises comprising, in the aggregate,
seventy-five percent (75%) or more of the rentable area of the Building.
(b) Tenant and its contractors shall be allowed access to
the Building approximately forty-five (45) days prior to Landlord's estimated
date of substantial completion of the Premises for the purpose of installing
Tenant's communication equipment and associated wiring and such persons shall
have access to the Premises approximately fifteen (15) days prior to
Landlord's estimated date of substantial completion of the Premises for the
purpose of installing Tenant's other special equipment, fixtures and furniture
(all such installations pursuant to this Section 2.2(b) being referred to
herein as "TENANT INSTALLATIONS") and, the provisions of Section 2.2(a) or
2.2(c) to the contrary notwithstanding, such Tenant Installations and related
activity shall not be considered the commencement of business operations in
the Premises by
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Tenant. Landlord shall use reasonable efforts to provide Tenant with
approximately sixty (60) days prior written notice of Landlord's estimated
date of substantial completion of the Premises and shall promptly respond to
any written request of Tenant inquiring as to Landlord's estimated date of
substantial completion. Any and all Tenant Installations and other related
activity by Tenant or its contractors prior to the Lease Commencement Date (i)
shall be subject to Landlord's and its contractor's reasonable scheduling and
sequencing requirements and (ii) shall be coordinated with Landlord and its
general contractor to insure that Tenant's work in and to the Premises does
not hinder, delay, inhibit or otherwise interfere with the work being
performed by Landlord and its contractors, the parties hereby acknowledging
and agreeing that the schedule for the performance of the construction and the
development of the Building does not provide additional time for the
performance by Tenant of the Tenant Installations. Notwithstanding anything
herein to the contrary neither Tenant nor its agents or contractors shall have
access to the Premises during the times specified by Landlord or its general
contractor as times that may cause unreasonable delay or interference with the
activities of or on behalf of Landlord in the Premises or the Building. All
terms and conditions of this Lease including, without limitation, the
insurance, release and waiver of liability provisions of Articles XIII and XV
hereof shall apply to and be effective during such period of occupancy by
Tenant, except for Tenant's obligation to pay Annual Base Rent and additional
rent attributable to Expenses.
(c) If one or more full floors within the Premises is
substantially complete prior to the Lease Commencement Date, and if Tenant
desires to occupy all or a portion of such full floor(s) for the conduct of
its business prior to the Lease Commencement Date, then, unless and until such
early occupancy includes 75% or more of the rentable area of the Building,
such early occupancy shall not cause the Lease Commencement Date to occur, but
all the terms of this Lease (including, without limitation, the requirement
that Tenant pay Annual Base Rent and additional rent (each, as hereinafter
defined) with respect to such full or partial floors) shall apply with respect
to each space thus occupied by Tenant from the date that Tenant takes
occupancy thereof for the conduct of its business therein. In the case of any
such partial occupancy prior to the Lease Commencement Date, Annual Base Rent
shall be determined based on the ratio of the rentable area so occupied to the
total rentable area of the Building.
2.3 Promptly after the Lease Commencement Date is ascertained,
Landlord and Tenant shall execute a written declaration setting forth the
Lease Commencement Date, the date upon which the Lease Term will expire, the
exact number of square feet of rentable area in the Premises, and the Annual
Base Rent. The form of such declaration is attached hereto as Exhibit B and
made a part hereof.
2.4 For purposes of this Lease, the term "LEASE YEAR" shall mean
either (a) each period of twelve (12) consecutive calendar months commencing
on the first day of the month immediately following the month in which the
Lease Commencement Date occurs, and on each anniversary of such date, except
that the first Lease Year shall also include the period from the Lease
Commencement Date to the first day of the following month; or (b) if the Lease
Commencement Date shall occur on the first day of a calendar month, each
period of twelve (12) consecutive calendar months commencing on the Lease
Commencement Date and on each anniversary of such date; whichever is
applicable.
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ARTICLE III
BASE RENT
3.1 (a) During the first Lease Year, Tenant shall pay to
Landlord as Annual Base Rent, net of all Expenses (which term is defined in
Section 4.2 below), for the Premises, without set off, deduction or demand, an
amount equal to the Formula Rent (as hereinafter defined), which amount shall
be increased on an annual basis as provided in Section 3.2 below.
(b) The "FORMULA RENT" shall be an amount equal to the
product of (i) the Project Costs, as defined in the Phase II Development
Agreement, multiplied by (ii) Nine and Six Tenths Percent (9.6%), which amount
may be increased in accordance with the provisions of Section 3.2 (a) hereof
and which amount, as it may be increased, shall be subject to annual
adjustment as provided in Section 3.2 (b) hereof.
(c) The Annual Base Rent payable hereunder during each Lease
Year shall be divided into equal monthly installments and such monthly
installments shall be due and payable in advance on the first day of each
month during such Lease Year. If the Lease Commencement Date (determined
pursuant to Section 2.2 hereof) occurs prior to a date when final Project
Costs are ascertained, then Annual Base Rent shall initially be determined and
payable based on projections of such costs as of the Lease Commencement Date,
as reasonably determined by Landlord and Tenant, and shall thereafter be
recalculated when such costs are ascertained. Upon such recalculation,
Landlord shall deliver to Tenant a written notice specifying (i) the
calculation of Annual Base Rent based upon actual Project Costs, (ii) the
Annual Base Rent that is payable to Landlord hereunder for the period
commencing on the Lease Commencement Date and continuing through the date of
such notice based on actual Project Costs, and (iii) the Annual Base Rent that
was in fact paid to Landlord for the same time period. If the amount of Annual
Base Rent paid by Tenant for such time period exceeds the amount of Annual
Base Rent payable for such time period based on actual Project Costs, Landlord
shall credit the net overpayment against the next monthly installment(s) of
Annual Base Rent and additional rent due hereunder. Conversely, if Tenant's
actual liability for Annual Base Rent for such time period exceeds the sums
theretofore paid by Tenant on account thereof, Tenant shall pay the amount of
the deficiency within thirty (30) days following Tenant's receipt of
Landlord's notice. In either event, there shall be added to the excess that is
to be credited or the deficiency that is to be paid (whichever is applicable)
a sum equal to interest on each monthly component of the amount to be credited
or paid from the date each monthly component would have been payable if actual
Project Costs had been known on the Lease Commencement Date to the date of the
credit or payment pursuant to the reconciliation statement calculated at the
Interest Rate (as hereinafter defined). Effective as of the date of such
notice (the "RENT RECALCULATION DATE"), Tenant shall begin paying Annual Base
Rent at the recalculated rate. Any dispute between Landlord and Tenant as to
the amount of the Project Costs (whether projected or final) shall be
determined in accordance with the provisions of the Phase II Development
Agreement.
(d) For purposes of calculating the Formula Rent payable
hereunder, the term "PROJECT COSTS" shall be determined in accordance with the
provisions of Section 10(a) of the Phase II Development Agreement.
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3.2 (a) In accordance with the provisions of Section 10(b)(ii)
of the Phase II Development Agreement, Tenant may elect that Landlord provide
Tenant with an additional improvement allowance (the "ADDITIONAL LEASEHOLD
IMPROVEMENT ALLOWANCE") to be used by Tenant in connection with designing,
constructing and installing the Leasehold Improvements in the Premises in an
amount up to but not to exceed the product of Four Dollars and Fifty Cents
($4.50) multiplied by the number of square feet of rentable area in the
Building In the event Tenant elects to utilize all or a portion of the
Additional Leasehold Improvement Allowance, the amount of annual base rent
payable by Tenant in accordance with Section 3.1 hereof shall be increased by
an amount sufficient to amortize the entire Additional Leasehold Improvement
Allowance (or such lesser portion thereof) which Tenant has elected to use at
an interest rate of ten percent (10%) per annum over the initial fifteen (15)
year term of this Lease.
(b) Commencing on (i) the first day of the second (2nd),
third (3rd) fourth (4th) and fifth (5th) Lease Years, the Annual Base Rent
payable for such Lease Year shall be increased over the escalated Annual Base
Rent in effect during the preceding Lease Year by two percent (2%), (ii) the
first day of the sixth (6th), seventh (7th) eighth (8th), ninth (9th) and
tenth (10th) Lease Years the Annual Base Rent payable for such Lease Year
shall be increased over the escalated Annual Base Rent in effect during the
preceding Lease Year by two and one-half percent (2.5%) and (iii) the first
day of the eleventh (11th), twelfth (12th), thirteenth (13th), fourteenth
(14th) and fifteenth (15th) Lease Years the Annual Base Rent payable for such
Lease Year shall be increased over the escalated Annual Base Rent in effect
during the preceding Lease Year by three percent (3%).
3.3 All rent shall be paid to Landlord, without set-off, deduction
or demand, in legal tender of the United States (i) at the address to which
notices to Landlord are to be given or to such other address as Landlord may
designate from time to time by written notice to Tenant, or (ii) by wire
transfer in accordance with wiring instructions to be provided to Tenant by
Landlord at least thirty (30) days prior to the Lease Commencement Date (or
such alternative wiring instructions as Landlord may designate from time to
time by written notice to Tenant). Any failure by Landlord to timely notify
Tenant of such wiring instructions shall not excuse the payment of rent by
Tenant; however, Tenant shall not be obligated to make any rent payment
hereunder sooner than five (5) business days following Tenant's receipt of
Landlord's wiring instructions. If Landlord shall at any time accept rent
after it shall come due and payable, such acceptance shall not excuse a delay
upon subsequent occasions, or constitute or be construed as a waiver of any of
Landlord's rights hereunder.
ARTICLE IV
ADDITIONAL RENT
4.1 Tenant shall bear the costs and expenses incurred each year in
the operation of the Building and the Land. For so long as Tenant is the sole
lessee of the Building, Tenant shall have the right to provide input into the
determination of such annual costs and expenses, as follows. Not more than
thirty (30) days prior to the Lease Commencement Date, Landlord shall prepare
and submit to Tenant a proposed budget for the operation and maintenance of
the Building and the Land, the parties acknowledging and agreeing that such
budget shall represent Landlord's reasonable expectation of such costs and
expenses as the Building will not have been substantially completed at the
time of the preparation of such budget. On or before
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November 15 of each calendar year during the Lease Term, Landlord shall
prepare and submit to Tenant (i) a proposed budget or other form of summary
identifying with reasonable detail the anticipated categories of expenditures
to be made, proposed major vendors to provide services and proposed scope of
services (including, but not limited to, security services) to be provided by
Landlord for the ensuing calendar year in the operation and maintenance of the
Building and the Land and (ii) after the first year of operation of the
Building, the operating history of the Building for the previous year (the
"OPERATING PLAN"). It is the intention of Landlord and Tenant that Operating
Expenses, as defined below, and the individual components thereof shall not
materially exceed prevailing market costs and rates for like items and
services, however, the parties acknowledge and agree that there may be
occasions from time to time where it is in the best interests of the Building
for a particular item to be performed or purchased at a cost or expense which
exceeds prevailing market rates. If Tenant has reasonable additions, deletions
or modifications to any elements of Landlord's proposed Operating Plan, Tenant
shall notify Landlord of same within thirty (30) days following receipt of the
proposed Operating Plan and Landlord shall incorporate Tenant's reasonable
additions, deletions and modifications into Landlord's proposed Operating Plan
and shall operate the Building substantially in accordance therewith; provided
that, in no event shall Landlord be obligated to operate the Building or the
Land in a manner that is inconsistent with the standards of a Class A suburban
office building in the Market Area. The Operating Plan (as it may be revised
with Tenant's input as aforesaid) shall serve as a general guide to the scope
of services to be provided and expenditures to be made in the operation and
maintenance of the Building and Land and Landlord shall not deviate therefrom
in any material manner without first obtaining Tenant's prior written consent,
which consent shall not be unreasonably withheld, conditioned or delayed, and
shall be deemed given if not withheld in writing within seven (7) business
days following Landlord's notice thereof to Tenant; provided that, in case of
emergency or in any case in which Landlord reasonably believes delay might
cause injury to persons, material injury to property or a violation of any
Legal Requirement, Landlord may act without Tenant's prior written consent.
Any failure of Landlord to timely provide an annual Operating Plan to Tenant
as provided herein shall not relieve Tenant of its obligation to pay
additional rent pursuant to this Article IV.
4.2 The costs and expenses (the "EXPENSES") for which Tenant shall
be responsible are defined as follows:
(a) "OPERATING EXPENSES" shall mean and include those direct
reasonable and customary expenses actually incurred and paid in operating and
maintaining the Building and the Land in a manner consistent with the
operating and maintenance standards observed at similar Class A suburban
office buildings located in the Market Area, including, but not limited to,
the following: (1) electricity, gas, water, sewer and other utility charges of
every type and nature; (2) premiums and other charges for insurance
(including, but not limited to, property insurance, rent loss insurance and
liability insurance) incurred in accordance with Section 12.2 hereof; (3) all
management fees incurred in the management of the Building (subject to the
limitation set forth below); (4) all costs incurred in connection with service
and maintenance contracts; (5) maintenance and repair expenses and supplies;
(6) amortization (calculated on a straight-line basis over the useful life of
the improvement, with interest at Landlord's applicable cost of funds or, if
the improvement is not financed, at the prime rate reported in The Wall Street
Journal) for capital expenditures made by Landlord, but only to the extent
that they (i) are made after the first two (2) years of the Lease Term and are
intended to decrease Operating Expenses
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or improve safety, or (ii) are made after the expiration of the tenth (10th)
Lease Year of the Lease Term as a result of Legal Requirements enacted after
the date of this Lease, provided, however, that Landlord shall be entitle to
recoup the cost of capital improvements which result in energy savings to the
Building within the savings period attributable to such improvement and
provided further that commencing in the sixth (6th) Lease Year, Landlord may
pass through directly to Tenant the entire actual cost incurred by Landlord in
connection with the maintenance, repair and replacement of major components of
any Building systems which prematurely fail due to Tenant's mandated hours of
operation of such system(s) in excess of sixty-eight (68) hours per week; (7)
salaries, wages, benefits and other expenses of Building personnel, together
with the costs of maintaining engineering, maintenance and/or management
offices in the Building (which costs shall not include imputed rent for the
space in the Building occupied for such purposes); provided, however, that if
during the Lease Term such personnel or entities are working on projects other
than the Building, then their wages, salaries, fees and related expenses shall
be appropriately allocated among all of such projects and only that portion of
such expenses reasonably allocable to the Building shall be included in
Operating Expenses; (8) legal fees (except as excluded below), administrative
expenses, and accounting, architectural and other professional fees and
expenses, except those that are normally absorbed by the property manager and
not charged separately to Landlord in addition to management fees; (9) costs
of any service not provided to the Building on the Lease Commencement Date but
thereafter provided by Landlord pursuant to the then current Operating Plan
established pursuant to Section 4.1 above, provided pursuant to the request of
Tenant, otherwise provided pursuant to Section 4.1 above, or, during any time
that Orbital is not the sole lessee of the Building, provided in the prudent
management of the Building; (10) charges for concierge, security, janitorial,
char and cleaning services and supplies furnished to the Building (except that
costs of furnishing char and janitorial service to any space in the Building
shall be excluded with respect to such space for so long as Tenant is
furnishing its own char and janitorial service to such space in accordance
with the provisions of this Lease); (11) costs associated with the provision
or operation of any common facilities, including (without limitation) parking
areas, landscaped areas, access roads, and the Building's loading dock; (12)
fees and assessments payable pursuant to any declaration of covenants recorded
against the Land or any property owners' association affecting the Land, which
covenants if recorded against the Land after the effective date of this Lease
and if Orbital is the lessee of fifty-one percent (51%) of the Building at
such time, shall be subject to Orbital's approval; (13) Supplemental Land
Costs, as defined in Section 4.2(c) below; and (14) any other reasonable
expense incurred by Landlord in maintaining, repairing or operating the
Building or the Complex. Any provision herein to the contrary notwithstanding,
Operating Expenses shall not include the following:
(i) the cost of any work performed (such as preparing
a tenant's space for occupancy, including painting
and decorating) or services provided (such as
separately metered electricity) for any tenant
(including Tenant) at such tenant's cost, or
provided by Landlord without charge (such as free
rent or improvement allowances);
(ii) salaries, benefits and other compensation of
Landlord's officers, partners, its headquarters
staff and personnel located outside of the
Complex, except to the extent includible pursuant
to clause (7) above;
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(iii) the cost of any work performed or service provided
for any tenant of the Building (other than Tenant,
if any) to a materially greater extent or in a
materially more favorable manner than that
furnished generally to the other tenants and
occupants;
(iv) the cost of any items for which Landlord is
reimbursed by insurance proceeds (or would have
been so reimbursed if Landlord had maintained the
insurance required pursuant to Section 12.2
hereof), condemnation awards, or otherwise, or the
cost of any item or service for which Landlord is
actually reimbursed or is entitled to be
reimbursed by another tenant of the Building,
provided, however, that Landlord may include any
insurance deductible in Operating Expenses;
(v) depreciation of the Building and the cost of any
additions, changes, or replacements to the
Building, or amortization thereof, which under
generally accepted accounting principles are
properly classified as capital expenditures,
except to the extent includable pursuant to clause
(6) above and subject to Tenant's obligations with
respect to capital expenditures pursuant to
Section 4.2(a)(6) above and Sections 4.8 and 6.2
below;
(vi) the cost of any repair made in response to any
fire or casualty damage (except for the amount of
any commercially reasonable "deductible" under
Landlord's property insurance) or any
condemnation;
(vii) interest and principal payments on any debt,
depreciation, and rental under any ground lease or
other underlying lease;
(viii) any real estate brokerage commissions or other
costs incurred in procuring tenants, or any fee in
lieu of commission;
(ix) property management fees in excess of two and
one-half percent (2.5%) of the Annual Base Rent
payable hereunder from time to time;
(x) any costs representing an amount paid to an entity
related to or affiliated with Landlord to the
extent in excess of the amount which would have
been paid in the absence of such a relationship;
(xi) any expenses for repairs or maintenance which are
covered by warranties, guaranties or service
contracts (excluding any mandatory deductibles);
(xii) legal expenses arising out of the construction,
sale, financing or refinancing of the Land or the
Building, or the enforcement or defense of the
provisions of any tenant's lease or organizational
matters of Landlord or of any other proceeding by
or against Landlord with respect to matters not
specifically intended to be included as Operating
Expenses;
(xiii) insurance premiums to the extent of any refunds
thereof;
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(xiv) incremental costs necessitated by or resulting
from the negligence or willful misconduct of
Landlord, its managing agent, or its employees or
from the gross negligence or willful misconduct of
Landlord's independent contractors or other
agents;
(xv) costs arising out of a sale, financing or
refinancing of the Land or the Building or any
interests therein;
(xvi) costs and taxes associated with the operation of
the business entity of Landlord, including
partnership audit, business entity accounting, and
business entity legal matters;
(xvii) costs, legal expenses, interest, fines and
penalties associated with Landlord's making any
late payments;
(xviii) any costs or expenses incurred in connection with
the remediation or removal of Hazardous Materials;
(xix) acquisition or leasing costs of sculpture,
paintings or other objects of art;
(xx) except as provided in Section 4.2(a)(6) above,
costs for repairing, replacing or otherwise
correcting defects (but not the costs of repair or
normal wear and tear) in the initial construction
of the Premises;
(xxi) costs of initial construction of the Premises,
including all Project Costs;
(xxii) rent for any on-site offices of Landlord or its
managing agent; provided, however that Tenant
shall make available to Landlord, without cost to
Landlord, approximately 1,700 rentable square feet
of space in the Building for a management office,
storage space, janitors' closets and/or building
engineer's shop (all in locations to be reasonably
agreed upon, including in the below grade garage
space), which space shall be included in the
rentable area of the Building when determining the
Base Rent to be paid by Tenant under Article III
hereof; and
(xxiii) charitable or political contributions.
In the event a single expenditure pays for the provision of a good or service
to both the Building and any other building in the Complex or owned by
Landlord, then Expenses shall include only the portion of such payment that is
equitably allocable to the Building, as reasonably determined by Landlord and
disclosed in writing to Tenant. Similarly, if any expenditure (whether in the
nature of Operating Expenses or Real Estate Taxes (as defined below) benefits
or otherwise relates to the Land and/or Building hereunder, as well as other
land and/or buildings (including any land that may have been excluded from the
Land hereunder pursuant to Section 1.4 hereof), then Expenses shall include
only the portion of such expenditure that is equitably allocable to the
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Land and/or Building hereunder (as they may be constituted from time to time),
as reasonably determined by Landlord and disclosed in writing to Tenant.
(b) "REAL ESTATE TAXES" shall mean and include (i) all real
property taxes, including general and special assessments, if any, which are
imposed upon Landlord in connection with the Building and/or the Land or
assessed against the Building and/or the Land; (ii) any other present or
future taxes or governmental charges which are imposed upon Landlord in
connection with the Building and/or the Land, or assessed against the Building
and/or the Land, including, but not limited to, any tax levied on or measured
by the rents payable by tenants in the Building which are in the nature of, or
in substitution for, real property taxes; and (iii) all taxes which are
imposed upon Landlord, and which are assessed against the value of any
improvements to the Premises made by Tenant or any machinery, equipment,
fixtures or other personal property of Tenant used therein. In no event shall
"Real Estate Taxes" include (A) income or net profit taxes imposed upon
Landlord, except to the extent such taxes are in substitution for real
property taxes, (B) the amount of any special taxes or special assessments
actually paid by Landlord in any calendar year in excess of the minimum
installment of special taxes or special assessments required to be paid by
Landlord during such calendar year (it being agreed that Landlord shall elect
the longest period of time allowed by the authority imposing the tax or
assessment in which to pay installments of special taxes or special
assessments that are to be prorated over several years), (C) franchise, stock
and inheritance or estate taxes and sales, use or excise taxes imposed on
rent, except to the extent such taxes are imposes in lieu of real estate
taxes, (D) any transfer taxes, recording fees, tap fees, excises, levies,
license fees, permit fees, impact fees, inspection fees or other authorization
fees and any other similar charges which are included in the term "Project
Costs". Tenant may request that all real estate taxing authorities, when
issuing notices of assessment and real estate tax bills with respect to the
Building or the Land, issue such notices and bills to both Landlord and Tenant
simultaneously, and Landlord shall cooperate with such request. If any such
taxing authority will not agree to same, then Tenant shall so notify Landlord
and Landlord shall thereafter use reasonable efforts to furnish to Tenant a
copy of each such notice of assessment or real estate tax ▇▇▇▇ that Landlord
receives from such taxing authority with respect to the Building and/or the
Land within thirty (30) days following Landlord's receipt thereof and shall be
obligated to furnish to Tenant a copy thereof (if available) within ten (10)
days following Landlord's receipt of Tenant's written request therefor.
Landlord shall make a determination whether or not to challenge or appeal such
assessment based on Landlord's reasonable judgment of which course is in the
best interest of the Building. So long as Orbital is leasing not less than
fifty-one percent (51%) of the rentable area of the Building, Landlord shall
inform Tenant of such determination, and shall make available appropriate
personnel to discuss with Tenant the reasons underlying such determination. In
the event Landlord determines not to challenge or appeal such assessment (or,
having undertaken to appeal or challenge such an assessment, does not pursue
the appeal or challenge with due diligence and continuity), and provided
Tenant is leasing the minimum square footage specified in the preceding
sentence, Landlord agrees that Tenant may appeal or challenge such assessment
in Landlord's place and stead and that Landlord will join in and cooperate
with Tenant in prosecuting such appeal or challenge; provided, however, that
such appeal or challenge shall be undertaken at Tenant's sole cost and at no
expense to Landlord (except that, if Tenant's appeal or challenge is
successful, then Tenant may recover its costs out of the refund or reduction
of Real Estate Taxes achieved by Tenant prior to allocating such reduction to
the tenants of the Building).
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(c) It is the intention of the parties that as the Complex
is subdivided and additional buildings are constructed therein, each of the
lots in the Complex shall bear their pro rata portion of the costs
(collectively, "SUPPLEMENTAL LAND COSTS") of all common roadwork and other
common infrastructure costs that are associated with the initial and any
subsequent development of the Complex (collectively, "COMMON SITE WORK"). For
purposes hereof, Supplemental Land Costs associated with a subsequent phase of
development of the Complex (i) shall include all costs and expenses
(including, without limitation, interest and interest carry) of the types that
are incurred (provided the cost incurred is subsequently paid) or paid by
Landlord or the owners of the other lots in the Complex in connection with the
further development of the lots in the Complex and (ii) shall be equitably
apportioned among all of the buildings in the Complex. Common Site Work shall
include, without limitation, the costs of extending the primary road network
and pedestrian walkways serving the Complex to serve subsequent phases; the
costs of extending utilities to the perimeter of a subsequent phase; the costs
of expanding storm water facilities to serve subsequent phases; the costs of
developing, installing lighting in, and landscaping entrances to the Complex
and other common areas of the Complex and any and all other site development
mandated by applicable Legal Requirements, as defined herein; and the costs of
installing directional signage and entrance signage in common areas situated
on subsequent phases
4.3 Tenant shall pay to Landlord, as additional rent for the
Premises, the Expenses incurred by Landlord in the operation of the Building
and the Land during any calendar year falling entirely or partly within the
Lease Term, but the Expenses for any calendar year during the Lease Term shall
be apportioned so that Tenant shall pay only that portion of such Expenses for
such year as fall within the Lease Term. This provision shall survive the
expiration or earlier termination of this Lease. Tenant shall also pay the
Expenses incurred by Landlord during any period of partial occupancy prior to
the Lease Commencement Date pursuant to Section 2.2 hereof.
4.4 If, during any period in which Orbital is not the sole lessee
of the Building, the occupancy rate for the Building during any calendar year
is less than ninety-five percent (95%), or if any office tenant is separately
paying for electricity or janitorial services furnished to its premises, then
Expenses for such calendar year shall be deemed to include all additional
expenses with respect to those Expenses that vary in accordance with the
occupancy of the Building, as reasonably estimated by Landlord, which would
have been incurred during such calendar year if the occupancy rate for the
Building had been ninety-five percent (95%) and if Landlord paid for
electricity and janitorial services furnished to such premises. This provision
shall not operate in a manner that would permit Landlord to recover from
Tenant additional rent on account of Operating Expenses for any calendar year
which, when added to the total additional rent payable by all tenants of the
Building on account of Operating Expenses for such year will exceed the actual
Operating Expenses incurred by Landlord for such year.
4.5 Commencing on the Lease Commencement Date and on the first day
of each month thereafter, Tenant shall make estimated monthly payments, based
on the Operating Plan, to Landlord on account of the Expenses that are
reasonably expected to be incurred during each calendar year falling entirely
or partly within the Lease Term. The amount of such monthly payments shall be
determined as follows: Commencing with the Lease Commencement Date (or such
earlier date as of which Expenses may be payable by Tenant pursuant to Section
4.3) and at
11
the beginning of each calendar year thereafter, Landlord shall submit to
Tenant a statement setting forth Landlord's reasonable estimate of the
Expenses that are expected to be incurred during such calendar year (and, if
Orbital is not the sole lessee of the Building, Tenant's proportionate share
thereof). Provided that Tenant receives such statement at least forty-five
(45) days in advance, Tenant shall pay to Landlord on the first day of each
month following receipt of such statement during such calendar year an amount
equal to (A) the excess of (i) the anticipated Expenses (or Tenant's
proportionate share thereof, during any period in which the Building is
multi-tenanted) for the full calendar year (or the portion of such calendar
year that falls within the Lease Term) over (ii) the monthly payments made by
Tenant (on the basis of the estimate in effect during the preceding calendar
year) prior to the commencement of payments made on the basis of Landlord's
estimate for the current calendar year, multiplied by (B) a fraction, the
numerator of which is one (1) and the denominator of which is the number of
months during such calendar year which fall within the Lease Term and follow
the date of the foregoing statement. Within approximately ninety (90) days
after the expiration of each calendar year, Landlord shall submit to Tenant a
statement certified by Landlord (the "RECONCILIATION STATEMENT"), showing (i)
the Expenses actually incurred during the preceding calendar year (and, during
any period in which the Building is multi-tenanted, Tenant's proportionate
share thereof), and (ii) the aggregate amount of the estimated payments made
by Tenant on account thereof. If the aggregate amount of such estimated
payments exceeds Tenant's actual liability for such Expenses, then Landlord
shall credit the net overpayment against the next monthly installment(s) of
Annual Base Rent and additional rent coming due under this Lease (or if the
Lease Term has ended, shall pay such net overpayment to Tenant within thirty
(30) days after providing such Reconciliation Statement to Tenant). If
Tenant's actual liability for such Expenses exceeds the estimated payments
made by Tenant on account thereof, then Tenant shall pay to Landlord the total
amount of such deficiency within thirty (30) days after its receipt of the
Reconciliation Statement from Landlord. In the event Landlord has failed to
deliver a Reconciliation Statement to Tenant within approximately ninety (90)
days after the expiration of a calendar year, Tenant may deliver to Landlord a
written demand that the Reconciliation Statement be delivered within sixty
(60) days following the date of delivery of Tenant's demand notice, and if
Landlord fails to deliver the Reconciliation Statement to Tenant within sixty
(60) days after the date on which Landlord receives Tenant's demand notice,
then Landlord shall forfeit the right to ▇▇▇▇ Tenant for any amount on account
of Expenses incurred during such calendar year in excess of the estimated
payments made by Tenant during such calendar year (but Tenant shall not
forfeit the right to be reimbursed for any overpayment if its estimated
payments exceeded the actual Expenses, and Landlord shall not be excused from
its obligation to deliver the Reconciliation Statement). The provisions of
this paragraph shall survive the expiration or earlier termination of this
Lease.
4.6 Tenant shall have the right, during business hours and upon
reasonable prior notice, from time to time to inspect and make copies of
Landlord's books and records relating to Expenses, and/or to have such books
and records audited at Tenant's expense by an independent certified public
accountant or other qualified consultant designated by Tenant, not more than
ten percent (10%) of the fees of whom shall be determined on a contingent
basis, except that any audit that discloses that annual Expenses have been
overstated by more than three percent (3%) shall be at Landlord's expense. Any
discrepancy shall be corrected by a payment of any shortfall to Landlord by
Tenant, or a refund of any overpayment to Tenant by Landlord, within thirty
(30) days after the applicable audit. In the event Tenant does not contest a
statement of Expenses
12
within three (3) years after the date it receives a Reconciliation Statement
(and provided Landlord has cooperated with Tenant undertaking an audit of
Landlord's books and records, if so requested by Tenant), such Reconciliation
Statement shall become binding and conclusive upon each party. Tenant shall
use reasonable efforts to (and shall use reasonable efforts to cause its
agents to ) keep the results of such audit confidential. Landlord shall retain
the books and records for the Building for the period subject to Tenant's
audit rights.
4.7 So long as Tenant is the sole lessee of the Building, Tenant
may request that electric utility bills be sent directly from the electricity
provider to Tenant, in which event Tenant shall be obligated to pay all
charges for electricity directly to such electricity provider as and when due.
If Tenant ceases to be the sole lessee of the Building, Tenant may request
that electricity furnished to the Premises be separately metered, if such
service is available from the applicable utility provider, in which event
Landlord shall, subject to any conditions or limitations imposed by the
electricity provider, install a submeter or checkmeter at Tenant's expense.
Following any such separate metering, Tenant shall timely pay directly to the
appropriate utility all charges for electricity furnished to the Premises (and
the charges for such separately metered electricity shall not be included in
Operating Expenses). Notwithstanding anything contained herein to the
contrary, if Tenant fails to pay any electric ▇▇▇▇ that is provided directly
to Tenant by the electric utility as and when due, such failure shall
constitute a default hereunder. If any such default is not cured within ten
(10) business days following written notice from Landlord, then Landlord shall
have the right, but shall not be obligated, to pay the delinquent amounts, and
Tenant shall reimburse Landlord therefor within five (5) business days after
receiving notice of such payment by Landlord; provided that Landlord may act
without notice to Tenant if delay would cause an interruption of utility
services, an emergency or similar situation. Notwithstanding anything to the
contrary herein, in the event electric service to the Premises is measured by
separate meter or check meter, Tenant shall not be relieved of its obligation
to pay its share of Expenses attributable to the provision of electrical
service to the common areas of the Building. Landlord shall have the right to
verify Tenant's electrical consumption in the Premises through the energy
management system in the Building.
4.8 Except as otherwise provided in Sections 4.2(a)(6), Section 6.2
and this Section 4.8, Landlord shall bear the cost of, and shall not pass
through to Tenant as an Expense hereunder, any necessary or appropriate
capital expenditures constituting additions or changes to, or replacements of,
the base building systems and other base building components of the Building
("BASE BUILDING CAPITAL EXPENDITURES"). The preceding sentence
notwithstanding, Landlord shall not be obligated to make any such capital
repair or replacement to specifications that exceed building standard
specifications unless Tenant agrees to pay in full, at the time the Base
Building Capital Expenditure is incurred, the excess cost of such
Tenant-upgraded capital repair or replacement over the cost of making such
capital replacement or repair to building standard specifications; provided,
however, in the event (i) the cost of the Base Building Capital Expenditure in
question is less than Five Hundred Thousand Dollars ($500,000.00), which cap
shall be increased annually by the increase in the Consumer Price Index, as
defined in the Phase II Development Agreement, and (ii) Orbital's net worth
(which shall be determined on a pro forma basis using generally accepted
accounting principles consistently applied and using the most recent financial
statements) is not less than it is on the Effective Date, then Tenant may
elect to amortize the cost of such Base Building Capital Expenditure, at an
interest rate acceptable to Landlord but not exceeding commercially reasonable
interests rates at the time of
13
the expenditure, as additional rent to be paid by Tenant over the remainder of
the Lease Term, assuming that Tenant does not and has not elected to renew
this Lease. In addition, any necessary or appropriate capital expenditures
constituting additions or changes to, or replacements of, any of Tenant's
tenant improvements shall be payable in full by Tenant at the time the capital
expenditure is incurred. For purposes hereof, "building standard"
specifications shall mean specifications customary in Class A suburban office
buildings in the Market Area.
ARTICLE V
SECURITY DEPOSIT
5.1 (a) Tenant shall be obligated to post, as the "SECURITY
DEPOSIT" hereunder, a sum equal to Four Hundred Sixty Thousand Dollars
($460,000.00). Upon the Lease Commencement Date, provided no default on the
part of Tenant under this Lease shall then be in existence and no Event of
Default, as defined in Section 18.1 hereof, has occurred hereunder, the
security deposit shall be reduced to Four Hundred Thousand Dollars
($400,000.00). All cash which Tenant delivers to Landlord as a security
deposit, including the proceeds if Landlord draws of the Letter of Credit, as
defined below, will be deposited in a separate, interest-bearing account
maintained by Landlord with a depository selected by Tenant and approved by
Landlord, in its reasonable discretion, with interest accruing to the benefit
of Tenant. Interest on the security deposit (if it is in the form of cash)
shall be disbursed to Tenant no less often than on a quarterly basis.
Following an Event of Default, interest earned on the security deposit shall
be added to and become a part of the security deposit and shall not be
disbursed to Tenant, except upon the return of the security deposit in
accordance with the terms hereof. Landlord hereby approves NationsBank, N.A.
as an acceptable depository for the security deposit.
(b) The security deposit shall be security for the
performance by Tenant of all of Tenant's obligations, covenants, conditions
and agreements under this Lease. Within thirty (30) days after the expiration
of the Lease Term, and provided Tenant has vacated the Premises and is not in
default hereunder, Landlord shall return the security deposit to Tenant, less
such portion thereof as Landlord shall have applied to satisfy any default by
Tenant hereunder. Following an Event of Default by Tenant hereunder, Landlord
shall have the right, but shall not be obligated, to use, apply or retain all
or any portion of the security deposit for (i) the payment of any Annual Base
Rent or additional rent or any other sum as to which Tenant is in default,
(ii) the payment of any amount which Landlord may spend or become obligated to
spend to repair physical damage to the Premises or the Building pursuant to
Section 8.3 hereof, or (iii) the payment of any amount Landlord may spend or
become obligated to spend, or for the compensation of Landlord for any losses
incurred, by reason of Tenant's default hereunder, including, but not limited
to, any damage or deficiency arising in connection with the reletting of the
Premises. If any portion of the security deposit is so used or applied
(including a draw under any letter of credit that may serve as the security
deposit hereunder), within three (3) business days after written notice to
Tenant of such use or application, Tenant shall deposit with Landlord cash in
an amount sufficient to restore the security deposit to the full amount
required to be maintained hereunder (or, if the security deposit is in the
form of a letter of credit, replace or restore the letter of credit to the
full amount required to be maintained hereunder), and Tenant's failure to do
so shall constitute a default under this Lease.
14
(c) Tenant shall have the right to deliver to Landlord an
unconditional, irrevocable letter of credit in substitution for the cash
security deposit, subject to the following terms and conditions. Such letter
of credit shall be (a) substantially in the form attached hereto as Exhibit D
or such other form and substance satisfactory to Landlord in its sole
discretion; (b) at all times in the amount of the security deposit, and shall
permit multiple draws; (c) issued by a commercial bank reasonably acceptable
to Landlord from time to time and located in the Washington, D.C. metropolitan
area; (d) made payable to, and expressly transferable and assignable at no
charge by, the owner from time to time of the Building (which
transfer/assignment shall be conditioned only upon the execution of a written
document in connection therewith); (e) payable at sight upon presentment to a
local branch of the issuer located in the Washington, D.C. metropolitan area
of a simple sight draft or certificate stating that an Event of Default has
occurred under this Lease and that Landlord is entitled to draw upon the
letter of credit in the amount set forth in the sight draft or certificate;
(f) of a term not less than one year; and (g) at least thirty (30) days prior
to the then-current expiration date of such letter of credit, either (1)
renewed (or automatically and unconditionally extended) from time to time
through the ninetieth (90th) day after the expiration of the Lease Term, or
(2) replaced with cash in the amount of the Security Deposit. Notwithstanding
anything in this Lease to the contrary, any cure or grace periods set forth in
this Lease shall not apply to Tenant's obligations under subsection (g) above,
and, specifically, if Tenant falls to timely comply with the requirements of
subsection (g) above, then Landlord shall have the right to immediately draw
upon the letter of credit without notice to Tenant and apply the proceeds to
the security deposit. Each letter of credit shall be issued by a commercial
bank that has a credit rating with respect to certificates of deposit, short
term deposits or commercial paper of at least P-2 (or equivalent) by ▇▇▇▇▇'▇
Investor Service, Inc., or at least A-2 (or equivalent) by Standard & Poor's
Corporation, and shall be otherwise acceptable to Landlord in its reasonable
discretion. If the issuer's credit rating is reduced below P-2 (or equivalent)
by ▇▇▇▇▇'▇ Investors Service, Inc. or below A-2 (or equivalent) by Standard &
Poor's Corporation, or if the financial condition of such issuer changes in
any other materially adverse way, then Landlord shall have the right the
require that Tenant obtain a substitute letter of credit from a different
issuer that complies in all respects with the requirements of this Section,
and Tenant's failure to obtain such substitute letter of credit within ten
(10) business days following Landlord's written demand therefor (with no other
notice or cure or grace period being applicable thereto, notwithstanding
anything in this Lease to the contrary) shall entitle Landlord to immediately
draw upon the then existing letter of credit in whole or in part, without
notice to Tenant. In the event the issuer of any letter of credit held by
Landlord is placed into receivership or conservatorship by the Federal Deposit
Insurance Corporation, or any successor or similar entity, then, effective as
of the date such receivership or conservatorship occurs, said letter of credit
shall be deemed not to meet the requirements of this Section, and, within ten
(10) business days thereafter, Tenant shall replace such letter of credit with
a substitute security deposit meeting the requirements of this Section (and
Tenant's failure to do so shall, notwithstanding anything in this Lease to the
contrary, constitute an Event of Default for which there shall be no notice or
grace or cure periods being applicable thereto other than the aforesaid ten
(10) business day period). Landlord shall return the superseded letter of
credit to Tenant promptly upon receipt of its replacement. Any failure or
refusal of the issuer to honor the letter of credit shall be at Tenant's sole
risk and shall not relieve Tenant of its obligations hereunder with respect to
the security deposit.
15
(d) Tenant shall have the right, from time to time, to
substitute a letter of credit meeting the requirements of Subparagraph (c) for
the cash security deposit, and vice versa, on one or more occasions, provided
that substitutions may not occur more frequently than one (1) time in any
twelve (12) month period.
(e) Provided that, as of the applicable Reduction Date, as
defined below, (i) no default on the part of Tenant under this Lease shall
then be in existence and no Event of Default, as defined in Section 18.1, has
occurred hereunder, (ii) no uncorrected physical damages to the Premises shall
have occurred, ordinary wear and tear excepted and (iii) no other event shall
have occurred during the Lease Term which would entitle Landlord to use or to
retain all or a portion of the security deposit in accordance with the
provisions of this Article V, Tenant shall have the right on the first day of
the second (2nd) Lease Year and on the first day of each of the following four
(4) Lease Years thereafter (each a "REDUCTION DATE") to reduce the security
deposit by the amount of Eighty Thousand Dollars ($80,000.00). Notwithstanding
anything herein to the contrary, if an Event of Default has occurred, then
there shall occur no further reduction in the security deposit. If any portion
of the security deposit is then in the form of a letter of credit, such
reduction shall occur by means of delivery by Tenant to Landlord of a
substitute Letter of Credit in such amount and in strict conformity with the
terms of this Article V, in which event, the original Letter of Credit and any
substituted Letter of Credit, as applicable, shall be returned to Tenant.
5.2 In the event of the sale or transfer of Landlord's interest in
the Building, Landlord shall have the right to transfer the security deposit
to the purchaser or assignee, provided such purchaser or assignee assumes
Landlord's obligations hereunder, as evidenced by the agreement of such
purchaser or assignee, a copy of which Landlord shall furnish to Tenant in
accordance with Section 14.3 hereof. If Landlord transfers the security
deposit to a purchaser or assignee, Tenant shall look only to such purchaser
or assignee for the return of the security deposit, and Landlord shall
thereupon be released from all liability to Tenant for the return of the
security deposit. If the security deposit is in the form of a letter of
credit, then Tenant shall, within ten (10) days after Landlord's request
therefor, cause the Letter of Credit to be amended or reissued by the issuer
to indicate the new beneficiary.
5.3 Tenant hereby acknowledges that Tenant will not look to the
holder of any mortgage (as defined in Section 20.1) encumbering the Building
for return of the security deposit if such holder, or its successors or
assigns, shall succeed to the ownership of the Building, whether by
foreclosure or deed in lieu thereof, except if and to the extent the security
deposit is actually transferred to such holder; provided, however, that
Landlord agrees to transfer any security deposit from Tenant to such holder of
any mortgage encumbering the Building.
5.4 (a) In the event Tenant elects to use all or a portion of
the Additional Leasehold Improvements Allowance, Tenant shall be required to
deposit with Landlord an additional security deposit (the "ADDITIONAL SECURITY
DEPOSIT") in an amount equal to fifty percent (50%) of the amount of the
Additional Leasehold Improvements Allowance actually used by Tenant. Except as
expressly provided herein, the provisions of this Article V shall govern the
delivery, maintenance, condition, use, disbursement and form of the Additional
Security Deposit.
16
(b) Provided that, as of the applicable Additional Security
Deposit Reduction Date, as defined below, (i) no default on the part of Tenant
under this Lease shall then be in existence and no Event of Default, as
defined in Section 18.1, has occurred hereunder, (ii) no uncorrected physical
damages to the Premises shall have occurred, ordinary wear and tear excepted
and (iii) no other event shall have occurred during the Lease Term which would
entitle Landlord to use or to retain all or a portion of the security deposit
in accordance with the provisions of this Article V, Tenant shall have the
right on the first day of the second (2nd) Lease Year and on the first day of
each of the following nine (9) Lease Years thereafter (each a "ADDITIONAL
SECURITY DEPOSIT REDUCTION DATE") to reduce the Additional Security Deposit in
equal installments each in the amount of ten percent (10%) of the amount of
the Additional Leasehold Improvement Allowance actually utilized by Tenant in
accordance with the provisions of the Phase II Development Agreement.
Notwithstanding anything herein to the contrary, if an Event of Default has
occurred, then there shall occur no further reduction in the Additional
Security Deposit. If any portion of the Additional Security Deposit is then in
the form of a letter of credit, such reduction shall occur by means of
delivery by Tenant to Landlord of a substitute Letter of Credit in such amount
and in strict conformity with the terms of this Article V, in which event, the
original Letter of Credit and any substituted Letter of Credit, as applicable,
shall be returned to Tenant.
ARTICLE VI
USE OF PREMISES
6.1 Tenant shall use and occupy the Premises solely for general
office purposes, research and development and related and ancillary uses and
any other uses that are permitted under the approved Site Plan, applicable
zoning laws and other Legal Requirements (as hereinafter defined) and are
compatible with a Class A suburban office complex in the Market Area, as
defined in Section 25.4 below, and for no other use or purpose. The parties
hereby agree that the following uses are compatible with a Class A suburban
office complex in the Market Area: laboratories, light assembly areas, health
club/fitness center, outdoor fitness trail, day care center, sundries/lobby
shop, laundry/dry cleaning drop-off service, and food service operations.
Notwithstanding anything herein to the contrary, in no event shall such
"compatible uses" in the aggregate exceed more than forty percent (40%) of the
rentable area of the Building. Tenant shall not use or occupy the Premises for
any unlawful purpose or in any manner that will constitute waste, nuisance or
unreasonable annoyance. Tenant's use of the Premises shall also comply with
all present and future laws, ordinances (including zoning ordinances and land
use requirements), regulations, and orders of Loudoun County, the Commonwealth
of Virginia and any other public or quasi-public authority having jurisdiction
over the Premises, concerning the use, occupancy and condition of the Premises
and all machinery, equipment and furnishings therein (together referred to
herein as "LEGAL REQUIREMENTS").
6.2 Pursuant to the provisions of the Phase II Development
Agreement, Landlord shall obtain the initial non-residential use permit and
any other similar governmental approvals which may be required for Tenant's
occupancy of the Premises. It is expressly understood that if any present or
future Legal Requirements require any other permit(s) for the Premises due to
Tenant's particular use thereof, or Tenant's improvements or future
alterations thereto, that Tenant will obtain such permit(s) at Tenant's own
expense. Further, Tenant will comply with all Legal Requirements which impose
on Landlord or Tenant a duty relating to or arising as a result
17
of Tenant's use or occupancy of the Premises. In particular, without limiting
the generality of the foregoing, any and all alterations or additions to the
Premises that are required to be made after the Lease Commencement Date, as a
result of Legal Requirements (now existing or hereafter enacted) shall be made
by Tenant at Tenant's sole cost and expense and in accordance with the
requirements of Article IX hereof. Notwithstanding anything contained herein
to the contrary, Landlord shall be required to comply with any present or
future Legal Requirements with respect to (i) elements and components of the
"base building" structure and systems and (ii) the common areas of the
Building which are within Landlord's control, unless, in either case, such
Legal Requirements are imposed because of Tenant's particular use or
configuration of the Premises (as opposed to office use generally) or any
improvements constructed in the Premises by Tenant or caused by Tenant or any
of its employees, agents, contractors or subtenants in which case Tenant shall
bear the entire cost of performing such addition, replacement or alteration.
Tenant shall promptly pay all fines, penalties and damages that may arise out
of or be imposed on Landlord or Tenant because of Tenant's failure to comply
with the provisions of this Section.
6.3 Tenant shall pay any business, rent or other taxes that are now
or hereafter levied upon Tenant's use or occupancy of the Premises, the
conduct of Tenant's business at the Premises, or Tenant's equipment, fixtures
or personal property. In the event that any such taxes are enacted, changed,
or altered so that any of such taxes are levied against Landlord, or the mode
of collection of such taxes is changed so that Landlord is responsible for
collection or payment of such taxes, Tenant shall pay any and all such taxes
to Landlord within thirty (30) days following written demand from Landlord.
6.4 Tenant shall not cause or permit any Hazardous Materials to be
generated, used, released, stored or disposed of in or about the Building or
the Complex, provided that Tenant may use and store reasonable quantities of
standard office supplies and cleaning materials as may be reasonably necessary
for Tenant to conduct normal general office use operations in the Premises and
in compliance with all Environmental Laws and other applicable Legal
Requirements. At the expiration or earlier termination of this Lease, Tenant
shall surrender the Premises to Landlord free of Hazardous Materials (except
any that may be Landlord's responsibility pursuant to Section 6.5 hereof and
any that are otherwise not Tenant's responsibility pursuant to the terms of
this Article VI) and, subject to the foregoing parenthetical, in compliance
with all Environmental Laws. "HAZARDOUS MATERIALS" means (a) asbestos and any
asbestos containing material and any substance that is then defined or listed
in, or otherwise classified pursuant to, any Environmental Law or any other
applicable Law as a "hazardous substance," "hazardous material," "hazardous
waste," "toxic substance," "toxic pollutant" or any other formulation intended
to define, list, or classify substances by reason of deleterious properties
such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity,
reproductive toxicity, or Toxicity Characteristic Leaching Procedure (TCLP)
toxicity, (b) any petroleum and drilling fluids, produced waters, and other
wastes associated with the exploration, development or production of crude
oil, natural gas, or geothermal resources, and (c) any petroleum product,
polychlorinated biphenyls, urea formaldehyde, radon gas, radioactive material
(including any source, special nuclear, or byproduct material),
chlorofluorocarbon, lead or lead-based product, and any other substance whose
presence would be hazardous to health or the environment. "ENVIRONMENTAL LAW"
means any present and future Law and any amendments (whether common law,
statute, rule, order, regulation or otherwise), permits and other requirements
or
18
guidelines of governmental authorities applicable to the Building or the Land
and relating to the environment and environmental conditions or to any
Hazardous Material (including, without limitation, CERCLA, 42 U.S.C. Section
9601 et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Section 6901 et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 et seq., the Federal Water Pollution Control Act, 33 U.S.C.
Section 1251 et seq., the Clean Air Act, 33 U.S.C. Section 7401 et seq., the
Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., the Safe
Drinking Water Act, 42 U.S.C. Section 300f et seq., the Emergency Planning and
Community Right-To-Know Act, 42 U.S.C. Section 1101 et seq., the Occupational
Safety and Health Act, 29 U.S.C. Section 651 et seq., and any so-called "Super
Fund" or "Super Lien" law, any Law requiring the filing of reports and notices
relating to hazardous substances, environmental laws administered by the
Environmental Protection Agency, and any similar state and local Laws, all
amendments thereto and all regulations, orders, decisions, and decrees now or
hereafter promulgated thereunder concerning the environment, industrial
hygiene or public health or safety). At all times, and notwithstanding any
termination of this Lease, Tenant shall indemnify and hold Landlord, its
employees and agents harmless from and against any damage, injury, loss,
liability, charge, demand or claim based on or arising out of the presence or
removal of, or failure to remove, Hazardous Materials generated, used,
released, stored or disposed of by Tenant or its employees, agents,
contractors, licensees or invitees (collectively, "INVITEES") in or about the
Building or the Complex, whether before or after the Lease Commencement Date.
In addition, Tenant shall give Landlord immediate verbal and follow-up written
notice of any actual or threatened Environmental Default, which Environmental
Default Tenant shall cure in accordance with all Environmental Laws and to the
reasonable satisfaction of Landlord and, except in the case of an emergency
(in which event Tenant may act without Landlord's consent), only after Tenant
has obtained Landlord's prior written consent, which shall not be unreasonably
withheld. An "ENVIRONMENTAL DEFAULT" means any of the following by Tenant or
any Invitee with respect to the Building, the Land or the Complex: a violation
of an Environmental Law; a release, spill or discharge of a Hazardous Material
on or from the Premises, the Land or the Building; an environmental condition
requiring responsive action; or an emergency environmental condition. Upon any
Environmental Default, in addition to all other rights available to Landlord
under this Lease, at law or in equity, Landlord shall have the right but not
the obligation to immediately enter the Premises, to supervise and approve any
actions taken by Tenant to address the Environmental Default, and, if Tenant
fails to immediately address same to Landlord's reasonable satisfaction, to
perform, at Tenant's sole cost and expense, any lawful action necessary to
address same. If any lender or governmental agency shall require testing to
ascertain whether an Environmental Default is pending or threatened, then
Tenant shall pay the reasonable costs therefor as additional rent. Promptly
upon request, Tenant shall execute from time to time affidavits,
representations and similar documents concerning Tenant's best knowledge and
belief regarding the presence of Hazardous Materials at or in the Building,
the Land or the Premises.
6.5 Landlord shall not cause or permit any Hazardous Materials to
be generated, used, released, stored or disposed of on the Land, in the
Building or any portion of the Complex that, it owns, in violation of
applicable Environmental Laws. Except as otherwise provided below, if Landlord
first becomes aware that any such Hazardous Materials have been generated,
used, released, stored or disposed of on the Land, in the Building or any
portion of the Complex that it owns in violation of applicable Environmental
Laws after construction of the Building is substantially complete, Landlord
shall take all reasonable steps necessary to promptly remove
19
such Hazardous Materials and/or remediate any contamination resulting
therefrom to the extent necessary to bring the Land into compliance with all
applicable Environmental Laws; provided that, Landlord shall have no such
obligations with respect to any Hazardous Materials present as a result,
directly or indirectly, of an Environmental Default by Tenant, which Hazardous
Materials, the removal and the remediation thereof, shall be the
responsibility of Tenant pursuant to Section 6.4 above. If the parties become
aware, prior to substantial completion of the Building, or during any
subsequent period of construction on behalf of Tenant pursuant to the Phase II
Development Agreement, that any Hazardous Materials have been generated, used,
released, stored or disposed of on the Land in violation of applicable
Environmental Laws, the remediation thereof shall be conducted pursuant to the
Phase II Development Agreement.
ARTICLE VII
ASSIGNMENT AND SUBLETTING
7.1 Except with respect to Tenant's Personal Property as
contemplated by Section 18.10 below and except as provided in Section 7.4
below, Tenant shall not have the right to assign, transfer, mortgage or
otherwise encumber this Lease or its interest herein without first complying
with the provisions of subsections (a) and (b) of this Section 7.1.
(a) No assignment, transfer, mortgage or other encumbrance
of this Lease shall be effected unless Tenant obtains the prior written
consent of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed by Landlord; provided, however, that, (i) if an Event
of Default then exists under this Lease Landlord, in its sole judgment, may
withhold its consent to any proposed assignment, transfer, mortgage or other
encumbrance of this Lease, and (ii) Landlord may withhold its consent if it
reasonably determines that the character of the proposed assignee or the
nature of the activities to be conducted by such proposed assignee would
materially affect the other tenants of the Building, if any, or the Complex or
would physically damage the Building or impair the reputation of the Building
as a Class A suburban office building in the Market Area, or the financial
history or credit rating of the proposed assignee presents a material risk to
Landlord of non-compliance with this Lease. No assignment or transfer of this
Lease or the right of occupancy hereunder may be effectuated by operation of
law or otherwise without the prior written consent of Landlord, as aforesaid.
Any attempted assignment or transfer by Tenant of this Lease or its interest
herein without Landlord's consent (if Landlord's consent thereto is required)
shall, if such attempted assignment or transfer is not nullified or voided by
Tenant within ten (10) business days following written notice from Landlord to
Tenant that the assignment or transfer was improperly attempted without
Landlord's consent, at the option of Landlord, terminate this Lease; however,
in the event of such termination, Tenant shall remain liable for all rent and
other sums due under this Lease and all damages suffered by Landlord on
account of such breach by Tenant.
(b) Tenant agrees to give Landlord at least ten (10)
business days' advance written notice of Tenant's intention to assign or
transfer this Lease, along with sufficient information about the proposed
assignee or transferee to enable Landlord to make the determination called for
by subsection (a) above.
(c) Notwithstanding anything contained herein to the
contrary, (i) Tenant shall not have the right to assign or transfer this Lease
prior to the Lease Commencement Date
20
hereunder, except to an Affiliate of Tenant (as hereinafter defined) or
otherwise pursuant to Section 7.5 hereof; and (ii) Tenant may not partially
assign this Lease.
7.2 Tenant shall not have the right to sublease (which term, as
used herein, shall include any type of subrental arrangement and any type of
license to occupy) all or any part of the Premises without first complying
with the provisions of subsections (a) and (b) of this Section 7.2.
(a) Tenant shall have the right to sublease any portion or
portions of the Premises; provided that, if a proposed sublease, in the
aggregate with all other subleases then in existence, will cause more than
fifty percent (50%) of the rentable area of the Premises to be subject to any
sublease, then Tenant must obtain the prior written consent of Landlord to
such proposed sublease, which consent shall not be unreasonably withheld,
conditioned or delayed by Landlord; provided, however, that Landlord may
withhold its consent to any proposed sublease if (i) an Event of Default then
exists under this Lease or (ii) Landlord reasonably determines that the
character of the proposed subtenant or the nature of the activities to be
conducted by such proposed subtenant would materially affect the other tenants
of the Building or the Complex, or would physically damage the Building or
impair the reputation of the Building as a Class A suburban office building in
the Market Area, or that the financial history or credit rating of the
proposed subtenant presents a material risk to Landlord of non-compliance with
this Lease. Notwithstanding anything contained herein to the contrary, in the
event a proposed sublease will not cause more than fifty percent (50%) of the
rentable area of the Premises to be subject to any sublease or assignment,
then Tenant may enter into such sublease without Landlord's consent, but upon
at least ten (10) business days' prior written notice to Landlord and provided
the sublease document otherwise satisfies the terms of Section 7.3 below.
(b) Tenant agrees to give Landlord at least fifteen (15)
business days advance written notice of Tenant's intention to sublease a
portion of the Premises, along with a copy of the proposed sublease and
sufficient information about the proposed subtenant to enable Landlord to make
the determination called for by subsection (a) above (if such sublease is
subject to Landlord's consent). In the event Landlord fails to approve or
disapprove any proposed sublease or subtenant within the fifteen (15) business
days after Landlord's receipt of Tenant's notice of its intention to sublet
together with the information about the proposed subtenant require pursuant to
this Section 7.2(b), then Landlord shall be deemed to have approved such
sublease and subtenant, unless Landlord has, in good faith, during such
fifteen (15) day period requested additional information about the subtenant
or requested changes to the proposed form of sublease to be entered into
between Tenant and its proposed subtenant.
7.3 The consent by Landlord to any assignment or subletting shall
not be construed as a waiver or release of Tenant from any and all liability
for the performance of all covenants and obligations to be performed by Tenant
under this Lease, nor shall the collection or acceptance of rent from any
assignee, transferee or subtenant constitute a waiver or release of Tenant
from any of its liabilities or obligations under this Lease. Landlord's
consent to any assignment or subletting shall not be construed as relieving
Tenant from the obligation of complying with the provisions of Sections 7.1 or
7.2 hereof, as applicable, with respect to any subsequent assignment or
subletting. For any period during which Tenant is in default hereunder with
respect to the payment of Annual Base Rent or additional rent and such default
has continued beyond any
21
applicable grace or cure period, Tenant hereby assigns to Landlord the rent
due from any subtenant of Tenant and hereby authorizes each subtenant to pay
said rent directly to Landlord. Whether or not Landlord's prior written
consent to a subletting is required pursuant to Section 7.2 above, Tenant
further agrees to submit any and all instruments of assignment and sublease to
Landlord prior to the execution thereof to enable Landlord to determine
whether such instrument complies with the terms hereof. All such instruments
shall provide that (i) such sublease or assignment is subject and subordinate
to this Lease in all respects, and to any amendments, modifications, renewals,
extensions or expansions hereof, (ii) in the case of a sublease, Tenant shall
remain primarily liable as Tenant hereunder, (iii) such assignee or sublessee
shall conduct a business in the Premises which is a permitted use pursuant to
Article VI of this Lease, (iv) in the case of an assignment, such assignee is
bound by the terms and conditions of this Lease and assumes all of the
obligations and liabilities of Tenant hereunder, (v) in the case of a
sublease, (A) Landlord is not, and will not become, a party to such sublease,
(B) Landlord's consent to such sublease does not create a contractual
relationship between Landlord and such sublessee, nor does it create any
liability of Landlord to such sublessee, and (C) such sublessee shall not
succeed to, or otherwise have the right to exercise or enforce, any of
Tenant's rights hereunder directly against Landlord, (vi) Landlord's consent
to such assignment or sublease does not affect the obligations of Landlord or
Tenant under this Lease, and (vii) Landlord's consent to such assignment or
sublease shall not be construed to mean that Landlord has approved any plans
or specifications for renovations to the Premises intended by such assignee or
sublessee and that any such work to the Premises must be conducted in
accordance with the terms of this Lease. Any such instrument of assignment or
sublease not approved by Landlord in each instance where Landlord's approval
is required, or, whether or not Landlord's approval is required, which does
not include all of the provisions described in clauses (i) through (vii)
above, as required (unless waived by Landlord in its sole discretion), shall
be null and void and of no force or effect. Any such instrument of assignment
or sublease submitted to Landlord for approval and not approved or disapproved
by Landlord within ten (10) business days after submission shall be deemed
approved by Landlord for all purposes under this Lease. If Landlord
disapproves any sublease or assignment submitted to Landlord for approval,
Landlord's notice of disapproval shall identify Landlord's reasons therefor.
7.4 (a) Notwithstanding the above restrictions on subletting and
assignment in this Article VII, and provided that no Event of Default then
exists under this Lease, Tenant shall have the right, upon not less than five
(5) business days' prior written notice to Landlord but without Landlord's
prior written consent, to assign this Lease or to sublet all or any part of
the Premises to an Affiliate of Tenant (as hereinafter defined), provided (i)
that no Event of Bankruptcy (as hereinafter defined) shall have occurred with
respect to such assignee or sublessee, (ii) that the conditions set forth in
Section 7.3(i) - (vii) are fully satisfied and (iii) that the character of
such person or entity and the nature of its activities in the Premises and in
the Building would not be inappropriate for a Class A suburban office building
in the Market Area.
(b) For purposes of this Section 7.5, an "AFFILIATE OF
TENANT" shall mean any corporation, association, trust, partnership, limited
liability company, joint venture or other entity (i) which Controls (as herein
defined) Tenant or (ii) which is under the Control of Tenant through stock
ownership or otherwise or (iii) which is under common Control with Tenant. The
terms "CONTROL" or "CONTROLS" as used in this Section 7.5 shall mean the power
to directly or indirectly influence the direction, management or policies of
Tenant or such other entity.
22
(c) Notwithstanding the above restrictions on assignment,
and provided that no Event of Default then exists under this Lease, Tenant
shall have the right, upon not less than thirty (30) days' prior written
notice to Landlord, but without Landlord's prior written consent, to assign
this Lease pursuant to a merger, consolidation, or other corporate
reorganization of Tenant, or the sale or transfer of all or substantially all
of the capital stock of Tenant or all or substantially all of the assets of
Tenant, provided that (i) Tenant, after such merger, consolidation,
reorganization or sale of stock or assets, has a creditworthiness (e.g. assets
and capitalization) and net worth (which shall be determined on a pro forma
basis using generally accepted accounting principles consistently applied and
using the most recent financial statements) equal to or greater than the net
worth of Tenant on the Effective Date, (ii) Tenant, after such merger,
consolidation, reorganization or sale of stock or assets, agrees in writing to
be bound by the terms and conditions of this Lease and to assume all of the
obligations and liabilities of Tenant under this Lease, (iii) Tenant, after
such merger, consolidation, reorganization or sale of stock or assets, shall
conduct a business on the Premises which is a permitted use pursuant to
Article VI of this Lease, (iv) the character of Tenant after the merger,
consolidation, reorganization or sale of stock or assets, as the case may be,
and the nature of Tenant's activities in the Premises would not be
inappropriate for a Class A suburban office building in the Market area, (v)
the conditions set forth in Section 7.3(i), (ii), (iii), (iv), (vi) and (vii)
are fully satisfied, and (vi) the assignment is not a so-called "sham"
transaction intended by Tenant to circumvent the provisions of Article VII of
this Lease.
7.5 Tenant shall use reasonable efforts to notify Landlord in
writing of any intention by Tenant to market the Premises or any portion
thereof for assignment or sublease, and shall furnish to Landlord such
information as Landlord may reasonably request with respect to the economic
terms of the assignment or sublease transaction being sought by Tenant and the
actions Tenant is taking to market the Premises.
ARTICLE VIII
MAINTENANCE AND REPAIRS
8.1 Landlord shall keep, maintain, repair and replace as
appropriate, the elements and components which are provided as a part of the
Base Building Work, as defined in the Phase II Development Agreement,
including, but not limited to, the foundation, roof, exterior walls,
structural portions (including columns within the Premises and the vertical
sprinkler loop through the Building), and exterior glass and windows of the
Building (specifically excluding the interior walls, doors, partitions, locks,
and door jambs in the Building), as well as all mechanical, plumbing, heating,
air conditioning, sprinkler and electrical systems and utility service lines
therein, the plumbing system to and from the Premises and core area restrooms
within the Premises, and the driveways, parking areas and grounds on the Land
in good condition and repair and, subject to the provisions of Article VI
above, in compliance with applicable Legal Requirements and the costs incurred
by Landlord in maintaining and repairing such items shall be included in
Expenses (unless the cost or expense of any such repair or maintenance is
excluded from Expenses under Section 4.2(a) above).
8.2 Subject to the provisions of Section 8.1 above, Tenant will
keep and maintain the Premises, including but not limited to, the Leasehold
Improvements, as defined in the Phase II
23
Development Agreement, and all fixtures and equipment located in the Building
(specifically including but not limited to, the interior walls, doors,
partitions, locks, door jambs, windows, telephones, telephone systems, inside
voice/data/video cabling and associated equipment, special light fixtures,
kitchen fixtures, auxiliary heating, ventilation or air-conditioning
equipment, fixtures and other special equipment and glass in the Premises, but
excluding those portions of the Premises to be maintained by Landlord pursuant
to Section 8.1 above) in clean, safe and sanitary condition, will take good
care thereof and will maintain and make all required repairs thereto, and will
suffer no waste or injury thereto. If Tenant so requests by written notice to
Landlord, Landlord shall make any repairs and perform any maintenance that are
otherwise Tenant's obligations under this Section 8.2, and the costs of
providing such services shall be included in Operating Expenses and payable by
Tenant pursuant to Article IV hereof. In addition, Tenant shall have the
right, but not the obligation, to effect minor repairs and routine maintenance
to the Premises (and, for so long as Tenant is the sole lessee of the
Building, the Land) provided that (i) Landlord shall be given reasonable prior
notice thereof (except in the case of emergency); (ii) once commenced, such
maintenance and repair work shall be completed promptly and in accordance with
standards for a Class A suburban office building; (iii) such repair or
maintenance will not jeopardize compliance with the Building's classification
as a Class A suburban office building; and (iv) Tenant shall not be entitled
to make structural repairs or repairs or maintenance that has a material
effect on any of the base building systems, except as permitted pursuant to
Section 14.6 hereof. At the expiration or other termination of the Lease Term,
Tenant shall surrender the Premises, broom clean, in substantially the same
order and condition which they are in on the Lease Commencement Date, as
altered by any improvements (as defined in Section 9.2 hereof) made in
accordance with Article IX hereof that Tenant is not obligated to remove
pursuant to Section 9.4 hereof, ordinary wear and tear, damage by the
elements, and casualty damage excepted.
8.3 Subject to the provisions of Section 12.4(b) below, all injury,
breakage and damage to the Premises or to any other part of the Building
caused by any negligent act or omission or willful misconduct of Tenant, or of
any agent, employee, subtenant, contractor, customer or invitee of Tenant,
shall be repaired by and at the sole expense of Tenant, except that Landlord
shall have the right, at its option, after Tenant's failure to cure (or
commence to cure, where applicable) within ten (10) business days after notice
to Tenant of such injury, breakage or damage, to make such repairs and to
charge Tenant for all costs and expenses incurred in connection therewith as
additional rent hereunder. The foregoing notwithstanding, should an emergency
or similar situation occur and delay would cause or is likely to cause
preventable injury to persons or material injury to property, Landlord may
elect to act without notice to Tenant.
ARTICLE IX
ALTERATIONS
9.1 (a) Tenant is contracting with Landlord, pursuant to the
Phase II Development Agreement for the construction of the Building,
including, but ot limited to, all Leasehold Improvements. Tenant hereby
acknowledges that it has performed its own due diligence with respect to the
Land and the development potential thereof, Landlord having made no
representations or warranties whatsoever with respect to the physical
condition of the Land or its suitability for any particular construction or
use. The provisions of Section 9.2 and 9.3 below
24
shall govern only Improvements, as defined below, made following the initial
construction of the Building and Leasehold Improvements pursuant to the Phase
II Development Agreement.
(b) Prior to the Lease Commencement Date, an Integrated
Punchlist shall be prepared in accordance with the provisions of Section 7 of
the Phase II Development Agreement. Tenant's taking possession of the Premises
shall constitute Tenant's acknowledgement that the Premises are in good
condition and that all work and materials are satisfactory, except as to any
items set forth in the Integrated Punchlist and except as to latent defects
with respect to the Leasehold Improvements discovered by Tenant within one (1)
year following the Lease Commencement Date (it being agreed that such one-year
time period shall not limit Landlord's ongoing obligation pursuant to Article
VIII of this Lease to maintain and repair the Base Building Work). Landlord
will cause its contractor to promptly correct any latent defect timely brought
to Landlord's attention by Tenant. Except to the extent that Landlord must
retain the ability to enforce warranties to obtain the correction of latent
defects, Landlord shall assign to Tenant the right to enforce all warranties
issued by Landlord's contractors and suppliers with respect to the Leasehold
Improvements.
9.2 Except as otherwise permitted pursuant to the Phase II
Development Agreement and Section 9.3 below, Tenant will not make or permit
anyone to make any alterations, additions or improvements (hereinafter
referred to collectively as "IMPROVEMENTS"), structural or otherwise, upon the
Land or in or to the Premises without the prior written consent of Landlord to
the proposed improvement (including the plans and specifications therefor). In
the case of any proposed improvement that is of a major structural nature or
any proposed improvement materially affecting any of the base building
systems, Landlord may grant or withhold its consent in its sole discretion,
unless the improvement is customary in Class A suburban office buildings in
the Market Area, including single user buildings, or would not materially
affect, in Landlord's judgment, the value or marketability of the Premises, in
which case Landlord's consent shall not be unreasonably withheld, conditioned
or delayed. All Improvements made by Tenant shall not be inconsistent with
usual and customary improvements to headquarters offices in Class A suburban
office buildings in the Market Area, including single user buildings. In the
event Landlord fails to respond to a request for its consent to an improvement
within ten (10) business days following submission of such request in writing,
then Landlord's consent shall be deemed granted. When granting its consent,
Landlord may impose any conditions it reasonably deems appropriate, including,
but not limited to, the approval by Landlord of the contractor or other
persons who will perform the work (which consent shall not be unreasonably
withheld, conditioned or delayed), Tenant's obtaining all necessary permits
and approvals for such work, and Tenant's obtaining, and providing Landlord
with certificates of insurance evidencing, reasonably appropriate levels and
types of insurance coverage. In addition, Landlord may condition, at the time
it is granted, its approval of any Improvements that are not customarily
maintained by landlords in Class A suburban office buildings in the Market
Area or would not materially affect, in Landlord's judgment, the value or
marketability of the Premises on Tenant's agreeing to maintain such
Improvements and/or to remove such Improvements at the expiration or earlier
termination of the Lease Term and to restore the Premises to substantially the
condition they were in prior to the making of such Improvements. All
Improvements permitted by Landlord (or allowed hereunder without Landlord's
approval) must conform to all applicable requirements of the insurers of the
Building, including, without limitation, Boston Properties' Loss Control
Guidelines ("INSURANCE REQUIREMENTS") and to all applicable Legal
25
Requirements. Landlord's review and approval of any such plans and
specifications and consent to the performance of work described therein shall
not be deemed an agreement by Landlord that such plans, specifications and
work conform with all applicable Legal Requirements and Insurance Requirements
nor be deemed a waiver of Tenant's obligations under this Lease with respect
to Legal Requirements and Insurance Requirements nor impose any liability or
obligation upon Landlord with respect to the completeness, design sufficiency
or compliance with Legal Requirements or Insurance Requirements of such plans,
specifications and work. Upon completion of any Improvements requiring
Landlord's approval, Tenant shall provide Landlord with final release of lien
forms executed by Tenant's general contractor. If, notwithstanding the
foregoing, any mechanic's or materialmen's lien is filed against the Premises,
the Building and/or the Land, for work claimed to have been done for, or
materials claimed to have been furnished to, the Premises on Tenant's account,
such lien shall be discharged by Tenant within twenty (20) days after Tenant
has notice thereof, at Tenant's sole cost and expense, by the payment thereof
or by the filing of a surety bond that discharges the lien. If Tenant shall
fail to discharge any such mechanic's or materialmen's lien within twenty (20)
days after receiving written notice thereof from Landlord, Landlord may, at
its option, discharge such lien and treat the cost thereof (including
reasonable attorneys' fees incurred in connection therewith) as additional
rent payable with the next monthly installment of Annual Base Rent falling
due. It is further understood and agreed that in the event Landlord shall give
its written consent to the making of any Improvements to the Premises, such
written consent shall not be deemed to be an agreement or consent by Landlord
to subject its interest in the Premises, the Building or the Land to any
mechanic's or materialmen's liens which may be filed in connection therewith.
Upon completion of any structural Improvements by Tenant, Tenant shall provide
Landlord with accurate "as-built" plans showing the new work in a "CADD"
format. In addition, if Tenant has made any Improvements (structural or
otherwise) in the Premises during the course of any calendar year, then Tenant
shall provide Landlord with such "as-built" plans (in CADD format, if
available) within thirty (30) days following the end of such calendar year;
provided, however, that Tenant shall not be obligated to provided Landlord
with as-built plans if such improvements are limited to painting and carpeting
all or a portion of the Premises and other work of a cosmetic nature.
9.3 Notwithstanding the provisions of Section 9.2 hereof to the
contrary, throughout the Lease Term, Tenant may make alterations or additions
to the Premises which (a) cost less than Twenty-Five Thousand Dollars
($25,000.00) individually or Two Hundred Thousand Dollars ($200,000.00) in the
aggregate during any twelve (12) consecutive month period, (b) are not
structural in nature and which do not relate to or affect the base Building
electrical, mechanical, fire or life safety systems, (c) are in conformance
with all applicable building, zoning and other codes or regulations affecting
or applying to the Building and (d) are shown on working drawings, space plans
or plans and specifications copies of which are delivered to Landlord within
twenty (20) days of Tenant's completion of such alterations or additions,
without obtaining Landlord's prior written approval; provided, however, that
upon completion of such work Tenant shall deliver to Landlord copies of lien
waivers from the contractors and materialmen providing the supplies, materials
and work therefor. In addition to the foregoing, Tenant shall not be required
to obtain the consent of Landlord for the making of alterations that are
purely decorative or cosmetic in nature, such as painting and carpeting, or
alterations consisting of minor re-partitioning and appurtenant changes to
distribution systems (i.e., electrical outlets, HVAC vents). In the event
Tenant intends to make any alterations to the
26
Premises in accordance with the provisions of this Section 9.3, Tenant, not
less than ten (10) days prior to the commencement of such work, shall notify
Landlord, in writing, as to (i) the date on which such work is to commence,
(ii) the date on which such work is scheduled to be completed, and (iii) the
name of the contractor or other person performing such work. In addition,
Tenant and Tenant's contractor shall coordinate the performance of such work
with the on-site property manager of the Building.
9.4 Tenant shall indemnify and hold Landlord harmless from and
against any and all expenses, liens, claims, liabilities and damages based on
or arising, directly or indirectly, by reason of the making of any
Improvements to the Premises, the furnishing of any services to the Premises
or the Building or the repair and maintenance of the Premises or the Building,
in each case by Tenant or its employees, agents or contractors; provided that
Tenant's obligations to indemnify and hold harmless Landlord pursuant to this
Section 9.4 shall not include any costs, damages, claims, liabilities or
expenses suffered by or claimed against Landlord directly based on, arising
out of or resulting from Landlord's breach of, or default as to, any of its
covenants or other obligations under this Lease or Landlord's or its employees
negligence or willful misconduct or the gross negligence of Landlord's agents
or contractors. If any Improvements are made without the prior written consent
of Landlord (if such consent is required hereunder) and they are not removed
and the Premises restored within thirty (30) days following Tenant's receipt
of written notice from Landlord requiring such removal and restoration,
Landlord shall have the right to remove and correct such Improvements and
restore the Premises to their condition immediately prior thereto, and Tenant
shall be liable for all expenses incurred by Landlord in connection therewith.
All Improvements affixed to the Premises or the Building made by either party,
including all Improvements made as part of the initial construction of the
Building and tenant build-out pursuant to the Phase II Development Agreement,
shall remain upon and be surrendered with the Premises as a part thereof at
the end of the Lease Term, except that (i) Tenant shall have the right to
remove, prior to the expiration of the Lease Term, all furniture, furnishings,
fixtures, trade fixtures and equipment installed in the Premises solely at the
expense of Tenant or otherwise identified by Tenant and agreed by Landlord,
and (ii) except with respect to the initial construction of the Building and
Leasehold Improvements pursuant to the Phase II Development Agreement, Tenant
shall be required to remove all Improvements to the Premises which Landlord
designates in writing for removal at the time Landlord approves installation
of such improvement (provided that Landlord shall have the right to designate
for removal any Improvements only if they are of a nature that is materially
different from that typically included in an office build-out). All damage and
injury to the Premises or the Building caused by such removal shall be
repaired by Tenant, at Tenant's sole expense, except any damage or injury to
tenant finishes in individual tenant space that would customarily be replaced
by Landlord in preparation for the next tenant. If any property of Tenant is
not removed by Tenant prior to the expiration or termination of this Lease,
the same shall become the property of Landlord and shall be surrendered with
the Premises as a part thereof.
ARTICLE X
SIGNS, EQUIPMENT AND FURNISHINGS
10.1 Throughout the Term of this Lease and subject to compliance
with any applicable Legal Requirements and Landlord's reasonable prior
approval, Tenant shall have the exclusive right to install and maintain, at
Tenant's sole expense, such signage identifying Tenant on the
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Building facade, within the Building and in the form of exterior monument
signs on the Land as Tenant shall desire. The size, position, materials,
color, style and manner of installation of such signage shall be determined by
Tenant, subject to Landlord's reasonable approval. If Tenant and its
Affiliates are leasing less than fifty percent (50%) of the rentable area of
the Building, then Tenant may continue to maintain any then-existing signage;
however, such right shall thereafter be non-exclusive, and shall be subject to
such changes in the size and positioning of such signage as Landlord may
reasonably require in order to accommodate dual signage in the event that
Landlord grants similar signage rights to any tenant leasing space in the
Building that is comparable to or greater than the amount of space then leased
by Tenant. If Tenant and its Affiliates are leasing less than twenty-five
percent (25%) of the rentable area of the Building, then Landlord may require
Tenant to remove, at Tenant's sole cost and expense, any then existing signage
and Tenant shall repair any damage to the Building resulting therefrom. All of
Tenant's signage shall be removed at the expiration or earlier termination of
the Lease Term, and Tenant shall repair any damage to the Building resulting
therefrom, at Tenant's cost and expense. If any sign, advertisement or notice
is exhibited or installed by Tenant in violation of the terms hereof, Landlord
shall have the right to remove the same at Tenant's expense. If Tenant sublets
all or any portion of the Premises, Tenant may delegate its signage rights
hereunder to its sublessee, without obtaining Landlord's consent thereto,
provided the name and logo to be displayed by such sublessee is compatible
with a Class A suburban office building and Landlord has approved such sign
and/or logo, which approval shall not be unreasonably withheld, conditioned or
delayed.
10.2 If Tenant and its Affiliates are leasing more than fifty
percent (50%) of the rentable area of the Building Tenant shall have the
right, subject to (a) Landlord's reasonable approval and (b) the approval, if
required, of requisite government authorities, to designate the name of the
Building and any associated private roads or drives, provided such names are
appropriate for a Class A suburban office building in the Market area. If
Tenant or an Affiliate of Tenant, individually or together, ceases at any time
to lease at least fifty-one percent (51%) of the rentable area of Premises,
Landlord shall have the right to rename the Building and any associated
private roads or drives.
10.3 In addition to the other signage rights provided herein, Tenant
shall have the right to erect temporary signage during the pre-development and
construction periods prior to the Lease Commencement Date, publicizing the
names and roles of the parties participating in the development of the
Complex; provided that, the design and content thereof shall be subject to the
mutual agreement of the parties. The parties agree to act reasonably in
attempting to reach such mutual agreement.
10.4 Tenant shall not place or install in any portion of the
Premises any safes, fixtures or other equipment which will exceed the load
factor for which such portion of the Premises was designed and constructed.
Any and all damage or injury to the Premises or the Building caused by moving
the property of Tenant into or out of the Premises, or due to the same being
in or upon the Premises, other than damage or injury to tenant finishes in
individual tenant space that would customarily be replaced by Landlord in
preparation for the next tenant shall be repaired at the sole cost of Tenant.
Tenant agrees to remove promptly from the parking areas or sidewalks adjacent
to the Building any of Tenant's furniture, equipment or other material there
delivered or deposited.
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ARTICLE XI
INSPECTION BY LANDLORD
11.1 Subject to Tenant's published security regulations and
procedures, Tenant will permit Landlord, or its agents or representatives, to
enter the Premises, without charge therefor to Landlord and without diminution
of the rent payable by Tenant, (i) to examine, inspect and protect the
Premises and the Building, (ii) to make such alterations and/or repairs as in
Landlord's reasonable judgment may be required by law or be necessary to
maintain the Building in good condition and repair, (iii) to comply with and
carry out Landlord's obligations under this Lease, and (iv) to exhibit the
same to prospective tenants (provided that Tenant's consent, which shall not
be unreasonably withheld, shall be required if the Premises are to be
exhibited to a prospective tenant prior to Tenant's exercise of its right to
renew this Lease or the expiration of such right as provided in Article XXV
below, or if there is no such right in accordance with this Agreement, no
earlier than twelve (12) months prior to the expiration of the term of this
Lease). In connection with any such entry, Landlord shall reasonably endeavor
to minimize the disruption to Tenant's use of the Premises, shall (except in
the event of an emergency) give Tenant at least twenty-four (24) hours advance
notice of such entry or such greater amount of time as may be reasonable under
the circumstances, shall (except in the event of an emergency) conduct such
entry only during normal working hours, and, except in the event of an
emergency, if requested by Tenant, shall permit a representative of Tenant to
escort Landlord (or its agents or representatives) during its entry in the
Premises. In connection with any alterations or repairs made pursuant to
clause (ii) above, (a) Landlord shall reasonably endeavor to minimize the
impact thereof on Tenant, both during and following the period of construction
or repair, (b) such alterations and repairs shall not materially reduce the
number of square feet of rentable area in the Premises, (c) such alterations
and repairs shall be performed in a manner that is reasonably compatible with
the then existing architectural and, in Landlord's judgment, aesthetic design
of the Premises, and (d) Landlord shall restore any tenant finishes that may
be disrupted by such alterations or repairs. Notwithstanding anything to the
contrary set forth in this Lease, except in the event of an emergency,
Landlord shall not be permitted access to areas previously designated in
writing by Tenant as security areas, unless Landlord and its representatives
are accompanied by an agent of Tenant designated and made available by Tenant
for such purposes.
11.2 Tenant may install additional locks, other devices and systems
which restrict access to the Premises and any part thereof. Tenant shall
provide Landlord with a means of access to the Premises and any part thereof
for emergency purposes, subject to applicable national security clearance
requirements and shall provide Landlord with a means of full access to the
Premises upon expiration of the Lease Term or earlier termination of this
Lease.
ARTICLE XII
INSURANCE
12.1 Subject to the provisions of Section 6.1 above, Tenant shall
not conduct or permit to be conducted any activity, or place any equipment,
inventory or other materials, in or about the Premises or the Building that
will in any way increase the rate of fire insurance or other insurance on the
Building. If any increase in the rate of fire insurance or other insurance is
stated
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by any insurance company or by the applicable Insurance Rating Bureau to be
due solely to any activity of Tenant or the placing of any equipment,
inventory or other materials by Tenant in or about the Premises or the
Building, such statement shall be conclusive evidence that the increase in
such rate is due to such activity or equipment and, as a result thereof,
Tenant shall be liable for the amount of such increase. Tenant shall reimburse
Landlord for such amount upon written demand from Landlord and such sum shall
be considered additional rent payable hereunder.
12.2 Throughout the Lease Term, Landlord shall insure the Building
against loss due to fire and other casualties included in standard, all-risk,
extended coverage insurance policies, in an amount equal to at least
ninety-five percent (95%) of the full replacement cost thereof. Throughout the
Lease Term, Landlord shall obtain and maintain commercial general liability
insurance in a company or companies licensed to do business in the
Commonwealth of Virginia. Such insurance shall be in minimum amounts of Five
Million Dollars ($5,000,000) per occurrence plus a general aggregate of Five
Million Dollars ($5,000,000) for injury to persons and damage to property and
shall be for a minimum term of one (1) year. Landlord and Tenant may
re-evaluate such minimum amount at the expiration of every third (3rd)Lease
Year and such minimum amounts may be adjusted as appropriate to be consistent
with Class A suburban office buildings in the Market Area, provided, however,
in no event shall such minimum amounts be adjusted downward (i) without the
approval of the holder of any mortgage, as defined in Section 22.1 below,
secured by the Building or (ii) below any corporate minimum requirements of
Landlord. Throughout the Lease Term, Landlord shall obtain and maintain a
policy of insurance protecting Landlord from loss of rents and other charges
during the period while the Premises are untenantable due to fire or other
insured casualty. The insurance required to be maintained by Landlord shall be
subject to the foregoing minimum requirements and shall otherwise be in
amounts and coverages that are commercially reasonable. So long as Tenant or
an Affiliate of Tenant is leasing the entire Building, Landlord's commercial
general liability insurance policy shall name Tenant as an additional insured.
Receipts or certificates evidencing payment of the premiums for such insurance
shall be delivered by Landlord to Tenant if requested by Tenant. Landlord's
casualty insurance policy shall contain an endorsement prohibiting
cancellation or reduction of coverage without first giving Tenant at least
thirty (30) days' prior written notice of such proposed action.
12.3 Throughout the Lease Term, Tenant shall insure the contents of
the Premises, including all furnishings, trade fixtures, and equipment used or
installed in the Premises by Tenant, and any other personal property of Tenant
therein, against loss due to fire and other casualties included in standard
extended coverage insurance policies in minimum amounts not less than ninety
percent (90%) of the full replacement cost of Tenant's furnishings, trade
fixtures, equipment and other personal property. Throughout the Lease Term,
Tenant shall obtain and maintain commercial general liability insurance in a
company or companies licensed to do business in the Commonwealth of Virginia
and reasonably approved by Landlord. Such insurance shall be in minimum
amounts of Five Million Dollars ($5,000,000) per occurrence plus a general
aggregate of Five Million Dollars ($5,000,000) for injury to persons and
damage to property and shall be for a minimum term of one (1) year. Landlord
and Tenant may reevaluate such minimum amount at the expiration of every third
(3rd) Lease Year and such minimum amounts may be adjusted as appropriate to be
consistent with Class A suburban office buildings in the Market Area,
provided, however, in no event shall such minimum amounts be adjusted downward
(i) without the approval of the holder of any mortgage, as defined in
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Section 22.1 below, secured by the Building or (ii) below any corporate
minimum requirements of Landlord. Such limits may be covered by a combination
of a general liability policy and an umbrella liability policy. In addition,
Tenant's commercial general liability insurance policy shall name Landlord and
the managing agent of the Building, as additional insureds. If requested by
the holder of any mortgage or deed of trust against the Building, the
commercial general liability policy referred to above shall also name such
holder as an additional insured thereunder. Receipts or certificates
evidencing payment of the premiums for such insurance shall be delivered by
Tenant if requested by Landlord. Each such policy shall contain an endorsement
prohibiting cancellation or reduction of coverage without first giving
Landlord and the holder of any mortgage or deed of trust on the Building at
least thirty (30) days' prior written notice of such proposed action.
12.4 (a) Tenant hereby waives its right of recovery against Landlord
and releases Landlord from any losses, claims, casualties or other damages for
which Landlord may otherwise be liable to the extent either (i) such loss,
claim, casualty or other damage would have been covered under insurance
coverage Tenant is required to maintain pursuant to this Article XII (without
regard to any deductible) or (ii) Tenant receives insurance proceeds on
account of any such losses, claims, casualties or other damages. Each policy
of property insurance obtained by Tenant pursuant to the provisions of this
Article XII shall include a waiver of the insurer's right of subrogation
against Landlord, and shall contain an endorsement to the effect that any loss
payable under such policy shall be payable notwithstanding any act or
negligence of Landlord, or any agent, contractor, employee or invitee of
Landlord, which might, absent such agreement, result in the forfeiture of
payment for such loss.
(b) Landlord hereby waives its right of recovery against
Tenant and releases Tenant from any losses, claims, casualties or other
damages for which Tenant may otherwise be liable to the extent either (i) such
loss, claim, casualty or other damage would have been covered under insurance
coverage Landlord is required to maintain pursuant to this Article XII
(without regard to any deductible) or (ii) Landlord receives insurance
proceeds on account of any such losses, claims, casualties or other damages.
Each policy of property insurance obtained by Landlord with respect to the
Building shall include a waiver of the insurer's right of subrogation against
Tenant, and shall contain an endorsement to the effect that any loss payable
under such policy shall be payable notwithstanding any act or negligence of
Tenant, or any agent, contractor employee or invitee of Tenant, which might,
absent such agreement, result in the forfeiture of payment for such loss.
ARTICLE XIII
SERVICES AND UTILITIES
13.1 (a) Landlord will furnish to the Premises during the normal
hours of operation of the Building (as set forth hereinbelow) air-conditioning
and heating during the seasons when such utilities are required. Landlord will
provide the following services consistent with the standards generally
applicable to Class A suburban office buildings in the Market Area: char and
janitorial service, electricity; elevator service; a perimeter access-control
system for the Building; maintenance of the grounds and landscaping
surrounding the Building, including prompt waste and snow removal; maintenance
of interior common areas, including lighting fixtures and bulb replacements,
hot and cold water supply, restroom facilities and furnishing of
31
lavatory supplies; and exterior window-cleaning service. Notwithstanding
anything herein to the contrary, Landlord shall have the right to remove
elevators from service as may be required for moving freight, or for servicing
and maintaining the elevators or the Building. At least one elevator cab shall
be available for use by Tenant at all times. The normal hours of operation of
the Building will be 7:00 a.m. to 7:00 p.m. on Monday through Friday (except
legal holidays) and 8:00 a.m. to 2:00 p.m. on Saturday (except legal holidays)
or such alternative hours of operation as Tenant may designate so long as
Tenant is the sole lessee of the Building. Landlord shall provide a Building
security system in accordance with the Construction Drawings and
Specifications, as defined in the Phase II Development Agreement. Tenant shall
be permitted access to the Premises on a twenty-four hours, seven-days-a-week
basis.
(b) Tenant, for so long as it is the sole lessee of the
Building, upon not less than thirty (30) days prior written notice to
Landlord, may elect to perform janitorial or security services (the "Assumed
Services"). If Tenant elects to perform either of the Assumed Services, (i)
Landlord shall not be obligated to perform such Assumed Service and shall have
no liability to Tenant if such services are not performed to Tenant's
satisfaction and (ii) all costs incurred in connection with providing the
Assumed Service shall be excluded from Operating Expenses. On the date of
execution of this Lease, Tenant has elected to perform janitorial and char
services in all secured areas of the Building, all research and development
areas and all control centers of the Building. Tenant may, at any time upon
thirty (30) days written notice to Landlord elect to discontinue the
performance of the Assumed Services and Landlord shall be required to resume
or commence such Assumed Service in accordance with Section 13.1(a) beginning
on the date set forth in Tenant's notice and such costs shall be included in
Operating Expenses. In the event Landlord reasonably determines that Tenant's
provider of an Assumed Service is not providing such service in accordance
with the standards applicable to Class A suburban office buildings in the
Market Area, Landlord shall notify Tenant, in writing, of the deficiencies it
has identified and Landlord and Tenant shall use commercially reasonable
efforts to correct such identified deficiencies in the provision of such
Assumed Service. If the provider of such Assumed Service fails to institute
such corrective measures promptly after Tenant's receipt of Landlord's notice,
Landlord shall have the right, at its option, upon thirty (30) days prior
written notice to Tenant, to direct Tenant to terminate the provider of such
Assumed Service and Landlord and Tenant shall mutually agree upon a different
provider of such Assumed Service. Landlord shall not undertake any action
under the preceding sentence unless such violation or failure shall continue
uncured for a period of thirty (30) days after Landlord has given notice to
Tenant of such deficiency or failure; provided that if such deficiency or
failure is not susceptible of being cured within such thirty (30) day period,
Landlord shall not undertake any action if the provider of the Assumed Service
commences curative action within such thirty (30) day period and proceeds
diligently thereafter to cure such deficiency or failure until completion.
13.2 It is understood and agreed that Landlord shall not have any
liability to Tenant whatsoever as a result of Landlord's inability (despite
the exercise of its commercially reasonable efforts) to furnish any of the
utilities or services required to be furnished by Landlord under the terms of
this Lease, whether resulting from breakdown, removal from service for
maintenance or repairs, strikes, scarcity of labor or materials, acts of God,
governmental requirements or from any other cause whatsoever. It is further
agreed that, except as provided in this Section 13.2 and Section 14.6 below,
any such inability to furnish the utilities or services required hereunder
shall not be considered an eviction, actual or constructive, of Tenant from
the
32
Premises, and shall not entitle Tenant to terminate this Lease or to an
abatement of any rent payable hereunder. Notwithstanding the foregoing or
anything else in this Lease, but subject to the provisions of Section 14.6
below, in the event that Tenant is prevented from using, and does not use, the
Premises or any portion thereof for five (5) consecutive business days or for
ten (10) business days in any twelve (12) month period (the "ELIGIBILITY
PERIOD") as a result of any interruption of utilities or services or access
(including elevator access) or any repair, maintenance or alteration performed
by Landlord after the Lease Commencement Date (other than repairs undertaken
pursuant to Article XVI hereof) which renders the Premises inaccessible or
untenantable (the foregoing circumstances being referred to herein as
"SUSPENSION EVENTS"), then all Annual Base Rent and additional rent payable
hereunder shall be reduced after expiration of the Eligibility Period for such
time that Tenant continues to be so prevented from using, and does not use,
the Premises or a portion thereof, in the proportion that the rentable area of
the portion of the Premises that Tenant is prevented from using, and does not
use, bears to the total rentable area of the Premises; provided that, any
interruption of utilities or services resulting from Tenant's failure to
timely pay for any electricity that is billed directly to Tenant by the
electric utility pursuant to Section 4.7 hereof shall not be deemed a
Suspension Event and shall not entitle Tenant to any rent abatement hereunder.
Landlord will repair and restore any such interrupted services or utilities as
soon as reasonably practicable following the interruption thereof.
13.3 (a) Landlord shall enter into a management agreement in form
and substance approved by Tenant (the "MANAGEMENT AGREEMENT") with an entity
designated by Landlord ("MANAGER"), subject to Tenant's approval, which shall
not be unreasonably withheld, conditioned or delayed; provided, however that
Tenant's approval of the terms and conditions of the Management Agreement and
the Manager shall not be required if the Manager is Landlord or an Affiliate
of Landlord and the terms of such agreement are substantially in the form
attached hereto as Exhibit F. If the Management Agreement is with a third
party, the Management Agreement shall contain a provision permitting Landlord
to terminate the Management Agreement without liability on the part of
Landlord or Tenant upon thirty (30) days prior notice to Manager and Tenant.
Any Management Agreement shall state that it is subject and subordinate to
this Lease. Landlord agrees not to cancel, amend or extend the Management
Agreement or appoint a new third-party Manager or enter into a new Management
Agreement with a third party without Tenant's approval, which shall not be
unreasonably withheld, conditioned or delayed. For purposes of this Section
13.3, an "AFFILIATE OF LANDLORD" shall mean any corporation, association,
trust, partnership, limited liability company, joint venture or other entity
(i) which Controls (as herein defined) Landlord or (ii) which is under the
Control of Landlord through stock ownership or otherwise or (iii) which is
under common Control with Landlord. The terms "CONTROL" or "CONTROLS" as used
in this Section 13.3 shall mean the power to directly or indirectly influence
the direction, management or policies of Landlord or such other entity.
(b) Prior to the expiration of the fifth (5th) Lease Year,
if Landlord or an Affiliate of Landlord is the Manager and Tenant reasonably
determines that the Premises are not being managed in accordance with the
standards set forth in the Management Agreement, Tenant shall notify Landlord,
in writing, of the deficiencies it has identified and Landlord shall use
commercially reasonable efforts to correct such identified deficiencies in the
management of the Building. If Landlord fails to institute such measures
promptly after notice from Tenant, Tenant
33
shall have the right, at its option, upon thirty (30) days prior written
notice to Landlord, to terminate the Management Agreement and to direct
Landlord to engage a third-party Manager. Tenant shall not undertake any
action under the preceding sentence unless such violation or failure shall
continue uncured for a period of thirty (30) days after Tenant has given
notice to Landlord of such deficiency or failure; provided that if such
deficiency or failure is not susceptible of being cured within such thirty
(30) day period, Tenant shall not undertake any action if Landlord commences
curative action within such thirty (30) day period and proceeds diligently
thereafter to cure such deficiency or failure until completion.
(c) Commencing in the sixth (6th) Lease Year, provided that
(i) there is no Event of Default, and (ii) Tenant and/or its Affiliates are
the sole lessees of the Premises, Tenant shall have the right, upon ninety
(90) days prior written notice to Landlord to direct Landlord to enter into a
Management Agreement with an independent third party manager reasonably
acceptable to Landlord. Landlord's approval of such third party manager shall
not be unreasonably withheld, conditioned or delayed.
(d) In the event Landlord reasonably determines that the
third party Manager is not managing the Premises in accordance with the
standards set forth in the Management Agreement, Landlord shall notify Tenant,
in writing, of the deficiencies it has identified and Landlord and Tenant
shall use commercially reasonable efforts to cause the Manager to correct such
identified deficiencies in the management of the Building. If the third party
Manager fails to institute such corrective measures promptly after Tenant's
receipt of Landlord's notice, Landlord shall have the right, at its option,
upon thirty (30) days prior written notice to Tenant, to terminate the
Management Agreement and Landlord and Tenant shall mutually agree upon a
third-party Manager to manage the Building. Landlord shall not undertake any
action under the preceding sentence unless such violation or failure shall
continue uncured for a period of thirty (30) days after Landlord has given
notice to Tenant of such deficiency or failure; provided that if such
deficiency or failure is not susceptible of being cured within such thirty
(30) day period, Landlord shall not undertake any action if the third-party
Manager commences curative action within such thirty (30) day period and
proceeds diligently thereafter to cure such deficiency or failure until
completion.
13.4 In the event Tenant determines that the services being
furnished by any contractor (including, commencing in the sixth (6th) Lease
Year, Landlord or an Affiliate of Landlord as Manager) employed by Landlord
are unsatisfactory, in Tenant's reasonable judgment, Tenant shall deliver
written notice to Landlord specifying in detail the manner in which the
services are deemed deficient. If the deficiencies are not, in Tenant's
reasonable judgment, substantially corrected during the next succeeding thirty
(30) days, then Tenant may deliver a further notice to Landlord advising
Landlord of such fact, and, provided such contract is terminated in accordance
with its terms and, therefor, Landlord will not incur any liability to the
contractor as a result thereof, Landlord shall terminate the contract of such
deficient contractor and select a qualified replacement contractor. Landlord
shall not be deemed to incur any such liability if Tenant agrees to assume
responsibility for any such liability. Landlord shall include a thirty-day
termination for convenience clause in any service contracts in which such a
clause is customary; any service contract not including such clause shall
require Tenant's approval, which approval shall not be unreasonably
conditioned, withheld or delayed..
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ARTICLE XIV
LIABILITY OF LANDLORD
14.1 Except as expressly set forth in this Lease and without
limiting or reducing Tenant's rights under the Phase II Development Agreement,
Landlord shall not be liable to Tenant, its employees, agents, business
invitees, licensees, customers, clients, family members or guests for any
damage, injury, loss, compensation or claim, including, but not limited to,
claims for the interruption of or loss to Tenant's business, based on, arising
out of or resulting from any cause whatsoever (except as hereinbelow set
forth), including but not limited to, the following: (i) repairs to any
portion of the Premises or the Building; (ii) interruption in the use of the
Premises; (iii) any accident or damage resulting from the use or operation (by
Landlord, Tenant or any other person or persons) of elevators, or of the
heating, cooling, electrical or plumbing equipment or apparatus; (iv) the
termination of this Lease by reason of the destruction of the Premises or the
Building; (v) any fire, robbery, theft, mysterious disappearance and/or any
other casualty; (vi) the actions of other tenants in the Building, if any, or
of any other person or persons; and (vii) any leakage in any part or portion
of the Premises or the Building, or from water, rain or snow that may leak
into, or flow from any part of the Premises or the Building, or from drains,
pipes or plumbing fixtures in the Building; provided, however, that Landlord
shall not be released pursuant to this Section 14.1 from any liability (a)
resulting directly from Landlord's breach of, or default, beyond any
applicable notice and cure period, as to, any of its covenants or other
obligations under this Lease, or (b) subject to Section 12.4(a) above,
property damage, personal injury or death caused directly by Landlord's or its
employees' negligence or willful misconduct or the gross negligence or willful
misconduct of Landlord's contractors or agents. In no event (notwithstanding
anything in the immediately-preceding sentence to the contrary) shall Landlord
have any liability to Tenant for any claims based on the interruption of or
loss to Tenant's business or consequential damages or indirect losses
whatsoever.
14.2 Tenant hereby agrees to indemnify, defend on request, and hold
Landlord harmless from and against all costs, damages, claims, liabilities and
expenses (including reasonable attorneys' fees and any costs of litigation)
suffered by or claimed against Landlord, directly or indirectly, and not
covered by the insurance required to be maintained by Landlord hereunder,
based on, arising out of or resulting from (i) Tenant's use and occupancy of
the Premises or the business conducted by Tenant therein, (ii) any accident,
injury or damage whatsoever caused to any person, or to the property of any
person, occurring on or about the Premises during the Lease Term, (iii) the
operation of a food service, health club, daycare center or other "compatible
use" (as defined in Section 6.1 hereof) at the Premises, including any
accident, injury or damage whatsoever caused to any person or property arising
therefrom, (iv) any act or omission to act by Tenant or its employees,
contractors, agents, licensees, or invitees, or (v) any breach or default by
Tenant in the performance or observance of its covenants or obligations under
this Lease; provided that Tenant's obligations to indemnify and hold harmless
Landlord pursuant to this Section 14.2 shall not include any costs, damages,
claims, liabilities or expenses suffered by or claimed against Landlord
directly based on, arising out of or resulting from Landlord's breach of, or
default as to, any of its covenants or other obligations under this Lease or
the negligence or willful misconduct of Landlord or its employees or the gross
negligence or willful misconduct of Landlord's contractors or agents.
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14.3 In the event that at any time Landlord shall sell or transfer
the Building, provided the purchaser or transferee assumes the obligations of
Landlord hereunder, the Landlord named herein shall not be liable to Tenant
for any obligations or liabilities based on or arising out of events or
conditions occurring on or after the date of such sale or transfer. If
requested by Tenant, Landlord shall furnish to Tenant a copy of the agreement
pursuant to which any such purchaser or transferee shall have assumed the
obligations of Landlord hereunder. Furthermore, upon such assumption, Tenant
agrees to attorn to any such purchaser or transferee upon all the terms and
conditions of this Lease. Notwithstanding any of the foregoing to the
contrary, Landlord agrees that (i) Landlord will not sell or transfer the
Building prior to the Lease Commencement Date; (ii) Landlord will not sell or
transfer the Building to any person or entity if an Event of Bankruptcy (as
hereinafter defined) shall have occurred and be continuing with respect to
such transferee at the time Landlord contracts to sell or transfer the
Building to such transferee; (iii) Landlord's right to sell the Building shall
be subject to Tenant's right of first offer provided in Article XXVIII below;
(iv) any sale of the Building shall be subject to Tenant's right of purchase
provided in XXVII below and (v) so long as Tenant and/or its Affiliates are
the sole lessees of the Building, if Landlord transfers or sells the Building,
then Tenant shall have the right, at its option, to assume all of Landlord's
operation, maintenance and repair obligations hereunder in lieu of the
performance thereof by such successor landlord (in which event no management
fee shall be payable to such successor landlord); provided that if Tenant
elects to assume such obligations, then Tenant shall perform such obligations
to the same extent and in the same manner and to the same standards required
of Landlord hereunder; provided further that, prior to the expiration of the
fifth (5th) Lease Year, Tenant shall not have the right to self-manage the
Building as aforesaid during the initial twelve (12) month period following
any such transfer or, if earlier, until the expiration of the fifth (5th)
Lease Year, unless the transferee is an institutional investor or other person
or entity that is not itself, and is not affiliated with another entity that
is, in the business of managing commercial real estate.
14.4 In the event that at any time during the Lease Term Tenant
shall have a claim against Landlord, except as otherwise provided in Section
14.6 hereof, Tenant shall not have the right to deduct the amount allegedly
owed to Tenant from any rent or other sums payable to Landlord hereunder, it
being understood that Tenant's sole remedy for recovering upon such claim
shall be to institute an independent action against Landlord.
14.5 Tenant agrees that in the event Tenant is awarded a money
judgment against Landlord, Tenant's sole recourse for satisfaction of such
judgment shall be limited to execution against Landlord's equity interest in
the Building and the Land at the time of such execution, which, if the
Building has been sold prior to such execution, shall include the net sale
proceeds, after payment of all prior liens, from the sale of the Building. In
no event shall Landlord or any partner or member of Landlord or any other
person be held to have any personal liability for satisfaction of any claims
or judgments that Tenant may have against Landlord.
14.6 In the event Landlord shall be in default with respect to any
service or action that Landlord is obligated to furnish or perform under this
Lease, then Tenant shall have the right to obtain such service or perform such
act on Landlord's account subject to the terms and conditions set forth below.
Notwithstanding anything contained herein to the contrary, Tenant shall have
the rights set forth in this Section 14.6 with respect to services and actions
that materially affect the structure of the Building, materially affect any
multi-tenant common area or
36
materially affect any base-building system only if Tenant gives Landlord and
Landlord's lender(s) (whose identity and notice address shall have been
provided to Tenant) written notice of Landlord's alleged default and Landlord
does not in good faith dispute such alleged default in writing within ten (10)
business days following the delivery of Tenant's notice. Prior to Tenant
undertaking any action to cure or remedy any Landlord default with respect to
any service or action that Landlord is obligated to furnish or perform under
this Lease, Tenant shall first give written notice of such default to Landlord
and Landlord's lender(s) (whose identity and notice address shall have been
provided to Tenant) and allow Landlord and such lender(s) ten (10) business
days following receipt by Landlord and such lender(s) of such written notice
to cure or remedy the condition specified in Tenant's notice; provided,
however, that if such condition cannot be cured within the ten (10) business
day period despite Landlord's exercise of its commercially reasonable efforts,
such period shall be extended for a reasonable additional time, so long as
Landlord or such lender(s) commence to cure such condition within the ten (10)
business day period and proceed diligently thereafter to effect such cure.
Notwithstanding any of the foregoing to the contrary, in the event of a
material failure of, or deficiency in, any of the Essential Building Services
(as hereinafter defined) which renders all or a substantial portion of the
Premises unsafe or unsuitable for the conduct of Tenant's business therein,
the period in which Landlord or such lender(s) must cure such condition prior
to Tenant's having the right to undertake any such action, shall be
forty-eight (48) hours following receipt by Landlord and such lender(s) of
such written notice provided notice is received between the hours of 8:00 a.m.
and 5:00 p.m. Monday through Friday, or between the hours of 8:00 a.m. and
2:00 p.m. on Saturday, excluding legal holidays; provided that, if the
condition cannot be cured within such 48-hour period, then, provided Landlord
or such lender(s) commence to cure such condition within such 48-hour period
and proceed diligently thereafter to effect such cure, then such 48-hour
period shall be extended for such reasonable period as is necessary to effect
such cure using diligent efforts. For purposes hereof, the term "ESSENTIAL
BUILDING SERVICES" shall mean (i) plumbing systems; (ii) electrical service;
(iii) HVAC service; (iv) life-safety systems; (v) elevator service; and (vi)
building access systems. If Landlord or such lender(s) fall to cure or remedy
any such condition within the applicable time period, as set forth above, then
Tenant may cure or remedy such condition and deliver an invoice to Landlord
for such costs and expenses, and Landlord shall pay to Tenant the amount of
such invoice within thirty (30) days after delivery by Tenant. The amount of
such expenses, when paid by Landlord, shall be included within Expenses, to
the extent such costs and expenses are not excluded from the definition of
Expenses. In the event Landlord fails to pay to Tenant when due any sum which
Tenant is entitled to recover from Landlord pursuant to this Section 14.6,
then Tenant shall have the right to a credit against Annual Base Rent in the
amount of any such unpaid sum, together with interest thereon at the Default
Rate (as defined in Section 18.7 below) from the date due until the date paid,
if Tenant has obtained a final, nonappealable court judgment that such sum was
due and payable to Tenant under the terms of this Section 14.6 but was not
paid by Landlord. In the event Tenant seeks to cure or remedy any condition
which gives rise to Tenant's remedies set forth in this Section 14.6, Tenant
shall (i) proceed in accordance with the applicable provisions of this Lease
and all applicable Legal Requirements; (ii) use only such con t ractors,
suppliers, etc. as are duly licensed in the Commonwealth of Virginia and
insured to effect such repairs and who perform such repairs on first-class
buildings in the normal course of their business; (iii) promptly effect such
repairs in a good workmanlike quality and in a first-class manner; and (iv)
use new or other first-quality materials. Landlord agrees to cooperate with
Tenant in the performance of repairs by Tenant's contractors, including
granting access to portions of the Building outside the
37
Premises and making available for inspection and copying any plans that might
be required by such contractors. Nothing in this Section 14.6 is intended to
obviate the provisions of Section 13.2 above.
14.7 Landlord hereby agrees to indemnify, defend on request, and
hold Tenant harmless from and against all costs, damages, claims, liabilities
and expenses (including reasonable attorneys' fees and court costs) suffered
by or claimed against Tenant, directly or indirectly, and not to be covered by
the insurance required to be maintained by Tenant hereunder, based on, arising
out of or resulting from any breach or default by Landlord in the performance
or observance of its covenants or obligations under this Lease, including, but
not limited to, Landlord's obligations pursuant to Section 6.5 hereof;
provided that Landlord's obligations to indemnify and hold harmless Tenant
pursuant to this Section 14.7 shall not include any costs, damages, claims,
liabilities, or expenses suffered by or claimed against Tenant directly based
on, arising out of or resulting from any negligence or willful misconduct of
Tenant or its agents or employees. Notwithstanding anything to the contrary in
this Section 14.7 or elsewhere in this Lease, this Section 14.7 shall not
apply to the holder of any mortgage or deed of trust secured by the Complex or
the Building unless such holder acts as landlord under this Lease or otherwise
owns or holds title to the Building by foreclosure or deed-in-lieu of
foreclosure.
ARTICLE XV
RULES AND REGULATIONS
15.1 Tenant agrees to comply with and observe the rules and
regulations pertaining to the use and occupancy of the Premises or the
Building set forth in Exhibit E hereto, together with all reasonable
amendments thereto as may be promulgated hereafter by Landlord (collectively,
the "RULES AND REGULATIONS"); provided that (i) any such amendment shall not
increase Tenant's monetary obligations hereunder or cause Tenant to incur
significant additional costs or adversely affect the rights expressly granted
to Tenant hereunder or Tenant's use and enjoyment of the Premises, (ii) Tenant
shall be given written notice of such amendment at least thirty (30) days
before it takes effect, (iii) if there is any inconsistency between this Lease
and the Rules and Regulations, this Lease shall govern; and (iv) while Tenant
is the sole tenant of the Building, Tenant shall not be subject to any of the
Rules and Regulations or any amendments thereto, except those that are
necessary to keep the Building in compliance with the standards applicable to
a Class A suburban office building in the Market Area. Without limiting the
generality of clause (iii) above, it is understood and agreed that if the
Rules and Regulations with respect to a particular matter call for stricter
Landlord approval rights than those contained herein, or the Rules and
Regulations are otherwise more restrictive than any provision herein governing
the same matter, then this Lease shall govern and control. Tenant's failure to
keep and observe said Rules and Regulations after applicable notice and
opportunity to cure shall constitute an Event of Default under this Lease.
Landlord shall use reasonable efforts to enforce the Rules and Regulations,
including any exceptions thereto, uniformly and shall not discriminate against
Tenant in the enforcement of the Rules and Regulations; provided that it is
understood that Landlord may grant exceptions to the Rules and Regulations in
circumstances in which it reasonably determines that such exceptions are
warranted.
15.2 This Lease is made subject to the provisions of the Declaration
of Covenants recorded in Deed Book _________ at Page _______, among the land
records of Loudoun
38
County, Virginia and that certain Reciprocal Easement Agreement recorded in
Deed Book _________ at Page _______, among the land records of Loudoun County,
Virginia a copy of each of which is attached hereto as Exhibit C. Landlord and
Tenant agree to observe and to comply with all provisions of said documents
which may be applicable to it. The Reciprocal Easement Agreement governs
certain easements, rights-of-way and obligations of the owners of the land
comprising the Complex deemed necessary or appropriate for utility,
construction, pedestrian pathway, shared parking, stormwater management and
similar purposes.
ARTICLE XVI
DAMAGE OR DESTRUCTION
16.1 If, during the Lease Term, the Premises or the Building are
totally or partially damaged or destroyed from any cause, thereby rendering
the Premises totally or partially inaccessible or unusable by Tenant for its
business, Landlord shall diligently (taking into account the time necessary to
effectuate a reasonably satisfactory settlement with any insurance company
involved) restore, replace and repair the Premises and the Building to
substantially the same condition they were in prior to such damage; provided,
however, if in the reasonable judgment of an independent architect selected by
Landlord the repairs, replacement and restoration cannot be completed within
two hundred seventy (270) days after the occurrence of such damage, including
the time needed for removal of debris, preparation of plans and issuance of
all required governmental permits, then Landlord shall have the right, at its
sole option, to terminate this Lease by giving written notice of termination
to Tenant within sixty (60) days after the occurrence of such damage. If this
Lease is terminated pursuant to the preceding sentence, all rent payable
hereunder shall be equitably apportioned and paid to the date of the
occurrence of such damage or destruction, and neither Landlord nor Tenant
shall have any further rights or remedies as against each other pursuant to
this Lease accruing after the date of termination. The judgment by Landlord's
independent architect as to whether it will take more than or less than 270
days to complete the repairs, replacement and restoration shall be subject to
review and challenge by an independent architect selected by Tenant, as
follows. If Tenant wishes to challenge such determination, an independent
architect selected by Tenant shall have a period of ten (10) business days
following Tenant's receipt of written notice from Landlord of its
determination in which to set forth its determination as to whether it will
take more than or less than 270 days to complete the repairs, replacement and
restoration (without regard to any delay occasioned by such challenge). If
Landlord's and Tenant's architects do not agree, then such architects shall
jointly appoint an independent architect who shall make a determination as to
whether it will take more than or less than 270 days to complete the repairs,
replacement and restoration (without regard to any delay occasioned by
Tenant's challenge), and the determination of such third architect shall be
binding on both Landlord and Tenant. Each party shall be responsible for its
own architect's fees, and shall share jointly in the fees of the third
architect.
16.2 If the repairs and restoration cannot be completed within two
hundred and seventy (270) days after the date of such damage or destruction
(as determined pursuant to Section 16.1 above), but Landlord does not elect to
terminate this Lease pursuant to Section 16.1, then Landlord shall promptly
notify Tenant of such determination. For a period continuing through the tenth
(10th) day after receipt of such notice, Tenant shall have the right to
terminate this Lease by providing written notice thereof to Landlord, in which
event the Lease Term shall end
39
on the date of the giving of such notice as if such date were the date
originally provided herein as the end of the Lease Term. If Tenant does not
elect to terminate this Lease within such period. and provided Landlord does
not elect to terminate this Lease, then Landlord shall proceed diligently to
repair and restore the Premises and the Building.
16.3 Notwithstanding anything to the contrary contained herein, in
the event the Premises are damaged during the last two (2) years within the
Lease Term, and if the period of time reasonably projected by Landlord for
restoration of the damage (taking into account the time necessary to
effectuate a satisfactory settlement with any insurance company involved)
exceeds one-fourth (1/4) of the time remaining in the Lease Term as of the
date of the damage, then Landlord and Tenant shall each have the right to
terminate this Lease by written notice delivered to the other party within
fifteen (15) days after Landlord notifies Tenant in writing of the projected
restoration period; provided, however, that if (i) Landlord exercises its
right of termination under this Section 16.3, and (ii) at such time, Tenant
has a right to renew the Lease Term pursuant to Article XXV hereof, and (iii)
Tenant notifies Landlord in writing, within fifteen (15) days following the
delivery of Landlord's termination notice, that Tenant is exercising its right
to renew the Lease Term, and (iv) pursuant to Article XXV, Landlord and Tenant
either reach agreement concerning the Market Rent applicable to the Renewal
Term or cause such determination to be made by the means described in Section
25.3(b), then Landlord's termination notice shall be deemed nullified and this
Lease shall continue in full force and effect through the remainder of the
Lease Term (as thus renewed).
16.4 If this Lease is not terminated in accordance with the
provisions of this Article XVI, until the repair and restoration of the
Premises is completed, Tenant shall be required to pay Annual Base Rent and
additional rent only for that part of the Premises that Landlord and Tenant
mutually agree, in their reasonable judgment, that Tenant is able to use (as
such use is contemplated by this Lease) while repairs are being made, based on
the ratio that the amount of usable rentable area bears to the total rentable
area in the Premises. In addition to any abatement granted pursuant to the
previous sentence, Tenant's abatement period shall continue until Tenant has
been given reasonably sufficient time, and sufficient access to the Premises,
to (i) rebuild any portion of the Premises it is required to rebuild, (ii)
install its property, furniture, fixtures, cabling and equipment, and (iii)
move in over a period of seven (7) consecutive days. The foregoing additional
abatement period shall extend for a period not to exceed sixty (60) days
following the date Landlord's repair and restoration is substantially
complete. In addition, the Lease Term shall be extended for the period of time
during which all or any portion of the rent is abated pursuant to this Section
16.4. Subject to the terms of Section 16.5 below, Landlord shall bear the
costs and expenses of repairing and restoring the Premises.
16.5 If Landlord repairs and restores the Premises as provided in
this Article XVI, Landlord shall not be required to repair or restore any
decorations, alterations or Improvements to the Premises previously made by or
at the expense of Tenant or any trade fixtures, furnishings, equipment or
personal property belonging to Tenant. It shall be Tenant's sole
responsibility to repair and restore all such items at Tenant's discretion.
40
ARTICLE XVII
CONDEMNATION
17.1 If (i) more than twenty percent (20%) of the rentable area of
the portion of the Premises comprised of space leased by Tenant in the
Building (the "BUILDING PREMISES"), or (ii) the use or occupancy of more than
twenty percent (20%) of the rentable area of the Building Premises, shall be
taken or condemned by any governmental or other authority having the power of
eminent domain for any public or quasi-public use or purpose (including a sale
thereof under threat of such a taking) (each such event being referred to
herein as a "TAKING"), then this Lease shall terminate on the date title
thereto (or the right to use or occupy, as appropriate) vests in such
governmental or quasi-governmental authority, and all Annual Base Rent and
additional rent payable hereunder shall be equitably apportioned as of such
date. This Lease shall similarly terminate if there is a Taking of more than
twenty percent (20%) of the minimum necessary parking for the Building
according to the approved Site Plan that cannot be replaced by substitute
parking spaces on other portions of the Land. If less than twenty percent
(20%) of the rentable area of the Building Premises or such minimum necessary
parking area or the use or occupancy thereof is condemned, then this Lease
shall continue in full force and effect as to the part of the Building
Premises and the Land not condemned, except that (i) as of the date title (or
the right to use or occupy, as appropriate) vests in such authority, Annual
Base Rent and Expenses with respect to the part of the Building Premises and
the Land condemned shall be equitably reduced for the balance of the Lease
Term, and (ii) Landlord shall, at its cost, restore the Building Premises to
create, to the extent reasonably possible, a single unit of space, including
(but not limited to) building or moving demising walls, suite entries, heating
and air conditioning equipment, and utility lines.
17.2 All awards, damages and other compensation paid by the
condemning authority on account of such Taking shall belong to Landlord, and
Tenant hereby assigns to Landlord all rights to such awards, damages and
compensation. Tenant agrees not to make any claim against Landlord or the
condemning authority for any portion of such award or compensation
attributable to damages to the Premises, the value of the unexpired term of
this Lease, the loss of profits or goodwill, leasehold improvements or
severance damages. Nothing contained herein, however, shall prevent Tenant
from pursuing a separate claim against the condemning authority for the value
of furnishings, equipment and trade fixtures installed in the Premises at
Tenant's expense and for relocation expenses, provided that such claim does
not in any way diminish the award or compensation payable to or recoverable by
Landlord in connection with such taking or condemnation.
ARTICLE XVIII
DEFAULT
18.1 The occurrence of any of the following shall constitute an
Event of Default by Tenant under this Lease:
(a) If Tenant shall fail to pay any installment of Annual
Base Rent or additional rent or any other payment required by this Lease when
due and such failure shall continue uncured for a period of ten (10) days
after Landlord notifies Tenant of such failure in writing; provided, however,
that after Landlord has given Tenant two (2) such written notices in
41
any twelve (12)-month period, Tenant shall be in default if any such payment
accruing during such twelve (12)-month period (and after the second of such
notices) is not made within ten (10) days after such payment is due (without
the necessity of any notice being sent by Landlord).
(b) If Tenant shall violate or fail to perform any other
term, condition, covenant or agreement to be performed or observed by Tenant
under this Lease and such violation or failure shall continue uncured for a
period of thirty (30) days after Landlord notifies Tenant in writing of such
failure. If such violation or failure is not capable of being cured within
such thirty (30)-day period, Tenant shall not be deemed to be in default
hereunder if Tenant commences curative action within such thirty (30)-day
period and proceeds diligently and in good faith thereafter to cure such
violation or failure until completion.
(c) An Event of Bankruptcy as defined in Article XIX hereof.
18.2 If there shall occur an Event of Default under this Lease,
including without limitation an Event of Default prior to the Lease
Commencement Date, Landlord shall have the right, at its sole option, to
terminate this Lease. In addition, with or without terminating this Lease,
Landlord may re-enter, terminate Tenant's right of possession, and take
possession of the Premises. The provisions of this Article XVIII shall operate
as a notice to quit, and Tenant waives any other notice to quit or notice of
Landlord's intention to re-enter the Premises or terminate this Lease. If
necessary, Landlord may proceed to recover possession of the Premises under
and by virtue of the laws of the Commonwealth of Virginia, or by such other
proceedings, including re-entry and possession, as may be applicable. If
Landlord terminates this Lease and/or terminates Tenant's right of possession,
then everything contained in this Lease on the part of Landlord to be done and
performed shall cease without prejudice, however, to the right of Landlord to
recover from Tenant all rent and other sums due under this Lease. Whether or
not this Lease and/or Tenant's right of possession is terminated by reason of
Tenant's default, Landlord shall have the right, after any Event of Default
occurs but only during the continuation thereof, to grant or withhold any
consent or approval pursuant to this Lease in its sole and absolute
discretion. Landlord agrees to use reasonable efforts to relet the Premises
for such rent and upon such terms as are not unreasonable under the
circumstances, and if the full rental provided herein plus the reasonable
costs, expenses and damages hereafter described shall not be realized by
Landlord, Tenant shall be liable for all damages sustained by Landlord,
including, without limitation, deficiency in Annual Base Rent and additional
rent, reasonable attorneys' fees, brokerage fees, and the expenses of placing
the Premises in the condition that would have been required if the date of
termination had been the date of expiration of the Lease Term. Tenant
expressly acknowledges that Landlord's agreement to use reasonable efforts to
relet the Premises shall in no event limit, restrict or prejudice in any way
Landlord's and Landlord's affiliates' and agents' rights to lease other space
in the Building, if any, or the Complex prior to reletting the Premises.
Subject to Landlord's obligations pursuant to the preceding two sentences,
Landlord shall in no way be responsible or liable for any failure to relet the
Premises or any part thereof, or any failure to collect any rent due or
accrued upon such reletting, to the end and intent that Tenant may be liable
for the Annual Base Rent, additional rent, and any and all other items of cost
and expense which Tenant shall have been obligated to pay throughout the
remainder of the Lease Term. Any damages or loss of rent sustained by Landlord
may be recovered by Landlord, at Landlord's option, at the time of the
reletting, or in separate actions, from time to time, as said damage shall
have been made more easily ascertainable by successive
42
relettings, or, at Landlord's option, may be deferred until the expiration of
the Lease Term, in which event Tenant hereby agrees that the cause of action
shall not be deemed to have accrued until the date of expiration of the Lease
Term. The provisions contained in this Section 18.2 shall not prevent the
enforcement of any claim Landlord may have against Tenant for anticipatory
breach of this Lease.
18.3 As an alternative to recovering damages on account of rental
deficiencies on a periodic basis as set forth in Section 18.2 above, Landlord
may elect to hold Tenant liable from and after the date of termination of this
Lease, for the Annual Base Rent, additional rent and all other items of cost
and expenses that will accrue under the Lease until the expiration of the
Lease Term. In the event Landlord elects to hold Tenant liable for the Annual
Base Rent, additional rent and all other items of cost and expenses including,
without limitation, brokers' and attorneys' fees (the "DEFAULT AMOUNT") at the
time of reletting of the Premises or if Landlord is unable to relet the
Premises at the time this Lease is terminated pursuant to this Article XVIII,
then Tenant shall pay to Landlord (i) the Default Amount minus (ii) any Annual
Base Rent, additional rent and other sums which Tenant proves by a
preponderance of the evidence would be received by Landlord upon commercially
reasonable efforts to relet the Premises through the expiration of the
scheduled Lease Term. The Default Amount shall be discounted at a rate equal
to the then current "Prime Rate" as published in the Money Rates section of
The Wall Street Journal and such amount shall be payable to Landlord in a lump
sum on demand, it being understood that upon payment of such liquidated and
agreed upon final damages, Tenant shall be released from further liability
under this Lease with respect to the period after the date of such payment
and, that if Tenant fails to pay such amount to Landlord within five (5) days
thereafter, Landlord may bring suit to collect any such damages at any time
after an Event of Default shall have occurred. In the event Landlord relets
the Premises together with other premises or for a term extending beyond the
scheduled expiration of the Lease Term, it is understood that Tenant will not
be entitled to apply any Annual Base Rent, additional rent or other sums
generated or projected to be generated by either such other premises or in the
period extending beyond the scheduled Lease Term (collectively, the "EXTRA
RENT") against Landlord's damages. Similarly in proving the amount that would
be received by Landlord upon a reletting of the Premises set forth in clause
(ii) above, Tenant shall not take into account the Extra Rent. Nothing herein
shall be construed to affect or to prejudice Landlord's right to prove and
claim in full unpaid rent accrued prior to termination of this Lease and
Tenant's vacating the Premises. If Landlord is entitled or Tenant is required
pursuant to any provision hereof to take any action upon the termination of
the Lease Term, then Landlord shall be entitled and Tenant shall be required
to take such action also upon the termination of Tenant's right of possession.
18.4 All rights and remedies of Landlord set forth herein are in
addition to all other tights and remedies available to Landlord pursuant to
the Phase II Development Agreement, at law or in equity. All rights and
remedies available to Landlord hereunder, pursuant to the Phase II Development
Agreement, or at law or in equity are expressly declared to be cumulative. The
exercise by Landlord of any such right or remedy shall not prevent the
concurrent or subsequent exercise of any other right or remedy; provided that
Landlord may not recover more than once for the same damages. No delay in the
enforcement or exercise of any such right or remedy shall constitute a waiver
of any default by Tenant hereunder or of any of Landlord's rights or remedies
in connection therewith. Landlord shall not be deemed to have waived any
default by Tenant hereunder unless such waiver is set forth in a written
instrument signed by
43
Landlord. If Landlord waives in writing any default by Tenant, such waiver
shall not be construed as a waiver of any covenant, condition or agreement set
forth in this Lease except as to specific circumstances described in such
written waiver.
18.5 If Landlord shall institute proceedings against Tenant and a
compromise or settlement thereof shall be made, the same shall not constitute
a waiver of default or of any other covenant, condition or agreement set forth
herein, nor of any of Landlord's rights hereunder, except to the extent agreed
by Landlord in writing in connection with such compromise or settlement.
Neither the payment by Tenant of a lesser amount than the installments of base
rent, additional rent or of any sums due hereunder nor any endorsement or
statement on any check or letter accompanying a check for payment of rent or
other sums payable hereunder shall be deemed an accord and satisfaction, and
Landlord may accept such check or payment without prejudice to Landlord's
right to recover the balance of such rent or other sums or to pursue any other
remedy available to Landlord. Notwithstanding any request or designation by
Tenant, Landlord may apply any payment received from Tenant to any payment
then due. No re-entry by Landlord, and no acceptance by Landlord of keys from
Tenant, shall be considered an acceptance of a surrender of this Lease.
18.6 If Tenant defaults in the making of any payment or in the doing
of any act herein required to be made or done by Tenant, then Landlord may
(after giving Tenant the appropriate notice and opportunity to cure specified
in Section 18.1 hereof), but shall not be required to, make such payment or do
such act. If Landlord elects to make such payment or do such act, all
reasonable costs and expenses incurred by Landlord, plus interest thereon at
the rate per annum which is two percent (2%) higher than the prime rate then
being quoted in The Wall Street Journal from the date paid by Landlord to the
date of payment thereof by Tenant, shall constitute additional rent hereunder
and shall be immediately paid by Tenant to Landlord; provided, however, that
nothing contained herein shall be construed as permitting Landlord to charge
or receive interest in excess of the maximum rate then allowed by law. The
taking of such action by Landlord shall not be considered a cure of such
default by Tenant prevent Landlord from pursuing any remedy it is otherwise
entitled to in connection with such default.
18.7 If Tenant fails to make any payment of Annual Base Rent or of
additional rent on or before the date such payment is due and payable, Tenant
shall pay to Landlord a late charge of five percent (5%) of the amount of such
payment. In addition, such payment shall bear interest at the rate per annum
which is two percent (2%) higher than the prime rate then being quoted in The
Wall Street Journal (the "DEFAULT RATE"), from the date such payment became
due to the date of payment thereof by Tenant; provided, however, that nothing
contained herein shall be construed as permitting Landlord to charge or
receive interest in excess of the maximum rate then allowed by law.
Notwithstanding any of the foregoing to the contrary, Landlord hereby waives
the imposition of such late charge and the interest payable on late payments
with respect to the first two (2) such late payments to occur in any twelve
(12) month period, provided Tenant in fact cures the default within ten (10)
days following Tenant's receipt of notice of such default. Such late charge
and interest shall constitute additional rent due and payable hereunder with
the next installment of Annual Base Rent due hereunder.
18.8 Notwithstanding anything in this Lease to the contrary, in the
event (i) an Event of Default shall occur under this Lease and (ii) Tenant
shall thereafter tender performance of the
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obligation that gave rise to such Event of Default and (iii) Landlord, in its
discretion, shall agree to accept such performance as curing the Event of
Default, then, for all purposes of this Lease, no Event of Default shall
thereafter be deemed to exist. Notwithstanding any of the foregoing to the
contrary, Landlord shall be obligated to accept Tenant's cure of the first
(1st) Event of Default to occur and be cured within any twelve (12) month
period provided such cure, when tendered, includes payment of all interest,
late charges, and other costs of enforcement incurred by Landlord on account
of such default (including, but not limited to, reasonable attorneys' fees).
18.9 (a) Landlord shall be in default under this Lease if (i) any
of Landlord's representations, warranties or covenant contained in this Lease
proves to be untrue in any material respect, or (ii) Landlord fails to perform
any covenant or agreement to be performed by Landlord hereunder and with
respect to clauses (i) and (ii) Landlord either: (A) fails promptly after
written notice from Tenant to commence to cure such failure or fails to
complete such cure diligently and within thirty (30) days after Tenant's
notice or (B) if such failure is of a type that cannot with the exercise of
reasonable diligence be cured within such thirty (30) day period, either fails
promptly to commence its cure during such period or fails thereafter to use
its best efforts to complete its cure in as short a time as possible.
(b) Except as otherwise expressly limited in this Lease, in
the event a material default by Landlord (as defined below) occurs, upon
written notice of such material default to Landlord, Tenant shall have the
right to terminate this Lease effective on the date specified in such notice,
which date shall not be not less than three (3) months and not more than one
(1) year after the date of such notice, provided that Landlord's default has
not been cured by such date. As used herein, the term "material" means a
breach or failure by Landlord, to cure or if not possible of cure to commerce
curing and; thereafter, to diligently pursue the cure of such default within
thirty (30) days after Landlord's receipt of Tenant's notice specifying in
reasonable detail such failure and such failure, affects in a material,
adverse way the ability of Tenant to use and occupy the Premises for any of
the purposes permitted hereunder or to exercise its rights hereunder.
18.10 For so long as Orbital Sciences Corporation or any Affiliate of
Orbital Sciences is the tenant under this Lease, Landlord hereby releases and
waives any and all liens or security interests (including any statutory liens)
Landlord may have upon any of Tenant's Personal Property, as herein defined.
Landlord agrees that to the extent such liens or security interests may not be
waived by Landlord, any such liens or security interests shall at all times be
subject and subordinate to any security interests and liens granted by Tenant
which may now or hereafter affect Tenant's Personal Property, and to all
renewals, modifications, consolidations, replacements and extensions thereof.
This clause shall be self-operative and nor further instrument of release,
waiver or subordination shall be required to affirm to any secured party the
effect of this clause. Notwithstanding the foregoing, in confirmation of such
release, waiver and subordination, Landlord shall at Tenant's written request,
execute and deliver to Tenant within twenty (20) days of Landlord's receipt of
Tenant's request, any reasonable requisite or appropriate certificate, waiver,
release or subordination agreement or other document that may be reasonably
requested by Tenant or other third party requiring such certificate waiver,
release or subordination agreement or document. "Tenant's Personal Property"
shall mean the leasehold improvements, good, wares, merchandise, inventory,
furniture, trade fixtures, machinery, equipment, telephones, telephone
systems, inside wire, business records, accounts receivable and
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other personal property of Tenant in or about the Premises or that may be
placed or kept therein during the Lease Term and also upon all proceeds of any
insurance which may accrue to Tenant by reason of damage to or destruction of
any such property, chattels or merchandise.
ARTICLE XIX
BANKRUPTCY
19.1 The following shall be an Event of Bankruptcy under this Lease:
(a) Tenant's becoming insolvent, as that term is defined in
Title 11 of the United States Code (the "BANKRUPTCY CODE"), or under the
insolvency laws of any State, District, Commonwealth or territory of the
United States that are applicable to Tenant (the "INSOLVENCY LAWS");
(b) The filing of a voluntary petition under the provisions
of the Bankruptcy Code or Insolvency Laws;
(c) The filing of an involuntary petition against Tenant as
the subject debtor under the Bankruptcy Code or Insolvency Laws, which either
(i) is not dismissed within ninety (90) days of filing or (ii) results in the
issuance of an order or relief against the debtor; or
(d) Tenant's making or consenting to an assignment for the
benefit of creditors or a common law composition of creditors.
19.2 (a) Upon occurrence of an Event of Bankruptcy, Landlord
shall have all rights and remedies available to Landlord pursuant to Article
XVIII, provided that while a case in which Tenant is the subject debtor under
the Bankruptcy Code is pending and only for so long as Tenant or its Trustee
in Bankruptcy (hereinafter referred to as "TRUSTEE") is in compliance with the
provisions of Section 19.2(b), (c) and (d) below, Landlord shall not exercise
its rights and remedies pursuant to Article XVIII.
(b) In the event Tenant becomes the subject debtor in a case
pending under the Bankruptcy Code, Landlord's right to terminate this Lease
pursuant to Section 19.2(a) shall be subject to the rights of Trustee to
assume or assign this Lease. Trustee shall not have the right to assume or
assign this Lease unless Trustee promptly (i) cures all defaults under this
Lease, (ii) compensates Landlord for monetary damages incurred as a result of
such defaults, and (iii) provides adequate assurance of future performance on
the part of Tenant as debtor in possession or on the part of the assignee
tenant
(c) Landlord and Tenant hereby agree in advance that
adequate assurance of future performance, as used in Section 19.2(b) above,
shall mean that all of the following minimum criteria must be met: (i)
Tenant's gross receipts in the ordinary course of business during the thirty
(30) day period immediately preceding the initiation of the case under the
Bankruptcy Code must be at least two (2) times greater than the next monthly
installment of annual base rent and additional rent due under this Lease; (ii)
both the monthly average and median of Tenant's gross receipts in the ordinary
course of business during the six month period immediately preceding the
initiation of the case under the Bankruptcy Code must be at least two
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(2) times greater than the next monthly installment of annual base rent and
additional rent due under this Lease; (iii) Trustee must deliver to the Trustee
adequate security in commercially reasonable amounts said amount to be held by
Trustee in escrow, without interest, until either Trustee or Tenant defaults in
its payment of rent or other obligations under this Lease (whereupon Landlord
shall have the right to draw on such escrowed funds) or until the expiration of
this Lease (whereupon the funds shall be returned to Trustee or Tenant); (iv)
Tenant must pay its estimated pro rata share of the cost of all services
provided by Landlord (whether or not previously included as a part of the annual
base rent) in accordance with the provisions of Article IV hereof; (v) Trustee
must agree that no prohibited use shall be permitted; and (vi) Tenant or Trustee
must agree to redeposit with the Trustee at any time Landlord is authorized to
and does draw on the escrow account referred to in (iii) hereof the amount
necessary to restore such escrow account to the original level.
(d) In the event Tenant is unable to (i) cure its defaults
within any applicable notice and cure period, (ii) pay the rent due under this
Lease and all other payments required of Tenant under this Lease on time (or
within five (5) days of the due date), or (iii) meet the criteria and
obligations imposed by Section 19.2(c) above, Tenant agrees in advance that it
has not met its burden to provide adequate assurance of future performance and
this Lease may be terminated by Landlord in accordance with Section 19.2(a)
above.
ARTICLE XX
SUBORDINATION; MORTGAGES
20.1 This Lease is subject and subordinate to the lien of any and all
mortgages (which term "MORTGAGES" shall include both construction and permanent
financing and shall include deeds of trust and similar security instruments)
which may now or hereafter encumber the Premises, and to all and any renewals,
extensions, modifications, recastings or refinancings thereof; provided,
however, that the effectiveness of such subordination is subject to the
condition that Landlord obtain from any holder of any such mortgage or deed of
trust on the Premises a non-disturbance agreement, to the end and intent that as
long as Tenant pays all rent when due and punctually observes all other
covenants and obligations on its part to be observed under this Lease (subject
to applicable notice and cure provisions), the terms and conditions of this
Lease shall continue in full force and effect and Tenant's rights under this
Lease and its possession, use and occupancy of the Premises shall not be
disturbed during the Lease Term by the holder of such mortgage or deed of trust
or by any purchaser upon foreclosure of such mortgage or deed of trust. At any
time after the execution of this Lease, the holder of any mortgage to which this
Lease is subordinate shall have the right to declare this Lease to be superior
to the lien of such mortgage, and Tenant agrees to execute all documents
required by such holder in confirmation thereof.
20.2 In confirmation of the foregoing subordination and
non-disturbance provisions and subject to the provisions of Section 20.1 above,
Tenant shall, within fifteen (15) days of its receipt of a request therefor,
promptly execute and deliver any reasonable and appropriate certificate or other
document evidencing such subordination. Tenant agrees that neither the
institution of any suit, action or other proceeding by the holder of any
mortgage on the Premises to realize upon such mortgage holder's interest in the
Premises, nor any sale of the Premises pursuant to the provisions of the
mortgage in favor of such mortgage holder, shall, by operation
47
of law or otherwise, result in the cancellation or termination of this Lease or
of the obligations of Tenant hereunder, and that Tenant shall attorn to the
purchaser at such foreclosure sale and shall recognize such purchaser as the
landlord under this Lease. Tenant further agrees that for the purposes of this
Section 20.2, the term "PURCHASER" or "PURCHASER AT A FORECLOSURE SALE" shall
mean, without limitation, a purchaser at a foreclosure sale affecting the
Premises or the holder of any mortgage on the Premises. Tenant agrees that upon
such attornment, such purchaser shall not (a) be bound by any rent credits or
payments of Annual Base Rent for more than one (1) month in advance, (b) be
bound by the amendment of any material term of this Lease (e.g. an amendment
which decreases the Annual Base Rent to be paid by Tenant under this Lease) made
without the consent of any lender providing financing for the Premises of which
Tenant has notice prior to entering into the amendment, (c) be liable for
damages for any act or omission of any prior landlord; or (d) be subject to any
offsets or defenses which Tenant might have against any prior landlord;
provided, however, that after succeeding to Landlord's interest under this
Lease, such purchaser shall perform in accordance with the terms of this Lease
all obligations of Landlord arising after the date such purchaser acquires title
to the Premises. Upon request by such purchaser, Tenant shall execute and
deliver an instrument or instruments confirming its attornment.
20.3 (a) After Tenant receives notice in writing from any person,
firm or other entity that it holds a mortgage or deed of trust on the Premises
or the Land requesting that copies of notices from Tenant to Landlord be sent to
it, no notice from Tenant to Landlord alleging any default by Landlord shall be
effective unless and until a copy of the same is given to such holder or Trustee
at the last address of such holder or Trustee; that shall have been furnished to
Tenant. The curing of any of Landlord's defaults by such holder or Trustee shall
be treated as performance by Landlord.
(b) In addition to the time afforded Landlord for the
curing of any default, except with respect to the time periods set forth in
Sections 13.2 and 14.6, any such holder or Trustee shall have an additional
fifteen (15) business days after the expiration of the period allowed to
Landlord for the cure of any such default within which to commence a cure and
such additional time as may be reasonable necessary to effect the cure using
diligent efforts.
20.4 In the event that any lender providing construction or permanent
financing or any refinancing for the Premises or the Land requires, as a
condition of such financing, that modifications to this Lease be obtained, and
provided that such modifications (i) are reasonably acceptable to Tenant, (ii)
do not adversely affect in a material manner Tenant's rights or obligations
hereunder, including its use of the Premises as herein permitted, (iii) do not
increase the rent or other sums to be paid by Tenant hereunder, (iv) do not
adversely affect in a material manner Tenant's use of the Premises as herein
permitted and (v) do not reduce or limit in a material manner Landlord's
obligations under this Lease, Landlord may submit to Tenant a written amendment
to this Lease incorporating such required changes, and Tenant hereby covenants
and agrees to execute, acknowledge and deliver such amendment to Landlord within
fifteen (15) days of Tenant's receipt thereof with such modifications as may
reasonably agreed upon by Landlord, Tenant and the lender requiring such
modifications.
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ARTICLE XXI
HOLDING OVER
21.1 In the event that Tenant shall not immediately surrender the
Premises on the date of the expiration of the Lease Term, Tenant shall become a
tenant by the month. During such holdover period, Tenant shall pay a rent equal
to one hundred fifty percent (150%) of the Annual Base Rent in effect during the
last month of the Lease Term. Said monthly tenancy shall commence on the first
day following the expiration of the Lease Term. As a monthly tenant, (i) Tenant
shall be subject to all the terms, conditions, covenants and agreements of this
Lease; (ii) Tenant shall give to Landlord at least thirty (30) days' written
notice of any intention to vacate the Premises; and (iii) Tenant shall be
entitled to thirty (30) days' written notice to quit the Premises, unless Tenant
is in default hereunder, in which event Tenant shall not be entitled to any
notice to quit, the usual thirty (30) days' notice to quit being hereby
expressly waived. Notwithstanding the foregoing provisions of this Section 21.1,
in the event that Tenant shall hold over after the expiration of the Lease Term,
and if Landlord shall desire to regain possession of the Premises promptly at
the expiration of the Lease Term, then at any time prior to Landlord's
acceptance of rent from Tenant as a monthly tenant hereunder, Landlord, at its
option, may forthwith re-enter and take possession of the Premises by any legal
process in force in the Commonwealth of Virginia.
ARTICLE XXII
COVENANTS OF LANDLORD
22.1 Landlord represents and covenants that it has the right to make
this Lease for the term aforesaid, and Landlord covenants that Tenant shall,
during the term hereby created, freely, peaceably and quietly occupy and enjoy
the full possession of the Premises without disturbance, molestation or
hindrance by any person or entity whatever claiming an interest in the Premises
prior or superior to Tenant's. Nothing in this Section 22.1, however, shall
prevent Landlord from exercising any remedy available to it on account of an
Event of Default by Tenant under this Lease. Landlord and Tenant each
acknowledge and agree that Tenant's leasehold estate in and to the Premises
vests on the date this Lease is fully executed by Landlord and Tenant,
notwithstanding that the Lease Term will not commence until a future date.
22.2 Landlord hereby reserves to itself and its successors and
assigns the following rights (all of which are hereby consented to by Tenant):
(i) if imposed by Legal Requirements in Landlord's reasonable judgment after
consultation with Tenant, if Tenant and/or its Affiliates are the lessees of
more than fifty-one percent (51%) of the Premises, to change the street address
and/or the arrangement and/or location of entrances, passageways, doors,
doorways, corridors, elevators, stairs, toilets, or other public parts of the
Building; and (ii) subject to compliance with Landlord's obligations pursuant to
Sections 8.1 and 11.1, if imposed by Legal Requirements or if necessary for the
proper functioning of the Premises after consultation with Tenant, if Tenant
and/or its Affiliates are the lessees of more than fifty-one percent (51%) of
the Premises, to erect, use and maintain pipes and conduits in and through the
Premises; and (iii) to establish and maintain field offices in the Building for
site engineers, property management and maintenance personnel comprising, in the
aggregate, approximately 600 rentable square feet; and in number and locations
that are typical for Class A suburban office buildings in the Market Area
provided that, subject to the foregoing standards, Tenant shall have approval
rights over the particular size
49
and locations of such facilities, which approval shall not be unreasonably
withheld, conditioned or delayed. Provided Landlord acts reasonably and
diligently and in a manner not likely to materially, adversely affect Tenant's
continuing and reasonably uninterrupted business functions, Landlord may
exercise any or all of the foregoing rights without being deemed to be guilty of
an eviction, actual or constructive, or a disturbance or interruption of the
business of Tenant or of Tenant's use or occupancy of the Premises and without
diminishing the rent payable hereunder.
ARTICLE XXIII
PARKING
23.1 Parking shall be available in the surface parking areas
appurtenant to the Building. Landlord and Tenant shall agree upon reasonable
access controls and operating policies that will govern the parking areas, all
of which shall be consistent with the standards of Class A suburban office
buildings and shall comply with all Legal Requirements (including, but not
limited to, those set forth in the Americans with Disabilities Act and similar
such laws in effect from time to time). Vehicles may be parked at any time free
of charge (during the initial Lease Term), seven (7) days per week, twenty-four
(24) hours per day. Landlord and Tenant agree that it is the parties' intention
that parking shall be made available to Tenant in a ratio of approximately four
(4) vehicles for every 1,000 gross square foot of Building area. Notwithstanding
anything in this Section 23.1 to the contrary, in no event shall Landlord be
obligated to provide Tenant more parking spaces than shown on the Site Plan for
the Building.
23.2 Subject to the provisions of Sections 14.1 and 14.7 hereof, it
is understood and agreed that Landlord does not assume any responsibility for,
and shall not be held liable for, any damage or loss to any automobiles parked
in the parking area or to any personal property located therein, or for any
injury sustained by any person in or about the parking areas.
ARTICLE XXIV
REPRESENTATIONS AND WARRANTIES
24.1 Landlord hereby warrants and represents to Tenant as follows:
(a) Landlord is a limited partnership, validly existing and
in good standing under the laws of the State of Delaware.
(b) Landlord has the full capacity, right, power and
authority to execute and deliver this Lease. The individuals signing this Lease
and all other documents executed or to be executed pursuant hereto on behalf of
Landlord are and shall be duly authorized to sign the same on Landlord's behalf
and to bind Landlord thereto.
(c) Landlord has not (1) made a general assignment for the
benefit of creditors, (ii) filed any involuntary petition in bankruptcy or
suffered the filing of any involuntary petition by Landlord's creditors, (iii)
suffered the appointment of a receiver to take possession of all or
substantially all of Landlord's assets, (iv) suffered the attachment or other
judicial seizure of all, or substantially all, of Landlord's assets, (v)
admitted in writing its inability to pay its debts as they come due, or (vi)
made an offer of settlement, extension or composition to its creditors
generally.
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(d) Neither the execution of this Lease nor the
consummation of the transaction contemplated hereby will (i) conflict with, or
result in a breach of, the terms, conditions or provisions of, or constitute a
default under, any agreement or instrument to which Landlord is a party or (ii)
violate any restriction or court order to which Landlord is subject.
24.2 Tenant hereby warrants and represents to Landlord as follows:
(a) Tenant is a corporation, validly existing and in good
standing under the laws of Delaware and is authorized to do business as a
foreign corporation in the Commonwealth of Virginia.
(b) Tenant has the full capacity, right, power and
authority to execute and deliver this Lease. The individuals signing this Lease
and all other documents executed or to be executed pursuant hereto on behalf of
Tenant are and shall be duly authorized to sign the same on Tenant's behalf and
to bind Tenant thereto.
(c) Tenant has not (i) made a general assignment for the
benefit of creditors, (ii) filed any involuntary petition in bankruptcy or
suffered the filing of any involuntary petition by Tenant's creditors, (iii)
suffered the appointment of a receiver to take possession of all or
substantially all of Tenant's assets, (iv) suffered the attachment or other
judicial seizure of all, or substantially all, of Tenant's assets, (v) admitted
in writing its inability to pay its debts as they come due, or (vi) made an
offer of settlement, extension or composition to its creditors generally.
(d) Neither the execution of this Lease nor the
consummation of the transaction contemplated hereby will (i) conflict with, or
result in a breach of, the terms, conditions or provisions of, or constitute a
default under, any agreement or instrument to which Tenant is a party or (ii)
violate any restriction or court order to which Tenant is subject.
24.3 Neither Landlord nor Tenant will intentionally cause or permit
any action to be taken which would cause any of their respective foregoing
representations or warranties to be untrue as of the Lease Commencement Date.
ARTICLE XXV
RENEWAL
25.1 Landlord hereby grants to Tenant three (3) successive five
(5)-year renewal options, each exercisable at Tenant's option and subject to the
conditions described below (each such five-year term, if exercised, being
referred to herein as a "RENEWAL TERM"). If exercised, and if the conditions
applicable thereto have been satisfied, the first Renewal Term shall commence
immediately following the end of the Lease Term provided in this Lease (as it
may be extended pursuant to Section 2.3 hereof), the second Renewal Term shall
commence immediately following the end of the first Renewal Term, and the third
Renewal Term shall commence immediately following the end of the second Renewal
Term. The right of renewal herein granted to Tenant with respect to each Renewal
Term shall be subject to, and shall be exercised in accordance with, the
following terms and conditions:
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(a) Tenant shall exercise its right of renewal with respect
to each Renewal Term by giving Landlord written notice thereof not earlier than
twenty-four (24) months and not later than twelve (12) months prior to the
expiration date of the then-current Lease Term. Tenant's exercise of its right
of renewal shall be irrevocable (except as provided in Section 25.3(a) below)
and shall be binding upon both Landlord and Tenant.
(b) In the event a renewal option notice is not given
timely, Tenant's right of renewal with respect to such Renewal Term shall lapse
and be of no further force or effect.
(c) If a monetary or material non-monetary Event of Default
has occurred hereunder and has continued for ten (10) business days and is
continuing uncured on the date a renewal option notice is sent or on the date
such Renewal Term is to commence, then, at Landlord's option, to be exercised
within fifteen (15) business days after the expiration of the applicable cure
period for such default, such Renewal Term shall not commence and the Lease Term
shall expire on the date the Lease Term would have expired without such renewal.
(d) In the event this Lease is not renewed for any Renewal
Term, Tenant's right to renew this Lease for any subsequent Renewal Terms shall
also lapse.
25.2 During any Renewal Term, all the terms, conditions, covenants
and agreements set forth in this Lease shall continue to apply and be binding
upon Landlord and Tenant, except that: (1) the Annual Base Rent shall be
calculated at the beginning of each Renewal Term as provided in this Article XXV
so that the Annual Base Rent payable during each Lease Year of such Renewal Term
shall be equal to ninety-five percent (95%) of Market Rent for such Renewal
Term, including a market-based formula for adjusting Market Rent for each Lease
Year of each Renewal Term; (2) Tenant shall pay for parking if such is the
market standard at the time it exercises its renewal option or if Tenant does
not wish to pay for parking the Annual Base Rent shall be adjusted to take into
account that Tenant is not paying for parking when it is market standard at the
time the Annual Base Rent is calculated for Tenant to do so; and (3) in no event
shall Tenant have the right to renew the Lease Term beyond the expiration of the
third Renewal Term provided for in Section 25.1.
25.3 "MARKET RENT" shall be the fair market amount of "net" Annual
Base Rent (including escalations if escalations are customary for comparable
facilities in the Market Area, as defined below) determined as follows:
(a) Following the giving of the renewal option notice,
Landlord and Tenant shall commence negotiations concerning the amount of Annual
Base Rent that shall constitute Market Rent. The parties shall have sixty (60)
days (the "Negotiation Period") after the date Tenant delivers its renewal
option notice in which to agree on such Market Rent. If, during such negotiation
period, the parties are unable to agree on such Market Rent, then Tenant shall
have the right, at its sole election, to rescind its exercise of the renewal
option by notice of rescission delivered to Landlord no later than thirty (30)
days after the expiration of the Negotiation Period (the "Rescission Period").
The Market Rent shall be stated and comprised of a component of Annual Base Rent
for the first Lease Year of the Renewal Term and, if customary, a component of
annual escalations to be stated in terms of percentage increases to Annual Base
Rent for the second, third, fourth and fifth Lease Years of the Renewal Term.
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(b) (i) In the event Landlord and Tenant do not reach
agreement concerning the Market Rent, and Tenant does not timely exercise the
right of rescission described in subsection (a) above, then the Market Rent and
a formula for escalations shall be determined by three (3) real estate brokers.
Landlord and Tenant shall each, within fifteen (15) days from the expiration of
the Rescission Period described in subsection (a) above, designate an
independent, licensed real estate broker or a licensed real estate professional
associated with a licensed real estate broker who shall have more than ten (10)
years' experience as a real estate broker specializing in commercial office
leasing, and who shall have expertise with the commercial real estate market in
which the Building is located; and the third broker shall be appointed by the
first two brokers. For purposes of this Lease, a broker shall not be deemed
"independent" if such broker shall have been engaged to work on behalf of the
party that is appointing such broker at the time of, or at any time during the
three (3) year period preceding, such broker's appointment; provided, however,
that the third (3rd) broker selected by the first two brokers shall not be
deemed independent if such broker or any entity with which such broker is
affiliated shall have been engaged to work on behalf of either Landlord or
Tenant during the two (2) year period immediately preceding such broker's
appointment. The costs and expenses of each broker appointed separately by
Landlord and Tenant will be borne by the party who appointed the broker. The
costs and expenses of the third broker will be shared equally by Landlord and
Tenant. The brokers appointed by Landlord and Tenant shall select a third broker
within fifteen (15) days of the date of appointment of the latter of the first
two brokers.
(ii) The brokers shall each establish what they believe
to be the Market Rent, including, if customary, the escalation formula and shall
notify Landlord and Tenant thereof by written notice within thirty (30) days of
the date of the appointment of the third broker, which notice shall be
accompanied by their reports. The Market Rent shall be stated and comprised of a
component of Annual Base Rent for the first Lease Year of the Renewal Term and,
if customary, a component of annual escalations to be stated in terms of
percentage increases to Annual Base Rent for the second, third, fourth and fifth
Lease Years of the Renewal Term. If any broker fails to render its determination
within such thirty (30) day period, it shall be disregarded. If the aggregate
dollar value (ignoring any present value calculations) of the determinations for
the five year Renewal Term of any two or three of the brokers shall be identical
in amount, said amount shall be deemed to be the Market Rent for the Premises.
If both the highest and the lowest determination differ by less than five
percent (5%) from the middle determination, then the Market Rent shall be deemed
to be the average of the three determinations. If the lowest determination
and/or the highest determination differs by more than five percent (5%) from the
middle determination, such determination or determinations shall be disregarded
and the Market Rent shall be deemed to be the average of the remaining
determinations.
(iii) The Market Rent (including escalations, if any)
for the Premises to begin as of the first day of the applicable Renewal Term
determined in accordance with the provisions of this Section shall be binding
and conclusive on Tenant and Landlord. Notwithstanding the foregoing, if either
party shall fail to appoint the broker to be appointed by such party within
fifteen (15) days following the Rescission Period, the Market Rent of the
Premises as determined by the broker so appointed shall be binding and
conclusive on Landlord and Tenant.
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25.4 As used herein, "Market Rent" shall be equal to "triple net"
base footage rent which would be available to new tenants (taking into account
all rent escalation factors) in buildings (to the extent such tenants are
single-users or have the space in a building comparable to the space leased by
Tenant in the Building) of similar age, finish, quality, design, location,
condition and value as the Building (excluding Improvements installed in the
Building at Tenant's sole expense) and located in office parks of quality
comparable to and in the ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇▇▇) ▇▇▇▇ between the Dulles Toll
Road and Route 7 (the "MARKET AREA"). The Market Rent shall reflect the absence
of landlord concessions such as rental abatement, build-out allowances, free
parking, costs such as brokerage commissions and a base year established as the
calendar year in which the first day of the Renewal Terms occurs. Such allowable
concessions and costs shall be factored into Market Rent by amortizing such
concessions and costs over the applicable Renewal Term through a reduction of
the base footage rent otherwise payable in the absence of such concessions and
costs including a reasonable amount of "downtime" not to exceed nine (9) months.
For purposes hereof, leases of between one hundred thousand (100,000) and two
hundred thousand (200,000) square feet of rentable area or greater shall be
deemed to be leases of similar size.
ARTICLE XXVI
COMMUNICATIONS EQUIPMENT
26.1 Tenant may install, free of charge (with the right to collect
and retain any income that may be derived therefrom), at its sole cost, risk and
expense, satellite dishes, antennas and communications equipment (the
"COMMUNICATIONS EQUIPMENT") on the roof of the Building and/or on portions of
the Land (for so long as such portions of the Land remain subject to this
Lease), in an amount and of a type determined by Tenant, subject to Tenant's
compliance with the approved Site Plan and all other Legal Requirements and
subject further to Landlord's prior written approval of location, placement,
plans and specifications for the Communications Equipment and the type and
placement of all cabling and wiring ancillary thereto, all of which Landlord
approvals shall not be unreasonably withheld, conditioned or delayed. Landlord
makes no representation concerning the suitability of the rooftop or the Land as
a location for the Communications Equipment, and Landlord's approval of Tenant's
plans and specifications shall in no event be construed as constituting such a
representation. Tenant shall be responsible for obtaining and maintaining all
approvals, permits and licenses required by any federal, state or local
government for installation and operation of the Communications Equipment and
for paying all fees attendant thereto and for complying with all other Legal
Requirements relating to the Communications Equipment. If the Communications
Equipment is installed, Tenant shall have sole responsibility for the
maintenance, repair and replacement thereof and of all cabling and wiring
ancillary thereto. Tenant shall coordinate with Landlord's property manager
concerning any penetration of the roof or the exterior facade of the Building,
and shall in no event take any action that will void any then-existing roof
warranty. All repairs to the Building made necessary by reason of the
furnishing, installation, maintenance, operation or removal of the
Communications Equipment or any replacements thereof shall be at Tenant's sole
cost. Upon expiration or termination of this Lease, Tenant agrees that it will
remove, forthwith, the Communications Equipment (but not the wiring or
accessories) and shall repair any damage to the Building caused by the
installation or removal of the Communications Equipment and related equipment.
In the event Tenant fails to remove the Communications Equipment, Landlord may
remove and dispose of such Communications Equipment and charge Tenant the entire
reasonable
55
cost thereof. Tenant's Communications Equipment shall not interfere with the
structure of the Building, any of the building systems, or, at any time that
Tenant is not the sole lessee of the Building, the equipment (including airwaves
reception and other equipment) of any other tenant in the Building who shall
have similar rights to maintain Communications Equipment and shall have
exercised those rights prior to the exercise thereof by Tenant hereunder. Any
such similar rights granted to any other tenant shall similarly restrict such
other tenant's Communications Equipment from interfering with Tenant's
Communications Equipment. Landlord shall enforce all such restrictions. If
Tenant ceases at any time to be the sole tenant of the Building, Tenant's rights
pursuant to this Section 26.1 shall be non-exclusive. Landlord shall have no
liability on account of any damage to or interference with the operation of the
Communications Equipment by any third party. Notwithstanding the foregoing,
Landlord agrees that it will manage the available space on the rooftop so as to
accommodate Tenant's needs with respect to the Communications Equipment to the
greatest extent reasonably possible, including requesting that other tenants or
rooftop users relocate their equipment if such relocation is necessary to enable
Tenant to operate its Communications Equipment. Landlord shall have the right to
require Tenant to relocate the Communications Equipment at Landlord's cost to
another suitable location on the rooftop reasonably acceptable to Tenant,
provided such relocation can be done at a time and in a manner that only
minimally and temporarily interferes with Tenant's use of the Communications
Equipment.
ARTICLE XXVII
TENANT'S PURCHASE OPTION
27.1 Tenant shall have the one (1) time option (the "PURCHASE
OPTION") to purchase the Premises upon six (6) months prior written notice
during the period commencing on the first day of the twelfth (12th) Lease Year
and continuing through the expiration of the ninth (9th) full calendar month of
the thirteenth (13th) Lease Year (the "PURCHASE OPTION WINDOW"). Tenant shall
notify Landlord (the "PURCHASE OPTION NOTICE") in writing, of its exercise of
the Purchase Option not earlier than the commencement of the seventh (7th) full
calendar month of the eleventh (11th) Lease Year and not later than the
expiration of the third (3rd) full calendar month of the thirteenth (13th) Lease
Year. The purchase price for the Premises shall be determined in accordance with
the provisions of Section 27.2 below.
27.2 The purchase price for the Premises shall be their Fair Market
Value which shall be determined as follows:
(a) During the sixty (60) day period following Landlord's
receipt of the Purchase Option Notice (the "PURCHASE PRICE NEGOTIATION PERIOD"),
Landlord and Tenant shall meet and shall seek to establish the Fair Market Value
of the Premises. For the purposes of this Article XXVII, the term "FAIR MARKET
VALUE" shall mean the all-cash price which a ready, willing and able buyer would
agree to pay for the Premises, after arm's length negotiations, giving due
consideration to all appropriate factors, including, the age, quality, finish,
design, current function, location and condition of the Premises and recognizing
the effect of this Lease remaining in place as of the Closing Date at the then
current Base Rent plus scheduled escalations and rights of renewal. If Landlord
and Tenant are unable to agree upon the Fair Market Value of the Premises during
the Purchase Price Negotiation Period, Tenant may elect to revoke its Purchase
Option Notice by written notice to Landlord within the thirty (30) day period
55
following the expiration of the Purchase Price Negotiation Period (the "PURCHASE
OFFER REVOCATION PERIOD"). If Tenant does not revoke its option in accordance
with the preceding sentence, it shall, no later than five (5) business days
thereafter, post a deposit (the "PURCHASE DEPOSIT") in an amount equal to seven
and one-half percent (7.5%) of the then current Annual Base Rent, which deposit
shall be held in escrow by a mutually acceptable title insurance company (the
"ESCROW AGENT"). Not more than five business days after the Fair Market Value of
the Premises is determined, Tenant shall increase the Purchase Deposit in to an
amount which will cause the Purchase Deposit to be seven and one-half percent
(7.5%) of the Fair Market Value of the Premises.
(b) If Tenant does not give written notice of revocation to
Landlord within the Purchase Offer Revocation Period, the Fair Market Value of
the Premises shall be determined by three (3) MAI appraisers, each of whom shall
be licensed in the Commonwealth of Virginia as a real estate appraiser and shall
have at least ten (10) years of commercial office sales, acquisition and leasing
experience in the Market Area. The three appraisers shall be appointed in the
same manner as the three brokers are appointed pursuant to Section 25.3 hereof.
In determining the Fair Market Value of the Premises, the appraisers (i) shall
be directed to assume a single building user in the Market Area with a five (5)
year lease term including full concessions and (ii) shall be directed to
determine (x) the market "triple net" rent for the Premises, assuming no
defaults under the terms and provisions of this Lease (the "PURCHASE OPTION
MARKET Rent") and (y) a market "cap" rate using the same assumptions specified
in (i) hereof (the "MARKET CAP RATE"). The Fair Market Value shall then be
calculated by dividing the Market Rent by the Market Cap Rate. The Fair Market
Value determined pursuant to the preceding sentence shall be further adjusted by
taking into account the net present value (using a discount rate of eight
percent (8%)) of the difference between Market Rent and the total rent to be
paid by Tenant for the balance of the Lease Term (including, without limitation,
any Supplemental Land Costs and increases in Annual Base Rent attributable to
amortizing Base Building Capital Expenditures). The appraisers shall each
establish what they believe to be the Fair Market Value of the Premises and
shall notify Landlord and Tenant thereof by written notice within thirty (30)
days of the date of appointment of the third appraiser, which notices shall be
accompanied by copies of their reports. If any appraiser fails to render its
determination within such thirty (30) day period, it shall be disregarded. If
the determinations of any two or three of the appraisers shall be identical in
amount, said amount shall be deemed to be the Fair Market Value for the
Premises. If both the highest and the lowest determination differ by less than
two percent (2%) from the middle determination, then the Fair Market Value shall
be deemed to be the average of the three determinations. If the lowest
determination and/or the highest determination differs by more than two percent
(2%) from the middle determination, such determination or determinations shall
be disregarded and the Fair Market Value shall be deemed to be the average of
the remaining determinations.
(c) Notwithstanding anything to the contrary in this Article
XXVII, Landlord and Tenant agree that the minimum purchase price for the
Premises shall be eighty percent (80%) of the Project Costs escalated by
increases in the Revised Consumer Price Index for Urban Wage Earners and
Clerical Workers, 1996 Base Year, All Items, Washington, DC-MD-VA Metropolitan
Area (CPI-W), as published by the Bureau of Labor Statistics of the United
States Department of Labor (herein referred to as the "Index"), which is
published for the period that includes the month immediately preceding the first
day of the first Lease Year and the
56
month immediately preceding the month that the Purchase Option Notice is dated
(herein referred to as the "Adjustment Index"). If the Index is changed so that
a base year other than 1996 is used, the Index used herein shall be converted in
accordance with the conversion factor published by the Bureau of Labor
Statistics of the United States Department of Labor. If the Index is
discontinued or otherwise revised during the Lease Term, such other government
index or computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the Index had not been
discontinued or revised.
(d) The Fair Market Value for the Premises determined in
accordance with the provisions of this Section 27.2 shall be binding and
conclusive upon Landlord and Tenant.
(e) In the event (i) Tenant does not deliver its Purchase
Option Notice to Landlord six (6) months prior to the expiration of the Purchase
Option Window (the "Purchase Option Expiration Date") or (ii) Tenant elects to
revoke its exercise of the Purchase Option as provided above, Tenant's Purchase
Option described herein shall lapse and be void and of no further force or
effect.
27.3 (a) The closing (the "CLOSING") of the purchase of the
Premises shall occur on a date (the "CLOSING DATE") which is no more than six
(6) months after the date of Tenant's Purchase Option Notice, but in any event
shall occur no later than the expiration of the Purchase Option Window. At
Closing, Tenant shall pay the full purchase price by federal wire transfer or
other mutually agreeable means. Closing shall be conducted through an escrow
with a title company selected by Tenant and reasonably acceptable to Landlord.
(b) Landlord shall execute a special warranty deed in
customary form conveying to Tenant fee simple title to the Land, in the form
attached to the Purchase and Sale Agreement between Landlord and Tenant dated of
even date herewith, free and clear of all mortgages, deeds of trust and other
encumbrances and subject only to permitted encumbrances and any such other
liens, encumbrances, covenants, restrictions, matter or thing of record which
(i) were placed on record by or because of Tenant or any Affiliate thereof, (ii)
which Tenant or any Affiliate has joined or consented or (iii) which Tenant
expressly agrees to assume. Except as provided in the preceding sentence, the
Premises shall be conveyed "as is" with no representations or warranties,
express or implied.
(c) Landlord shall execute a certificate that it is not a
foreign person, partnership or other entity and any other affidavits or
instruments reasonably requested by the title company handling the closing that
are then customary in commercial transactions of a similar nature.
(d) The Closing shall take place at a mutually agreed upon
time and location in the Washington, D.C. metropolitan area.
(e) Landlord and Tenant will each pay their own attorneys'
fees in connection with the Closing. Landlord and Tenant shall each pay one-half
of all applicable escrow fees charged by the Escrow Agent. All Virginia state,
county and all other taxes imposed upon the grantor shall be paid by Landlord.
All Virginia state, county and all other taxes and recordation taxes shall be
paid by Tenant. Title examination, title insurance premiums, survey charges,
57
notary fees, costs and expenses related purchase money financing and all other
charges incident to settlement (other than charges related to the release of any
existing liens on the Premises) shall be paid by Tenant. All other charges shall
be borne by Landlord or Tenant as is usual and customary to be borne by seller
and purchaser, respectively, in customary transactions not involving a
landlord/tenant relationship.
(f) All rent payments payable or receivable, taxes,
assessments, utility charges and other similar items usually adjusted and
prorated at closing shall be prorated as of the date of Closing.
(g) This Lease shall continue in full force and effect
through the Closing Date.
27.4 If either party shall fail to close on the Purchase Option
hereunder under circumstances when such party is required to close, then the
other party may pursue all remedies available to it at law or in equity,
including specific performance. At its election, Landlord may retain the
Purchase Deposit as liquidated damages and this Lease shall, at Landlord's sole
discretion, continue in full force and effect as if Tenant had never exercised
its Purchase Option.
27.5 Nothing set forth in this Article XXVII shall restrict or
prevent Landlord from (a) making an assignment of its interest in this Lease for
security, (b) admitting lenders or others as limited partners in the partnership
which constitutes Landlord or (c) granting to lenders or others equity interests
in the Premises or the partnership which constitutes Landlord; provided,
however, that any such conveyance shall not affect Tenant's Purchase Option and
any such assignee or transferee shall comply with the provisions of this Article
XXVII.
27.6 The rights of purchase set forth herein may be exercised by
Orbital Sciences Corporation and not by any assignee of Orbital Sciences
Corporation other than an Affiliate of Tenant or an assignee permitted pursuant
to Section 7.4 above and only if Tenant and/or its Affiliates are occupying not
less than fifty percent (50%) of the Premises demised under this Lease. Such
rights shall not be assignable by Orbital Sciences Corporation to any third
party nor, except as expressly provided herein, to any assignee, subtenant or
successor-in-interest to Tenant, other than an Affiliate of Tenant.
27.7 If there is a monetary or material non-monetary Event of Default
under this Lease on the date the Purchase Option Notice is delivered to Landlord
or at any time thereafter prior to Closing, then, at Landlord's Option, to be
exercised within fifteen (15) business days after the expiration of the
applicable cure period for such default, Tenant's right to purchase the Premises
provided herein shall lapse and be of no further force or effect.
ARTICLE XXVIII
RIGHT OF FIRST OFFER
28.1 In the event Landlord, during the Lease Term, wishes to sell or
assign its fee interest in the Premises Landlord shall first give Tenant the
opportunity to purchase such fee interest subject to the following terms and
conditions:
58
(a) If Landlord decides to sell the Premises, Landlord shall
deliver written notice to Tenant of Landlord's intent to sell the Premises,
which notice shall include the cash purchase price and other terms upon which
Landlord is willing to sell the Premises (the "NOTICE OF INTENT TO SELL"). If
Tenant wishes to purchase the Premises upon the terms and conditions set forth
in the Notice to Sell, Tenant shall give Landlord written notice ("OFFER
EXERCISE NOTICE") of its election to exercise its right to purchase the Premises
within thirty (30) days following Tenant's receipt of the Notice of Intent to
Sell. Failure of Tenant to respond within such thirty (30) day period shall be
deemed an election not to exercise Tenant's right to purchase granted herein;
provided that Tenant agrees to confirm such deemed waiver by executing a
recordable written waiver and providing such further assurances thereof as
Landlord may reasonably request.
(b) If Tenant exercises its right to purchase the Premises
pursuant to this Section 28.1, the purchase price shall be the price specified
in the Notice of Intent to Sell and closing shall occur within the time frames
set forth in the Notice of Intent to Sell (but if Tenant elects to exercise its
rights hereunder such closing shall occur within sixty (60) days from the date
of Tenant's Offer Exercise Notice) and otherwise pursuant to the terms of
Section 27.3 hereof.
(c) If a Notice of Intent to Sell is given and Tenant
elects (or is deemed to have elected) not to purchase the Premises, then
Landlord shall be free to sell the Premises to any other person or entity on
terms not materially more favorable to the prospective purchaser than the terms
upon which Tenant shall have had the right to purchase the Premises. For
purposes hereof, any purchase that is at a purchase price (taking into account
the closing costs described in Section 27.3(e) above) that is not less than
ninety-five percent (95%) of the purchase price that would have been payable by
Tenant shall be deemed not to be materially more favorable to the prospective
purchaser. In the event of a proposed sale on terms that are materially more
favorable to the prospective purchaser, Landlord shall be required to give
Tenant another notice of Intent to Sell, specifying the proposed terms of sale
and to afford Tenant the opportunity, once again, to elect to purchase the
Premises on the terms so specified, in accordance with the provisions hereof.
(d) In no event shall Tenant have the right to purchase and,
except as expressly permitted herein, Landlord shall not sell less than the
entire Premises.
(e) Notwithstanding anything contained herein to the
contrary, Tenant shall not be afforded the rights specified in this Section 28.1
and shall not be entitled to purchase the Premises in the case of (i) a sale or
other transfer to an Affiliate of Landlord or (ii) any transfer or conveyance of
title to the Premises or any interest therein or in Landlord as part of a group
of assets marketed for sale, exchange or other disposition in a single or
related series of transactions by Landlord or any Affiliate of Landlord.
Furthermore, Tenant shall have no rights pursuant to this Article XXVIII with
respect to any conveyance or contribution of the Building or any interest
therein or in Landlord to a real estate investment trust, umbrella partnership
real estate investment trust or other entity as part of a transaction in which
shares of a real estate investment trust are being sold to the public.
59
28.2 (a) Provided Tenant has been afforded the rights granted to
Tenant in this Article XXVIII, Tenant's right to purchase the Premises pursuant
to Section 28.1 shall forever terminate automatically upon the consummation of a
sale of the Premises to an unaffiliated third party purchaser. Tenant agrees to
confirm the termination of its rights hereunder by executing a recordable,
written termination and providing such further assurances thereof as Landlord
may reasonably request.
(b) Any election by Tenant not to exercise its rights
pursuant to Section 28.1 above shall not extinguish or otherwise impair any of
Tenant's right to purchase the Premises pursuant to Article XXVII above.
28.3 Nothing set forth in this Article XXVIII shall restrict or
prevent Landlord from (a) making an assignment of its interest in this Lease for
security, (b) admitting lenders or others as limited partners in the partnership
which constitutes Landlord or (c) granting to lenders or others equity interests
in the Premises or the partnership which constitutes Landlord; provided,
however, that any such conveyance shall not affect Tenant's Right of First
Refusal and any such assignee or transferee shall comply with the provisions of
this Article XXVIII.
28.4 The rights of purchase set forth herein may be exercised by
Orbital Sciences Corporation and not by any assignee of Orbital Sciences
Corporation other than an Affiliate of Tenant or an assignee permitted pursuant
to Section 7.4 above only during the Lease Term and only if Tenant and/or its
Affiliates are occupying not less than fifty percent (50%) of the Premises
demised under this Lease. Such rights shall not be assignable by Orbital
Sciences Corporation to any third party nor, except as expressly provided in the
preceding sentence, to any assignee, subtenant or successor-in-interest to
Tenant, other than an Affiliate of Tenant.
28.5 Notwithstanding anything to the contrary set forth herein,
Tenant's rights to purchase under this Article XXVIII shall not be applicable to
a transaction involving the transfer of the Premises to a
mortgagee-in-possession or a receiver of the Building, the Land or the Premises
or a purchaser of the Building, the Land or the Premises at any foreclosure sale
thereof, or a grantee of the Land, the Building or the Premises under a
deed-in-lieu of foreclosure nor shall the provisions of this Article XXVIII be
binding upon any such mortgagee-in-possession or receiver or purchaser at
foreclosure or grantee under a deed-in-lieu of foreclosure, after a default by
Landlord under any financing documents encumbering the Building, the Land or the
Premises, as applicable, at any time during the Lease Term. Further, if the
Land, the Building or the Premises is sold as a result of any mortgage financing
secured thereby (e.g. a convertible mortgage or convertible securities) then
Tenant's rights under this Article XXVIII shall terminate and be of no force or
effect. Tenant shall have no right to approve nor have any control over the type
or extent of financing obtained by Landlord with respect to the Land, the
Building or the Premises, except as may be expressly provided in Article XX of
this Lease.
28.6 In the event that at any time Landlord sells or transfers any of
its interest in the Premises or this Lease to an unaffiliated third party and
has otherwise complied with the provisions of this Article XXVIII, then provided
the purchaser or transferee assumes the obligations of Landlord hereunder,
Landlord named herein shall not be liable to Tenant for any obligations or
liabilities based on or arising out of events or conditions occurring on or
after the date of such sale or transfer.
60
28.7 If there is an Event of Default under this Lease on the date the
Offer Exercise Notice is delivered to Landlord or at any time thereafter prior
to Closing, then, at Landlord's Option, Tenant's right to purchase the Premises
provided herein shall lapse and be of no further force or effect.
ARTICLE XXIX
GENERAL PROVISIONS
29.1 Tenant acknowledges that neither Landlord nor any broker, agent
or employee of Landlord has made any representations or promises with respect to
the Premises or the Building except as herein expressly set forth, and no
rights, privileges, easements or licenses are being acquired by Tenant except as
herein expressly set forth. The preceding sentence to the contrary
notwithstanding, Landlord and Tenant acknowledge the execution and delivery of
(a) the Phase II Development Agreement and (b) a purchase and sale agreement
with respect to the Land (the "Purchase Contract") concurrently with the
execution and delivery of this Lease. Landlord and Tenant agree that the Phase
II Development Agreement and the Purchase Contract create certain rights,
obligations, liabilities and responsibilities on both Landlord and Tenant as
specifically provided therein. Landlord and Tenant agree that each of them has
made certain representations and warranties to the other in the Phase II
Development Agreement and the Purchase Contract as more specifically provided
therein.
29.2 Nothing contained in this Lease shall be construed as creating
a partnership or joint venture of or between Landlord and Tenant, or to create
any other relationship between the parties hereto other than that of landlord
and tenant.
29.3 Landlord and Tenant recognize CB ▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. ("CB") as
the broker procuring this Lease and Landlord shall pay said broker a commission
pursuant to a separate agreement between CB and Landlord, a copy of which
agreement is attached hereto as Exhibit C and made a part hereof (the "BROKERAGE
AGREEMENT"). Tenant hereby acknowledges and agrees to the terms and provisions
of the Brokerage Agreement. Tenant hereby agrees that any and all commissions
paid to CB by Landlord in accordance with the terms and provisions of the
Brokerage Agreement shall be included in Project Costs as determined in
accordance with the provisions of the Phase II Development Agreement. Landlord
and Tenant each represents and warrants to the other that, except as provided in
the first sentence of this Section 29.3, neither of them has employed or dealt
with any broker, agent or finder in carrying on the negotiations relating to
this Lease. Each party shall indemnify and hold the other harmless from and
against any claim or claims for brokerage or other commissions asserted by any
broker, agent or finder engaged by the indemnifying party or with whom the
indemnifying party has dealt in connection with this Lease, other than CB.
29.4 Tenant agrees, at any time and from time to time (but no more
than twice in any twelve (12) month period), upon not less than fifteen (15)
days' prior written notice by Landlord, to execute, acknowledge and deliver to
Landlord a statement in writing (i) certifying that this Lease is unmodified and
in full force and effect (or if there have been any modifications, that the
Lease is in full force and effect as modified and stating the modifications);
(ii) stating (x) the amounts of Base Rent and Additional Rent currently due and
payable by Tenant, (y) that Tenant has not paid rent more than thirty (30) days
in advance of its due date and (z) the dates to which
61
the rent and any other charges hereunder have been paid by Tenant; (iii) stating
whether or not, to the best knowledge of Tenant, Landlord is in default in the
performance of any covenant, agreement or condition contained in this Lease, and
if so, specifying the nature of such default; (iv) stating the address to which
notices to Tenant are to be sent; (v) certifying that Tenant is (or is not) in
possession of the Premises and conducting its business therein; (vi) stating
that the Lease Term has commenced and the full rental is now accruing; (vii)
stating that any improvements required by the Lease or the Phase II Development
Agreement to be made by Landlord have been made to the satisfaction of Tenant;
(viii) stating whether there are then existing any set-offs, charges, liens,
claims or defenses against the enforcement of any right )and if so, specifying
the same in detail); and (ix) stating such other information as Landlord or any
mortgagee or prospective mortgagee of the Building may reasonably request. Any
such statement delivered by Tenant may be relied upon by any landlord of the
Building or the Land, any prospective purchaser of the Building or such land,
any mortgagee or prospective mortgagee of the Building or such land or of
Landlord's interest therein, or any prospective assignee of any such mortgagee.
Landlord agrees, at any time and from time to time (but no more than twice in
any twelve (12) month period), upon not less than fifteen (15) days' prior
written notice by Tenant, to execute, acknowledge and deliver to Tenant a
statement in writing: (i) certifying that this Lease is unmodified and in full
force and effect (or if there have been any modifications, that the Lease is in
full force and effect as modified and stating the modifications); (ii) stating
the dates to which the rent and any other charges hereunder have been paid by
Tenant; (iii) stating whether or not, to the best knowledge of Landlord, Tenant
is in default in the performance of any covenant, agreement or condition
contained in this Lease, and if so, specifying the nature of such default; (iv)
stating the address to which notices to Landlord are to be sent; and (v) stating
such other information as Tenant may reasonably request.
29.5 Landlord and Tenant each hereby waives trial by jury in any
action, proceeding or counterclaim brought by either of them against the other
in connection with any matter arising out of or in any way connected with this
Lease, the relationship of landlord and tenant hereunder, Tenant's use or
occupancy of the Premises, and/or any claim of injury or damage.
29.6 All notices or other communications required hereunder shall be
in writing and shall be delivered in person (with receipt therefor), or sent by
certified mail, return receipt requested, postage prepaid, or by facsimile
transmission, to the following addresses or facsimile numbers:
(i) if to Landlord, at:
c/o Boston Properties, Inc.
▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: Senior Vice President/Property Management
facsimile no. ▇▇▇-▇▇▇-▇▇▇▇ (verify no. 202-646-7600);
62
with a copy to:
c/o Boston Properties, Inc.
▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: Associate General Counsel
facsimile no. ▇▇▇-▇▇▇-▇▇▇▇ (verify no. 202-646-7600);
and a copy to:
Boston Properties, Inc.
Prudential Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: General Counsel
facsimile no. ▇▇▇-▇▇▇-▇▇▇▇ (verify no. 617-859-2600);
(ii) if to Tenant, at:
the Premises
Attn: Director, Corporate Finance and Real Estate
(facsimile no. to be designated by Tenant by notice given to Landlord in
accordance herewith);
except that, prior to the Lease Commencement Date, notices to such Director of
Operations shall be given at:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
facsimile no.: 703 406-3506 (verify no.: 703 406-5051);
with a copy to:
the Premises
Attn: General Counsel
facsimile no.: ▇▇▇-▇▇▇-▇▇▇▇ (verify no. 703-406-5505);
except that, prior to the Lease Commencement Date, notices to such General
Counsel shall be given at:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
facsimile no.: 703 ____________ (verify no.: 703____________);
and a copy to:
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, Esq.
▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
facsimile no.: ▇▇▇-▇▇▇-▇▇▇▇ (verify no. 202-637-5900).
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Notwithstanding anything contained herein to the contrary, all notices given by
Tenant pursuant to Section 14.6 hereof shall be given at the addresses and in
the manner specified above but, in addition, in order to constitute effective
notice to Landlord, shall be given to the on-site building engineer or to such
other person at such other address as Landlord may specify by written notice to
Tenant. Either party may change its address for the giving of notices by notice
given in accordance with this Section. Notices given by any means other than by
facsimile shall be deemed given or received on the date actually received or, if
refused, on the date delivery was attempted and refused. Notices given by
facsimile shall be deemed given or received when confirmation of complete
receipt is obtained by the transmitting party during normal business hours or,
if not confirmed during normal business hours, on the next business day.
29.7 If any provision of this Lease or the application thereof to
any person or circumstances shall to any extent be invalid or unenforceable, the
remainder of this Lease, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected thereby, and each provision of this Lease shall be valid and
enforced to the fullest extent permitted by law.
29.8 Feminine or neuter pronouns shall be substituted for those of
the masculine form, and the plural shall be substituted for the singular number,
in any place or places herein in which the context may require such
substitution.
29.9 The provisions of this Lease shall be binding upon, and shall
inure to the benefit of, the parties hereto and each of their respective
representatives, successors and assigns, subject to the provisions hereof
restricting assignment by Landlord or Tenant or subletting by Tenant. The term
"Tenant" as used in this Lease shall include Orbital's permitted assigns in
accordance with the provisions of Article VII of this Lease.
29.10 This Lease, together with the Phase II Development Agreement and
the other contemporaneous agreements entered into pursuant thereto, contains and
embodies the entire agreement of the parties hereto and supersedes all other
prior agreements, negotiations and discussions between the parties hereto, all
of which are merged herein. Any representation, inducement or agreement that is
not contained in this Lease shall not be of any force or effect. This Lease may
not be modified or changed in whole or in part in any manner other than by an
instrument in writing duly signed by both parties hereto.
29.11 This Lease shall be governed by and construed in accordance with
the laws of the Commonwealth of Virginia, without regard to the principles of
conflicts of law.
29.12 Article and section numbers and headings are used herein for the
convenience of reference and shall not be considered when construing or
interpreting this Lease. In this Lease, unless otherwise specified, (a) the
singular includes the plural and the plural the singular; (b) words and terms
which include a number of constituent parts, things or elements, including the
terms Premises, Land, Building, Parking Structure and Personal Property, unless
otherwise specified, shall be construed as referring separately to each
constituent part, thing, or element thereof as well as to all of such
constituent parts, things or elements as a whole; (c) reference to statutes are
to be construed as including all rules and regulations adopted pursuant to the
statute
65
referred to; (d) references to agreements and other contractual instruments
shall be deemed to include all subsequent amendments thereto or changes therein
entered into in accordance with their respective terms; (e) references to
persons include their permitted successors and assigns; (f) the words "hereto"
or "herein" or "hereof" or "hereunder" or words of similar import refer to this
Lease in its entirety; and (g) the words "including" or "include" or words of
similar import, unless otherwise specified shall be deemed to be followed by the
words "without limitation".
29.13 The submission of an unsigned copy of this document to Tenant
for Tenant's consideration does not constitute an offer to lease the Premises or
an option to or for the Premises. This document shall become effective and
binding only upon the execution and delivery of this Lease by both Landlord and
Tenant.
29.14 Time is of the essence of each provision of this Lease.
29.15 This Lease shall not be recorded, except that upon the request
of either party, the parties agree to execute, in recordable form, a short-form
memorandum of this Lease, provided that such memorandum shall not contain any of
the specific rental terms set forth herein and shall otherwise be mutually
acceptable to Landlord and Tenant. Such memorandum may be recorded in the land
records of Loudoun County, Virginia, and the party desiring such recordation
shall pay all recordation costs.
29.16 Except as otherwise specifically provided herein, any additional
rent owed by Tenant to Landlord, and any cost, expense, damage or liability
shall be paid by Tenant to Landlord no later than fifty (50) days after the date
Landlord notifies Tenant in writing of the amount of such additional rent or
such cost, expense, damage or liability; provided that regularly scheduled
monthly payments of additional rent pursuant to Article IV hereof shall be due
and payable on the first day of each month, subject to the terms and conditions
of Article IV. If any payment hereunder is due after the end of the Lease Term,
such additional rent or such cost, expense, damage or liability shall be paid by
Tenant to Landlord not later than fifty (50) days after Landlord notifies Tenant
of the amount of such additional rent or such cost, expense, damage or
liability.
29.17 All claims by Landlord with respect to Tenant's duties and
obligations hereunder, including but not limited to Tenant's duties and
obligations to pay Annual Base Rent, additional rent and the costs, expenses,
damages and liabilities incurred by Landlord for which Tenant is liable, shall
survive the termination of this Lease for any reason whatsoever. All claims by
Tenant with respect to Landlord's duties and obligations hereunder shall survive
the termination of this Lease for any reason whatsoever.
29.18 Except as expressly provided in the Phase II Development
Agreement with respect to the initial construction of the Building and the
Leasehold Improvements, in the event either Tenant or Landlord is in any way
delayed, interrupted or prevented from performing any of its respective
obligations under this Lease (other than Tenant's obligation to pay any rent due
hereunder), and such delay, interruption or prevention is due to fire, act of
God, governmental or quasi-governmental act (including, but not limited to, any
delay in the issuance of required permits or in the scheduling or performance of
required inspections), national emergency, strike, labor dispute, unusual delays
in transportation, inability to procure materials or utilities (where
66
such inability was not reasonably capable of being anticipated), or any other
cause beyond Tenant's or Landlord's reasonable control (whether similar or
dissimilar) (all of which are collectively referred to herein as "FORCE
MAJEURE"), then Tenant or Landlord (as applicable) shall be excused from
performing the affected obligations for the period of such delay, interruption
or prevention. Notwithstanding the foregoing, each party shall use reasonable
efforts to mitigate the delay in such party's performance due to Force Majeure.
29.19 Any amounts required to be paid by Tenant under this Lease shall
be considered additional rent. All payments of additional rent shall be paid to
Landlord without diminution, set-off or deduction (except as otherwise provided
in Section 14.6 hereof) in the same manner as Annual Base Rent pursuant to
Section 3.3 hereof or as may otherwise be provided in this Lease.
29.20 If Landlord or Tenant is required or elects to take legal action
against the other party to enforce the provisions of this Lease and a judgment
is rendered in such action by a court of competent jurisdiction, then the
prevailing party in such action shall be entitled to collect from the other
party its costs and expenses incurred in connection with such legal action
(including, but not limited to, reasonable attorneys' fees and court costs).
29.21 Notwithstanding anything to the contrary in this Lease, for so
long as Orbital Sciences Corporation or any Affiliate of Orbital Sciences
Corporation is the tenant under this Lease, Landlord agrees that any liability
of Tenant arising out of or in connection with this Lease or the relationship of
Landlord and Tenant and the ability of Landlord to recover damages or other
relief under this Lease shall be limited solely to the assets of Tenant. For so
long as Orbital Sciences Corporation or any Affiliate of Orbital Sciences
Corporation is the tenant under this Lease, in no instance whatsoever shall any
present, past or future employee, officer, director or shareholder of Orbital
Sciences Corporation or any Affiliate of Orbital Sciences Corporation have any
personal liability to Landlord for the satisfaction of any obligations or
liabilities of Tenant under this Lease.
29.22 This Lease includes and incorporates Exhibits A, ▇-▇, ▇-▇, ▇, ▇,
▇, ▇ and F attached hereto.
The parties hereto acknowledge and agree that this Lease and the Phase
II Development Agreement shall be interpreted, to the maximum extent possible,
so that they are consistent with each other and with the view that they are
intended to effectuate common and unified purposes. In the event that there is
any conflict or inconsistency between the terms or conditions in any of these
documents, or if the application of the terms or conditions in these documents
to any circumstances may result in inconsistent treatment, the parties agree
that the terms and conditions of this Lease shall take precedence over the Phase
II Development Agreement.
67
ARTICLE XXX
DIRECTORY OF DEFINED TERMS
The following terms used herein are defined where indicated below:
68
Term
Additional Leasehold Improvement Allowance..............Section 3.2 (a)
Additional Security Deposit.............................Section 5.4 (a)
Additional Security Deposit Reduction Date..............Section 5.4(b)
Affiliate of Tenant.....................................Section 7.5
Affiliate of Landlord...................................Section 13.3(a)
Annual Base Rent........................................Section 3.1
Bankruptcy Code.........................................Section 19.1(a)
Base Building Capital Expenditures......................Section 4.8
Base Building Work......................................Section 8.1
Brokerage Agreement.....................................Section 29.3
Building................................................Recital B
Building Premises.......................................Section 17.1
Closing.................................................Section 27.3
Closing Date............................................Section 27.3
Communications Equipment................................Section 26.1
Complex.................................................Recital A
Default Amount..........................................Section 18.3
Default Rate............................................Section 18.7
Divisible Portion of the Building Premises..............Section 26.1
Effective Date..........................................Introduction
Eligibility Period......................................Section 13.2
Environmental Default...................................Section 6.4
Environmental Law.......................................Section 6.4
Escrow Agent............................................Section 27.2(a)
Essential Building Services.............................Section 14.6
Expenses................................................Section 4.2
Fair Market Value.......................................Section 27.2
Formula Rent............................................Section 3.1(c)
Hazardous Materials.....................................Section 6.4
Improvements............................................Section 9.2
Insolvency Laws.........................................Section 19.1
Insurance Requirements..................................Section 9.2
Invitees................................................Section 6.4
Landlord Affiliate......................................Section 13.3
Lease Commencement Date.................................Section 2.2
Lease Term..............................................Section 2.1
Lease Year..............................................Section 2.2
Leasehold Improvements..................................Section 8.2
Legal Requirements......................................Section 6.1
Management Agreement....................................Section 13.3(a)
Manager.................................................Section 13.3(a)
Market Area.............................................Section 25.4
Market Cap Rate.........................................Section 27.2(b)
Market Rent.............................................Section 26.3
Minimum Net Worth Amount................................Section 5.1
69
mortgages...............................................Section 20.1
Notice of Intent to Sell................................Section 28.1(a)
Offer Exercise Notice...................................Section 28.1(a)
Operating Expenses......................................Section 4.2
Operating Plan..........................................Section 4.1
Parking Structure.......................................Section 23.3
Phase II Development Agreement..........................Recital B
Premises................................................Section 1.1
Project Architect.......................................Section 1.3
Project Costs...........................................Section 3.1
Purchase Deposit........................................Section 27.2
Purchase Offer Revocation Period........................Section 27.2
Purchase Option.........................................Section 27.1
Purchase Option Market Rent.............................Section 27.2(b)
Purchase Option Notice..................................Section 27.1
Purchase Option Window..................................Section 27.1
Purchase Price Negotiation Period.......................Section 27.2
purchaser/purchaser at a foreclosure sale...............Section 20.2
Real Estate Taxes.......................................Section 4.2
Reconciliation Statement................................Section 4.5
Renewal Term............................................Section 26.1
Rent Recalculation Date.................................Section 3.1
Right of First Offer....................................Section 28.2
Rules and Regulations...................................Section 15.1
security deposit........................................Section 5.1
Supplemental Land Costs.................................Section 4.2(c)
Suspension Events.......................................Section 13.2
Taking..................................................Section 17.1
Tenant Installations....................................Section 2.2(b)
Trustee.................................................Section 19.2
70
IN WITNESS WHEREOF, Landlord and Tenant have executed this Deed of Lease
under seal on or as of the day and year first above written.
WITNESS: LANDLORD:
By: BOSTON PROPERTIES LIMITED PARTNERSHIP, a
Delaware limited partnership
By: Boston Properties, Inc. its General Partner
[SIG] By: /s/ E. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------- --------------------------------
[Corporate Seal] Name: E. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
WITNESS: TENANT:
ORBITAL SCIENCES CORPORATION,
a Delaware corporation
[SIG] By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------- ---------------------------------------
[Corporate Seal] Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice Pres. & Corp. Controller
71