DEED OF LEASE
by and between
PETULA ASSOCIATES, LTD.
("Landlord")
and
GOVERNMENT TECHNOLOGY SERVICES, INC.
("Tenant")
'11/13/97
TABLE OF CONTENTS
Section Page
1. DEMISE
..................................................
1
2. TERM...................................................
. 1
3. RENT...................................................
. 7
4. PERMITTED
USE........................................... 13
5. EXPENSES
............................................... 14
6. ADDITIONAL
RENT.......................................... 17
7. SORTING AND SEPARATION OF REFUSE AND
TRASH............... 19
8. HAZARDOUS
SUBSTANCES..................................... 20
9. INSURANCE..............................................
.. 22
10. DAMAGE OR
DESTRUCTION.................................... 10
11. INDEMNIFICATION........................................
.. 25
12. ASSIGNMENT AND
SUBLETTING................................ 27
13. CARE OF
PREMISES......................................... 33
14. ALTERATION BY
TENANT..................................... 33
15. CONDEMNATION...........................................
.. 35
16. SUBORDINATION..........................................
.. 35
17. ACCESS TO
PREMISES....................................... 38
18. RULES AND
REGULATIONS.................................... 39
19. COVENANTS OF RIGHT TO
LEASE.............................. 39
20. MECHANICS
LIENS.......................................... 39
21. EXPIRATION OF LEASE AND SURRENDER OF
POSSESSION.......... 40
22. DEFAULT-REMEDIES.......................................
. 41
23. RE-ENTRY BY
LANDLORD..................................... 48
24. ADDITIONAL RIGHTS TO
LANDLORD............................ 49
25. SUCCESSORS, ASSIGNS AND
LIABILITY........................ 49
26. NOTICES................................................
.. 49
27. MORTGAGEE'S
APPROVAL..................................... 50
28. ESTOPPEL
CERTIFICATES.................................... 51
29. DEFAULT RATE OF
INTEREST................................. 51
30. EXCULPATORY
PROVISIONS................................... 51
31. MORTGAGEE
PROTECTION..................................... 52
32. RECIPROCAL COVENANT ON NOTIFICATION OF ADA
VIOLATIONS.... 52
33. LAWS THAT
GOVERN......................................... 53
34. FINANCIAL
STATEMENTS..................................... 53
35. PARKING................................................
.. 53
36. SIGNAGE................................................
.. 54
37. RECORDATION............................................
.. 55
38. FORCE
MAJEURE............................................
55
39. LANDLORD'S
LIEN.......................................... 56
40. BROKERS................................................
.. 57
41. CONFIDENTIALITY........................................
.. 57
42. LEASE/DEED OF
LEASE...................................... 58
43. RIGHT OF FIRST
OFFER..................................... 58
44. MISCELLANEOUS..........................................
.. 59
45. ROOF-TOP
EQUIPMENT...................................... 60
EXHIBIT A - Land
EXHIBIT B - Work Agreement
EXHIBIT B-1 - Current Site Plan
EXHIBIT B-2 - Form of Environmental Certification
EXHIBIT B-3 - Current Specification
EXHIBIT C - Declaration of Lease Commencement
EXHIBIT D - Rules and Regulations
EXHIBIT E - Avion (R) Signage Program
EXHIBIT F - License Agreement
EXHIBIT F-1 - Location of License Area
EXHIBIT F-2 - Intentionally Deleted
EXHIBIT F-3 - Minimum Equipment Requirements
EXHIBIT F-4 - Contractor Insurance Requirements
EXHIBIT G Non-Disturbance Agreement
DEED OF LEASE
THIS DEED OF LEASE ("Lease") is made this 10th day of
December, 1997, by and between PETULA ASSOCIATES, LTD.,
whose address for the purpose of this Lease shall be 711
High Street, Des Moines, Iowa 50392-1370, Attn: CRE
Equities/Mid-Atlantic Team, hereinafter referred to as
"Landlord", and GOVERNMENT TECHNOLOGY SERVICES, INC.,
hereinafter referred to as "Tenant".
IT IS AGREED AS FOLLOWS:
1. DEMISE.
Landlord does hereby lease to Tenant and Tenant does
hereby lease from Landlord the premises consisting of
the Improvements to be constructed upon the land
("Land") described on Exhibit A attached hereto and
made a part hereof and any selected parking located on
the Land which Tenant is entitled to utilize pursuant
to Section 35 hereof (the Improvements, together with
the portion of the Land on which the Improvements and
any related parking are located, is herein referred to
as the "Premises" or the "Property").
Improvements. The Improvements (also referred to in
Exhibit B as the "Base Building Work") shall mean the
building to be constructed on the Land in accordance
with the Work Agreement attached hereto as Exhibit B,
to contain approximately one hundred thousand five
hundred (100,500) rentable square feet as defined by
the Building Owners and Managers Association
International's Standard Method for Measuring Floor
Area in Office Buildings dated June 7, 1996, as
approved by the American National Standards Institute,
Inc. (ANSI/BOMA Z65.1-1996) (the "BOMA method"). Upon
substantial completion of the Improvements, the
rentable area of the Improvements shall be determined
in accordance with the BOMA method by the Architect (as
herein defined). The rentable area of the Improvements
as so determined shall be controlling for purposes of
establishing the Rent hereunder.
2. TERM.
(A) Initial Term
(1) The term of this Lease ("Lease Term") shall,
subject to Section 2(C) hereof and Section
10(c) of Exhibit B hereto, be for a period of
120 months, commencing on the date of
Substantial Completion of the Improvements
and the Tenant Work (all as more fully set
forth in Exhibit B) ("Commencement Date") and
ending at 11:59 p.m. on the day ("Expiration
Date") immediately preceding the tenth (10th)
anniversary of the Commencement Date;
provided that, if the Commencement Date is a
day other than the first (1st) day of a
calendar month, the Expiration Date shall be
the last day of the month in which the tenth
(10th) anniversary of the Commencement Date
shall occur. Except as provided below,
Tenant shall not be obligated to pay Rent
until possession of the Premises is tendered
to Tenant with the Improvements and the
Tenant Work therein Substantially Complete.
If the Commencement Date is a date other than
the first day of the month, Rent for the
month in which the Commencement Date occurs
shall be prorated on a daily basis.
(2) If Tenant occupies the Premises prior to the
Commencement Date, other than for purposes of
installation of telephones, cabling, special
equipment, trade fixtures and furniture in
accordance with Section 12(a) of Exhibit B,
such occupancy shall be subject to all
provisions hereof and shall not advance the
last day of the Lease Term, and Tenant shall
pay Rent for such period at the initial
monthly rate set forth below.
(3) If Landlord is delayed in Substantially
Completing the Landlord's Work (as defined in
Exhibit B) or in tendering possession of the
Premises with the Landlord's Work therein
Substantially Complete, in whole or part, by
a Tenant Delay, Rent and Additional Rent
shall, nonetheless, commence on that date on
which the Improvements and the Tenant Work
would have been Substantially Completed but
for the Tenant Delay (e.g., if there are two
(2) days of Tenant Delay and the Premises are
tendered to Tenant with the Improvements and
the Tenant Work Substantially Complete on
December 15, Rent and Additional Rent shall
accrue from December 13th).
(4) Subject to the terms of the last sentence of
this Section 2(a)(4), notwithstanding
anything herein contained to the contrary, if
construction of the Improvements has not
commenced on or before the Commencement
Deadline, Tenant shall have the right to
terminate this Lease by written notice
("Tenant's Commencement Termination Notice")
delivered to Landlord not earlier than the
Commencement Deadline and not later than ten
(10) calendar days after the Commencement
Deadline (but in all events not later than
commencement of construction of the
Improvements), in which event (i) this Lease
shall cease and terminate without payment to
Tenant of any penalty, compensation or any
portion of the Allowance (as herein defined),
and without reimbursement of any costs,
damages, expenses or fees suffered or
incurred by or on behalf of Tenant, as if the
date on which Tenant's Commencement
Termination Notice is delivered to Landlord
was the Expiration Date, and (ii) Landlord
shall return to Tenant any Security Deposit
and any prepaid Rent. As used herein, the
term "Commencement Deadline" shall mean
August 1, 1998 [subject to a day-for-day
extension for each day of delay attributable
to Tenant Delays, which Commencement Deadline
shall not be subject to delay for "Force
Majeure" (as defined in Section 38 below)];
provided that, if Tenant fails to timely
terminate this Lease pursuant to this Section
2(A)(4), then for purposes of Section
2(A)(5), the term "Commencement Deadline"
shall mean the date on which the Permit (as
defined in Exhibit B) is issued by Fairfax
County. Despite the foregoing, in the event
that the "Construction Lender" (as defined in
Section 16(B)(3) below) has foreclosed upon
the Property or has accepted a deed in lieu
of foreclosure, and, subject to the
provisions of Section 38 below, is diligently
pursuing completion of the work to be
performed by Landlord under Exhibit B hereto,
Tenant shall not have the right to terminate
the Lease pursuant to the provisions of this
Section 2(A)(4).
(5) Notwithstanding anything herein contained to
the contrary, if the Landlord's Work
(exclusive of "long-lead" items and Punch
List Work items, as defined herein) is not
Substantially Complete within eleven (11)
months after the Commencement Deadline
(subject to a day-for-day extension for each
day of delay which occurs after the
Commencement Deadline and is attributable to
Tenant Delays, the "Completion Deadline")
and, as a result, Tenant is unable to
lawfully (and, in fact, does not) occupy the
Premises and use the Premises for the uses
permitted hereby, Tenant shall have the right
to deliver a sixty (60) day written notice of
termination ("Tenant's Completion Termination
Notice") delivered to Landlord not earlier
than the Completion Deadline nor later than
ten (10) calendar days after the Completion
Deadline (but in all events not later than
commencement of the Tenant's Work). If
Tenant timely delivers the Tenant's
Completion Termination Notice and the
Landlord's Work (exclusive of "long-lead"
items and Punch List Work items, as defined
herein) is not Substantially Complete within
sixty (60) days after delivery of Tenant's
Completion Termination Notice (subject to a
day-for-day extension for each day of delay
which occurs after such delivery of Tenant's
Completion Termination Notice and which is
attributable to Tenant Delays), and, as a
result, Tenant is unable to lawfully (and, in
fact, does not) occupy the Premises and use
the Premises for the uses permitted hereby ,
this Lease shall automatically cease and
terminate without payment of penalty or
compensation as if the date on which such 60-
day period (as the same may be extended as
aforesaid) expires was the Expiration Date,
and Landlord shall return to Tenant any
Security Deposit and any prepaid Rent.
(B) Commencement Certificate.
At the request of Landlord at any time after
the Commencement Date has occurred, Tenant
hereby agrees to execute a declaration in the
form attached hereto as Exhibit C
("Declaration") as incorporated herein by
reference. Tenant's failure to execute the
Declaration shall not affect the Commencement
Date or the Lease Term, as same are
determined by the terms of this Lease.
(C) Extension Period.
(1) Provided no Event of Default is in existence
under this Lease at the time of the exercise
of the Extension Option or thereafter
(through and including the commencement date
of the Extension Period), and provided that
this Lease shall not theretofore have been
terminated, Tenant shall have one (1) non-
recurring option (the "Extension Option") to
extend the Expiration Date of the Lease Term
for a period of five (5) consecutive years
(the "Extension Period"). The Extension
Period shall commence on the day following
the Expiration Date determined under Section
2(A) [as the same may be extended pursuant to
Section 10(c) of Exhibit B hereto] and end on
the fifth (5th) anniversary of the scheduled
Expiration Date determined under Section 2(A)
[as the same may be extended pursuant to
Section 10(c) of Exhibit B hereto]. The
Extension Period shall be upon the same terms
and conditions contained herein except that
(A) the Rent payable in the Extension Period
shall be adjusted on the first (1st) day of
the Extension Period to equal one hundred
percent (100%) of the then-prevailing fair
market rental rate for the Premises (the "New
Rental Rate"), and shall thereafter be
subject to adjustment in accordance with the
provisions of Section 3(B) hereof and (B)
Tenant shall have no option to extend the
Expiration Date of the Lease Term beyond the
last day of the Extension Period.
(2) Tenant may exercise the Extension Option only
by delivering binding written notice (the
"Extension Option Notice") to Landlord of
Tenant's election to exercise the Extension
Option not later than twelve (12) months
prior to the commencement of the Extension
Period; provided that (i) Tenant's Extension
Option Notice shall be ineffective unless the
same designates Tenant's broker for purposes
of arbitration if the parties are unable to
agree on the New Rental Rate, and (ii) if
Tenant delivers its Extension Option Notice
to Landlord more than twelve (12) months in
advance, Tenant may elect to rescind its
Extension Option Notice at any time which is
at least three hundred fifteen (315) days
prior to the commencement of the Extension
Period (and in all events prior to the
execution of a binding agreement to extend
this Lease for the Extension Period), on the
condition that Tenant reimburses Landlord
upon demand for any out-of-pocket costs
incurred by or on behalf of Landlord in
connection with the determination of the New
Rental Rate and/or preparation of a lease
amendment extending this Lease for the
Extension Period. Landlord and Tenant agree
to negotiate in good faith for a period of
thirty (30) days to attempt to reach
agreement on the New Rental Rate applicable
to the Extension Period, promptly following
delivery of Tenant's Extension Option Notice.
If the parties fail to agree on such New
Rental Rate within said thirty (30) day
period, the determination of fair market
rental rate for the Premises shall be
arbitrated by brokers as set forth below
(each party hereby agreeing to submit the
determination of the fair market rental rate
for the Premises to arbitration in the manner
provided herein, if the parties are unable to
agree on the New Rental Rate within said
thirty (30) day period). Landlord shall
designate the broker appointed by it within
ten (10) business days after the expiration
of the aforesaid thirty (30) day period, and
each party shall by written notice (a copy of
which shall be provided to the other party
hereto) instruct their respective brokers to
commence such arbitration within ten (10)
business days after the expiration of the
aforesaid thirty (30) day period.
(3) In the event the Tenant designates a broker
and the Landlord fails to so designate a
broker within the aforesaid ten (10) business
day period, the broker appointed by the
Tenant shall proceed to make his valuation,
in which case the fair market rental rate of
the Premises shall be as determined by such
broker (such determination to be binding on
Landlord and Tenant). In the event each
party designates a broker as aforesaid, each
broker shall proceed to make an independent
determination of the then-prevailing fair
market rental rate of the Premises within
thirty (30) days after appointment of
Landlord's broker.
(4) Each broker shall render a separate written
report, within thirty (30) days after
appointment of Landlord's broker, of such
broker's estimate of the then-prevailing fair
market rental rate for the Premises as of the
commencement of the Extension Period. If the
values contained in the written reports
differ by five percent (5%) or less of the
greater of such values, the New Rental Rate
shall be one hundred percent (100%) of the
arithmetic average of such values (such
determination to be binding on Landlord and
Tenant). If the values contained in the
written reports differ to a greater extent
than set forth above, the brokers shall,
within five (5) days, promptly jointly
appoint a third broker. If the two brokers
so appointed shall fail to agree upon the
selection of a third broker within ten (10)
days after the expiration of such 30-day
period, then either party, upon written
notice to the other, may request such
appointment by the American Arbitration
Association (or any organization successor
thereto). The parties shall cooperate to
expedite such appointment. Within twenty
(20) days of his appointment, the third
broker shall render a written report of his
opinion of the value of the then-prevailing
fair market rental rate for the Premises as
of the commencement of the Extension Period.
One hundred percent (100%) of the arithmetic
average of the values in the three (3)
evaluation reports shall then be the New
Rental Rate for the Extension Period (which
determination shall be binding on Landlord
and Tenant); provided, however, that if the
lowest or highest of the three (3)
evaluations, or both, varies by more than ten
(10%) from the middle evaluation, such
evaluation or evaluations so varying shall be
disregarded in computing said average.
(5) In the event the New Rental Rate has not been
determined on or before the commencement of
the Extension Period, the Rent payable by
Tenant until such determination shall be
deemed equal to the Rent payable by Tenant
pursuant to Section 3(A) immediately prior to
the commencement of the Extension Period (as
the same may be adjusted hereunder);
provided, however, within fifteen (15) days
of such determination, Tenant shall pay
Landlord the excess of (i) the monthly
installments of monthly Rent as calculated
for the first (1st) year of the Extension
Period, above (ii) the monthly installments
of Rent actually paid by the Tenant, in
respect of each month commencing on or after
the commencement of the Extension Period but
prior to such determination, or Landlord
shall credit Tenant for any excess rent paid
by Tenant if the rental rate has declined,
and Tenant shall thereafter pay Rent for such
Extension Period as determined and adjusted
hereunder.
(6) All valuations of the fair market rental rate
of the Premises shall be in writing and shall
be expressed in terms of an annual rent.
Each broker's determination shall be based on
all relevant factors affecting fair market
rental rate, including, but not limited to
(and without limiting the scope of such
relevant factors), other terms of this Lease
which are applicable to the Extension Period
(including, but not limited to, the services
provided by Landlord and those which are
provided by Tenant, and the absence of any
concessions such as free rent or construction
allowance), the duration of the Extension
Period, the age and quality of the Building
(as defined in Exhibit B) and the Premises,
current "market" concessions, the fact that
the determination is for a renewal, the fact
that the determination is for a renewal as of
a future date, and (if true) that no
brokerage commission will be payable with
respect to the Extension Period. To the
extent a reasonable sample is available, each
broker shall use as a basis for comparison
the rent for leases entered into for
comparable space in comparable buildings in
the submarket of Chantilly, Virginia in which
the Premises is located, within the period
which commences twelve (12) months prior to
the date of such determination, which leases
shall commence at approximately the same time
as the Extension Period.
(7) Each broker appointed hereunder shall be an
independent, licensed real estate broker in
the Commonwealth of Virginia, not affiliated
with either party, specializing in commercial
real estate in Chantilly, Virginia, having
not less than ten (10) years relevant
experience, and shall be qualified by
experience and ability to appraise the fair
market rental for the Premises. The party
appointing each broker shall be obligated,
promptly after receipt of the valuation
report prepared by the broker appointed by
such party, to deliver a copy of such
valuation report to the other party in the
manner provided elsewhere in this Lease for
the delivery of notices. If a third broker
is appointed, the third broker shall be
directed, at the time of his appointment, to
deliver copies of his valuation report,
promptly upon its completion, to Landlord and
Tenant in the manner provided elsewhere in
this Lease for the delivery of notices. The
fees and other costs of each of the first two
brokers shall be borne by the party
appointing each such broker, with the fees
and other costs of the third broker being
shared equally by Landlord and Tenant.
(8) Unless otherwise agreed in writing by
Landlord and Tenant at the time the New
Rental Rate is determined, it is understood
that the New Rental Rate shall be the initial
Rent for the first (1st) Lease Year of the
Extension Period, and that such Rent shall be
subject thereafter to annual escalations, on
each successive anniversary of the
commencement of the Extension Period, based
on the provisions of Section 3(B).
(9) Tenant's failure to timely deliver the
Tenant's Extension Option Notice shall render
the Extension Option null and void.
3. RENT.
(A) Rent. Tenant shall pay for the use and occupancy
of the Premises an annual base rental ("Rent")
equal to Ten and Fifteen One Hundred Dollars
($10.15) per rentable square foot of the
Improvements payable in equal monthly
installments. Rent shall be paid on the first day
of each month in advance without demand or notice
(except as otherwise expressly provided herein),
deduction, offset, or counterclaim during the
Lease Term. Rent for any period during the Lease
Term which is less than one month shall be a pro
rata portion of the monthly installment, provided
that if the Commencement Date is not the first
(1st) day of a calendar month, such pro rata
portion shall be added to the Rent for the first
(1st) Lease Year. Rent shall be payable in lawful
money of the United States to Landlord at the
address stated herein or to such other persons or
at such other places as Landlord may designate in
writing.
(B) Escalation of Rent. Commencing on the first day
of the second Lease Year (as hereinafter defined)
and on the first day of each Lease Year thereafter
during the Lease Term (each an "Adjustment Date"),
Tenant shall pay to Landlord on the first day of
each month as Rent an amount (the "Adjustment
Amount") equal to the sum of (i) the Rent in
effect immediately preceding the current
Adjustment Date plus (ii) three percent (3%) of
the Rent in effect immediately preceding such
Adjustment Date. The Adjustment Amount shall then
be deemed to be the Rent in effect and shall be
deemed to be the Rent in effect for purposes of
calculating the next Adjustment Amount.
"Lease Year" shall mean the twelve (12) month
periods within the Lease Term, the first Lease
Year commencing on the Commencement Date and
terminating on the last day of the twelfth full
calendar month after the Commencement Date, with
each subsequent Lease Year commencing on the date
immediately following the last day of the
preceding Lease Year and continuing for a period
of twelve (12) full calendar months, except that
the last Lease Year of the Lease Term shall
terminate on the date this Lease expires or is
otherwise terminated.
(C) Place of Payment. Rent, Additional Rent and other
sums owed by Tenant shall be paid to Landlord at
the offices of Landlord's property manager at 1115
30th Street, N.W., Washington, D.C. 20007 or at
such place as Landlord may designate from time to
time in writing.
(D) Late Charge. Tenant hereby acknowledges that late
payment by Tenant of Rent, Additional Rent or
other sums due hereunder will cause Landlord to
incur collection costs not contemplated by this
Lease. Therefore, if any installment of Rent,
Additional Rent or any other sum due from Tenant
shall not be received by Landlord when such amount
is due, Tenant shall pay to Landlord a late charge
of five percent (5%) of such overdue amount;
provided that, Landlord agrees to waive the
imposition of such late charge on the first (1st)
occasion in any twelve (12) month period on the
conditions that no such late charge waiver has
been granted or exercised in the preceding twelve
(12) months, and the overdue payment is paid
within five (5) business days after notice from
Landlord that the payment was not paid when due.
Additionally, Tenant shall pay to Landlord the
Default Rate (as set forth in Section 29) on all
sums in default. Acceptance of such late charge
and/or the Default Rate by Landlord shall in no
event constitute a waiver of Tenant's default with
respect to such overdue amount, or prevent
Landlord from exercising any other right or remedy
available to Landlord.
(E) Security Deposit.
(1) Purpose of Security Deposit. The Security
Deposit shall be held by Landlord as security
for Tenant's faithful performance of Tenant's
obligations hereunder, with such Security
Deposit securing Tenant's obligations
hereunder subject to the terms and conditions
set forth in this Section 3(E).
(2) Required Amount. Tenant shall, at all times,
ensure that the aggregate amount of all
Permitted Security (as herein defined) held
by Landlord from time to time (the "Security
Deposit") is equal to the then-current
Required Amount. If, as a result of the
application of all or any part of the
Security Deposit in accordance with the terms
hereof, the Security Deposit shall be less
than the then-current Required Amount, Tenant
shall, within fifteen (15) days of Landlord's
written demand, provide Landlord with
additional Permitted Security equal to the
amount of the deficiency. Tenant's failure
to restore the Security Deposit to the then-
current Required Amount when and as required
hereby shall constitute a material breach of
this Lease. As used herein, the term
"Required Amount" shall initially mean the
sum of Two Million Dollars ($2,000,000.00).
The "Required Amount" shall be reduced on
each Reduction Date by Two Hundred Thousand
Dollars ($200,000). "Reduction Date" shall
mean the first (1st) day of each Lease Year
commencing on or after the first (1st) day of
the second (2nd) Lease Year, on which no
Event of Default is in existence hereunder.
(3) Initial Deposits. Tenant shall deposit with
Landlord upon execution hereof Permitted
Security in the amount of Six Hundred
Thousand Dollars ($600,000.00). Landlord
agrees to provide Tenant with written notice
(the "LC Notice") of the date that
construction of the Improvements either (x)
is estimated to commence, or (y) has already
commenced. Upon the later to occur of the
date that is two (2) days prior to the date
construction is scheduled to commence on the
Improvements pursuant to the Work Agreement
(Exhibit B), or the date which is ten (10)
days after the date that Tenant receives the
LC Notice, Tenant shall deposit with Landlord
additional Permitted Security in the amount
of One Million Four Hundred Thousand Dollars
($1,400,000.00), to increase the total amount
of Permitted Security to Two Million Dollars
($2,000,000.00).
(4) Permitted Security. Tenant shall provide the
Security Deposit to Landlord in the form of
one or more letters of credit ("LC") meeting
the criteria set forth in Section 3(E)(7)
("Permitted Security"); provided that, the
aggregate number of LCs forming a part of the
Security Deposit shall at no time exceed four
(4). Tenant shall immediately notify
Landlord in writing if Tenant acquires actual
knowledge (from a source other than Landlord)
that any LC provided to Landlord no longer
constitutes Permitted Security.
(5) Qualified Issuer. As used herein, the term
"Qualified Issuer" shall mean a federally-
insured commercial bank or other federally-
insured financial institution which has an
office (whether of its own or a correspondent
bank) located in the greater Washington, D.C.
metropolitan area at which Permitted Security
(or a sight draft drawn thereon) may be
presented for payment (a "DC Payment
Office"), and which has a Qualified Credit
Rating. Whether an institution is a
Qualified Issuer shall be subject to
continuous review (i.e., an institution shall
no longer be considered a Qualified Issuer at
any time after the loss of federal insurance,
the closure of all DC Payment Offices, or
loss of a Qualified Credit Rating). As used
herein, the term "Qualified Credit Rating"
shall mean at least Prime-2 (or then-current
equivalent) by Moody's Investor Services,
Inc., at least A-2 (or then-current
equivalent) by Standard & Poor's Corporation,
or B- by Lace Financial Corporation.
Landlord hereby acknowledges that, as of the
date of this Lease, Landlord considers
Deutsche Bank to be a Qualified Issuer.
(6) Substitute Security. If the Security Deposit
is, at any time, less than the Required
Amount (whether due to application of the
Security Deposit pursuant to the terms
hereof, the loss of a Qualified Credit Rating
by the issuer of some or all of assets
delivered to Landlord for purposes of forming
a part of the Security Deposit, or
otherwise), Tenant shall deliver to Landlord
additional Permitted Security sufficient to
restore the Security Deposit to the Required
Amount, not later than fifteen (15) business
days after Landlord's written demand.
(7) Special LC Requirements. Each LC forming all
or a part of the Security Deposit shall meet
each of the following criteria:
(A) the LC shall be transferable,
fully-funded, and run in favor of
Landlord;
(B) the LC shall be issued by a Qualified
Issuer (as herein defined);
(C) the LC shall be irrevocable for a period
of one (1) year, and provide that it is
automatically renewable for successive
one (1) year periods unless the issuer
notifies Landlord by certified mail,
return receipt request, at least thirty
(30) days in advance of the expiration
date thereof, that the issuer will not
renew the LC;
(D) the LC shall be in such form, and shall
contain such terms, as are reasonably
acceptable to Landlord, providing, among
other things, in substance that:
(1) Landlord and its successors and
assigns shall have the right to
draw down an amount up to the then-
current face amount of the letter
of credit upon presentation to the
issuing bank of Landlord's own
declaration signed or purportedly
signed by or on its behalf, reading
as follows:
(i) that the declarant has
authority to make the
declaration on behalf of the
Landlord;
(ii) that the declaration is made
pursuant to the terms of the
letter of credit number; and
(iii) that Landlord is entitled
to draw down the letter of
credit under the terms of
Section 3(E)(9)(A) or
3(E)(9)(B) of the lease made
between Landlord and Tenant.
(2) The LC will be honored by the
issuer without inquiry as to the
accuracy of the accompanying
declaration, and regardless of
whether Tenant disputes the content
of such declaration; and
(3) In the event of a transfer of
Landlord's interest in the
Premises, Landlord shall have the
right to transfer the LC to the
transferee.
(4) Notwithstanding the foregoing,
Landlord agrees that the terms of
the LC may limit draws upon the LC
pursuant to Section 3(E)(9)(A) to
not more than Two Hundred Thousand
Dollars ($200,000.00) in any period
of ten (10) consecutive days.
(8) Treatment of Cash Security Deposit. Any cash
sums forming all or a part of the Security
Deposit as a result of a draw upon a letter
of credit shall be kept in a separately
designated security deposit account in a
federally-insured bank (which may include
other security deposits), with interest
thereon accruing forming a part of the
Security Deposit.
(9) Right to Draw Upon Security Deposit.
(A) Upon the occurrence of any monetary
Event of Default, Landlord and its
successors and assigns shall have the
right to negotiate, present for payment,
draw upon, use, apply or retain all or a
portion of the Security Deposit for the
payment of the Rent, Additional Rent or
other charge, payment or sum due to
Landlord from Tenant, provided in no
event shall the amount of any such draw
exceed the amount required to cure such
monetary Event of Default.
(B) Upon (i) Tenant's failure, within
fifteen (15) business days after
delivery of written notice to Landlord
from the issuer of an LC forming all or
a part of the Security Deposit that the
issuer will not renew the LC, to deliver
to Landlord additional Permitted
Security in an amount equal to the LC
which will not be renewed, or (ii)
Tenant's failure, within fifteen (15)
business days after written notice from
Landlord that the some or all of the
assets delivered to Landlord to form a
part of the Security Deposit no longer
meet the criteria to be considered
Permitted Security (whether due to a
reduction in an LC issuer's credit
rating or otherwise), to deliver to
Landlord additional Permitted Security
sufficient to restore the Security
Deposit to the Required Amount, Landlord
and its successors and assigns shall
have the right to negotiate, present for
payment, and/or draw upon any portion of
the Security Deposit (or any LC then
held by Landlord and formerly
constituting a part of the Security
Deposit) not in the form of cash, and to
hold the proceeds of such negotiation,
presentment or draw (together with all
cash already forming a part of the
Security Deposit) as a cash Security
Deposit; provided that, Tenant shall
substitute additional Permitted Security
for the cash so held upon Landlord's
demand (in which event Landlord shall
return to Tenant the portion of the cash
held equal to the amount of such
additional Permitted Security).
(10) Transfer of Security Deposit.
(A) Tenant acknowledges and agrees that
Landlord shall have the right to
transfer the Security Deposit to any
assignee or other transferee of
Landlord's interest in the Property,
subject to the terms hereof, and that
the provisions hereof shall apply to
every such assignment or transfer to a
new Landlord. Upon delivery of the
Security Deposit to any assignee or
other transferee of Landlord's interest
in the Premises, Landlord shall
thereupon be discharged from any further
liability with respect to the Security
Deposit.
(B) Each Permitted Security forming a part
of the Security Deposit shall expressly
permit transfer of such Permitted
Security (whether by endorsement without
recourse, delivery, assignment, or re-
issuance in the name of the new
Landlord), and shall require the issuer
to acknowledge and accept the transfer
upon execution and delivery of a form of
transfer agreement which complies with
the issuer's reasonable requirements and
payment of a reasonable and customary
transfer fee (which fee, if such fee
exceeds One Hundred Dollars ($100.00)
and is paid by Landlord, shall be repaid
by Tenant to Landlord upon demand). If
any issuer fails, within ten (10) days
after being notified of such transfer
and delivery of the transfer agreement
and payment of the transfer fee, to
acknowledge and accept the transfer of
the Permitted Security which it has
issued, Tenant shall deliver to Landlord
additional Permitted Security equal to
the amount of Permitted Security for
which such issuer has failed to
acknowledge and accept the transfer
(Tenant hereby acknowledging and
agreeing that Tenant shall be solely
responsible for any and all fees in
excess of One Hundred Dollars ($100.00)
charged by the issuer of such additional
Permitted Security.
(11) Return of Security Deposit. If Tenant
performs all of Tenant's obligations
hereunder, the Security Deposit, or so much
thereof as has not theretofore been applied
by Landlord, shall be returned with any
unpaid interest accrued thereon (if any) to
Tenant (or at Landlord's option, to the last
assignee, if any, of Tenant's interest
hereunder) within thirty (30) days of the
later of (i) the last day of the Lease Term,
(ii) the date Tenant vacated the Premises, or
(iii) the date Tenant has fulfilled all its
obligations hereunder.
(12) Covenant Against Assignment or Encumbrance.
Tenant further covenants that it will not
assign, encumber or otherwise transfer any or
all of Tenant's interest in any portion of
the Security Deposit, and acknowledges that
neither Landlord nor its successors or
assigns will be bound by any attempted
assignment, encumbrance or other transfer.
(13) No Trust Relationship. No trust relationship
is created herein between Landlord and Tenant
regarding the Security Deposit.
(14) Rights Against Mortgagee. Tenant hereby
agrees not to look to any mortgagee as
mortgagee, mortgagee-in-possession or
successor in title to the Premises for
accountability for the Security Deposit
unless (but only to the extent) the Security
Deposit has actually been received by said
mortgagee as security for Tenant's
performance of this Lease. Notwithstanding
the foregoing, this Section 3(E)(14) shall
not apply to Principal Mutual Life Insurance
Company or any of its wholly-owned
subsidiaries, it being understood and agreed
that, if Principal Mutual Life Insurance
Company or its wholly-owned subsidiaries are
the mortgagee-in-possession or successor in
title to the Premises, such party shall be
responsible to account for and apply the
Security Deposit in accordance with the terms
of this Lease (regardless of whether such
party has actually received the Security
Deposit).
4. PERMITTED USE.
Tenant covenants that the Premises will be used solely
(if at all) for the following uses (collectively, the
"Permitted Use"): (1) general office purposes; (2)
warehouse use; (3) cafeteria use; (4) sales
presentations; (5) equipment demonstrations; (6)
seminars; (7) consulting purposes; and (8) catalogue,
mail and telephone sales. Tenant further covenants
that the Premises will not be used or occupied for any
unlawful purposes. Tenant agrees to and shall use the
Premises solely for the purpose of conducting the
Permitted Use and for no other business or purpose.
Tenant acknowledges that the Permitted Use is not a use
granted exclusively to Tenant and that Landlord
reserves the right to lease premises in the Property to
others for the same or a similar permitted use. Tenant
further acknowledges that it has received no written or
oral inducements from Landlord or any of Landlord's
representatives concerning this Lease (other than as
specifically set forth herein) or that Tenant will be
granted any such exclusive rights. Tenant shall not
commit or allow to be committed any waste upon the
Premises, or any public or private nuisance.
5. EXPENSES.
(A) Taxes
(1) Landlord shall pay all taxes applicable to
the Property which are payable during the
Lease Term.
(2) As used herein, the term "taxes" shall mean
real estate taxes, assessments (whether
general or special), sewer rents, rates and
charges, transit and transit district taxes,
taxes based upon the receipt of Rent or other
payments hereunder, and any other federal,
state or local governmental charge, general,
special, ordinary or extraordinary (but not
including income or franchise taxes,
inheritance, estate or gift taxes, net profit
taxes or any other taxes imposed upon or
measured by Landlord's net income or profits,
except as provided herein), which may now or
hereafter be levied, assessed or imposed
against the Property or Premises ("Taxes").
If the Property is assessed as part of a
larger parcel of land, Taxes shall only
include the portion thereof which is
allocable to the Property. The allocation
referenced in the preceding sentence shall be
based on the ratio of the rentable area of
the Improvements to the rentable area of all
improvements upon such larger parcel of land,
in the following manner: (i) until the
construction commences for improvements other
than the Improvements on such parcel of land,
(A) the assessment for improvements shall be
entirely allocated to the Property, and (B)
the assessment for the land shall be
allocated based on the sum of (1) the
rentable area of the Improvements, plus (2)
the rentable areas of the other proposed
improvements on such land as set forth on
that certain site plan which is entitled
"Site/Grading Plan, GTSI Headquarters @
Avion, Parcel "D-1"," prepared by Rinker-
Detwiler & Associates, P.C. as Job Number 97-
065-H, dated October ___, 1997, (the "Current
Site Plan") attached hereto as Exhibit B-1
(as such rentable areas may be modified from
time to time)]; and (ii) once the
construction of improvements other than the
Improvements on such parcel of land has
commenced, the assessment for improvements
and land shall be allocated as stated on the
relevant tax bill(s) or assessor's
worksheet(s) (or, if not separately
allocated, based on the sum of (1) the
rentable area of the Improvements, plus (2)
the rentable areas of the proposed
improvements on such land for which
construction has commenced). To the extent
any Tax may be paid without penalty or
interest in installments over a number of
years, such Tax shall be included in Taxes
for any year only to the extent of the
installments allocable to such year (as if
Landlord had elected to pay such Tax over the
longest possible period, whether or not
Landlord has so elected). Provided Tenant
shall timely pay its Pro Rata Share of Taxes,
"Taxes" shall exclude any penalties or
interest thereon. As of the date hereof,
Landlord estimates that the Taxes for
calendar year 1999 will be $80,400.00.
Landlord agrees to deliver a copy of each
assessment notice on the Property promptly
following the receipt thereof. Additionally,
Landlord shall have no obligation to protest
Taxes, but if Landlord does protest Taxes,
the actual out-of-pocket cost of such protest
shall also be deemed Taxes. Landlord shall
advise Tenant upon request (to be made not
more than fourteen (14) days in advance of
the filing deadline for protest of the
current tax assessment) whether Landlord
intends to protest the current tax
assessment. If Landlord advises Tenant that
Landlord does not intend to protest such
current tax assessment, Tenant shall have the
right to challenge or appeal such assessment
in Landlord's name but at Tenant's sole
expense, and Landlord shall cooperate in such
challenge or appeal (including executing such
forms as may be reasonably necessary to
institute and prosecute such action);
provided that, Tenant shall have no right to
challenge or appeal any Tax assessment during
the last two (2) years of the Lease Term.
(B) Landlord shall provide insurance for the Property
as set forth in Subsection 9(A) ("Insurance"). If
Landlord has a net worth in excess of Fifty
Million Dollars ($50,000,000.00), Landlord shall
have the right to self-insure (in which event,
Operating Expenses shall include the reasonable
costs which would have been incurred if Landlord
had obtained the insurance set forth in Section
9(A) from a third party); provided that, in all
events Landlord may self-insure the first Fifty
Thousand Dollars ($50,000.00) of liability risk
with regard to the Property (whether through
deductibles, co-insurance or otherwise).
(C) (1) Landlord shall provide for the following
throughout the Lease Term as they relate to
the Premises: (a) landscaping; (b) property
management; and (c) the maintenance, repair
and/or replacement of the Premises and
Improvements as follows: (i) the roof; (ii)
all structural components of the Premises and
Improvements; (iii) the parking lot (except
as expressly provided in Section 35 hereof),
(iv) sidewalks, alleys and any and all access
drives, including the removal of snow and ice
therefrom (provided that, Tenant shall have
the right to perform its own snow removal, at
Tenant's sole cost and risk, if Landlord
fails to promptly commence snow removal when
and as reasonably required to permit access
to the Premises); (v) fire sprinkler and fire
control systems (if any); (vi) exterior plate
glass; (vii) life safety systems and
equipment; and (viii) repairs of items under
warranty. Landlord agrees to maintain the
foregoing systems and components in a first-
class manner throughout the Lease Term;
provided that, Landlord shall have no
liability for failure to maintain or repair
the same unless and until Landlord shall fail
to perform such maintenance or make such
repairs within a reasonable time after
acquiring actual knowledge of the need for
such maintenance or repairs.
(2) Tenant (and not Landlord) shall provide
throughout the Lease Term, at Tenant's sole
expense, all other maintenance, repair and/or
replacement (as and when reasonably required)
of the Premises and Improvements (including,
but not limited to, (a) heating and air
conditioning equipment, lines and fixtures;
(b) plumbing equipment, lines and fixtures,
excluding fire sprinkler and fire control
systems (if any); (c) electrical equipment,
lines and fixtures; (d) all other utility
equipment, lines and fixtures; and (e) all
ingress-egress doors to the Property), all as
reasonably required in order to maintain the
Improvements and the Tenant Work in good
working order and condition. Notwithstanding
the foregoing, Landlord shall perform any of
the services listed in this Section 5(C)(2)
upon Tenant's written request, in which event
all reasonable costs, expenses and fees
incurred by or on behalf of Landlord to
perform the same shall constitute Operating
Expenses.
(D) Tenant shall pay all utility bills incurred,
including, but not limited to, water, gas,
electricity, fuel, light, heat and power bills,
when and as due. If Tenant shall fail to pay any
utility bill when and as due, Landlord shall have
the right to pay such utility bill on Tenant's
behalf (in which event the amount so paid shall be
deemed Additional Rent which shall be repaid by
Tenant upon demand). Landlord shall not be liable
for any failure to furnish, or for any loss,
injury or damage caused by or resulting from any
variation, interruption or failure of utility
services. In the event of (i) any interruption of
essential utilities or services due to Landlord's
gross negligence or willful misconduct, which
interruption or failure continues for more than
three (3) consecutive business days, then,
provided such interruption or failure shall render
a material portion of the Premises untenantable,
all Rent and Additional Rent payable hereunder
with respect to such portion of the Premises shall
thereafter be abated until such portion of the
Premises is tenantable.
(E) Tenant, at Tenant's sole expense, shall comply
with all laws, rules, orders, ordinances,
directions, regulations and requirements of
federal, state, county, and municipal authorities
now in force or which may hereafter be in force,
with respect to the use, repair, replacement,
maintenance, occupancy or alteration of the
Premises by Tenant or Tenant's Agents (as herein
defined); provided that, Tenant shall have no
obligation to perform structural alterations or
improvements, unless such structural alterations
or improvements (i) are required by law as a
result of Tenant's or Tenant's Agents' specific
use or manner of use of the Premises, or repair of
the Premises, or (ii) would not have been required
to be performed but for additions, alteration,
improvements or modifications made by or on behalf
of Tenant. Landlord shall perform all structural
alterations or improvements which are not Tenant's
responsibility pursuant to the terms hereof.
(F) Except as otherwise expressly provided herein, the
Tenant will keep, maintain and preserve the
Premises in a good condition, ordinary wear and
tear excepted, and shall provide all services,
maintenance and repair require to keep the
Premises in such condition. Without limiting the
foregoing, Tenant, at its sole cost and expense,
will provide janitorial service for the Premises
and interior and exterior window washing for the
Premises. Except as provided in Section 5(C)(1)
above, Tenant, at the Tenant's sole cost and
expense, shall also make all interior repairs and
replacements to the Premises, including, but not
limited to, interior walls, doors and windows,
floors, floor coverings and light bulbs.
(G) All costs, expenses and fees incurred by or on
behalf of Landlord in connection with providing
any of the items in Subsections 5(B) and 5(C), to
the extent paid by or on behalf of Landlord shall
be referred to as "Operating Expenses"; provided
that, the amount of the property management fee
included in Operating Expenses shall not exceed
(i) Two Thousand Five Hundred Fifty-One Dollars
($2,551.00) per month during the first (1st)
calendar year of the Lease Term (which amount, as
of the date of this Lease, is deemed by Landlord
and Tenant to be the fair market value of the
goods and services provided in exchange for such
property management fee), and (ii) in any
subsequent calendar year, the fair market value of
the goods and services provided in exchange
therefor. For purposes of determining the fair
market value of the goods and services provided in
exchange for the property management fee, not more
often than once every third (3rd) calendar year
Landlord shall, upon Tenant's written request,
conduct a survey of the property management fees
paid to first-class property management companies
serving the Chantilly, Virginia submarket with
respect to single-story, single-tenant buildings
located in a similar office parks in the
Chantilly, Virginia submarket which are leased
with similar tenant responsibilities, and shall
provide to Tenant a copy of such survey. In the
event of any dispute between Landlord and Tenant
on the fair market value of the goods and services
provide in exchange for the property management
fee, Landlord and Tenant shall submit such dispute
to binding arbitration pursuant to the Uniform
Arbitration Act as adopted by the Commonwealth of
Virginia, Va. Code Ann. 8.01-581.01 et seq. (as
the same may be amended from time to time).
Tenant further acknowledges that the portion
allocable to the Premises of the reasonable costs
incurred in connection with the operation and
management of, and providing and obtaining
maintenance, landscaping, utilities and repairs
for Avion (R) Business Park shall constitute
Operating Expenses.
6. ADDITIONAL RENT.
(A) Tenant shall pay its Pro Rata Share of Taxes and
Operating Expenses ("Tenant's Share"). As soon as
practicable each year during the Lease Term,
Landlord shall furnish to Tenant a detailed
estimate of Tenant's Share for the timeframe in
question (broken down on a category by category
basis). Tenant acknowledges that Landlord has
provided Tenant with a non-binding estimate of the
Tenant's Share for calendar year 1999, prior to
the execution hereof. Tenant shall pay to
Landlord the estimate for Tenant's Share in equal
monthly installments at the same time and place as
Rent is to be paid. Landlord will furnish a
statement of the actual Tenant's Share no later
than April 1 of each year during the Lease Term,
including the year following the year in which the
Lease expires or is otherwise terminated. In the
event that Landlord is, for any reason, unable to
furnish the statement of the actual Tenant's Share
within the time specified above, Landlord will
furnish such statement as soon thereafter as
practicable with the same force and effect as the
statement would have had if delivered within the
time specified above. Tenant will pay to Landlord
any deficiency as shown by such statement within
thirty (30) days of receipt of such statement.
Provided no Event of Default by Tenant is in
existence under this Lease, Landlord will refund
to Tenant any excess as shown by such statement
within thirty (30) days of the date of the
statement; provided that, if an Event of Default
by Tenant is in existence, Landlord shall refund
to Tenant the amount of such excess at such time
as all Events of Default have been cured.
Landlord will keep books and records showing the
Operating Expenses in accordance with generally
accepted accounting principles.
(B) Any and all payments (other than Rent) required to
be made by Tenant pursuant to this Lease shall be
deemed additional Rent ("Additional Rent").
Landlord shall have the same rights and remedies
for said payments as for Rent.
(C) Pro Rata Share. Tenant's pro rata share is 100%
("Pro Rata Share").
(D) Tenant's Right to Audit. If Tenant disputes any
Operating Expenses or Taxes statement, Tenant must
provide Landlord with specific written objections
within one hundred eighty (180) days after
receiving the statement (failing which, the
statement will be deemed conclusive). Within 30
days after receiving these objections, Landlord
will either adjust the disputed statement in
response to Tenant's objection(s) and credit any
overpayment to Tenant as stated above, or notify
Tenant that it believes Tenant's objection is
without merit (it being agreed that, if Landlord
fails to respond within such 30-day period,
Landlord shall be deemed to have agreed to adjust
the disputed statement in response to Tenant's
objection(s) and credit any overpayment to Tenant
as stated above). If Tenant timely disputes a
statement and Landlord notifies Tenant that
Tenant's objection is without merit, Tenant may --
if no Event of Default by Tenant is then in
existence -- cause (i) qualified accounting
employees of Tenant, or (ii) an independent,
certified public accountant ("CPA") to audit the
supporting data for the disputed statement (in
which event, such supporting data shall be made
available to the employee or CPA). However,
Tenant may not exercise its audit right unless the
audit commences within thirty (30) days after
Landlord notifies Tenant that Tenant's objection
is without merit, nor may Tenant audit any
statement more than once (it being understood that
the foregoing prohibition against multiple audits
of the same statement shall not be deemed to
prohibit the examination of the same documents
more than once in the course of the same audit).
Any CPA selected by Tenant to conduct an audit
must have least 5 years experience performing
operating expense pass-through audits for
commercial office buildings in the metropolitan
Washington, D.C. area, and must be approved by
Landlord. Landlord's approval will not be
unreasonably withheld or delayed, if such CPA (a)
is not compensated on a contingency fee basis, and
(b) signs a confidentiality agreement in form
reasonably acceptable to Landlord (Landlord hereby
agreeing that no such confidentiality agreement
shall prohibit the disclosure, in any action or
suit instituted by Tenant against Landlord with
regard to the audited Operating Expenses or Taxes,
of information required to institute or prosecute
such action or suit, but such confidentiality
agreement may require Tenant and the CPA to agree
to reasonable protective orders in connection
therewith). Each audit under this Section 6(D)
must be conducted at Landlord's property manager's
Washington, D.C. area office. If Landlord does
not agree with the audit results of the CPA Tenant
selects, or Tenant's employee(s), Landlord and
Tenant will endeavor to resolve their differences
(failing which, the dispute will be conclusively
determined based on an independent audit by a
third-party CPA selected by the parties or,
failing agreement, appointed by the American
Arbitration Association or any recognized
successor thereto upon application by either
party). The parties will make any necessary
adjustments in accordance with the third-party CPA
audit. Tenant must pay all costs and expenses of
Tenant's audit (including, but not limited to,
reasonable copying charges), unless the amounts
paid by Tenant to Landlord for the year in
question exceeded the amounts to which Landlord
was entitled by more than 6%, in which event
Landlord will reimburse Tenant for the reasonable
costs incurred in connection with Tenant's audit.
If the third-party CPA audit shows Tenant has
underpaid Operating Expenses or Taxes (or both),
in addition to paying to Landlord the underpayment
amount, Tenant shall reimburse Landlord upon
demand for all reasonable costs, expenses and fees
incurred by Landlord in connection with such
dispute. If a third-party CPA ultimately resolves
the dispute, the losing party shall pay the costs
incurred in connection with the third-party CPA
audit (including, but not limited to, reasonable
copying charges). Tenant has no right to withhold
or reduce any performance by Tenant under the
Lease pending or based upon any audit under this
Section 6(D).
7. SORTING AND SEPARATION OF REFUSE AND TRASH.
Tenant shall be responsible for contracting for all
trash removal services. Tenant covenants and agrees,
as its sole cost and expense, to comply with all
present and future laws, orders and regulations of all
state, federal, municipal and local governments,
departments, commissions and boards regarding the
collection, sorting, separation and recycling of waste
products, garbage, refuse and trash. Tenant shall pay
all costs, expenses, fines, penalties or damages that
may be imposed on Landlord or Tenant by reason of
Tenant's failure to comply with the provisions of this
Section 7, and, at Tenant's sole cost and expense,
shall indemnify, defend and hold Landlord harmless
(including legal fees and expenses) from and against
any actions, claims and suits arising from such
noncompliance, utilizing counsel reasonably
satisfactory to Landlord.
8. HAZARDOUS SUBSTANCES.
(A) The term "Hazardous Substances" shall mean
pollutants, contaminants, toxic or hazardous
wastes, or any other substances, the use and/or
the removal of which is required or the use of
which is restricted, prohibited or penalized by
any "Environmental Law", which term shall mean any
federal, state or local law, regulation, order,
ordinance or other statute of a governmental or
quasi-governmental authority relating to pollution
or protection of the environment. Tenant hereby
agrees that (A) no activity will be conducted on
the Premises that will produce any Hazardous
Substances, except for such activities that are
part of the ordinary course of Tenant's business
activities (the "Permitted Activities") provided
said Permitted Activities are conducted in
accordance with all Environmental Laws and have
been acknowledged and consented to in advance in
writing by Landlord (such consent not to be
unreasonably withheld); Tenant shall be
responsible for obtaining any required permits and
paying any fees and providing any testing required
by any governmental agency in connection with the
Permitted Activities; (B) the Premises will not be
used in any manner for the storage of any
Hazardous Substances except for the temporary
storage of such materials (the "Permitted
Materials") that are used in the ordinary course
of the Permitted Activities, provided such
Permitted Materials are properly stored in a
manner and location meeting all Environmental Laws
and acknowledged and consented to in advance in
writing by Landlord (such consent not to be
unreasonably withheld); Tenant shall be
responsible for obtaining any required permits and
paying any fees and providing any testing required
by any governmental agency in connection with the
Permitted Materials; (C) no portion of the
Premises will be used as a landfill or a dump; (D)
Tenant will not install any underground tanks of
any type; (E) Tenant will not cause any surface or
subsurface conditions to exist or come into
existence that constitute, or with the passage of
time may constitute a public or private nuisance;
(F) Tenant will not knowingly or negligently
permit any Hazardous Substances to be brought onto
the Premises by or on behalf of Tenant, except for
the Permitted Materials described above, and if so
brought thereon, the same shall be immediately
removed, with proper disposal, and all required
cleanup procedures shall be diligently undertaken
pursuant to all Environmental Laws. Landlord or
Landlord's representative shall have the right but
not the obligation to enter the Premises for the
purpose of inspecting the storage, use and
disposal of Permitted Materials to ensure
compliance with all Environmental Laws. Should it
be determined, in Landlord's sole (but reasonable)
opinion, that said Permitted Materials are being
improperly stored, used, or disposed of, then
Tenant shall immediately take such corrective
action as is reasonably requested by Landlord.
Should Tenant fail to take such corrective action
within ten (10) days (or such shorter period as is
reasonable under the circumstances), Landlord
shall have the right to perform such work and
Tenant shall promptly reimburse Landlord for any
and all actual, out-of-pocket costs associated
with said work. If at any time during or after
the Lease Term, the Premises are found to be
contaminated by Hazardous Materials as a
consequence of the acts or omissions of Tenant or
any of Tenant's Agents, or any surface or
subsurface conditions exist at the Property as a
consequence of the acts or omissions of Tenant or
any of Tenant's Agents, Tenant shall diligently
institute proper and thorough cleanup procedures
at Tenant's sole cost, and Tenant agrees to
indemnify, defend and hold harmless Landlord, its
lenders, any managing agents and leasing agents of
the Property, and their respective agents,
partners, officers, directors and employees, from
all claims, demands, actions, liabilities, costs,
expenses, penalties (whether civil or criminal),
damages (actual or punitive) and obligations of
any nature arising from or as a result of such
contamination or conditions. The foregoing
indemnification and the responsibilities of Tenant
shall survive the termination or expiration of
this Lease.
(B) Except with regard to the use, storage and
disposal, in accordance with applicable law, of
Hazardous Substances utilized in the ordinary
course of the maintenance, repair and/or operation
of the Property ("Landlord's Permitted
Substances"), Landlord agrees that it will be
fully responsible for all costs, expenses, damages
or liabilities which may occur from the use,
storage, disposal, release, spill or discharge of
Hazardous Substances by Landlord or its agents,
representatives, employees or contractors while
acting within the scope of their employment, and
it shall indemnify, defend and hold harmless
Tenant and its agents, employees, partners,
officers, directors, invitees, assignees,
sublessees, contractors and others for whose
actions Tenant is responsible (collectively,
"Tenant's Agents") from all claims, demands,
actions, liabilities, reasonable costs, reasonable
expenses, penalties (whether civil or criminal),
damages (actual or punitive) and obligations of
any nature to the extent arising from or as a
result of any violation of this Section 8(B). The
foregoing indemnification and the responsibilities
of Landlord shall survive the termination or
expiration of this Lease.
(C) During and after the Lease Term, Tenant and
Landlord shall each promptly provide the other
with copies of all summons, citations, directives,
information inquiries or requests, notices of
potential responsibility, notices of violation or
deficiency, orders or decrees, claims, complaints,
investigations, judgments, letters, notices of
environmental liens, and other communications,
issued or threatened in writing, from the United
States Environmental Protection Agency,
Occupational Safety and Health Administration, the
Commonwealth of Virginia Department of
Environmental Quality, or other federal, state or
local agency or authority, or any other entity or
individual, whether public or private, concerning
(i) any Hazardous Substance regarding the Property
or the Premises; (ii) the imposition of any
environmental lien on the Property or the
Premises; or (iii) any alleged violation of or
responsibility under any Environmental Law, with
respect to the Property.
9. INSURANCE.
(A) INSURANCE BY LANDLORD.
Landlord shall, during the Lease Term, procure and
keep in force the following insurance (it being
understood that the cost of commercially
reasonable premiums and deductibles incurred or
paid by or on behalf of Landlord in connection
therewith will be deemed Additional Rent payable
by Tenant pursuant to Section 5 and Section 6
(Tenant hereby acknowledging that, as of the date
hereof, Landlord's deductible in connection with
its casualty insurance is $10,000 per occurrence,
and such deductible is commercially reasonable)):
(1) Property insurance insuring the Premises and
Improvements and rental income insurance
(i.e., loss of rents insurance) for perils
covered by the causes of loss - special form
(all risk) and in addition coverage for
flood, earthquake and boiler and machinery
(if applicable). Such coverage (except for
flood and earthquake) shall be written on a
replacement cost basis equal to ninety
percent (90%) of the full insurable
replacement value of the foregoing and shall
not cover Tenant's equipment, trade fixtures,
inventory, fixtures or personal property
located on or in the Premises.
(2) Commercial general liability insurance
against any and all claims for death, bodily
injury and property damage occurring in or
about the Premises or the land. Such
insurance shall have a combined single limit
of not less than One Million Dollars
($1,000,000) per occurrence per location with
a Two Million Dollars ($2,000,000) aggregate
limit, and shall name Tenant as an additional
insured.
(3) Such other insurance as Landlord deems
reasonably necessary and prudent, consistent
with the insurance customarily maintained by
comparable buildings in the Chantilly
submarket of Fairfax County, Virginia, or as
reasonably required by Landlord's
beneficiaries or mortgagees of any deed of
trust or mortgage encumbering the Premises.
(B) INSURANCE BY TENANT.
Tenant shall, during the Lease Term, procure and
keep in force the following insurance:
(1) Commercial general liability insurance naming
Landlord and Landlord's managing agent for
the Premises as additional insureds against
any and all claims for death, bodily injury
and property damage occurring in, or about
the Premises arising out of Tenant's use and
occupancy of the Premises. Such insurance
shall have a combined single limit of not
less than One Million Dollars ($1,000,000)
per occurrence with Two Million Dollars
($2,000,000) aggregate limit and excess
umbrella liability insurance in the amount of
Two Million Dollars ($2,000,000). If Tenant
has other locations that it owns or leases,
the policy shall include an aggregate limit
per location endorsement conforming to the
foregoing. Such liability insurance shall be
primary and not contributing with any
insurance available to Landlord and
Landlord's insurance shall be in excess
thereto. In no event shall the limits of
such insurance be considered as limiting the
liability of Tenant under this lease.
(2) Personal property insurance insuring all
equipment, trade fixtures, inventory,
fixtures and personal property located on or
in the Premises for perils covered by the
cause of loss - special form (all risk) and
in addition, coverage for flood, earthquake
and boiler and machinery (if applicable).
Such insurance shall be written on a
replacement cost basis in an amount equal to
ninety percent (90%) of the full replacement
value of the aggregate of the foregoing.
(3) Workers' compensation insurance in accordance
with statutory law and employers' liability
insurance with a limit of not less than
$100,000 per accident, $500,000 for a disease
policy limit, and $100,000 for disease limit
for each employee.
(4) Business interruption insurance in such
amounts, if any, that Tenant in its prudent
business judgment, elects to maintain, from
time to time, it being understood and agreed
that if there is any conflict between the
provisions of this Section 9(B)(4) and the
provisions of Section 9 (B)(5),the provisions
of this Section 9(B)(4) shall govern and
control.
(5) Such other insurance as Landlord deems
necessary and prudent, consistent with the
insurance customarily required to be
maintained by tenants of comparable buildings
in the Chantilly submarket of Fairfax County,
Virginia, or as reasonably required by
Landlord's beneficiaries or mortgagees of any
deed of trust or mortgage encumbering the
Property.
The policies required to be maintained by Tenant
and the policies required to be maintained by
Landlord shall each be issued by companies rated
AX or better in the most current issue of Best's
Insurance Reports. Insurers shall be licensed or
authorized to do business in the state in which
the Premises is located and domiciled in the
United States. Any deductible amounts under any
of Tenant's insurance policies required hereunder
shall not exceed $10,000. Certificates of
insurance (certified copies of the policies shall
be provided upon Landlord's request) shall be
delivered to Landlord prior to the Commencement
Date and annually thereafter at least thirty (30)
days prior to the expiration date of the old
policy. Tenant shall have the right to provide
insurance coverage which it is obligated to carry
pursuant to the terms hereof in a blanket policy,
provided such blanket policy expressly affords
coverage to the Premises, and to Landlord, as
required by this Lease. Each policy of insurance
shall provide notification to Landlord at least
ten (10) days prior to any cancellation or
modification to reduce the insurance coverage. In
the event Tenant does not purchase the insurance
required by this Lease or fails to keep the same
in full force and effect, Landlord may (but shall
not be obligated to), upon forty-eight (48) hours
notice (or, in the case of the lapse of Tenant's
general liability insurance, without notice),
purchase the required insurance and pay the
premium. The Tenant shall repay to Landlord, as
Additional Rent the amount so paid promptly upon
demand. In addition, Landlord may recover from
Tenant and Tenant agrees to pay, as Additional
Rent, any and all reasonable expenses (including
reasonable attorneys' fee) and damages which
Landlord may sustain by reason of the failure of
Tenant to obtain and maintain such insurance.
(C) SUBROGATION.
Landlord and Tenant mutually waive their
respective rights of recovery against each other
for any loss of, or damage to, either parties'
property, to the extent that such loss or damage
is insured by an insurance policy required to be
in effect at the time of such loss or damage.
Each party shall obtain any special endorsements,
if required by its insurer, whereby the insurer
waives its rights of subrogation against the other
party. This clause shall not apply in those cases
where waiver of subrogation would cause either
parties' insurance to be voided or otherwise made
uncollectible.
10. DAMAGE OR DESTRUCTION.
If (i) the Premises shall be materially damaged or
destroyed during the last year of the Lease Term (it
being agreed that, if the Extension Option was
exercised prior to such damage or destruction and
Tenant's right of rescission thereof has lapsed or is
waived in writing by Tenant not later than the earlier
of (x) 315 days in advance of the Expiration Date, or
(y) thirty (30) days after the date of such damage or
destruction, the last year of the Lease Term shall be
deemed to be the last year of the Extension Period), or
(ii) the Premises is damaged or destroyed to such
extent that the damage or destruction cannot be
repaired within a period of three hundred sixty-five
(365) days of the date of such damage or destruction,
either Landlord or Tenant may terminate this Lease by
written notice (the "Damage Notice") delivered to the
other within sixty (60) days of the date of such damage
or destruction (and in such event this Lease shall
terminate as of date of such damage or destruction as
if such date were the Expiration Date hereof). In
addition, Landlord, at its sole option, shall have the
right to cancel and terminate this Lease, by written
notice (the "Section 10 Notice") delivered to Tenant
not later than sixty (60) days after the date of damage
or destruction, in the event (i) the Premises is
materially damaged or destroyed, (ii) the unexpired
portion of the Lease Term which will remain after
completion of rebuilding or restoration of the Premises
(based on the estimated time for rebuilding or
restoration from a reputable, independent contractor)
is less than forty-two (42) months [it being agreed
that, for purposes of the foregoing calculation, if the
Extension Option was exercised prior to such damage or
destruction and Tenant's right of rescission thereof
has lapsed or is waived in writing by Tenant not later
than the earlier of (x) 315 days in advance of the
Expiration Date, or (y) thirty (30) days after the date
of such damage or destruction, less than forty-two (42)
months of the Extension Period will remain unexpired
after completion of rebuilding or restoration of the
Premises, based upon the estimated time for such
rebuilding or restoration], and (iii) Tenant shall fail
to execute and deliver to Landlord within thirty (30)
days after the date that Tenant received the Section 10
Notice an extension of the Lease Term equal to the
amount of time by which the remaining Lease Term
(which, if the Extension Option is not exercised prior
to such damage or destruction or if Tenant's right of
rescission thereof has not lapsed or is not waived in
writing by Tenant within thirty (30) days after the
date of such damage or destruction, shall exclude the
Extension Period, and in all events shall exclude the
estimated time to rebuild or restore the Premises) is
less than forty-two (42) months, upon the same terms
and conditions set forth herein except that the Rent
for the period of such extension shall equal the
then-escalated Rent in effect immediately prior to the
expiration of the Lease Term, subject to escalation in
the same manner in effect immediately prior to the
expiration of the Lease Term. If Landlord delivers
neither the Damage Notice or the Section 10 Notice to
Tenant within sixty (60) days after the date of the
damage or casualty, Landlord shall be deemed to have
waived its right to terminate this Lease in connection
with such damage or destruction. If this Lease is not
terminated, then Landlord shall repair and restore the
Premises (exclusive of Tenant's equipment, trade
fixtures, inventory, fixtures and personal property)
with all reasonable speed (but in all events not later
than twelve (12) months after the date of the damage)
to substantially the same condition as immediately
prior to such damage or destruction, and the Rent and
Additional Rent or a just and proportionate part
thereof, according to Tenant's ability to utilize the
Premises in its damaged condition, shall be abated
until the Premises shall have been repaired and
restored by Landlord.
11. INDEMNIFICATION.
(A) Subject to the terms of Section 9(C), Tenant shall
and does hereby indemnify, hold harmless, and
defend Landlord (except for Landlord's gross
negligence or willful misconduct) against all
costs, damages, injury, claims, liabilities or
expenses (including, but not limited to,
reasonable attorneys' fees), losses and court
costs with respect to injury or death to any
person or for damage to or loss of use of any
property arising out of any occurrence in, on or
about the Property or on account of the use,
condition, occupational safety or occupancy of the
Property, to the extent caused or contributed to
by Tenant or Tenant's Agents, or arising out of
any occurrence in, upon or at the Premises, or on
account of the use, condition, occupational safety
or occupancy of the Premises. To the fullest
extent permitted by applicable law, it is the
intent of the parties hereto that the indemnity
contained in this Section shall not be limited or
barred by reason of any ordinary negligence on the
part of Landlord or Landlord's agents, but nothing
herein contained shall be deemed to require Tenant
to indemnify Landlord against the negligence of
Landlord or Landlord's agents except to the extent
Tenant is insured against liability arising
therefrom. Such indemnification shall include and
apply to (but shall not be limited to) reasonable
attorneys' fees, investigation costs, and other
costs actually and reasonably incurred by
Landlord. Subject to the terms of Section 9(C),
Tenant shall and does hereby further indemnify,
defend and hold harmless Landlord from and against
any and all costs, damages, injury, claims,
liabilities or expenses arising from any breach or
default in the performance of any obligation on
Tenant's part to be performed under the terms of
this Lease. The provisions of this Section shall
survive the expiration or termination of this
Lease with respect to any damage, injury, death,
breach or default occurring prior to such
expiration or termination. This Lease is made on
the express conditions that, except as expressly
set forth in this Lease, Landlord shall not be
liable for, or suffer loss by reason of, injury to
person or property, from whatever cause, in any
way connected with the condition, use,
occupational safety or occupancy of the Premises
specifically including, without limitation, any
liability for injury to the person or property of
Tenant or Tenant's Agents.
(B) Subject to the terms hereof (including, but not
limited to, Section 9(C) hereof), Landlord shall
and does hereby indemnify and hold harmless Tenant
from and against all costs, damages, injury,
claims, liabilities, expenses (including, but not
limited to, reasonable attorneys' fees), losses
and court costs to the extent caused by or
contributed to by any gross negligence or willful
misconduct of Landlord or its agents or employees
acting within the scope of their employment. Such
indemnification shall include and apply to (but
shall not be limited to) reasonable attorneys'
fees, investigation costs, and other costs
actually and reasonably incurred by Tenant.
Subject to the terms of Section 9(C), Landlord
shall further and does hereby indemnify, defend
and hold harmless Tenant from and against any and
all costs, damages, injury, claims, liabilities or
expenses arising from any breach or default in the
performance of any obligation on Landlord's part
to be performed under the terms of this Lease. To
the fullest extent permitted by applicable law, it
is the intent of the parties hereto that the
indemnity contained in this paragraph shall not be
limited or barred by reason of any ordinary
negligence on the part of Tenant or Tenant's
Agents, but nothing herein contained shall be
deemed to require Landlord to indemnify Tenant
against the negligence of Tenant or Tenant Agents
except to the extent Landlord is insured against
liability arising therefrom. The provisions of
this Section shall survive the expiration or
termination of this Lease with respect to any
damage, injury, death, breach or default occurring
prior to such expiration or termination. This
Lease is made on the express conditions that,
except as expressly set forth in this Lease,
Tenant shall not be liable for, or suffer loss by
reason of, injury to person or property, from
whatever cause, in any way connected with the
condition, use, occupational safety or occupancy
of the common areas of Avion (R) Business Park
specifically including, without limitation, any
liability for injury to the person or property of
Landlord or Landlord's agents or employees.
12. ASSIGNMENT AND SUBLETTING.
(A) Tenant shall not assign, encumber, mortgage,
pledge, license, hypothecate or otherwise transfer
the Premises or this Lease, in whole or in part,
or sublease all or any part of the Premises, or
permit the use or occupancy of any part of the
Premises by any person or entity other than Tenant
and its employees, without the prior written
consent of Landlord, which may be granted or
withheld in Landlord's sole discretion; provided
that, subject to Landlord's termination right as
set forth below, Landlord agrees not to
unreasonably withhold, delay or condition its
consent to any sublease or assignment (each a
"Transfer"). Notwithstanding anything herein
contained to the contrary, it shall be deemed
reasonable for Landlord to withhold its consent to
a proposed Transfer if Landlord reasonably
determines that: (1) the proposed Transferee or
its business is not of a type and quality suitable
for a building of comparable quality and type, (2)
the proposed Transferee is a governmental or
quasi-governmental authority, a foreign government
or international agency or other organization
entitled to sovereign or other immunity, (3) the
proposed operations of the proposed assignee or
subtenant would materially and adversely interfere
with the ability of other tenants of the Building
to utilize their premises for the uses
("Comparable Uses") that are consistent with the
type of uses found in buildings that are of
similar quality and type as the Building, (4) the
proposed assignee has not been demonstrated to
Landlord's satisfaction to have sufficient
financial capability and stability to perform its
obligations under such proposed assignment, or (5)
the proposed Transferee is proposing to engage in
a use which (i) is not a Permitted Use, (ii) is
not permitted pursuant to applicable law to be
conducted by the proposed Transferee or within the
Premises (or such lesser portion as is being
sublet) or both, (iii) will violate any covenant,
condition, restriction or other matter of record
affecting title to the Property, or (iv) will
violate any "exclusive use" or other restrictive
covenant of any other lease of any portion of the
Property (so long as such exclusive use or
restrictive covenant does not restrict the ability
of Tenant to engage in the Permitted Use).
(B) (1) Tenant must request Landlord's consent to an
assignment or sublease in writing at least
thirty (30) days prior to the commencement
date of the proposed sublease or assignment,
which request must include (a) the name and
address of the proposed assignee or
subtenant, (b) the nature and character of
the business of the proposed assignee or
subtenant, (c) financial information
(including financial statements) of the
proposed assignee or subtenant, and (d) a
copy of the proposed sublet or assignment
agreement, which must be in substance and
form reasonably acceptable to Landlord.
Tenant shall also provide any additional
information Landlord reasonably requests
regarding such proposed assignment or
subletting.
(2) Within twenty-one (21) days after Landlord
receives Tenant's request for consent to a
proposed assignment or subletting (with all
required information included), Landlord
shall have the option: (i) to grant its
consent to such proposed assignment or
subletting, or (ii) to deny or condition its
consent to such proposed assignment or
subletting (it being understood that such
consent will not, subject to Landlord's right
of termination, be unreasonably withheld,
conditioned or delayed), or (iii) at
Landlord's sole discretion, to terminate this
Lease effective as of the commencement date
of such proposed assignment, or, if a
sublease, to sublease the portion of the
Premises proposed to be subleased, on the
same terms and conditions set forth in the
proposed sublease for which Landlord's
consent is sought. If Landlord fails to
respond to Tenant within such period of time,
Tenant may deliver to Landlord a second (2nd)
request for such consent, which notice shall
specifically state that the failure by
Landlord to respond within five (5) business
days shall be deemed Landlord's election to
grant its consent thereto, and in the absence
of a response to such second (2nd) notice,
Landlord shall be deemed to have granted its
consent thereto. Landlord acknowledges that
as of the date of this Lease, Tenant has
delivered to Landlord a list containing the
names of the entities identified by Tenant as
Tenant's current direct competitors. At
least seven (7) days prior to the date that
Landlord enters into a lease or grants any
party (other than Tenant) the right to use
any portion of the Premises, Landlord shall
deliver a written notice (the "Competitor
Request Notice") to Tenant which requests
that Tenant provide Landlord with a written
list of Tenant's then direct competitors. If
within seven (7) days after the date that
Tenant receives a Competitor Request Notice,
Tenant delivers to Landlord a list of direct
competitors, then such list shall be deemed
the then-current "Competitor List", provided
that if Tenant fails to deliver to Landlord
such list within seven (7) days after the
date Tenant receives a Competitor Request
Notice, then the then current Competitor List
shall be deemed to be the most recent list of
direct competitors that has been delivered to
Landlord by Tenant. Landlord acknowledges
and agrees that, so long as (x) GTSI is the
Tenant hereunder, and (y) GTSI utilizes the
Premises for sales, marketing or training
purposes or for its executive offices,
Landlord may not (i) lease space recaptured
pursuant to the foregoing clause
12(B)(2)(iii) or the following Section
12(B)(3) to any direct competitor of GTSI on
the then current Competitor List or (ii)
permit any direct competitor of GTSI on the
then current Competitor List to use any
portion of the Premises. For purposes of
this Section 12(B)(2) and Section 12(E), (i)
the term "GTSI" shall include Government
Technology Services, Inc. and any
organization successor thereto by means of
merger, consolidation or reorganization, and
(ii) the terms "direct competitor" and
"direct competitors" shall mean business
operations that have been identified by
Tenant in writing on the most recent
Competitor List as direct competitors in
accordance with the foregoing provisions,
which operations engage in the resale of
computers to the United States government (it
being understood that computer manufacturers,
and any division of any company which
otherwise qualifies as a direct competitor of
GTSI but the division of which is to be
located within the recaptured space does not
engage in the resale of computers to the
United States government, shall not be
prohibited by the preceding provisions of
this Section 12 (B)(2)).
(3) Tenant shall additionally have the right to
deliver to Landlord advance written notice
(each an "Intent Notice") of Tenant's intent
to assign or sublease before Tenant
identifies the proposed assignee or
sublessee. Each Intent Notice shall include
the terms and conditions upon which Tenant
proposes to assign or sublease. Landlord may
exercise its recapture right pursuant to the
foregoing Section 12(B)(2)(iii), with respect
to the space Tenant intends to sublet or
assign as identified in Tenant's Intent
Notice, within twenty-one (21) days after
delivery of Tenant's Intent Notice, but if
Landlord fails to exercise such right within
such 21-day period, Landlord shall have no
right to exercise such recapture right, with
respect to any proposed assignment or sublet
of the space identified in Tenant's Intent
Notice on the terms and conditions described
in such Intent Notice, during the sixty (60)
day period following the expiration of such
21-day recapture period (or any earlier date
on which Landlord notifies Tenant that it
will not exercise its recapture right at that
time).
(C) Each sublease and/or assignment is also subject to
all of the following terms and conditions:
(1) Tenant shall pay to Landlord as Additional
Rent fifty percent (50%) of the amount (the
"sublet profit"), if any, by which the rent
(net of any rent abatements), any additional
rent and any other sums paid by the assignee
or subtenant to Tenant under such assignment
or sublease (after deducting therefrom the
reasonable out-of-pocket costs incurred by
Tenant in the subject transaction, including,
but not limited to, brokerage commissions,
hard and soft construction expenses, tenant
concessions (exclusive of non-cash
concessions, such as free rent), and
reasonable legal fees) exceeds the total of
(i) the Rent plus (ii) any Additional Rent
payable by Tenant hereunder, which is
allocable to the portion of the Premises
and/or the Lease Term which is the subject of
such assignment or sublease. The foregoing
payments shall be made on a monthly basis by
Tenant in each month in which a sublet profit
is received. In the event that Tenant
receives any consideration in connection with
a merger, consolidation, reorganization of
Tenant, or in connection with a sale of all
or substantially all of Tenant's assets or
stock, then the provisions of this Section
12(c)(1) shall not be applicable to such
consideration.
(2) No consent to any assignment or sublease
shall constitute a further waiver of the
provisions of this Section, and all
subsequent assignments or subleases may be
made only upon the terms and conditions of
this Section 12 and, where required, with the
prior written consent of Landlord in
accordance herewith. In no event shall any
consent by Landlord be construed to permit
reassignment or resubletting by a permitted
assignee or sublessee.
(3) No sublease or assignment by Tenant shall
relieve Tenant of any liability hereunder.
(4) Any assignment or sublease made without
Landlord's prior written consent (if such
consent is required) shall be void, and
shall, at the option of the Landlord,
constitute an Event of Default under this
Lease.
(5) No assignment or sublease shall be granted
for any term which extends beyond the Lease
Term.
(6) Tenant shall reimburse Landlord upon demand
for all reasonable costs, expenses and fees
incurred by or on behalf of Landlord in
connection with any proposed assignment or
sublease by Tenant (including, but not
limited to, Landlord's reasonable attorneys
fees and out-of-pocket expenses, if any), up
to a maximum of One Thousand Five Hundred
Dollars ($1,500.00) per proposed Transfer.
(D) The following events also constitute an
"Assignment" which is subject to the terms of this
Section and for which Landlord's prior written
consent is required: (i) if Tenant is a
corporation and any part or all of Tenant's shares
of stock, or the shares of stock or other
ownership interests of any corporation or other
entity owning shares of Tenant's stock, shall in
any one or more instances be issued, or
transferred by sale, assignment, conveyance,
operation of law (including, but not limited to,
transfer as a result of or in conjunction with any
merger, reorganization or recapitalization) or
other disposition, or otherwise changed, so as to
result in less than fifty-one (51%) of such
shares, or other ownership interests, or less than
fifty-one percent (51%) of any class of such
shares or other ownership interests, being owned
by the present (i.e., as of the date hereof)
owners thereof; (ii) if Tenant is a partnership
and any general partnership interest(s), or the
stock or other ownership interests of any
corporation or other entity owning any such
general partnership interests(s), in the
partnership shall in any one or more instances be
issued, or transferred by sale, assignment,
conveyance, operation of law (including, but not
limited to, transfer as a result of or in
conjunction with any merger, reorganization or
recapitalization) or other disposition, or
otherwise changed, so as to result in less than
fifty-one percent (51%) of such general
partnership interests(s), stock (or any class of
such stock) or other ownership interests being
owned by the present (i.e., as of the date hereof)
owners thereof; (iii) if Tenant is a limited
liability company or any other type of entity, and
any interest(s) of any member or other equity
owner, or the ownership interests of any entity
owning any membership interest(s) or other equity
interest in the Tenant, shall in any one or more
instances be issued, or transferred by sale,
assignment, conveyance, operation of law
(including, but not limited to, transfer as a
result of or in conjunction with any merger,
reorganization or recapitalization) or other
disposition, or otherwise changed, so as to result
in less than fifty-one percent (51%) of such
membership interests or other such equity and/or
ownership interests being owned by the present
(i.e., as of the date hereof) owners thereof; or
(iv) if effective control of the corporation,
partnership, limited liability company or other
form of Tenant shall be taken from those
exercising such control as of the date hereof.
Notwithstanding anything herein contained to the
contrary, this Section 12(D) shall not be deemed
to apply to Tenant if Tenant is a corporation the
shares of which are traded on a
nationally-recognized exchange and which is
required to make public disclosures regarding
ownership and financial condition.
(E) Notwithstanding any other provision of this Lease
to the contrary, GTSI (as defined in Section
12(B)(2)), while it is the Tenant and no Event of
Default is in existence hereunder, shall have the
right to (1) assign this Lease or to sublet all or
any portion of the Premises, in either case
without the consent of Landlord, to any successor
to GTSI by merger, consolidation or
reorganization, and to any affiliate that is
wholly-owned by or under common ownership with
GTSI (as part of a single group of interlocking
companies), or to any wholly-owned and controlled
division or sub-entity of GTSI, or (2) sublet up
to twenty percent (20%) of the Premises in the
aggregate (collectively, the "Permitted
Sublettings") without the consent of Landlord,
subject to the satisfaction of the following
conditions: (a) the proposed assignee or sublessee
(the "Transferee") and its business shall be of a
type and quality suitable for a building of
comparable quality and type, (b) the proposed
Transferee shall not be a governmental or
quasi-governmental authority, a foreign government
or international agency or other organization
entitled to sovereign or other immunity, (c) the
proposed operations of the proposed assignee or
subtenant will not materially and adversely
interfere with the ability of other tenants of the
Building to utilize their premises for the
Comparable Uses, (d) GTSI shall notify Landlord
not less than ten (10) days in advance of the
effective date of such assignment or sublease of
GTSI's intent to enter into such assignment or
sublease (failing which, Landlord shall be
entitled, and GTSI shall pay to Landlord as
liquidated damages, the sum of Five Hundred
Dollars ($500.00) for each failure to so notify
Landlord), (e) occupancy of the Premises by such
Transferee will not violate existing law, (f)
there will be no use of the Premises in violation
of the terms hereof, (g) with respect to an
assignment, such Transferee shall expressly assume
all of the obligations of the Tenant hereunder on
a form reasonably acceptable to Landlord, and (h)
no such assignment or subletting shall relieve
GTSI of any agreement, covenant, duty, liability
or obligation hereunder. Landlord acknowledges
and agrees that Landlord's right to recapture
pursuant to this Section 12 shall not apply to any
assignment or sublease to any successor to GTSI by
merger, consolidation or reorganization, or to
affiliate that is wholly-owned by or under common
ownership with GTSI (as part of a single group of
interlocking companies), or to any wholly-owned
and controlled division or sub-entity of GTSI,
which may be made without Landlord's consent under
the terms hereof, nor to the Permitted
Sublettings.
(F) Tenant hereby assigns to the Landlord absolutely
the rent due from each assignee and subtenant and
Tenant hereby authorizes each such assignee and
subtenant to pay said rent directly to Landlord
for credit, as and when collected by the Landlord
(and net of the Landlord's reasonable collection
costs), against the Rent and Additional Rent
payable hereunder; provided that, for all periods
in which no Event of Default shall be in existence
hereunder, Landlord shall permit Tenant to
continue to collect the rent from such assignees
and subtenants.
13. CARE OF PREMISES.
Except to the extent the obligation of Landlord
pursuant to the express terms hereof, Tenant covenants
and agrees that during the Lease Term it will keep the
Premises and every part thereof in good order,
condition and repair (subject to reasonable wear and
tear, and damage by fire or other casualty which is not
Tenant's obligation to repair),and that it will in all
respects and at all times duly comply with all
applicable laws, and all covenants, conditions and
restrictions applicable to the Property.
14. ALTERATION BY TENANT.
(A) Tenant is hereby given the right, at its sole cost
and expense, at any time during the Lease Term, to
make non-structural alterations or improvements to
the interior of the Improvements which Tenant
deems necessary or desirable for its purposes;
provided, however, that no alterations or
improvements shall be made without the prior
written approval of Landlord, which written
approval shall not be unreasonably withheld,
conditioned or delayed so long as the proposed
alterations do not affect the structure of the
Property or the systems serving the same, do not
require any alterations to be made to portions of
the Property outside the Premises, and will not
materially and adversely interfere with the
ability of other tenants of the Building to
utilize their premises for the Comparable Uses.
Landlord's approval of any plans, specifications
or work drawings shall create no responsibility or
liability on the part of the Landlord for their
completeness, design sufficiency or compliance
with any laws, rules and regulations of
governmental agencies or authorities.
Notwithstanding the foregoing, Landlord's consent
shall not be required for purely cosmetic
decorations nor for non-structural alterations
costing less than Twenty-Five Thousand Dollars
($25,000.00) in the aggregate, so long as (1)
Tenant notifies Landlord of its intent to carry
out such alterations at least ten (10) days in
advance, (2) the proposed alterations do not
affect the structure of the Property or the
systems serving the same, do not require any
alterations to be made to portions of the Property
outside the Premises, do not require the issuance
of a building permit, and will not adversely
affect any other tenant or occupant of the
Property, and (3) Tenant provides Landlord with
reasonable assurances against the attachment of
any mechanics' or materialmen's liens to the
Property. Landlord agrees to respond to any
request for consent to any alteration costing less
than Fifty Thousand Dollars ($50,000) within five
(5) business days after delivery to Landlord of
Tenant's request for consent accompanied by
detailed plans and specifications for the proposed
alteration.
(B) All work herein permitted shall be done and
completed by the Tenant in a good and workmanlike
manner and in compliance with all requirements of
law and of governmental rules and regulations.
Tenant agrees to and does hereby indemnify the
Landlord against all mechanics' or other liens
arising out of any of such work, and also against
any and all costs, damages, injury, claims,
liabilities or expenses which arise out of any
such work. The Landlord agrees to join with the
Tenant in applying for all permits necessary to be
secured from governmental authorities and to
promptly execute such consents as such authorities
may reasonably require in connection with any of
the foregoing work.
(C) Upon written notice to Tenant within ninety (90)
days after expiration of the Lease Term, Landlord
may require that Tenant remove, at Tenant's sole
cost and expense, any or all alterations,
improvements or additions to the Improvements, and
restore the Improvements to their prior condition.
Notwithstanding the foregoing, Landlord shall have
no right to require removal of the Tenant Work, or
any subsequent alteration, addition, improvement
or modification in or to the Premises for which
Landlord's consent is required, unless Landlord
expressly reserves (in writing) the right to
require such removal at the time Landlord's
consent to the plans and specifications therefor
is given. Unless Landlord requires their removal
in accordance with the foregoing, all alterations,
additions and improvements which may be made on
the Improvements (other than video/surveillance
equipment installed by or on behalf of Tenant at
Tenant's expense, exclusive of the Tenant's
Allowance) shall become the property of Landlord
and remain upon and be surrendered with the
Improvements. Tenant shall also repair any damage
to the Improvements or Tenant Work caused by the
installation or removal of Tenant's trade
fixtures, furnishings and equipment, or any
alterations or other improvements made to the
Improvements or Tenant Work by or on behalf of
Tenant.
15. CONDEMNATION.
(A) If the Premises shall be wholly taken by exercise
of right of eminent domain, then this Lease shall
terminate from the day the possession of the whole
of the Premises shall be required under the
exercise of such power of eminent domain. Any
award for the taking of all or part of the
Premises under the power of eminent domain or any
payment made under threat of the exercise of such
power shall be the property of the Landlord.
Tenant reserves such separate rights as it may
have against the condemning authority to claim
damages for loss of its trade fixtures and the
cost of removal and relocation expense, provided
such Tenant rights do not, in any way, diminish
the award to which Landlord would otherwise be
entitled or reduce the amounts payable to Landlord
pursuant to this subsection.
(B) If such part of the Improvements shall be
condemned so as to substantially and materially
hamper the operation of Tenant's business, then
the Rent and Additional Rent payable hereunder
shall be reduced in the proportion that the
remaining area of the Improvements bears to the
original area of the Improvements.
16. SUBORDINATION.
(A) Provided that (i) Landlord enters into a mortgage
which encumbers all or any portion of the
Property, and (ii) Landlord's mortgagee shall have
executed and delivered to Tenant a written
subordination, attornment and non-disturbance
agreement meeting the criteria set forth in
Section 16(B)(the "Approved Agreement"), (x) this
Lease shall be subject and subordinate to the lien
of such mortgage (and to any and all advances made
thereunder); however, Landlord's mortgagee shall
have the right, without Tenant's consent, to
require this Lease be superior to any such
mortgage, and (y) Tenant agrees to execute such
Approved Agreement. Notwithstanding anything
herein to the contrary, if Principal Mutual Life
Insurance Company ("PMLIC") or any party that is
related to or affiliated with PMLIC is the
mortgagee, the form of the subordination and
non-disturbance agreement that will be entered
into shall be the form that is attached hereto as
Exhibit G.
(B) (1) The subordination of this Lease to any
mortgage shall be conditioned upon Landlord
obtaining from the holder of such mortgage a
commercially reasonable form of written
non-disturbance agreement which provides (A)
in the event of a foreclosure or other action
taken under the mortgage by the holder
thereof, this Lease and the rights of Tenant
hereunder shall not be disturbed but shall
continue in full force and effect so long as
Tenant shall not be in default hereunder
beyond the applicable notice and cure period
(if any), and (B) such holder will agree that
in the event it shall be in possession of the
Premises, that so long as Tenant shall
observe and perform all of the obligations of
Tenant to be performed pursuant to this Lease
(subject to applicable notice and cure
rights), such Mortgagee will perform all
obligations of Landlord required to be
performed under this Lease.
(2) Tenant hereby acknowledges that it has been
informed that Principal Mutual Life Insurance
Company currently is the beneficiary of a
deed of trust which encumbers the Land.
Tenant further acknowledges and agrees that
the form of subordination, non-disturbance
and attornment agreement attached hereto as
Exhibit G (the "Approved SNDA") constitutes a
commercially reasonable form of
non-disturbance agreement. Landlord hereby
agrees that, if Principal Mutual Life
Insurance Company fails to execute and
deliver the Approved SNDA to Tenant within
five (5) days after Landlord and Tenant
execute and deliver this Lease, Tenant may
deliver to Landlord a five (5) day written
notice of termination (the "SNDA Termination
Notice") within ten (10) days after the
expiration of the first 5-day period.
Provided the Tenant's SNDA Termination Notice
is timely delivered, and further provided
that such SNDA Termination Notice shall
state, inter alia, that the failure by
Principal Mutual Life Insurance Company to
execute and deliver the Approved SNDA within
five (5) days after delivery of the SNDA
Termination Notice will result in a
termination of this Lease, if Principal
Mutual Life Insurance Company fails to
execute and deliver the Approved SNDA to
Tenant within five (5) days after delivery of
the SNDA Termination Notice this Lease shall
cease and terminate without payment of
penalty or compensation as if the fifth (5th)
day after the date on which Tenant's SNDA
Termination Notice is delivered to Landlord
was the Expiration Date, and Landlord shall
return to Tenant any Security Deposit and any
prepaid Rent.
(3) Tenant hereby acknowledges that it has been
informed that Landlord intends to obtain a
construction loan to finance the construction
of the Improvements and/or the Tenant Work
from a third-party construction lender (the
"Construction Lender"). Landlord hereby
agrees that, if the Construction Lender fails
to execute and deliver to Tenant a
commercially reasonable form of
non-disturbance agreement (a "Construction
SNDA", which form shall provide, inter alia,
that if the Construction Lender forecloses
upon the Property or accepts a deed to the
Property in lieu of foreclosure, the
Construction Lender will, subject to the
provisions of Section 38 below, diligently
pursue completion of the construction of the
Improvements and the Tenant Work beginning
upon the Construction Lender's obtaining
possession of the Property, provided that (i)
Tenant attorns to the Construction Lender as
substitute landlord, (ii) Tenant agrees not
to terminate this Lease, provided that,
subject to the provisions of Section 38
below, the Construction Lender is diligently
pursuing completion of the work to be
performed by Landlord under Exhibit B, and
(iii) Tenant is not in default beyond the
expiration of any applicable cure period, on
or before August 1, 1998, Tenant may deliver
to Landlord a five (5) day written notice of
termination (the "Construction SNDA
Termination Notice") on or before August 11,
1998. Provided the Tenant's Construction
SNDA Termination Notice is timely delivered,
and further provided that such Construction
SNDA Termination Notice shall state, inter
alia, that the failure by the Construction
Lender to execute and deliver the
Construction SNDA within five (5) days after
delivery of the Construction SNDA Termination
Notice will result in a termination of this
Lease, if the Construction Lender fails to
execute and deliver the Construction SNDA to
Tenant within five (5) days after delivery of
the Construction SNDA Termination Notice this
Lease shall cease and terminate without
payment of penalty or compensation as if the
fifth (5th) day after the date on which
Tenant's Construction SNDA Termination Notice
is delivered to Landlord was the Expiration
Date, and Landlord shall return to Tenant any
Security Deposit and any prepaid Rent.
(C) In the event any proceedings are brought for
foreclosure, or in the event of the exercise of
the power of sale under any mortgage made by the
Landlord covering the Premises, Tenant shall
attorn to the purchaser at any such foreclosure,
or to the grantee of a deed in lieu of
foreclosure, and recognize such purchaser or
grantee as the Landlord under this Lease.
(D) Tenant hereby agrees that no mortgagee or its
successor shall be (i) bound by any payment of
Rent or Additional Rent for more than one (1)
month in advance, (ii) bound by any amendment or
modification of this Lease made without the
consent of Landlord's mortgagee or its successor
(which consent, if PMLIC is the mortgagee, shall
not be unreasonably withheld, conditioned or
delayed), (iii) liable for damages for any breach,
act or omission of any prior landlord, (iv) bound
to effect or pay for any construction for Tenant's
occupancy (it being understood and agreed that
such mortgagee or its successor shall be obligated
to perform the initial construction of the
Improvements in accordance with the provisions of
Exhibit B to the extent not previously completed),
or (v) subject to any claim of offset or defenses
that Tenant may have against any prior landlord.
Notwithstanding anything herein contained to the
contrary, (x) the foregoing clause (iv) shall not
apply to Principal Mutual Life Insurance Company
or its wholly-owned subsidiaries or to any
Construction Lender, and (y) with respect to any
mortgage, secured in whole or part by the
Property, under which PMLIC or any of its
wholly-owned subsidiaries is the mortgagee or
beneficiary, the disposition of any casualty
proceeds and condemnation awards shall, in the
first instance, be controlled by the terms of this
Lease and not such lender's loan documents, and
such lender will be obligated to return the
Security Deposit, whether or not received by such
lender. Upon Tenant's written request, Landlord
agrees to exercise reasonable efforts (the same
not to include refinancing, payment of money or
posting of security by Landlord) to obtain the
agreement of any future mortgagee (other than
Principal Mutual Life Insurance Company or its
wholly-owned subsidiaries or any Construction
Lender) to include in its non-disturbance
agreement such mortgagee's agreement that (a)
clause (iv) of this Section 16(D) will be
inapplicable, (b) the disposition of any casualty
proceeds and condemnation awards shall, in the
first instance, be controlled by the terms of this
Lease and not such lender's loan documents, and
(c) the lender will be obligated to return the
Security Deposit, whether or not received by such
lender, but the refusal of any such future
mortgagee to agree to such provisions shall not
entitle Tenant to refuse to execute a commercially
reasonable form of written non-disturbance
agreement which complies with Section 16(B).
(E) The word "mortgage" as used herein includes
mortgages, deeds of trust and any sale-leaseback
transactions, or other similar instruments, and
modifications, extensions, renewals, and
replacements thereof, and any and all advances
thereunder.
17. ACCESS TO PREMISES.
Landlord and its authorized agents shall have access to
the Premises, upon forty-eight (48) hours' notice (but
without notice in the event of an emergency) at any and
all reasonable times to inspect the same, to make any
repair or alteration to the Premises, to exhibit and
show the Premises to prospective tenants during the
last three hundred fifteen (315) days of the Lease
Term, and for other purposes pertaining to the rights
of the Landlord. Tenant may require an authorized
representative of Tenant accompany any entry into the
Premises, provided Tenant makes such representative
available upon reasonable prior notice. Tenant shall
also have the right to restrict access to secure areas,
so long as (i) Tenant accepts all responsibility and
liability arising from Landlord's inability to access
such areas, and (ii) a senior employee of Landlord or
Landlord's managing agent is provided access to such
secure area upon 48-hours' notice for purposes of
verifying the condition and use thereof. In exercising
Landlord's rights under this Section 17, Landlord
agrees to exercise commercially reasonable efforts to
avoid any unreasonable interference with the operation
of Tenant's business in the Premises.
18. RULES AND REGULATIONS.
Tenant agrees to comply with the current rules and
regulations set forth in the attached Exhibit D and
made a part hereof by reference. Tenant further agrees
to comply with future rules and regulations promulgated
by Landlord concerning the Premises, to the extent (i)
such future rules and regulations do not increase
Tenant's obligations or decrease Tenant's rights
hereunder, (ii) such future rules and regulations are
not in conflict with the express terms of this Lease,
and (iii) such future rules and regulations are imposed
on all comparable tenants in Avion (R) Business Park.
19. COVENANTS OF RIGHT TO LEASE.
Landlord covenants that it owns the fee interest in the
Land subject to existing covenants, conditions and
restrictions of record, that it has good and sufficient
right to enter into this Lease, subject to approval
from Landlord's mortgagee, and that Landlord alone has
the right to lease the Premises for the Lease Term.
Tenant acknowledges that Landlord has provided to
Tenant a current title report for the Land (the "Title
Report") prior to the date hereof, and Landlord
represents that, to the best of Landlord's actual
knowledge as of the date hereof, Landlord has not
entered into any proffers with respect to the Land that
are binding upon the Land or the occupants thereof
which either are not disclosed on the Title Report or
have not been disclosed in writing to Tenant prior to
the date hereof. Landlord further covenants that upon
Tenant performing the terms and obligations of Tenant
under this Lease, Tenant shall be entitled to have
quiet enjoyment of the Premises and the Property
throughout the Lease Term and any renewal or extension
thereof, without hindrance or molestation by Landlord
or anyone lawfully claiming by, through or under
Landlord, subject to the terms of this Lease; provided
that, nothing herein contained shall be deemed to
constitute a guaranty that neighboring tenants will not
utilize portions of Tenant's parking, but, subject to
the provisions of Section 36 below, Landlord agrees to
consult with Tenant on measures to assure Tenant of the
parking it requires. Subject to the terms hereof,
Tenant shall be entitled to use, and will have access
to, the Premises three hundred sixty-five (365) days
per year, twenty-four (24) hours per day.
20. MECHANICS LIENS.
Neither Tenant nor anyone claiming by, through, or
under Tenant or this Lease, shall have the right to
file or place any mechanics lien or other lien of any
kind or character whatsoever upon the Premises or upon
any improvement thereon, or upon the leasehold interest
of Tenant therein. Notice is hereby given that no
contractor, subcontractor, or anyone else who may
furnish any material, service or labor for any Property
improvements, alteration, repairs or any part thereof,
shall at any time be or become entitled to any lien
thereon. For the further security of Landlord, Tenant
covenants and agrees to give actual notice thereof in
advance to any and all contractors and subcontractors
who may furnish or agree to furnish any such material,
service or labor. Tenant shall cause any such lien
imposed to be released of record by payment or posting
of the proper bond reasonably acceptable to Landlord
within ten (10) days after the earlier of imposition of
the lien or written request by Landlord. If Tenant
fails to remove any lien within the ten (10) day
period, then Landlord, upon ten (10) days prior notice
to Tenant, may do so at Tenant's expense and Tenant's
reimbursement to Landlord for such amount, including,
but not limited to, reasonable attorneys fees and
costs, shall be deemed Additional Rent.
21. EXPIRATION OF LEASE AND SURRENDER OF POSSESSION.
(A) Holding Over. Tenant will, at the expiration or
termination of this Lease by lapse of time or
otherwise, yield up immediate possession of the
Premises to Landlord in the condition required
under this Lease. If Tenant retains possession of
the Premises or any part thereof after such
expiration or termination, then Landlord may, at
its option, serve written notice upon Tenant that
such holding over constitutes (i) creation of a
month-to-month tenancy, upon the terms and
conditions set forth in this Lease, or (ii)
creation of a tenancy at sufferance, upon the
terms and conditions set forth in this Lease;
provided, however, that the monthly Rent (or daily
Rent under (ii)) shall, in addition to all other
sums which are to be paid by Tenant hereunder, be
equal to one hundred ten percent (110%) of the sum
of Rent plus Additional Rent owed monthly to
Landlord under this Lease immediately prior to
such expiration or termination (prorated in the
case of (ii) on the basis of a 365 day year for
each day Tenant remains in possession); provided
further that, if Landlord shall institute any
action, case or suit to recover possession of the
Premises (whether styled as an unlawful detainer
action or otherwise), the monthly Rent (or daily
Rent under (ii)) payable pursuant to the preceding
sentence shall increase, effective as of the date
on which such action, case or suit is filed with
the court, to one hundred fifty percent (150%) of
the sum of Rent plus Additional Rent owed monthly
to Landlord under this Lease immediately prior to
such expiration or termination (prorated in the
case of (ii) on the basis of a 365 day year for
each day Tenant remains in possession). If no
such notice is served, then a tenancy at
sufferance shall be deemed to be created at the
Rent in the preceding sentence. Tenant shall also
pay to Landlord as Additional Rent all damages
sustained by Landlord resulting from retention of
possession by Tenant, including the loss of any
proposed subsequent tenant for any portion of the
Premises. The provisions of this Section shall
not constitute a waiver by Landlord of any right
of re-entry as herein set forth; nor shall receipt
of any Rent or any other act in apparent
affirmance of the tenancy operate as a waiver of
Landlord's right to terminate this Lease for a
breach of any of the terms, covenants, or
obligations herein on Tenant's part to be
performed.
(B) Subject to Section 14(C) and the following Section
21(C), upon the expiration of this Lease, by lapse
of time or otherwise, any and all buildings,
improvements or additions erected on the Premises
by Tenant shall, at the option of Landlord, be and
become the property of the Landlord without any
payment therefor and Tenant shall, at the option
of Landlord, surrender said Premises, together
with all buildings, improvements or additions
thereon, whether erected by Tenant or Landlord,
ordinary wear and tear excepted.
(C) Tenant may install in the Premises adequate
furnishings, furniture, equipment (including, but
not limited to, security cameras on the exterior
of the Building), fixtures, machinery and other
personal property for the operation of its
business (collectively, "Tenant's Property"), and
upon the expiration or termination of this Lease
by lapse of time or otherwise, Tenant shall remove
Tenant's Property at Tenant's sole cost. Upon
removal of Tenant's Property, Tenant shall repair
any damage to the Premises caused by the
installation or removal thereof at Tenant's sole
cost.
22. DEFAULT-REMEDIES.
(A) The occurrence of one or more of the following
events shall constitute a material default and
breach of this Lease by Tenant ("Event of
Default"):
(1) Failure by Tenant to make payment of any
Rent, Additional Rent, or any other payment
required to be made by Tenant hereunder, as
and when due, and such a failure shall
continue for a period of five (5) business
days after written notice of such failure
from Landlord; provided that, if two (2) such
notices have been delivered within the twelve
(12) months immediately preceding any failure
to make any payment when and as due, such
failure shall, without notice or demand, be
deemed an Event of Default;
(2) The making by Tenant (or any guarantor) of
any assignment or arrangement for the benefit
of creditors;
(3) The levying of an attachment, execution of
other judicial seizure upon the Tenant's
property in or interest under this Lease,
which is not satisfied or released or the
enforcement thereof superseded by an
appropriate proceeding within sixty (60) days
thereafter;
(4) The appointment of a receiver or trustee to
take possession of the property of Tenant (or
any guarantor) or of Tenant's (or any
guarantor's) business or assets and the order
or decree appointing such receiver or trustee
shall have remained in force undischarged for
sixty (60) days after the entry of such order
or decree;
(5) The vacating or abandonment of the Premises,
unless (i) Tenant notifies Landlord of its
intent to vacate or abandon not less than ten
(10) days in advance thereof, (ii) Tenant
obtains and maintains all necessary
endorsements to ensure that Tenant's
insurance shall remain in effect with regard
to the Premises, notwithstanding such
vacating or abandonment of the Premises, and
(iii) Tenant takes all necessary steps to
ensure there will be no unauthorized access
to the Premises during the period of any such
vacancy or abandonment;
(6) The failure by Tenant to maintain any
insurance required herein, which failure
continues for more than two (2) business days
after written notice from Landlord advising
Tenant of such failure;
(7) An assignment, subletting, pledge, mortgage,
or other transfer of this Lease or the
Premises by Tenant, or any transfer of any
interest in the Tenant, in violation of
Section 12 of this Lease; and/or
(8) The failure by Tenant to perform or observe
any other term, covenant, agreement or
condition to be performed or kept by the
Tenant under the terms, conditions, or
provisions of this Lease, which failure is
not cured within ten (10) days after written
notice thereof from Landlord (or such longer
time as may be reasonably required to cure
such failure through the exercise of due
diligence, unless (i) such failure is a
willful repudiation of the Lease authorized
by Tenant's Board of Directors, (ii) such
failure cannot, based on objective evidence,
be cured, (iii) such failure relates to the
existence of a generally-recognized, imminent
danger to the health or safety of occupants
of the Premises due to a hazardous condition
on the Premises, or (iv) such failure
subjects Landlord to criminal prosecution).
(B) If an Event of Default shall have occurred,
Landlord shall have (in addition to all other
rights and remedies provided by law or otherwise
provided by this Lease) the right, at the option
of the Landlord, then or at any time thereafter
while such Event of Default shall continue, to
elect any one or more of the following:
(1) To continue this Lease in full force and
effect (so long as Landlord does not
terminate this Lease), and Landlord shall
have the right to collect Rent, Additional
Rent and other charges when due for the
remainder of the Lease Term; and/or
(2) To cure such default or defaults at its own
expense and without prejudice to any other
remedies which it might otherwise have; and
any reasonable payment made or reasonable
expenses incurred by Landlord in curing such
default, with interest thereon at the Default
Rate (as hereafter defined), to be and become
Additional Rent to be paid by Tenant with the
next installment of Rent falling due
thereafter (but in no event earlier than
fifteen (15) days, nor later than thirty (30)
days, after the date on which Landlord
invoices Tenant for the same); and/or
(3) To re-enter the Premises in accordance with
applicable law, and dispossess Tenant and
anyone claiming through or under Tenant by
summary proceedings or otherwise, and remove
their effects, and take complete possession
of the Premises and either (a) declare this
Lease terminated and the Lease Term ended, or
(b) elect to continue this Lease in full
force and effect, but with the right at any
time thereafter that such Event of Default
remains uncured to declare this Lease
terminated and the Lease Term ended. In such
re-entry, Landlord may, as permitted by
applicable law, remove all persons from the
Premises, and Tenant hereby covenants in such
event, for itself and all others occupying
the Premises under Tenant, to peacefully
yield up and surrender the Premises to
Landlord. If Landlord elects to terminate
this Lease and/or elects to terminate
Tenant's right of possession, every
obligation of Landlord contained in this
Lease shall, upon entry of a final,
non-appealable judgment terminating this
Lease or Landlord's reentry onto the Premises
in accordance with applicable law, cease
without prejudice to Tenant's liability for
all Rent, Additional Rent, and other sums
owed by Tenant herein.
Should Landlord declare this Lease terminated and
the Lease Term ended (pursuant to Section
22(B)(3)(a) above), the Landlord shall be entitled
to recover from Tenant the Rent, Additional Rent,
and all other sums due and owing by Tenant to the
date of termination, plus the reasonable costs of
curing all Tenant's defaults existing at or prior
to the date of termination, plus the reasonable
costs of recovering possession of the Premises,
plus the reasonable costs of reletting the
Premises including, but not limited to repairs to
the Premises, costs to prepare and refinish the
Premises for reletting, leasing commissions,
rental concessions, and legal fees and costs, plus
other actual damages suffered or incurred by
Landlord due to all Events of Default and any late
fees or other charges incurred by Landlord under
any mortgage, plus the deficiency, if any, between
Tenant's Rent and Additional Rent for the balance
of the Lease Term and the rent obtained by
Landlord under another lease for the Premises, for
the balance of the Lease Term remaining under this
Lease on the date of termination.
Should Landlord elect to continue this Lease
(pursuant to Section 22(B)(3)(b) above), Landlord
shall be entitled to recover from Tenant the Rent,
Additional Rent and all other sums due and owing
by Tenant up to the date of dispossession, plus
the reasonable costs of curing all Events of
Default existing at or prior to the date of
dispossession, plus the Rent, Additional Rent and
all other sums owed by Tenant on a continuing
basis as said amounts accrue to the end of the
Lease Term, less the rental which Landlord
receives during such period, if any, from others
to whom the Premises may be relet, plus the
reasonable cost of recovering possession of the
Premises, plus the reasonable costs of reletting
including, but not limited to repairs to the
Premises, costs to prepare and refinish the
Premises for reletting, leasing commissions,
rental concessions, and legal fees and costs. Any
suit brought by Landlord to enforce collection of
such deficiency for any one month shall not
prejudice Landlord's right to enforce the
collection of any deficiency for any subsequent
month in subsequent separate actions, or Landlord
may defer initiating any such suit until after the
expiration of the Lease Term (in which event such
deferral shall not be construed as a waiver of
Landlord's rights as set forth herein and
Landlord's cause of action shall be deemed not to
have accrued until the expiration of the Lease
Term), and it being further understood that if
Landlord elects to bring suits from time to time
prior to reletting the Premises, Landlord shall be
entitled to its full damages through the date of
the award of damages without regard to any rent,
additional rent or other sums that are or may be
projected to be received by Landlord upon a
subsequent reletting of the Premises. In the
event that Landlord relets the Premises together
with other premises or for a term extending beyond
the scheduled expiration of the Lease Term, it is
understood that Tenant will not be entitled to
apply against Landlord's damages any rent,
additional rent or other sums generated or
projected to be generated by either such other
premises or the period extending beyond the
scheduled expiration of the Lease Term. Landlord
shall use commercially reasonable efforts to relet
and rent the Premises with or without advertising
for the remainder of the Lease Term, or for such
longer or shorter period as Landlord shall deem
advisable.
In lieu of the amounts recoverable by Landlord
pursuant to the two immediately preceding
paragraphs, but in addition to other remedies and
amounts otherwise recoverable by Landlord in this
Lease, Landlord may, at its sole election, (i)
terminate this Lease, (ii) collect all Rent,
Additional Rent, and other sums due and owing by
Tenant up to the date of termination, and (iii)
provided Landlord terminates Tenant's right to
possession of the Premises, accelerate and collect
the present value of the positive difference (if
any) between (x) the sum of all Rent, Additional
Rent and all other sums required to be paid by
Tenant through the remainder of the Lease Term,
and (y) the fair market rental value of the
Premises for the remainder of the Lease Term, net
of a reasonable vacancy and concession allowance
determined by Landlord in its reasonable
discretion (the present value of such difference
being herein referred to as the "Accelerated
Rent"), which Accelerated Rent shall be discounted
to present value using an interest rate equal to
six and one-half percent (6.5%) per annum
("Present Value Accelerated Rent"). In the event
Landlord is successful in reletting the Premises
for any part of the remainder of the Lease Term
prior to payment of the Present Value Accelerated
Rent, the fair market rental value shall be deemed
to equal the rents reserved under such reletting,
and Landlord shall not be obligated to pay over
the proceeds of such reletting in whole or part.
In no event shall Landlord be liable for, nor
shall Tenant's obligations hereunder be diminished
by reason of, any failure by Landlord to relet all
or any portion of the Premises or to collect any
rent due upon such reletting.
(C) Tenant, on its own behalf and on behalf of all
persons claiming through or under Tenant,
including all creditors, does hereby specifically
waive and surrender any and all rights and
privileges, so far as is permitted by law, which
Tenant and all such persons might otherwise have
under any present or future law (1) to the service
of any notice to quit or of Landlord's intention
to re-enter or to institute legal proceedings,
which notice may otherwise be required to be
given, (2) to redeem the Premises, (3) to re-enter
or repossess the Premises, (4) to restore the
operation of this Lease, with respect to any
dispossession of Tenant by judgment or warrant of
any court or judge, or any re-entry by Landlord,
or any expiration or termination of this Lease,
whether such dispossession, re-entry, expiration
or termination shall be by operation of law or
pursuant to the provisions of this Lease, or (5)
which exempts property from liability for debt or
for distress for rent. Landlord and Tenant each
hereby consents to the exercise of personal
jurisdiction over it by any federal or local court
in the jurisdiction in which the Premises is
located.
(D) If Tenant fails to take possession of the Premises
upon the commencement of the Lease Term, Landlord
and Tenant acknowledge that this Lease Agreement
may be construed as a contract to or for lease,
as opposed to a contract of lease. Accordingly,
Landlord and Tenant agree that, if Tenant defaults
under this Lease (beyond the applicable notice and
cure period, if any) prior to the Lease
Commencement Date, or if Tenant fails to accept
possession of the Premises when tendered by
Landlord (it being acknowledged and agreed that
any such failure by Tenant to accept possession of
the Premises when tendered by Landlord shall be an
Event of Default hereunder, but that Tenant shall
not be required to actually occupy the Premises in
order for Tenant to accept possession thereof),
Landlord shall be entitled to terminate Tenant's
right to possession of the Premises pursuant to
the Lease Agreement and to recover from Tenant,
subject to the conditions and limitations set
forth in Section 22(B), contract damages resulting
from Tenant's default and/or failure to accept
possession of the Premises in an amount equal to
all of the rents and other sums required to be
paid under the Lease (as if Tenant had taken
possession of the Premises when tendered by
Landlord) from the date on which Landlord tenders
possession of the Premises to Tenant until the
date on which the Premises are relet (if ever) or
any earlier date on which the Lease would have
expired by its terms, plus (but without
duplication) all of the damages reserved to
Landlord in Section 22(B) of this Lease
(including, but not limited to, any rent
deficiency upon any reletting, costs of reletting,
and court costs and attorneys' fees incurred to
relet the Premises and/or to enforce Landlord's
rights under the terms of this Lease).
(E) Landlord Default.
(1) Subject to the terms hereof, if (i) Landlord
shall default in the performance of any
covenant or provision of this Lease
pertaining to the provision of services by
Landlord or performance of repairs or
maintenance on Landlord's part to be
performed (which default shall not be
occasioned by (a) the acts or omissions of
Tenant or Tenant's agents, assignees,
contractors, employees, invitees, licensees,
sublessees or others for whose actions Tenant
is responsible or over whose actions Tenant
can reasonably be expected to exercise
control, or (b) circumstances, events or
facts beyond Landlord's reasonable control),
(ii) Landlord shall fail to remedy such
default within ten (10) days after Tenant
shall have given Landlord written notice of
such default specifying the same in detail
and specifying that the failure to cure the
same within ten (10) days shall be deemed a
Landlord Default hereunder, and (iii) such
default shall substantially impair Tenant's
use and enjoyment of the Premises, then upon
the expiration of such 10-day cure period the
Tenant shall (as Tenant's sole and exclusive
remedies) be entitled to exercise the
remedies set forth in this Section 22(E).
Notwithstanding the foregoing, in the event
that any such default is not reasonably
susceptible of cure within such ten (10) day
cure period, such cure period shall
automatically be deemed to be extended for
such additional period as shall be reasonably
required to cure such default, provided that
Landlord commences such cure within such
10-day period and diligently pursues such
cure thereafter. Any such default on the
part of Landlord which is not cured within
such 10-day cure period (as the same may be
extended pursuant to the preceding sentence)
shall be deemed a "Landlord Default".
(2) Subject to the terms hereof, in the event of
a Landlord Default, Tenant shall, provided
that no Event of Default by Tenant is in
existence hereunder, have the right (but not
the obligation) to remedy such Landlord
Default and charge Landlord for the
reasonable cost of such remedy, which charges
shall be payable by Landlord within thirty
(30) days of Tenant's demand therefor;
provided that, (i) Tenant's actions to cure
any Landlord Default shall conform and comply
in all respects with the terms of this Lease
(including, but not limited to, the
applicable provisions of Section 14), (ii)
the charges payable by Landlord pursuant to
this Section 22(E) shall constitute Operating
Expenses to the extent the same would
constitute Operating Expenses under Section 5
hereof if incurred directly by Landlord (it
being agreed, however, that any additional
incremental increase in such costs which is
reasonably attributable solely to the
Landlord Default (i.e., if Landlord had
performed directly it would have been able to
render performance at a lower cost) shall be
excluded from Operating Expenses), and (iii)
Tenant shall have no right to remedy any
Landlord Default if (a) such remedy will or
may materially and adversely interfere with
the ability of other tenants of the Building
to utilize their premises for the Comparable
Uses or invalidate or impair any warranty
applicable to any portion of the Building,
the Building structure or any system serving
any of the same, or (b) such Landlord Default
arises from or out of, or in connection with,
any fire or other casualty damage to, or
condemnation of, the Building.
(3) In the event Tenant engages in self-help as
provided in subparagraph 22(E)(2) above and
Landlord disagrees with the propriety of
Tenant's actions and/or the level of expenses
incurred by Tenant, and refuses to reimburse
Tenant for its costs, the parties agree to
submit such dispute to arbitration; provided
that, this subparagraph 22(E)(3) shall not be
deemed to require that Tenant refrain from
curing a Landlord Default in compliance with
this Section 22(E) until such dispute is
submitted to arbitration, nor shall this
subparagraph 22(E)(3) be deemed to preclude
Landlord from submitting to arbitration,
after the exercise of such remedy by Tenant,
any dispute regarding the existence of a
Landlord Default or arising from the exercise
of (or the costs of exercising) such remedy
by Tenant.
(4) Notwithstanding anything herein contained to
the contrary, in the event the Building, or
any part thereof, or the land on which the
Building is constructed, or the Landlord's
estate in the Building, is at any time
subject to a mortgage or deed of trust (each
a "Mortgage"), and/or (ii) this Lease, or the
Rent payable under this Lease, is assigned to
a mortgagee or the trustee(s) under a deed of
trust (each a "Mortgagee"), then Tenant shall
have no right to exercise any remedy under
this Section 22(E) unless and until Tenant
shall first deliver written notice, in the
manner provided elsewhere in this Lease for
the delivery of notices, to such Mortgagee,
specifying the Landlord Default in reasonable
detail, and affording such Mortgagee the same
notice and cure period set forth above for
the cure of a Landlord Default (it being
understood and agreed that no such Mortgagee
shall be obligated to cure any Landlord
Default). Tenant further agrees to deliver
to each such mortgagee or trustee a copy of
any notice delivered to Landlord pursuant to
the provisions of this Section 22(E).
23. RE-ENTRY BY LANDLORD.
No re-entry by Landlord or any action brought by
Landlord to remove Tenant from the Premises shall
operate to terminate this Lease unless Landlord shall
have given written notice of termination to Tenant, in
which event Tenant's liability shall be as above
provided. Subject to the express limitations and
conditions set forth herein, no right or remedy herein
granted to Landlord or Tenant is intended to be
exclusive of any other right or remedy, and each and
every right and remedy herein provided shall be
cumulative and in addition to any other right or remedy
hereunder or now or hereafter existing in law or equity
or by statute. In the event of termination of this
Lease, Tenant waives any and all rights to redeem the
Premises either given by any statute now or herein
enacted.
24. ADDITIONAL RIGHTS TO LANDLORD.
(A) In addition to any and all other remedies,
Landlord or Tenant may restrain any threatened
breach of any covenant, condition or agreement
herein contained, but except as otherwise
expressly set forth herein the mention herein of
any particular remedy or right shall not preclude
the Landlord or Tenant from any other remedy or
right it may have either at law or equity, or by
virtue of some other provision of this Lease; nor
shall the consent to one act, which would
otherwise be a violation or waiver of or redress
for one violation either of covenant, promise,
agreement, undertaking or condition, prevent a
subsequent act which would originally have
constituted a violation from having all the force
and effect of any original violation.
(B) Receipt by Landlord of Rent or other payments from
the Tenant shall not be deemed to operate as a
waiver of any rights of the Landlord to enforce
payment of any Rent, Additional Rent, or other
payments previously due or which may thereafter
become due, or of any rights of the Landlord to
terminate this Lease or to exercise any remedy or
right which otherwise might be available to the
Landlord, the right of Landlord to declare a
forfeiture for each and every breach of this Lease
is a continuing one for the life of this Lease.
(C) Intentionally Deleted.
(D) Intentionally Deleted.
25. SUCCESSORS, ASSIGNS AND LIABILITY.
The terms, covenants, conditions and agreements herein
contained and as the same may from time to time
hereafter be supplemented, modified or amended, shall
apply to, bind, and inure to the benefit of the parties
hereto and their legal representatives, successors and
assigns, respectively, subject to Section 12 hereof.
In the event either party now or hereafter shall
consist of more than one person, firm or corporation,
then and in such event all such person, firms and/or
corporations shall be jointly and severally liable as
parties hereunder.
26. NOTICES.
All notices and demands required to be given to either
party hereunder shall be in writing and shall be deemed
to have been given upon the earlier to occur of
delivery or refusal of delivery (or inability to
deliver at the last address provided by the recipient
to the sender), provided that such notice or demand is
sent by certified United States mail, postage prepaid,
return receipt requested, or by personal delivery, or
by a nationally recognized overnight delivery service
which provides evidence of delivery, delivery prepaid,
addressed to the party to whom directed at the address
set forth below or at such other address as may be from
time to time designated in writing by the party
changing such address.
Landlord Tenant
Petula Associates, Ltd. If Prior to the
Commencement
711 High Street Date:
Des Moines, Iowa 50392-1370 Government
Technology
Attn: CRE Equities/Mid-Atlantic 4100 Lafayette
Center Drive
Team Chantilly, VA 20151-1200
With a copy to: With a copy to:
Trammell Crow Real Estate Government
Technology
Services, Inc. Services, Inc.
1115 30th Street, N.W. 4100 Lafayette
Center Drive
Washington, D.C. 20007 Chantilly, Virginia
20151-1200
Attn: Property Manager/Avion Attn: General
Counsel
If after the Commencement
Date:
Tenant at the Premises
Attn: Director of
Facilities
With a copy to:
Tenant at the Premises
Attn: General Counsel
Notwithstanding the foregoing, Tenant acknowledges and
agrees that any motion, pleading or other filing
(including, but not limited to, any motion to compel
performance pursuant to 11 U.S.C. 365(d)(3), or any
proof of claim) by Landlord in any bankruptcy case in
which Tenant is the debtor shall constitute notice to
Tenant for purposes of this Lease.
27. MORTGAGEE'S APPROVAL.
Tenant hereby agrees that, if Landlord's mortgagee
shall require modifications of the terms and provisions
of this Lease, Tenant shall not unreasonably withhold,
condition or delay its execution and delivery of the
agreements required to effect such Lease modification
(it being understood that any such reasonable
modification(s) shall be executed and delivered within
thirty (30) days after Landlord's request therefor).
In no event, however, shall Tenant be required to agree
to modify any provision of this Lease relating to the
amount of Rent, Additional Rent or other charges
reserved herein, the size and/or location of the
Premises, the Improvements or the Lease Term, or to any
modification which would conflict with the express
terms hereof, nor shall any such modification diminish
Landlord's obligations or Tenant's rights hereunder or
increase Tenant's obligations hereunder.
28. ESTOPPEL CERTIFICATES.
Within fifteen (15) days after delivery of a written
request from the other party hereto (the "Requesting
Party"), the party receiving such request (the
"Receiving Party") agrees to execute, acknowledge and
deliver to the Requesting Party (or, if Landlord is the
Requesting Party, any proposed mortgagee or purchaser)
a statement in writing, in form reasonably satisfactory
to the Requesting Party, certifying whether this Lease
is in full force and effect and, if it is in full force
and effect, what modifications (if any) have been made
to this Lease to the date of the certification, whether
or not any defaults or offsets exist with respect to
this Lease and, if there are, what they are claimed to
be, and setting forth the date(s) to which Rent or
other charges have been paid in advance, if any. The
failure of Tenant to execute, acknowledge, and deliver
to Landlord a statement requested pursuant to this
Section 28, which failure shall continue for more than
five (5) days after a second (2nd) written notice from
Landlord (delivered not earlier than the expiration of
the initial 15-day period) demanding such statement,
shall constitute an acknowledgment by Tenant that this
Lease is unmodified and in full force and effect and
that the Rent and other charges have been duly and
fully paid to and including the respective due dates
immediately preceding the date of Landlord's notice to
Tenant and shall constitute as to any person, a waiver
of any defaults which may exist prior to such notice.
29. DEFAULT RATE OF INTEREST.
All amounts owed by one party to the other pursuant to
any provision of this Lease shall bear interest from
the date due until paid at five percent (5%) per annum
above the generally prevailing "prime rate" as
published in the "Money Rates" section of the Wall
Street Journal (Eastern Edition) on the due date of
such sum (or, if not a business day, the next business
day), unless a lesser rate shall then be the maximum
rate permissible by law, in which event said lesser
rate shall be charged ("Default Rate"); provided that,
interest shall not accrue on any payment which is paid
within five (5) business days after written notice that
such payment is due and payable, unless two (2) or more
such notices have been delivered to the party from whom
payment is due within the twelve (12) months
immediately preceding the due date of the current
payment.
30. EXCULPATORY PROVISIONS.
It is expressly understood and agreed by and between
the parties hereto, anything herein to the contrary
notwithstanding, that each and all of the
representations, warranties, covenants, undertakings,
indemnities and agreements herein made on the part of
Landlord while in form purporting to be the
representations, warranties, covenants, undertakings,
indemnities and agreements of Landlord are nevertheless
each and every one of them made and intended, not as
personal representations, warranties, covenants,
undertakings, indemnities and agreements by Landlord or
for the purpose or with the intention of binding
Landlord personally, but are made and intended for the
purpose only of subjecting Landlord's interest in the
Premises to the terms of this Lease and for no other
purpose whatsoever, and in case of default hereunder by
Landlord, Tenant shall look solely to the interests of
Landlord in the Property. Landlord shall not have any
personal liability to pay any indebtedness accruing
hereunder or to perform any covenant, either express or
implied, herein contained. All such personal liability
of Landlord, if any, is expressly waived and released
by Tenant and by all persons claiming by, through or
under Tenant. Notwithstanding the foregoing, this
Section 30 shall be inapplicable to any judgment for
monetary damages entered against Landlord and in favor
of Tenant, to the extent Tenant's damages were found to
have been proximately caused by Landlord's fraud or
Landlord's misapplication of insurance proceeds or a
condemnation award.
31. MORTGAGEE PROTECTION.
Tenant agrees to give any holder of any first mortgage
or first trust deed in the nature of a mortgage (both
hereinafter referred to as a "First Mortgage") against
the Premises, or any interest therein, by registered or
certified mail, a copy of any notice or claim of
default served upon Landlord by Tenant, provided that
prior to such notice, Tenant has been notified in
writing of the address of such First Mortgage holder.
Tenant further agrees that if Landlord shall have
failed to cure any such default within twenty (20) days
after such notice to Landlord (or if such default
cannot be cured or corrected within that time, then
such additional time as may be necessary if Landlord
has commenced within such twenty (20) days and is
diligently pursuing the remedies or steps necessary to
cure or correct such default), then the holder of the
First Mortgage shall have an additional thirty (30)
days within which to cure or correct such default (or
if such default cannot be cured or corrected within
that time, then such additional time as may be
necessary if such holder of the First Mortgage has
commenced with such thirty (30) days and is diligently
pursuing the remedies or steps necessary to cure or
correct such default, including the time necessary to
obtain possession if possession is necessary to cure or
correct such default).
32. RECIPROCAL COVENANT ON NOTIFICATION OF ADA VIOLATIONS.
Within ten (10) days after receipt, Landlord and Tenant
shall advise the other party in writing, and provide
the other with copies of (as applicable), any notices
alleging violation of the Americans with Disabilities
Act of 1990 ("ADA") relating to any portion of the
Premises or the Improvements; any claims made or
threatened in writing regarding noncompliance with the
ADA and relating to any portion of the Premises or the
Improvements; or any governmental or regulatory actions
or investigations instituted or threatened regarding
noncompliance with the ADA and relating to any portion
of the Premises or the Improvements.
33. LAWS THAT GOVERN.
The terms and conditions of this Lease shall be
governed by the laws of the jurisdiction in which the
Premises is located.
34. FINANCIAL STATEMENTS.
Within ten (10) business days of Landlord's request,
Tenant shall deliver to Landlord the current financial
statements of Tenant, and financial statements for the
two (2) years prior to the current year. The financial
statements shall include a balance sheet, profit and
loss statement, and statement of cash flows for each
year, accompanied by an opinion from a certified public
accountant certifying that the financial statements are
prepared in accordance with generally accepted
accounting principles consistently applied. If Tenant
fails to deliver such financial statements within two
(2) business days after Landlord's second (2nd) request
for such financial statements, an amount equal to $250
per day shall be charged as Additional Rent for each
day thereafter on which Tenant fails to deliver to
Landlord the financial statements required herein.
Notwithstanding the foregoing, this Section 34 shall
not be deemed to apply to GTSI or to any other publicly
traded corporation so long as GTSI or such publicly
traded corporation, as applicable, publicly discloses
its financial condition.
35. PARKING.
In connection with construction of the Improvements,
Landlord shall construct on the Premises in accordance
with the Work Agreement attached hereto as Exhibit B,
surface parking at a ratio equal to not less than 4
spaces per 1,000 square feet of net rentable area in
the Improvements. Tenant shall have the right to park
in the parking facilities free of charge (other than
payment of Tenant's Pro Rata Share of Operating
Expenses). If, after Landlord completes construction
of the second building (the "Second Building")
contemplated by the Current Site Plan (as defined
herein) and executes a lease therefor, Tenant
determines that use of parking on the Property by third
parties is leaving Tenant with insufficient parking
spaces for its employees and visitors, Tenant shall
have the right to install professional signs and
stencils on Tenant's parking spaces, identifying such
spaces as reserved for the exclusive use of Tenant and
its employees and invitees. Tenant shall have the
right, at any time, to install professional signs and
stencils identifying Tenant's executive and visitor
parking spaces. Tenant shall have the right to tow any
vehicle parked in Tenant's parking spaces in violation
of Tenant's posted signs, provided that such signs warn
that violators will be towed and provide such other
information as is required by law to allow such towing.
Landlord and Tenant acknowledge that Tenant's parking
area will be as shown cross-hatched on the Current Site
Plan (subject to modification in accordance with
Exhibit B). Tenant shall, at all times and at Tenant's
sole expense, maintain its parking signs and stencils
in a first-class condition.
36. SIGNAGE.
(A) Landlord shall permit Tenant to place two (2)
signs containing Tenant's logo upon the
Improvements subject to Landlord's approval as to
design, method of attachment, placement, size,
color and style (such approval not to be
unreasonably withheld, conditioned or delayed), it
being further agreed that Landlord shall not
withhold its approval as to the design, color,
size, or style of such signs to the extent that
such signs comply with the signage requirements of
Exhibit E hereto. So long as Tenant shall occupy
at least fifty percent (50%) of the Building, no
other tenant shall be permitted to place signage
on the Building.
(B) So long as Tenant occupies at least seventy-five
percent (75%) of the Building, Tenant shall also
have the exclusive right, subject to approval by
Fairfax County and receipt of all necessary
approvals, easements, licenses and permits (which
the parties agree to cooperate to obtain), to
install and maintain one (1) monument sign
containing Tenant's name and/or logo on the Land
adjacent to Stonecroft Boulevard (in a location
mutually-agreed by Landlord and Tenant [and to be
tentatively agreed by the parties not later than
when Landlord's proposed site plan is submitted
for Fairfax County approval], each hereby agreeing
to negotiate the same in good faith and further
agreeing not to unreasonably withhold, condition
or delay their agreement to the same). If Tenant
occupies less than seventy-five percent (75%) of
the Building, Landlord shall have the right to
install and maintain its own monument sign on the
Land adjacent to Stonecroft Boulevard (in a
location mutually-agreed by Landlord and Tenant,
each hereby agreeing to negotiate the same in good
faith and further agreeing not to unreasonably
withhold, condition or delay their agreement to
the same). If Tenant occupies less than
seventy-five percent (75%) of the Building, and
Fairfax County does not permit installation of a
second monument sign on the Land adjacent to
Stonecroft Boulevard, Tenant agrees to provide
Landlord with fifty percent (50%) of the signage
space on its monument sign and Landlord agrees to
reimburse Tenant for (i) any modifications to such
monument sign reasonably required in connection
therewith and (ii) fifty percent (50%) of the
original cost of constructing and installing the
monument sign.
(C) In the event Landlord, in Landlord's sole
discretion, installs a monument or directional
signage at the entrance to the parking areas from
Avion Parkway, Tenant shall be entitled to have
sign space on such directional sign equal to that
of the other tenants occupying improvements on
Parcel D-1, Avion Development, as shown on plat
attached to Deed of Division recorded in Deed Book
7375 at page 562, among the land records of
Fairfax County, Virginia ("Parcel D-1"); provided
that, Tenant's signage thereon shall be uppermost
in location on such directional sign. Tenant
shall reimburse Landlord for its proportionate
share (based on the proportion of signage space
allowed thereon) of all costs, expenses and fees
attributable to such directional sign.
(D) Tenant shall obtain and pay for all governmental
approvals, permits and/or licenses required in
connection with any signage installed by or on
behalf of Tenant. In addition, all such signage
shall be subject to Landlord's prior approval (not
to be unreasonably withheld, conditioned or
delayed), and must comply with the established
signage program at Avion Business Park (a copy of
which is attached hereto as Exhibit E) and with
all covenants, conditions and restrictions of
record. The cost of Tenant's signage shall be
borne by Tenant (it being understood, however,
that Tenant may elect to be reimbursed from the
Allowance (as defined in Exhibit B) for the cost
of Tenant's permitted signage.
(E) If any signage (other than signage on the interior
of the Premises which is not visible from outside
the Premises) is exhibited without Tenant first
obtaining the Landlord's written consent thereto,
Landlord shall have the right, upon ten (10) days
written notice to Tenant, to remove the same and
Tenant shall be liable for any and all expenses
incurred by Landlord in connection with such
removal. Tenant shall maintain all of its signage
in a good state of repair and save the Landlord
harmless from any loss, cost or damage as a result
of the construction, installation, maintenance,
existence or removal of the same, and Tenant shall
repair any damage which may have been caused by
the construction, installation, operation,
existence, maintenance or removal of such signage.
Upon vacating the Premises, Tenant shall remove
all of its signage and repair all damage caused by
the installation, operation and/or removal
thereof, at the Tenant's sole expense.
37. RECORDATION.
Except to the extent required by law, Tenant shall not
record this Lease among or in any public records.
38. FORCE MAJEURE.
This Lease and the obligations of the parties hereunder
shall not be affected or impaired because the Landlord
or Tenant (as applicable) is unable to fulfill any of
its obligations hereunder or is delayed in doing so, to
the extent such inability or delay is caused by reason
of war, civil unrest, strike, labor troubles, unusually
inclement weather, governmental delays, inability to
procure services or materials despite reasonable
efforts, third party delays, acts of God, or any other
cause(s) beyond the reasonable control of the Landlord
or Tenant (as applicable) (which causes are referred to
collectively herein as "Force Majeure"). The time
specified for the performance of an obligation of
Landlord or Tenant (as applicable) in this Lease shall
be extended one day for each day of delay suffered by
Landlord or Tenant (as applicable) in the performance
of such obligation as a result of any Force Majeure
cause, provided that the party from whom performance is
due exercises commercially reasonable efforts to
mitigate the effects of such Force Majeure cause.
Notwithstanding the foregoing, but subject to the terms
of the sentence which immediately follows this
sentence, (i) this Section 38 shall have no application
to, nor shall the time for the performance of
Landlord's or Tenant's obligations hereunder be
extended with respect to, any obligation for the
payment of money or the surrender of the Premises upon
the expiration of the Lease Term, and (ii) this Section
38 shall be disregarded for purposes of determining
Tenant's termination rights pursuant to Section 2(A)(4)
and for determining the liquidated damages, if any, to
which Tenant may be entitled pursuant to Section 10(c)
of Exhibit B (it being understood that Force Majeure
shall have no application to Section 2(A)(4), and is
independently treated in Section 10(c) of Exhibit B).
Notwithstanding anything herein to the contrary, (x) if
the Construction Lender has foreclosed upon the
Property or has accepted a deed in lieu of foreclosure,
and (y) such Construction Lender is diligently pursuing
completion of the work to be performed by Landlord
under Exhibit B hereto, this Section shall apply to
Tenant's right to terminate pursuant to Section
2(A)(4).
39. LANDLORD'S LIEN.
As security for the performance of Tenant's
obligations, Tenant grants to Landlord a lien upon and
a security interest in Tenant's existing or hereafter
acquired personal property, inventory, furniture,
furnishings, fixtures, equipment, licenses, permits,
and all other tangible and intangible property, assets
and accounts, and all additions, modifications,
products and proceeds thereof, including, without
limitation, such tangible property which has been used
at the Premises, purchased for use at the Premises,
located at any time in the Premises or used or to be
used in connection with the business conducted or to be
conducted in the Premises, whether or not the same may
thereafter be removed from the Premises. Such lien
shall be in addition to all rights of distraint
available under applicable law. Within five (5) days
after request from time to time, Tenant shall execute,
acknowledge and deliver to Landlord a financing
statement and any other document evidencing or
establishing such lien and security interest which may
be requested by Landlord. During the Lease Term,
Tenant shall not sell, transfer or remove from the
Premises any of the aforementioned tangible property
without Landlord's prior written consent, unless the
same shall be promptly replaced with similar items of
comparable value. In order to further assure Tenant's
performance of its obligations under this Lease, Tenant
covenants that during the Lease Term, it will not
convey or otherwise transfer its assets or permit its
assets to be encumbered to the extent that any such
conveyance, transfer or encumbrance is not done in the
ordinary course of Tenant's business or would
materially and adversely affect the net worth of
Tenant. Notwithstanding anything herein to the
contrary, said lien shall be subordinated to the rights
of any lessor of any equipment or personal property
under any equipment lease, the rights of the seller
under any conditional sales contract, and to the
properly perfected lien of any bona fide third party
lender providing financing to Tenant in the ordinary
course of Tenant's business. Landlord also shall, to
the extent permitted by law, have (in addition to all
other rights) a right of distress for rent as security
for all Rent, Additional Rent and any other sums
payable under this Lease.
40. BROKERS.
Tenant represents and warrants to Landlord, and
Landlord represents and warrants to Tenant, that
neither it nor its officers or agents nor anyone acting
on its behalf has dealt with any real estate broker
other than Trammell Crow Real Estate Services, Inc. and
Cambridge Property Group Limited Partnership in the
negotiating or making of this Lease, and each agrees to
indemnify and hold the other party, and its respective
agents, employees, partners, directors, shareholders
and independent contractors harmless from all
liabilities, costs, demands, judgments, settlements,
claims and losses, including reasonable attorneys fees
and costs, incurred in conjunction with any such claim
or claims of any other broker or brokers claiming to
have interested Tenant in the Property or Premises or
claiming to have caused Landlord or Tenant to enter
into this Lease. Landlord acknowledges that it has
agreed to pay Trammell Crow Real Estate Services, Inc.
and Cambridge Property Group Limited Partnership a
commission with respect to this Lease, pursuant to a
separate agreement.
41. CONFIDENTIALITY.
Tenant agrees that this Lease is confidential and,
agrees to exercise reasonable, good faith efforts not
to disclose the contents of this Lease to any third
party, except Tenant's brokers, lawyers, architects,
engineers, and other consultants engaged in connection
with this Lease transaction; provided that, this
Section 41 shall not prohibit the disclosure of the
terms of this Lease to the U.S. Government or Tenant's
lenders, to the extent required by law or contract
between Tenant and such party.
42. LEASE/DEED OF LEASE.
To the extent required under applicable law to make
this Lease legally effective, this Lease shall
constitute a deed of lease executed under seal.
43. RIGHT OF FIRST OFFER.
(A) Subject to the terms hereof and provided no Event
of Default then remains uncured under the Lease,
Landlord agrees that it will not sell the Premises
(or, if the Premises is Landlord's sole asset,
transfer all of Landlord's capital stock) during
the Lease Term unless it first extends a bona fide
offer to sell the Premises to Tenant at a price
and on such terms and conditions as Landlord may
describe in a written "offer to sell" given to
Tenant in the same fashion as notices given
pursuant to the provisions of Section 26 of this
Lease. Landlord shall, not less than fifteen (15)
days prior to Landlord's general circulation of
offering materials for the Premises, deliver to
Tenant the offer to sell ("Sale Offer Notice").
Tenant shall have fifteen days after receipt of
the Sale Offer Notice to (i) exercise its right of
first offer by agreeing to the economic terms of
the purchase and sale and giving Landlord written
notice of Tenant's election to acquire the
Premises ("Sale Election Notice") or (ii) not to
exercise its right of first offer for the
acquisition of the premises, it being understood
and agreed that if no notice is received from
Tenant during said fifteen day period, Tenant
shall be deemed not to have elected to purchase
the Premises. Within 30 days after receipt of
Tenant's Sale Election Notice, Landlord will
provide Tenant with an agreement of purchase and
sale, which Landlord and Tenant will negotiate and
execute within thirty (30) days of Tenant's
delivery of the Sale Election Notice. In the
event Tenant fails to execute the agreement of
purchase and sale within said thirty (30) day
period after giving its Sale Election Notice or in
the event Tenant does not deliver the Sale
Election Notice, then Landlord shall have the
right thereafter to sell the Premises to any third
party purchaser free and clear of any rights by
Tenant under this Section 43; provided that,
before entering into a contract to sell the
Premises at a price which is less than ninety-five
percent (95%) of the price at which the Premises
was offered to Tenant in Landlord's Sale Offer
Notice, Landlord shall again offer to sell the
Premises to Tenant in accordance with this Section
43 (in which event Tenant shall exercise its
rights under this Section 43 by delivery of the
Sale Election Notice within three (3) business
days after delivery of the Sale Offer Notice).
(B) Subject to the terms hereof and provided no Event
of Default has occurred under the Lease, Landlord
agrees that, during the first (1st) six and
one-half (6-1/2) years of the Lease Term, before
executing any lease for space in any other
building constructed on Parcel D-1 (an "Adjacent
Building"), Landlord will provide Tenant with a
bona fide offer to lease such Adjacent Building at
a rental rate and on such other terms and
conditions as Landlord describes in a written
"offer to lease" (the "Lease Offer Notice")
delivered to Tenant in the same fashion as notices
given pursuant to the provisions of Section 26 of
this Lease. Tenant shall have fifteen days after
receipt of the Lease Offer Notice to (i) exercise
its right of first offer by agreeing to the
economic terms of the lease and giving Landlord
written notice of Tenant's election to lease such
Adjacent Building ("Lease Election Notice") or
(ii) not to exercise its right of first offer for
the lease of the Adjacent Building, it being
understood and agreed that if no notice is
received from Tenant during said fifteen day
period, Tenant shall be deemed not to have elected
to lease the Adjacent Building. Within 30 days
after receipt of Tenant's Lease Election Notice,
Landlord will provide Tenant with a lease
agreement, which Landlord and Tenant will
negotiate and execute within thirty (30) days of
Tenant's delivery of the Lease Election Notice.
In the event Tenant fails to execute the lease
agreement within said thirty (30) day period after
giving its Lease Election Notice or in the event
Tenant does not deliver the Lease Election Notice,
then Landlord shall have the right thereafter to
lease all or any part of the Adjacent Building to
any third party free and clear of any rights by
Tenant under this Section 43. Notwithstanding
anything herein contained to the contrary, Tenant
acknowledges that (i) its rights under this
Section 43(B) are subject and subordinate to any
now-existing expansion rights in or to such
Adjacent Building, and to any expansion or renewal
rights granted to future tenants of such Adjacent
Building, and (ii) this Section 43(B) shall be
inapplicable to the initial "lease-up" of any
"pre-leased" or "build-to-suit" Adjacent Building.
44. MISCELLANEOUS.
(A) In the event that Tenant desires to store or
maintain the type or character of goods or
materials in the Premises which cause an increase
in insurance premiums, Tenant shall first obtain
the written consent of Landlord and Tenant shall
reimburse Landlord for any increase in premiums
caused thereby.
(B) Unless the context clearly denotes the contrary,
the words "Rent" and "Additional Rent" as used in
this Lease not only includes cash rental for the
Premises, but also all other payments and
obligations to pay assumed by the Tenant, whether
such obligations to pay run to the Landlord or to
other parties.
(C) In any litigation between the parties arising out
of this Lease, or in connection with any
consultations with counsel and other actions taken
or notices delivered in relation to a default by
any party to this Lease, the non-prevailing party
shall pay to the prevailing party all reasonable
expenses and costs including reasonable attorneys'
fees incurred by the prevailing party in
connection with the default and/or litigation, as
the case may be (including fees and costs in
preparation for and at trial, and on appeal, if
applicable) ("Legal Costs"). The Legal Costs
shall be payable on demand, and, if the prevailing
party is Landlord, the Legal Costs shall be deemed
Additional Rent, subject to all of Landlord's
rights and remedies provided herein.
(D) It is mutually agreed by and between Landlord and
Tenant that the respective parties hereto shall,
and they hereby do, waive trial by jury in any
action, proceeding or counterclaim brought by
either of the parties hereto against the other on
any matter whatsoever arising out of or in any way
connected with this Lease, the relationship of
Landlord and Tenant, Tenant's use of or occupancy
of the Premises or any claim of injury or damage
and any emergency statutory or any other statutory
remedy. If Landlord commences any summary
proceeding for nonpayment of Rent or Additional
Rent, Tenant will not interpose any counterclaim
of whatever nature or description in any such
proceeding, unless such counterclaim is a
mandatory counterclaim which would be waived if
not interposed in such proceeding.
(E) If any term or provision of this Lease is declared
invalid or unenforceable, the remainder of this
Lease shall not be affected by such determination
and shall continue to be valid and enforceable.
(F) Landlord and Tenant warrant that this agreement is
being executed with full corporate authority and
that the officers whose signatures appear hereon
are duly authorized and empowered to make and
execute this Lease in the name of the corporation
by appropriate and legal resolution of its Board
of Directors.
(G) This Lease contains the entire agreement between
the parties hereto. No representations,
inducements, promises or agreements, oral or
otherwise, between the parties not embodied herein
shall be of any force or effect, and all reliance
by Tenant with respect to any representations,
inducements, promises or agreements is based
solely on those contained in this Lease. Any
modification to this Lease must be in writing and
duly executed by the parties hereto.
45. ROOF-TOP EQUIPMENT.
Tenant shall have the right to utilize a portion of the
roof of the Building for purposes of installing and
operating one or more satellite dishes or antennas,
subject to the terms of the attached Exhibit F.
Landlord and Tenant shall each complete, execute and
deliver to other the attached Exhibit F prior to Tenant
making any installation upon the Building roof.
Nothing herein contained shall be deemed to grant
Tenant the exclusive right to utilize the roof of the
Building.
IN WITNESS WHEREOF, Landlord and Tenant have executed
this Lease under seal on this 10th day of December, 1997.
WITNESS/ATTEST: LANDLORD:
PETULA ASSOCIATES, LTD., an
Iowa corporation
______________________________
By: /s/ Michael D. Ripson
(Seal)
Title: Vice President
By: /s/ R. L. Minear
(Seal)
Title: Vice President
WITNESS/ATTEST: TENANT:
GOVERNMENT TECHNOLOGY
SERVICES, INC.,
_____________________________ a Delaware corporation
By: /s/ M. Dendy Young
(Seal)
Title: CEO