Exhibit 10.35
11720 SUNRISE VALLEY DRIVE
RESTON, VIRGINIA
DEED OF OFFICE LEASE
BETWEEN
11720 SUNRISECORP., L.L.C.,
as LANDLORD
and
MERCATOR SOFTWARE, INC.,
as TENANT
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INDEX
Article I Basic Lease Information ................................................. 1
Article II Premises ................................................................ 2
Article III Term .................................................................... 2
Article IV Base Rent ............................................................... 3
Article V Increases In Operating Expenses ......................................... 4
Article VI Increases in Real Estate Taxes .......................................... 6
Article VII Use of Premises ......................................................... 7
Article VIII Assignment and Subletting ............................................... 7
Article IX Maintenance ............................................................. 10
Article X Tenant Alterations ...................................................... 11
Article XI Signs; Furnishings ...................................................... 12
Article XII Tenant's Equipment ...................................................... 12
Article XIII Security Deposit ........................................................ 13
Article XIV Inspection .............................................................. 14
Article XV Insurance ............................................................... 14
Article XVI Services and Utilities .................................................. 15
Article XVII Liability of Landlord ................................................... 16
Article XVIII Rules and Regulations ................................................... 16
Article XIX Damage .................................................................. 17
Article XX Condemnation ............................................................ 17
Article XXI Default of Tenant ....................................................... 18
Article XXII Bankruptcy .............................................................. 20
Article XXIII Subordination ........................................................... 20
Article XXIV Delivery at End of Lease Term ........................................... 21
Article XXV Covenant of Landlord .................................................... 22
Article XXVI General Provisions ...................................................... 22
EXHIBITS
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EXHIBIT A - FLOOR PLANS
EXHIBIT B - WORK AGREEMENT
EXHIBIT B-1 TENANT EQUIPMENT LIST
EXHIBIT C - CERTIFICATE AFFIRMING RENT COMMENCEMENT DATE
EXHIBIT D - SUITE FURNITURE PROVIDED BY LANDLORD TO TENANT
EXHIBIT E - CLEANING SPECIFICATIONS
EXHIBIT F - RULES AND REGULATIONS
EXHIBIT G - SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
EXHIBIT H - WORK AGREEMENT
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DEED OF OFFICE LEASE
THIS DEED OF OFFICE LEASE ("Lease") is made this ___ day of February,
2002 (the "Effective Date") between 11720 Sunrisecorp., L.L.C., a Maryland
limited liability company ("Landlord"), and Mercator Software, Inc., a Delaware
corporation, having an office at 45 Danbury Road, Wilton, Connecticut 06897
("Tenant").
WHEREAS, Landlord is the owner of 11720 Sunrise Valley Drive, Reston,
Virginia 20191 (the "Building"); and
WHEREAS, Tenant desires to lease space in the Building and Landlord is
willing to lease Tenant space in the Building, upon the terms, conditions,
covenants and agreements set forth herein.
NOW, THEREFORE, the parties hereto, intending legally to be bound,
hereby covenant and agree as set forth below.
Article I Basic Lease Information.
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1.1 (a) Building: A seven (7) story office building
containing approximately 69,204 square feet of rentable area.
(b) Premises: Approximately 11,442 square feet of
rentable area located on the second floor of the Building, as identified on
Exhibit A attached hereto.
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(c) Lease Term: The period commencing on the Lease
Commencement Date and ending on the last day of the calendar month that
completes sixty (60) full calendar months following the Lease Commencement Date,
unless sooner terminated in accordance with the provisions of this Lease. The
date on which the Lease Term expires shall be the "Lease Expiration Date."
(d) Lease Commencement Date: March 1, 2002
(e) Rent Commencement Date: Thirty (30) days after
the Lease Commencement Date.
(f) Base Rent: For the first lease year the Base Rent
shall be Two Hundred Forty Thousand Two Hundred Eighty-Two Dollars
($240,282.00), payable in equal monthly installments of Twenty Thousand
Twenty-Three Dollars and 50/100 ($20,023.50). For the second Lease Year the Base
Rent shall be Two Hundred Fifty-One Thousand Seven Hundred Twenty-Four Dollars
($251,724.00), payable in equal monthly installments of Twenty Thousand Nine
Hundred Seventy-Seven Dollars ($20,977.00).
(g) Base Operating Expenses: Operating Expenses for
calendar year 2002, adjusted if the Building is not at least ninety-five
percent (95%) occupied to reflect ninety-five percent (95%) occupancy during
calendar year 2002.
(h) Base Real Estate Taxes: Real Estate Taxes
assessed and/or charged during calendar year 2002 equitably adjusted to account
for the fully assessed value of the Building.
(i) (A) Tenant's Operating Expense Percentage:
Sixteen and Fifty-Three Hundreds Percentage (16.53%). The ratio that the square
feet of rentable area in the Premises bears to the square feet of rentable
office area in the Building
(B) Tenant's Real Estate Percentage: Sixteen and
Fifty-Three Hundreds Percentage (16.53%). The ratio that the square feet of
rentable area in the Premises bears to the square feet of rentable area in the
Building.
(j) Security Deposit: Forty-Three Thousand One
Hundred Thirteen Dollars and 38/100 ($43,113.38)
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(k) Tenant Address for Notices: 45 Danbury Road,Wilton,
Connecticut 06897, Attn: Kenneth J. Hall, Executive Vice President and Chief
Financial Officer, and Bishop Nowotnik, Manager-Corporate Facilities and
Administration.
(l) Work: The original improvement of the Premises will be
in accordance with Exhibit B. Upon substantial completion of the Work,
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Landlord shall provide a nonresidential use permit to Tenant. In the event that
Landlord has not substantially completed the Work (excluding any punch list
items) and has ceased all work for a period of ten (10) business days, Tenant
may give Landlord written notice ("Tenant Notice") that Tenant intends to
complete the Work and in the event Landlord has not recommenced Work in two (2)
business days of such Tenant Notice, Tenant shall complete the Work in
accordance with Exhibit H. Tenant shall have no obligation to complete the Work
unless Tenant has given Tenant Notice in which event Tenant shall have such an
obligation. If Landlord's failure to substantially complete the Work or
cessation of Work is due to force majeure, as described more fully in Section
26.19 hereof, Tenant shall not have a right to complete the Work. Upon demand by
Tenant, Landlord shall pay to Tenant the actual and reasonable costs and
expenses of completing the Work. If such amount is not paid by Landlord to
Tenant within thirty (30) days of the request, such amount shall bear interest
at the Default Rate from the date billed until the date it is paid by Landlord.
(m) Parking: Landlord will provide Tenant the right to 3.3
spaces per 1,000 square feet leased in the Building, upon the terms and
conditions set forth in Section 2.2.
(n) Calendar Year: Each annual period commencing on January
1 and ending on December 31.
(o) Common Areas: All areas and facilities of the Building
and adjoining parking areas and driveways for the common use and/or benefit of
tenants of the Building as allocated by Landlord from time to time, including,
without limitation, the public lobbies, elevators, corridors, stairways, toilet
rooms, parking areas, loading and unloading areas, roadways and sidewalks.
Article II Premises.
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2.1 Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the Premises for the Lease Term and upon the terms, conditions,
covenants, and agreements hereinafter provided. The lease of the Premises
includes the right, together with other tenants of the Building and members of
the public, to use the Common Areas, but includes no other rights not
specifically set forth herein.
2.2 Tenant shall have the right to use on an unassigned and
non-exclusive basis the number of parking permits set forth in Section 1.1(m) in
the parking lot of the Building during the Lease Term at no extra charge. Tenant
covenants and agrees to comply with all reasonable and non-discriminatory
parking rules and regulations that Landlord may make hereafter from time to time
with respect to the use of the parking areas. Landlord's remedies under such
rules and regulations may include, but shall not be limited to, the right to tow
away at owner's expense any vehicles not parked in compliance with the rules and
regulations. Landlord shall not be responsible to Tenant for the noncompliance
or breach of such rules and regulations by any other tenant, its agents,
employees and invitees or members of the public who may park in the parking
areas. Landlord shall have the right, from time to time, without Tenant's
consent, to change, alter, add to, temporarily close or otherwise affect the
parking facilities in such manner as Landlord, in its reasonable discretion,
deems appropriate including, without limitation, the right to designate reserved
spaces available only for use by one or more tenants (however, in such event,
those parking spaces shall still be deemed Common Area for the purpose of the
definition of Operating Expenses), provided that, except in emergency situations
or situations beyond Landlord's control, Landlord shall use reasonable efforts
to provide alternative parking facilities with sufficient parking spaces.
Landlord reserves the right to reduce the number of Tenant's parking spaces
proportionately with other tenants during such periods of construction of all or
a portion of the parking facilities; provided, however, that except during
temporary periods of construction, change, alteration, addition, closure or
other events that affect
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the parking facilities, Landlord shall provide a minimum of 3.3 spaces per 1,000
square feet leased in the Building.
Article III Term.
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3.1 The Lease Term shall commence on the Lease Commencement
Date, except for Tenant's obligation to pay any rent hereunder which shall
commence on the Rent Commencement Date. Each twelve (12) month period during the
Lease Term, initially beginning on the Lease Commencement Date, shall be a Lease
Year. Notwithstanding the Rent Commencement Date set forth in Section 1.1(e)
above, if for any reason Landlord cannot deliver possession of the Premises to
Tenant, Landlord shall not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease or Tenant's obligations hereunder.
Notwithstanding the foregoing, if the Premises are not substantially completed
by the Lease Commencement Date, Landlord shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease or Tenant's
obligations hereunder.3.2 Promptly after the Rent Commencement Date is
ascertained, Landlord and Tenant shall execute a certificate substantially in
the form of Exhibit C hereto affirming the Rent Commencement Date and the Lease
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Expiration Date.
3.3 Landlord grants Tenant one (1) option to extend the Lease
Term for a period of five (5) years (the "Extension Option") commencing upon the
Lease Expiration Date (the "Commencement Date of Extension Term") and expiring
at 11:59 p.m. EST on the date that is five years to the day thereafter (the
"Expiration Date of Extension Term") subject to the covenants and conditions set
forth in this Lease. Tenant shall have no right to an extension of the Term if
at the time Tenant seeks to exercise the Extension Option or at the time the
Commencement Date of Extension Term would have otherwise occurred Tenant (i) has
then assigned this Lease or sublet more than forty percent (40%) of the Premises
or (ii) is in default under this Lease beyond applicable notice and cure period,
or (iii) to exercise the Extension Option, Tenant shall give notice of its
exercise to Landlord not later than nine (9) months prior to the Lease
Expiration Date. If Tenant is entitled to and gives Landlord notice in
accordance with the terms of this Section 3.3, the Term shall be extended for
the period commencing on the Commencement Date of Extension Term and expiring on
the Expiration Date of Extension Term and, except as set forth below in this
Section 3.3, shall be on the same terms and condition as are set forth in this
Lease. Base Rent during the extended Term shall be the then-current market rent
for other office properties of comparable quality and character to the Building
within a two (2) mile radius of the Building, as such Base Rent is reasonably
determined pursuant to Section 26.23(d). Tenant shall have no further right or
option to extend the Term.
Article IV Base Rent.
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4.1 Tenant shall pay Base Rent in advance, in equal monthly
installments, with the first (1/st/) payment to be made simultaneously with
Tenant's execution of this Lease, and the second and subsequent monthly payments
to be made on the first day of the third month in the first Lease year and each
and every calendar month following the Rent Commencement Date during the Lease
Term. If the Lease Term begins on a date other than on the first (1/st/) day of
a month, Base Rent for the month of commencement shall be prorated at the rate
of one thirtieth (1/30th) of the monthly installment of Base Rent for each day.
Tenant will pay all rent to Landlord, at the office of Landlord, or to such
other party or to such other address as Landlord may designate from time to time
by written notice to Tenant.
4.2 Commencing with the third Lease Year and for each
subsequent Lease Year during the Lease Term, Base Rent shall be increased
annually by an amount equal to three percent (3%) multiplied by the Base Rent
payable during the immediately preceding Lease Year.
4.3 All sums payable by Tenant under this Lease shall be
payable without demand, set-off or deduction except as specifically set forth
herein, and shall be paid to Landlord in immediately available funds in legal
tender of the United States by wire transfer or by check (subject to
collection), at the address to which notices to Landlord are to be given or to
such other party or such other address as Landlord may designate in writing.
Landlord's acceptance of rent after it shall have become due and payable shall
not excuse a delay upon any subsequent
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occasion or constitute a waiver of any of Landlord's rights. Tenant will deliver
rent to Landlord's lender upon lender notice to Tenant from lender instructing
Tenant to deliver such rent to lender, and Tenant shall incur no liability to
Landlord for making any such payments to lender.
4.4 All costs and expenses which Tenant assumes or agrees to
pay to Landlord pursuant to this Lease, including without limitation, Operating
Expenses and Real Estate Taxes (both as hereinafter defined), shall be deemed to
be additional rent ("Additional Rent") and, in the event of nonpayment thereof,
Landlord shall have all the rights and remedies provided for in case of
nonpayment of rent, including assessment of interest and late payment fees. Base
Rent and Additional Rent are sometimes referred to collectively herein as
"rent."
4.5 If Tenant fails to make any payment of the Base Rent,
Additional Rent or any other sum payable to Landlord on or before the date which
is three (3) days after such payment is due and payable (without regard to any
grace period specified in the Lease), Tenant shall pay a late charge of five
percent (5%) of the amount unpaid. In addition, if Tenant's failure to make such
payment continues for more than thirty (30) days after the date such payment is
due and payable, such payment and such late charge shall bear interest at the
Default Rate as set forth in this Lease from the date such payment was due to
the date of payment thereof. Such late charge and interest shall constitute
Additional Rent due hereunder, shall be paid with the next monthly installment
of Base Rent coming due hereunder, shall constitute agreed liquidated damages
and not penalties, and shall be in addition to, and not in lieu of, all other
rights and remedies provided to Landlord in this Lease, at law, or in equity.
4.6 Base Rent for the thirteenth (13/th/) and thirty-seventh
(37/th/) months of this Lease shall be abated.
Article V Increases In Operating Expenses.
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5.1 Commencing on the first day of the second Lease Year and
thereafter during the Lease Term and any renewal thereof, Tenant shall pay to
Landlord as Additional Rent Tenant's Operating Expense Percentage of any
increase of Operating Expenses for each Calendar Year, falling entirely or
partially within the Lease Term, over the Base Operating Expenses.
5.2 Operating Expenses, as that term is used herein, shall
mean all costs and expenses (excluding the cost of any capital improvements
[other than as provided in item 8 below] or costs specifically billable to
tenants) that Landlord shall pay or become obligated to pay in connection with
the ownership, management, operation and maintenance of the Building, including
but not limited to, the following:
(a)
(1) Wages, salaries and all benefits and pension payments of
all employees engaged in operating and maintenance or
security of the Building, including taxes, insurance and
benefits relating thereto.
(2) All supplies and materials used in operation and
maintenance of the Building.
(3) Cost of all utilities (including surcharges) for the
Building, including the cost of elevators, water, sewer,
power, heating, lighting, air conditioning and
ventilating for the Building.
(4) Cost of all maintenance and service agreements for the
Building and the equipment therein, including but not
limited to, security, concierge and energy management
services, window cleaning, elevator maintenance and
janitorial service.
(5) Cost of all insurance relating to the Building, including
the cost of casualty and liability insurance applicable
to the Building and Landlord's
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personal property used in connection therewith, and
worker's compensation insurance.
(6) Cost of repairs and general maintenance (excluding
repairs and general maintenance paid by proceeds of
insurance or by Tenant or other third parties, and
alterations attributable solely to tenants of the
Building other than Tenant), and a management fee for
managers of the Building approximately equivalent to
the prevailing market rate charged by other
management firms operating in the Reston, Virginia
area for the management of similarly-classed office
buildings.
(7) The costs of any additional services made available
to all tenants generally by Landlord in the prudent
management of the Building.
(8) The cost of any capital improvements made to the
Building that, in Landlord's reasonable judgment, are
expected to result in a net reduction of Operating
Expenses or are required under any governmental law
or regulation, such cost thereof to be amortized over
the useful life of the capital improvement (only the
annual amortization amount to be included in
Operating Expenses), together with interest on the
unamortized balance at a per annum rate equal to two
percent (2%) over the prime rate published in the
Wall Street Journal's Money Rates Column on the first
business day such capital improvements are completed,
or such higher rate as may have been paid by Landlord
on funds borrowed for the purpose of constructing
said capital improvements.
(9) All personal property taxes and any other taxes which
may be assessed during the Lease Term as a result of
leasing space in the Building, including any business
improvement district or similar tax, value-added tax,
ad valorem tax or excise tax. It is agreed that
Tenant shall be responsible for all ad valorem taxes
on Tenant's personal property.
Operating Expenses and Real Estate Taxes shall not include the
following:
(b)
(1) Original construction costs of the Building;
(2) Expenses for repairs, replacements or maintenance
arising from the initial construction of the Building
to the extent such expenses are either (i) reimbursed
to Landlord by virtue of warranties from contractors,
or suppliers; or (ii) result by reason of
deficiencies in design or workmanship, except
conditions from ordinary wear and tear;
(3) Expenses associated with leasing space in the
Building or the sale of any interest in the Building,
including, without limitation, advertising and
marketing, commissions or any amounts paid for or on
behalf of any tenant such as space planning, moving
costs, rental and other tenant concessions;
(4) Amounts paid to any partners, shareholder, officer,
or director of Landlord, for salary or other
compensation except to the extent paid in connection
with ownership, management, operation or maintenance
of the Building;
(5) Reserves for repairs, maintenance, and replacements;
(6) Any amounts paid to any person, firm, or corporation
that is related to or otherwise affiliated with
Landlord or any general partner, officer or director
of Landlord or any of its general partners to the
extent they
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exceed arms-length competitive prices paid in the
Reston, Virginia area for the services or goods
provided;
(7) Costs of electricity outside normal business hours
sold to tenants of the Building by Landlord or
service in excess of that furnished to Tenant if
Landlord received reimbursement from such tenants as
an additional charge;
(8) Costs of repairs incurred by reason of fire or other
casualty or condemnation if Landlord receives
compensation therefor through the proceeds of
insurance or condemnation awards;
(9) Costs of renovating or otherwise improving space for
new or existing tenants or in renovating space
vacated by any tenant or any other work which
Landlord performs for any tenant;
(10) Interest, penalties or liens arising by reason of
Landlord's failure to timely pay any operating
expense (including ground rent) or real estate tax
due;
(11) Costs incurred for maintenance of any retail areas of
the Building, or compensation paid to clerks,
attendants, sales persons, or other persons on or in
commercial concessions (including the parking lot)
operated in the Building;
(12) Costs relating to maintaining Landlord's existence as
a corporation, partnership or other entity, such as
trustee's fees, annual fees, corporate or partnership
organization or administration expenses, deed
recordation expenses, and legal and accounting fees
(other than with respect to Building operations);
(13) Costs (including fines and penalties imposed)
incurred by Landlord to remove any hazardous or toxic
wastes, materials or substances from either the
Building or land;
(14) Depreciation of the Building or any equipment,
machinery, fixtures or improvements therein;
(15) The cost of any "tap fees" or one time lump sum sewer
or water connection fees for the Building;
(16) Landlord's general corporate overhead and general
administrative expenses except to the extent paid in
connection with ownership, management, operation or
maintenance of the Building;
(17) Costs directly resulting from the gross negligence or
willful misconduct of Landlord or its agents,
contractors or employees;
(18) Ground rents;
(19) Salaries, wages, or other compensation paid to
employees of any property management organization
being paid a fee by Landlord for its service where
such services are covered by a management fee; or the
allocation of salaries, wages, or other compensation
to any employee of Landlord who is not exclusively
assigned to the operation, management, maintenance,
or repair of the Building in excess of that portion
of work such employee actually performs for the
Property;
(20) Costs unrelated to the Property, including any
allocation of costs incurred on a shared basis, such
as centralized accounting costs, unless the
allocation is made on a reasonable and consistent
basis that fairly reflects the share of any costs
actually attributable to the Property;
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(21) Accounting or legal fees other than those incurred in
connection with reducing or attempting to reduce Operating
Expenses or Real Estate Taxes;
(22) Costs incurred to remedy, repair or otherwise to correct any
violation that existed as of the Lease Commencement Date;
(23) Principal and interest payments pursuant to any mortgage or
deed of trust covering the Building or the land;
(24) Costs of sculpture, paintings and other art objects;
(25) Costs of selling, syndicating, financing, mortgaging or
hypothecating any part of or interest in the Property;
(26) The cost of any electric current reimbursed directly to
Landlord by any tenant through metering or any other means;
(27) Cost of any item, service or repair to the extent it is covered
by a warranty, guaranty or insurance policy maintained or held
by the Landlord; and
(28) No inheritance tax, estate tax, succession tax, transfer tax,
or gift tax shall be included as real estate tax.
(29) The rent for Landlord's on-site management or leasing office;
(30) Increased insurance premiums caused by Landlord's or any other
tenant's hazardous acts;
(31) Rental costs and related expenses for leasing systems or
equipment that would be considered a capital improvement or
expenditure if purchased except to the extent such capital
improvement or expenditure would be permitted pursuant to
Section 5.2(a)(8);
(32) Interest and amortization of funds borrowed by Landlord,
whether secured or unsecured;
(33) Cost of replacing or retrofitting the HVAC system but only to
the extent specifically required so as to comply with laws that
regulate or prohibit the use or release of chlorofluorocarbons
(CFSs) or hydrocarbons (HCFSs);
5.3 If the average occupancy rate for the Building during any
Calendar Year is less than ninety-five percent (95%), or if any tenant is
separately paying for janitorial services or other services furnished to its
premises, Operating Expenses for such Calendar Year shall be deemed to include
all additional expenses, as reasonably estimated by Landlord, which would have
been incurred during such Calendar Year if such average occupancy rate had been
ninety-five percent (95%) and if Landlord paid for janitorial services and other
services furnished to such premises.
5.4 Prior to the first day of the second Lease Year and thereafter
at or after the beginning of each Calendar Year subsequent to the Calendar Year
in which Tenant's obligation to pay Additional Rent commences (or more
frequently if deemed reasonably necessary by Landlord) Landlord shall submit to
Tenant a statement of Landlord's reasonable estimate on an annual basis of any
increase in Operating Expenses over the Base Operating Expenses, and within
thirty (30) days after delivery of such statement Tenant shall pay to Landlord
as Additional Rent, an amount equal to one-twelfth (1/12) of the amount
determined to be Tenant's Operating Expense Percentage of such increase
("Tenant's Share"). In case such estimate is submitted during the Calendar Year
(other than the Calendar Year in which Tenant's obligation to pay Additional
Rent commences), Tenant shall include with the next monthly installment of Base
Rent (i) a lump sum payment to Landlord equal to one-twelfth (1/12) of Tenant's
Share multiplied by the number of months in such Calendar Year that will have
elapsed prior to the
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first month the payment required by clause (ii) hereof is due and (ii) begin
paying to the Landlord monthly as Additional Rent, due and payable on the first
day of each month an amount equal to one-twelfth (1/12) of Tenant's Share.
Within six (6) months, after the expiration of the Calendar Year in which
Tenant's obligation to pay Additional Rent commences and each Calendar Year
thereafter during the Lease Term, Landlord shall submit to Tenant a statement
(which shall include a general itemization of the Base Operating Expenses)
showing the determination in reasonably itemized detail by category of expense
of the total actual increase in Operating Expenses and Tenant's Share. If such
statement shows that Tenant's monthly payments pursuant to this paragraph
exceeded Tenant's Share of the actual increases incurred for the preceding
Calendar Year, then Tenant may deduct such overpayments from its next payment or
payments of monthly Base Rent until fully reimbursed therefor, or, if such
overpayment occurs in the final year of the Lease Term, Landlord will refund
such amount to Tenant within twenty (20) days . If such statement shows that
Tenant's Share of Landlord's actual increases exceeded Tenant's monthly payments
for the preceding Calendar Year, the deficiency shall be paid by Tenant together
with the next monthly installment of Base Rent due.
5.5 If the Lease Term expires on a day other than the last day of a
Calendar Year, respectively, then Tenant's liability for its proportionate share
of increases in Operating Expenses and Real Estate Taxes incurred during such
Calendar Year shall be apportioned by multiplying the amount of Tenant's
liability therefor for the full Calendar Year by a fraction, the numerator of
which is the number of days during such partial Calendar Year, and the
denominator of which is 365. Tenant's liability for payment of its proportionate
share of increases as aforesaid shall survive expiration or termination of this
Lease. If Tenant's monthly estimated payments made during such partial Calendar
Year exceed its actual proportionate share, such excess (after deducting
therefrom any amounts due from Tenant to Landlord) shall be refunded by Landlord
within thirty (30) days after completion of Landlord's reconciliation for that
Calendar Year, which obligation shall survive the expiration or earlier
termination of this Lease.
5.6 Within six (6) months after receipt of Landlord's statement
showing actual figures for the year, Tenant shall have the right to upon ten
(10) days' notice to audit, inspect and copy such books and records at Tenant's
sole cost and expense. If it shall be determined that there is an error in
Landlord's statement, Tenant shall be entitled to a credit for any overpayment.
If the extent of the error is more than three percent (3%) of the amount charged
to Tenant as its share of the increase in Operating Expenses, then Landlord
shall pay the cost of the audit. Any payment, refund or credit made pursuant to
this Section 5.6 shall be made without prejudice to any right of Tenant to
dispute, or of Landlord to correct, any item(s) as billed pursuant to the
provision hereof; provided however, such right to correct or adjust rental
payments shall terminate at the expiration of two (2) years after the date any
payment shall have become due.
Article VI Increases in Real Estate Taxes.
-----------------------------------------
6.1 Commencing on the first day of the second Lease Year and
thereafter during the Lease Term and any renewal thereof, Tenant shall pay to
Landlord as Additional Rent, Tenant's Real Estate Percentage of any increase in
Real Estate Taxes for each Calendar Year falling entirely or partially within
the Lease Term over the Base Real Estate Taxes. Real Estate Taxes shall mean (i)
all real estate taxes, including general and special assessments, if any, which
are imposed upon Landlord or assessed against the Building and/or the land on
which the Building is situated ("Land") during any Calendar Year, and (ii) any
other present or future taxes or governmental charges, including any business
improvement district assessments, that are imposed upon Landlord or assessed
against the Building and/or the Land during any Calendar Year which are in the
nature of, in addition to or in substitution for real estate taxes, including,
without limitation, any license fees, tax measured by or imposed upon rents, or
other tax or charge upon Landlord's business of leasing the Building, but shall
not include any federal, state or local income tax or any franchise, estate,
inheritance, capital stock, excise or excess profits tax, unless such taxes are
in the nature of or in substitution for Real Estate Taxes. Real Estate Taxes
shall also include all expenses incurred by Landlord in obtaining or attempting
to obtain a
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reduction of Real Estate Taxes, including but not limited to, legal fees
provided such legal fees are at competitive rates. Landlord shall provide
evidence of such expenses to Tenant.
6.2 Prior to the first day of the second Lease Year and thereafter
at or after the beginning of each Calendar Year subsequent to the Calendar Year
in which Tenant's obligation to pay Additional Rent commences (or more
frequently if deemed necessary by Landlord), Landlord shall submit to Tenant a
statement of Landlord's reasonable estimate of any such tax increase over the
Base Real Estate Taxes and within thirty (30) days after delivery of such
statement, Tenant shall pay to Landlord, as Additional Rent, an amount equal to
one-twelfth (1/12th) of the amount determined to be Tenant's aforesaid
percentage of such increase in annual Real Estate Taxes. Within six (6) months,
after the expiration of the Calendar Year in which Tenant's obligation to pay
Additional Rent commences and each Calendar Year thereafter during the Lease
Term, Landlord shall submit to Tenant a statement (which statement shall include
a copy of the tax bill for the Base Real Estate Taxes and a copy of the real
estate tax bill for the year in question), showing the determination of the
total actual increase in Real Estate Taxes and Tenant's proportionate share of
such increase. If such statement shows that Tenant's monthly payments pursuant
to this paragraph exceeded Tenant's share of the actual increase incurred for
the preceding Calendar Year, then Tenant may deduct such overpayments from its
next payment or payments of monthly Base Rent until fully reimbursed therefor.
If such statement shows that Tenant's share of Landlord's actual increase
exceeded Tenant's monthly payments for the preceding Calendar Year, then Tenant
shall pay the total amount of such deficiency to Landlord together with the next
monthly installment of Base Rent due.
6.3 If the Lease Term expires on a day other than the last day of a
Calendar Year, Tenant's liability for its proportionate share of increases in
Real Estate Taxes incurred during such Calendar Year shall be apportioned by
multiplying the amount of Tenant's liability therefor for the full Calendar Year
by a fraction, the numerator of which is the number of days during such partial
Calendar Year, and the denominator of which is 365. Tenant's liability for a
payment of its proportionate share of increases as aforesaid shall survive
expiration or termination of this Lease. If Tenant's monthly estimated payments
made during such partial Calendar Year exceed its actual proportionate share,
such excess (after deducting therefrom any amounts due from Tenant to Landlord)
shall be refunded by Landlord within thirty (30) days after completion of
Landlord's reconciliation for that Calendar Year.
Article VII Use of Premises.
---------------------------
7.1 Tenant will use and occupy the Premises solely for general
office purposes consistent with a first class office building in the Reston,
Virginia, metropolitan area and only in accordance with the uses permitted under
all applicable laws, ordinances and other municipal regulations and for no other
use or purpose. Tenant will not use or occupy the Premises for any unlawful
purpose, or for any purpose that will constitute a nuisance or unreasonable
annoyance to Landlord or other tenants of the Building, and will comply with all
present and future laws, ordinances, regulations, and orders of the United
States of America, the Commonwealth of Virginia and any other public or
quasi-public authority having jurisdiction over the Premises.
7.2 Tenant shall not generate, use, store or dispose of any
Hazardous Material in or about the Building. For purposes of this Lease,
"Hazardous Materials" shall include, but shall not be limited to, (a) "hazardous
wastes," as defined by the Resource Conservation and Recovery Act of 1976, as
amended from time to time, (b) "hazardous substances," as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any similar law of any jurisdiction in which the
Building is located, (c) "toxic substances," as defined by the Toxic Substances
Control Act, as amended from time to time, (d) "hazardous materials," as defined
by the Hazardous Materials Transportation Act, as amended from time to time, (e)
oil or other petroleum products, and (f) any substance whose presence could be
detrimental to the Building or hazardous to health or the environment. Tenant
shall defend (at Landlord's election), indemnify and hold Landlord harmless from
any and all claims, damages, fines, judgments, penalties, costs, liabilities or
losses arising during or after the Lease Term and arising from Tenant's breach
of this Section 7.2. The indemnification pursuant to this Section shall survive
termination or expiration of this Lease for a period of three (3) years. Tenant
shall promptly forward to Landlord copies of all writings
9
received by Tenant relating to any alleged or suspected discharge or the alleged
or suspected presence of any Hazardous Materials in or about the Premises or the
Building (to the extent resulting from or relating to Tenant's operations in the
Premises), including without limitation any reports, citations, notices or other
writings by, to or from any governmental or quasi-governmental authority
empowered to regulate or oversee the disposition of Hazardous Materials, whether
demonstrating compliance with applicable law or giving notice of any request for
information or commencement of investigation, or constituting an informal
request for action or to show cause why action is not required, a formal
request, or any other administrative or court document.
7.3 Landlord represents and warrants that to its actual knowledge,
without a duty to investigate, the Building, does not as of the Lease
Commencement Date contain Hazardous Materials. Tenant shall have no obligation
to remove or remediate any Hazardous Materials that exist at the Building as of
the Lease Commencement Date of this Lease. Landlord shall remove and/or
remediate any Hazardous Materials (unless such removal or remediation is the
responsibility of Tenant or any other third party) to the extent and solely to
the extent that such remediation or removal is required by any law or regulation
relating to Hazardous Materials.
Article VIII Assignment and Subletting.
--------------------------------------
8.1 Tenant shall not voluntarily or by operation of law assign,
transfer, mortgage, sublet or otherwise transfer or encumber all or any part of
Tenant's interest in this Lease or in the Premises (any of the foregoing a
"Transfer") without Landlord's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. Landlord shall respond to
Tenant's written request for consent hereunder within thirty (30) days after
Landlord's receipt of the written request together with all information
reasonably requested by Landlord in connection with the request from Tenant. Any
Transfer or attempted Transfer without such consent shall be void and shall
constitute a material default and breach of this Lease and, in such event,
Landlord shall have the right to terminate this Lease. Tenant's written request
for Landlord's consent shall include, and Landlord's thirty (30) day response
period referred to above shall not commence, unless and until Landlord has
received from Tenant, all of the following information: (i) financial statements
for the proposed transferee for the past two (2) years prepared in accordance
with generally accepted accounting principles, (ii) a TRW credit report or
similar report on the proposed transferee, (iii) a detailed description of the
business the proposed transferee intends to operate at the Premises, (iv) the
proposed effective date of the Transfer and copies of any other agreements with
the proposed transferee or in connection with the proposed Transfer, (v) a copy
of the proposed Transfer agreement which includes all of the terms and
conditions of the proposed Transfer, and (vi) a detailed description of any
ownership or commercial relationship between Tenant and the proposed transferee.
If the obligations of the proposed transferee will be guaranteed by any person
or entity, Tenant's written request shall not be considered complete until the
information described in (i), (ii), and (iii) of the previous sentence has been
provided with respect to each proposed guarantor. "Transfer" shall also include
the transfer (i) if Tenant is a corporation, and Tenant's stock is not publicly
traded over a recognized securities exchange, of more than twenty five percent
(25%) of the voting stock of such corporation during the Lease Term (whether or
not in one or more transfers) or the dissolution, merger or liquidation of the
corporation, or (ii) if Tenant is a partnership or other entity, of more than
twenty five percent (25%) of the profit and loss participation in such
partnership or entity during the Lease Term (whether or not in one or more
transfers) or the dissolution, merger or liquidation of the partnership or
entity. If Tenant is a limited or general partnership (or is comprised of two or
more persons, individually or as co-partners), Tenant shall not be entitled to
change or convert to (i) a limited liability company, (ii) a limited liability
partnership or (iii) any other entity which possesses the characteristics of
limited liability without the prior written consent of Landlord, which consent
may be given or withheld in Landlord's sole discretion. Tenant's sole remedy in
the event that Landlord shall wrongfully withhold consent to or disapprove any
Transfer shall be to obtain an order by a court of competent jurisdiction that
Landlord grant such consent; in no event shall Landlord be liable for damages
with respect to its
10
granting or withholding consent to any proposed Transfer. If Landlord shall,
pursuant to its rights hereunder, exercise any option to recapture the Premises,
or shall, pursuant to its rights hereunder, deny a request for consent to a
proposed Transfer, Tenant shall indemnify, defend and hold Landlord harmless
from and against any and all losses, liabilities, damages, costs and claims that
may be made against Landlord by the proposed transferee, or by any brokers or
other persons claiming a commission or similar compensation in connection with
the proposed Transfer. The assignment or sublease of a part or all of the
Premises by Tenant to an Affiliate (as hereinafter defined) shall not constitute
a Transfer and shall not require Landlord's consent or be subject to Landlord's
recapture right. For purposes of this section, an "Affiliate" shall mean any
corporation or other entity which, directly or indirectly, controls or is
controlled by or is under common control with Tenant. For this purpose,
"control" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such corporation
or other entity, whether through the ownership of voting securities or interest
or by contract or otherwise.
8.2 The following terms and conditions shall be applicable to any
Transfer:
(1) Regardless of Landlord's consent, no Transfer shall release
Tenant from Tenant's obligations hereunder or alter the primary liability of
Tenant to pay the rent and other sums due Landlord hereunder and to perform all
other obligations to be performed by Tenant hereunder or release any guarantor
from its obligations under its guaranty.
(2) Landlord may accept rent from any person other than Tenant
pending approval or disapproval of a proposed Transfer.
(3) Neither a delay in the approval or disapproval of a
Transfer, nor the acceptance of rent, shall constitute a waiver or estoppel of
Landlord's right to exercise its rights and remedies for the breach of any of
the terms or conditions of this Article VIII.
(4) The consent by Landlord to any Transfer shall not
constitute a consent to any subsequent Transfer by Tenant or to any subsequent
or successive Transfer by a transferee. However, Landlord may consent to
subsequent Transfers or any amendments or modifications thereto without
notifying anyone other than Tenant liable on the Lease or any guaranty and
without obtaining their or Tenant's consent, and such action shall not relieve
such persons from liability under this Lease or any guaranty.
(5) Upon the occurrence of an Event of Default under this
Lease, Landlord may proceed directly against Tenant, any guarantors or anyone
else responsible for the performance of this Lease, including any transferee,
without first exhausting Landlord's remedies against any other person or entity
responsible therefor to Landlord, or any security held by Landlord.
(6) Landlord's written consent to any Transfer by Tenant shall
not constitute an acknowledgment that no Event of Default then exists under this
Lease nor shall such consent be deemed a waiver of any then existing Event of
Default (or fact or condition which with the passage of time or giving of notice
and expiration of any cure period would constitute an Event of Default).
(7) [Intentionally Omitted]
(8) Landlord shall not be liable under this Lease or under any
sublease to any subtenant.
(9) No assignment, sublease or other document entered into in
connection with a Transfer and applicable to the Transfer may be modified or
amended without Landlord's prior written consent (not to be unreasonably
withheld).
(10) Any transferee shall be deemed, for the benefit of
Landlord, to have assumed and agreed to conform and comply with each and every
term, covenant, condition and obligation herein to be observed or performed by
Tenant during the term of said transfer, other than such obligations as are
contrary or inconsistent with provisions of
11
an agreement to which Landlord has specifically consented in writing, and any
assignee agrees to execute any documents reasonably required by Landlord to
acknowledge its duties and obligations under this Lease.
(11) The form of the subtenant agreement shall be subject to
the reasonable approval of Landlord. Landlord shall be provided with copies of
the executed subtenant agreement.
8.3 Tenant may not sublet all or any portion of the Premises
without the prior written consent of Landlord, which will not unreasonably
withheld, provided the following criteria are satisfied: (i) the proposed
subtenant's or assignee's use of the Premises is permitted under this Lease,
(ii) the proposed subtenant or assignee is of good reputation and character;
(iii) the proposed subtenant or assignee is not otherwise a tenant of the
Building, does not have diplomatic or sovereign immunity, and is not a federal,
state or local governmental agency; (iv) the proposed subtenant or assignee does
not intend to use the Premises for a Prohibited Activity (as hereinafter
defined); and (v) Tenant and such proposed subtenant or assignee otherwise
comply with the conditions set forth in this Article VIII. A "Prohibited
Activity" for purposes of this provision shall include uses which will, in
Landlord's reasonable judgment: (a) introduce undue amounts of public traffic in
the Building (in excess of average traffic which Landlord reasonably believes is
generated by other tenants in the Building), (b) place a strain on the existing
plumbing, electrical and mechanical systems, or (c) generate unusually high
densities of employees per square foot of rentable space. In addition, Tenant
may not advertise space at a rental rate which is less than is being quoted by
Landlord for other office space in the building at the time of such sublease of
assignment.
8.4 The following terms and conditions shall apply to any
subletting by Tenant of all or any part of the Premises and shall be deemed
included in all subleases under this Lease whether or not expressly incorporated
therein:
(1) Tenant hereby absolutely and unconditionally assigns and
transfers to Landlord all of Tenant's interest in all rentals and income arising
from any sublease entered into by Tenant, and Landlord may collect such rent and
income and apply same toward Tenant's obligations under this Lease; provided,
however, that until an Event of Default shall occur in the performance of
Tenant's obligations under this Lease, Tenant may receive, collect and enjoy the
rents accruing under such sublease. Landlord shall not, by reason of this or any
other assignment of such rents to Landlord nor by reason of the collection of
the rents from a subtenant, be deemed to have assumed or recognized any sublease
or to be liable to the subtenant for any failure of Tenant to perform and comply
with any of Tenant's obligations to such subtenant under such sublease,
including, but not limited to, Tenant's obligation to return any Security
Deposit. Tenant hereby irrevocably authorizes and directs any such subtenant,
upon receipt of a written notice from Landlord stating that Tenant has committed
an Event of Default under this Lease, to pay to Landlord the rents due as they
become due under the sublease. Tenant agrees that such subtenant shall have the
right to rely upon any such statement and request from Landlord, and that such
subtenant shall pay such rents to Landlord without any obligation or right to
inquire as to whether such Event of Default exists and notwithstanding any
notice from or claim from Tenant to the contrary.
(2) If Tenant has committed an Event of Default under this
Lease, Landlord at its option and without any obligation to do so, may require
any subtenant to attorn to Landlord, in which event Landlord shall undertake the
obligations of Tenant under such sublease from the time of the exercise of said
option to the termination of such sublease; provided, however, Landlord shall
not be liable for any prepaid rents or Security Deposit paid by such subtenant
to Tenant or for any other prior defaults of Tenant under such sublease.
8.5 Landlord shall be entitled to receive from Tenant (as and when
received by Tenant) as an item of Additional Rent seventy-five percent (75%) of
all
12
amounts received by Tenant from any transferee in excess of the amounts payable
by Tenant to Landlord hereunder (hereinafter the "Transfer Premium"). The
Transfer Premium shall be reduced by the actual, reasonable (not to exceed
market) brokerage commissions, tenant improvement allowance, alteration
expenses, and legal fees actually paid by Tenant in order to complete the
Transfer. "Transfer Premium" shall include but not be limited to all Base Rent,
Additional Rent or other consideration of any type whatsoever payable by the
transferee in excess of the Base Rent and Additional Rent payable by Tenant
under this Lease. If less than all of the Premises is transferred, the Base Rent
and the Additional Rent shall be determined on a per rentable square foot basis.
Transfer Premium shall also include, but not be limited to, key money and bonus
money paid by the transferee to Tenant in connection with such Transfer, and any
payment in excess of fair market value for services rendered by Tenant to the
transferee or for assets, fixtures, inventory, equipment, or furniture
transferred by Tenant to the transferee in connection with such Transfer to the
extent that such payment in excess of fair market value is in lieu of Base Rent
or Additional Rent. For purposes of calculating the Transfer Premium, expenses
will be amortized over the life of the Transfer.
8.6 Within thirty (30) days from any request of Tenant to Transfer
all or a portion of the Premises, Landlord shall have the option to terminate
this Lease with respect to any space affected by such proposed Transfer as of
the date thirty (30) days after Landlord's election (in which case, Tenant shall
be released for liability accruing after the effective date of termination). In
the event of a recapture by Landlord, if this Lease shall be canceled with
respect to less than the entire Premises, the Base Rent, Tenant's Operating
Expense Percentage increases, the number of parking spaces and other items
(e.g., directory strips) Tenant may use shall be adjusted on the basis of the
number of rentable square feet retained by Tenant in proportion to the number of
rentable square feet contained in the original Premises, and this Lease as so
amended shall continue thereafter in full force and effect, and upon request of
either party, the parties shall execute written confirmation of same. If
Landlord recaptures only a portion of the Premises, it shall construct and erect
at its sole cost partitions to sever the space to be retained by Tenant from the
space recaptured by Landlord. Landlord may, at its option, lease any recaptured
portion of the Premises to the proposed transferee or to any other person or
entity without liability to Tenant. Tenant shall not be entitled to any portion
of the profit, if any, Landlord may realize on account of such termination and
reletting.
8.7 In the event Tenant shall assign this Lease or sublet the
Premises or request the consent of Landlord to any Transfer, Tenant shall
promptly pay, as Additional Rent, Landlord's costs and expenses incurred in
connection therewith, including, but not limited to, attorneys', architects',
accountants', engineers' or other consultants' fees (not to exceed $1,000), or,
if no third party fees are claimed by Landlord, an administrative fee of One
Thousand and No/100 Dollars ($1,000.00).
8.8 Assignments Permitted. Notwithstanding any provisions to the
---------------------
contrary contained in this Lease, this Lease may be assigned, or the demised
premises may be sublet, in whole or in part, without the consent of Landlord to
any corporation or other entity into or with which Tenant may be merged or
consolidated or to any corporation or other entity which shall be an affiliate,
subsidiary or successor of Tenant, or of a corporation or other entity into or
with which Tenant may be consolidated. Under no circumstances shall a sale of a
majority or more of the common stock or other form of equity ownership of Tenant
be deemed an assignment pursuant to the terms and provisions of this Lease. The
provisions of Section 8.6 shall not apply to Transfers described in this Section
8.8. Although the assignments or sublettings described in this Section 8.8 are
Transfers, to the extent that a provision in this Article requires Landlord's
consent such consent shall not be required for the transactions described
herein.
For purposes of this Section a "subsidiary" or "affiliate" or a
"successor" of Tenant shall mean the following:
(a) An "affiliate" shall mean any corporation or other entity which,
directly or indirectly controls or is controlled by or is under
common
13
control with Tenant. For this purpose, "control" shall mean the
possession directly or indirectly, of the power to direct or
cause the direction of the management and policies of such
corporation or other entity, whether through the ownership of
voting securities or interest or by contract or otherwise.
(b) A "subsidiary" shall mean any corporation or other entity not
less than 50% of whose outstanding stock or other form of equity
ownership shall, at the time, be owned directly or indirectly by
Tenant.
(c) A "successor" of Tenant shall mean an entity into or with which
Tenant is merged or consolidated or an entity to which
substantially all of Tenant's assets are transferred in
accordance with applicable statutory provisions for merger or
consolidation of corporation or other entities, provided that by
operation of law or by effective provisions contained in the
instruments or merger or consolidation, the liabilities of the
entities participating in such merger or consolidation are
assumed by the entity surviving such merger or created by such
consolidation (provided further that such merger or transfer of
assets is for a good business purpose and not principally for
the purpose of transferring the leasehold estate created hereby,
and that such corporation or entity has a net worth at least
equal to the net worth of Tenant immediately prior to such
merger or transfer).
Article IX Maintenance.
----------------------
9.1 Tenant will keep the Premises and fixtures and equipment therein
in clean, safe and sanitary condition, will take good care thereof, will suffer
no waste or injury thereto, except for ordinary wear and tear and damage by fire
or other casualty which is governed by Article XIX, and will, at the expiration
or other termination of the Lease Term, surrender the same as required by
Article XXIV. Tenant shall maintain a maintenance contract for the repair and
maintenance of the separate air conditioning equipment (either installed by
Landlord or Tenant.) to service the Tenant's computer lab.
9.2 Throughout the Lease Term, Landlord will promptly and
expeditiously undertake and manage, in a manner consistent with other office
buildings in the Reston, Virginia area, all necessary or customary repairs to,
and maintenance of: (a) base building structural systems; (b) the roof; (c) all
base building mechanical, plumbing, life safety and electrical systems; and (d)
Common Areas.
Article X Tenant Alterations.
-----------------------------
10.1 The original improvement of the Premises shall be constructed by
Landlord at Landlord's sole cost and expense in accordance with Exhibit B.
---------
Landlord is under no obligation to make any structural or other alterations,
decorations, additions, improvements or other changes (collectively
"Alterations") in or to the Premises except as set forth in Exhibit B or
---------
otherwise expressly provided in this Lease. Any additional Alterations, which
are necessary in order for the Premises to comply with requirements of the
Americans with Disabilities Act (as hereinafter defined) or such other laws or
amendments thereto which may be hereinafter enacted during the term of this
Lease or any extensions or renewals hereof shall be the responsibility of Tenant
except, however, Tenant shall not be responsible for making any structural
improvements, and Tenant hereby agrees to indemnify Landlord for any loss, claim
or damages incurred by Landlord as a result of Tenant's failure to make such
additional Alterations.
10.2 Except for minor, cosmetic improvements not visible from outside
of the Premises or alterations which cost less than Twenty-Five Thousand Dollars
($25,000) do not affect the Building Systems and are not visible from outside of
the Premises (such as interior painting or floor coverings), Tenant shall not,
without Landlord's prior written consent, which may be given or withheld in
Landlord's sole discretion, make any Alterations in, on or about the
14
Premises or the Building. Alterations shall include, but shall not be limited
to, the installation or alteration of security or fire protection systems,
communication systems, millwork, shelving, file retrieval or storage systems,
window and wall coverings, electrical distribution systems, lighting fixtures,
telephone or computer system wiring, HVAC and plumbing. Notwithstanding the
foregoing, Landlord's approval of non-structural Alterations which do not affect
the base building system will not be unreasonably withheld. At the expiration of
the Lease Term, Landlord may require the removal of any Alterations installed by
Tenant and the restoration of the Premises and the Building to their prior
condition, at Tenant's expense (excluding the Alteration of the Premises to
expand the computer lab to include one additional office space). Notwithstanding
anything else contained herein, all fixtures shall, at the sole option of
Landlord, become the property of Landlord and shall not be removed without
Landlord's prior written consent. If, as a result of any Alteration made by
Tenant, Landlord is obligated to comply with the Americans With Disabilities Act
or any other law or regulation and such compliance requires Landlord to make any
improvement or Alteration to any portion of the Building, as a condition to
Landlord's consent, Landlord shall have the right to require Tenant to pay to
Landlord prior to the construction of any Alteration by Tenant, the entire cost
of any improvement or Alteration Landlord is obligated to complete by such law
or regulation. Should Landlord permit Tenant to make its own Alterations, Tenant
shall use only such contractor as has been expressly approved by Landlord, and
Landlord may require Tenant to provide to Landlord for Alterations which cost
Fifty Thousand Dollars ($50,000) or more, at Tenant's sole cost and expense, a
lien and completion bond in an amount equal to one and one-half times the
estimated cost of such Alterations. Should Tenant make any Alterations without
the prior approval of Landlord, or use a contractor not expressly approved by
Landlord, Landlord may, at any time during the Term of this Lease, require that
Tenant remove all or part of the Alterations and return the Premises to the
condition it was in prior to the making of the Alterations. In the event Tenant
makes any Alterations, Tenant agrees to obtain or cause its contractor to
obtain, prior to the commencement of any work, "builders all risk" insurance in
an amount reasonably approved by Landlord and workers compensation insurance.
Notwithstanding anything herein to the contrary, no Landlord fees shall apply to
and Tenant shall not be required to remove (unless Landlord otherwise notifies
Tenant with plan approval) any Improvements installed as part of Tenant's
initial build-out and approved by Landlord, other than Tenant fixtures and
equipment.
10.3 Any Alterations in or about the Premises that Tenant shall
desire to make shall be presented to Landlord in written form, with plans and
specifications which are sufficiently detailed to obtain a building permit. If
Landlord consents to an Alteration, the consent shall be deemed conditioned upon
Tenant acquiring a building permit from the applicable governmental agencies,
furnishing a copy thereof to Landlord prior to the commencement of the work, and
compliance by Tenant with all conditions of said permit in a prompt and
expeditious manner. Additionally, Landlord may condition its consent, among
other matters, to Tenant performing such Alterations during non-business hours
if such Alterations will create unreasonable noise, noxious fumes or otherwise
interfere with the quiet enjoyment of the other tenants in the Building. Tenant
shall provide Landlord with as-built plans and specifications for any
Alterations made to the Premises. All Alterations which may be made to the
Premises by Tenant shall be paid for by Tenant, at Tenant's sole expense, and
shall be made and done in a good and workmanlike manner and with new materials.
10.4 Tenant shall not permit a mechanic's lien or liens to be placed
upon the Premises or the Building as a result of any Alterations made by it and
agrees, if any such lien be filed on account of the acts of Tenant, promptly to
discharge the same. In the event Tenant fails to discharge any such lien, it may
be paid by Landlord after written notice to Tenant without releasing Tenant and
the cost charged to Tenant as Additional Rent under this Lease.
10.5 Tenant shall give Landlord not less than ten (10) days' advance
written notice prior to the commencement of any work in the Premises by Tenant,
and Landlord shall have the right to post notices of non-responsibility in or on
the Premises or the Building.
10.6 Notwithstanding anything contained herein to the contrary, all
Alterations undertaken by Tenant shall be performed in accordance with Exhibit
H.
15
Article XI Signs; Furnishings.
------------------------------
11.1 Tenant shall not inscribe, paint, affix, or otherwise display
any sign, advertisement or notice on any part of the outside or inside of the
Building. Landlord shall provide at no cost to Tenant a standard suite
identification sign to be affixed by Landlord at the exterior entrance to the
Premises in the standard size, color and style selected by Landlord for the
Building. Landlord shall also prepare and install at no cost to Tenant a
standard name plate for the lobby directory of the Building. If any other signs
advertisements or notices are painted, affixed, or otherwise displayed without
the prior approval of Landlord, Landlord shall have the right to remove the
same, and Tenant shall be liable for any and all costs and expenses incurred by
Landlord in such removal. The signage rights granted to Tenant in this Article
XI are personal to the original Tenant and may not be assigned by or to any
person or entity other than Tenant. Landlord shall provide Tenant with signage
rights to place its name or logo on the monument sign at the intersection of
Sunrise Valley Drive and Roland Clarke Place. Furthermore, in the event that
Tenant leases at least twenty-five thousand (25,000) rentable square feet in the
Building, subject to Landlord's review, local codes, and the rights of other
Tenants. Tenant shall have the right to place its name or logo at the top of the
Building facing Sunrise Valley Drive.
11.2 Landlord shall have the right to prescribe the weight and
position of safes and other heavy equipment or fixtures, which shall, if
considered necessary by Landlord, stand on plank strips to distribute the
weight. Any and all damage or injury to the Premises or the Building caused by
moving the property of Tenant into, in or out of the Premises, or due to the
same being on the Premises, shall be repaired by, and at the sole cost of,
Tenant. No furniture, equipment or other bulky matter of any description will be
received into the Building or carried in the elevators except as approved by
Landlord, and all such furniture, equipment and other bulky matter shall be
delivered only through the designated delivery entrance of the Building. All
moving of furniture, equipment and other materials shall be under the direct
control and supervision of Landlord who shall, however, not be responsible for
any damage to or charges for moving the same. Tenant agrees promptly to remove
from the sidewalks adjacent to the Building any of Tenant's furniture, equipment
or other material there delivered or deposited.
11.3 Landlord shall allow Tenant to use the furniture that is
currently located in the Premises as described in Exhibit D (the "Furniture") at
---------
no cost or expense to Tenant. The Furniture is delivered in its "AS IS"
condition with no representation or warranty with respect to its condition or
fitness for any use. Tenant will keep the furniture in as good condition as
received, will suffer no waste or injury thereto, except for ordinary wear and
tear, damage by fire or other casualty. Tenant will surrender such furniture
upon expiration of this Lease. Furniture shall remain the property of Landlord.
Article XII Tenant's Equipment.
-------------------------------
Tenant will not install or operate in the Premises any electrically
operated equipment or other machinery, other than standard electric typewriters,
personal computers, telephone system, adding machines, radios, televisions,
clocks and copying machines, coffee machines, microwaves and customary equipment
used for office purposes (provided such equipment does not require excess
electrical consumption or vibration eliminators) without first obtaining the
prior written consent of Landlord, who may condition such consent upon the
payment by Tenant of additional rent in compensation for such excess consumption
of utilities as determined in the sole discretion of Landlord and for the cost
of separate metering or additional wiring as may be occasioned by the operation
of said equipment or machinery. Tenant shall not install any other equipment of
any kind or nature whatsoever which will or may necessitate any changes,
replacements or additions to, or in the use of, the water system, heating
system, plumbing system, air-conditioning system, or electrical system of the
Premises or the Building without first obtaining the prior written consent of
Landlord. Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of the
Building or to any space therein to such a degree as to be objectionable to
Landlord or to any tenant shall be installed and maintained by Tenant, at
Tenant's expense, on
16
vibration eliminators or other devices sufficient to eliminate such noise and
vibration. Landlord reserves the right to separately meter any utility
consumption in the Premises.
Article XIII Security Deposit.
------------------------------
Tenant shall deposit with Landlord the Security Deposit, as security
for the prompt, full and faithful performance by Tenant of each and every
provision of this Lease and of all obligations of Tenant hereunder. The Security
Deposit shall be in the form of cash. If an Event of Default occurs, Landlord
may use, apply or retain the whole or any part of the Security Deposit for the
payment of (i) any Base Rent or Additional Rent which Tenant shall not have paid
or which may become due after the occurrence of such Event of Default, (ii) any
sum expended by Landlord on Tenant's behalf in accordance with the provisions of
this Lease or (iii) any other sum which Landlord may expend or be required to
expend by reason of Tenant's default, including damages or deficiency in the
reletting of the Premises. The use, application or retention of the Security
Deposit, or any portion thereof, by Landlord shall not prevent Landlord from
exercising any other right or remedy provided by this Lease or by law and shall
not operate as a limitation on any recovery to which Landlord may otherwise be
entitled. If any portion of the Security Deposit is used, applied or retained by
Landlord for the purposes set forth above, Tenant agrees, within fifteen (15)
days to deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to the amount held by Landlord prior to Landlord's exercising
any of its rights to use or apply the Security Deposit hereunder. If Tenant
shall fully and faithfully comply with all of the provisions of this Lease, the
Security Deposit, or any balance thereof, shall be returned to Tenant within
Thirty (30) days after the expiration of the Term, with interest accruing at
three percent (3%) per annum. In the absence of evidence satisfactory to
Landlord of any permitted assignment of the right to receive the Security
Deposit, or the remaining balance thereof, Landlord may return the same to
Tenant, regardless of one or more assignments of Tenant's interest in this Lease
or the Security Deposit. In such event, upon the return of the Security Deposit
(or balance thereof) to Tenant, Landlord shall be completely relieved of
liability under this Article. In the event of a transfer of Landlord's interest
in the Premises, Landlord shall transfer the Security Deposit to the transferee
thereof. In such event, upon the delivery by Landlord to the transferee of
Landlord's interest of the Security Deposit, Landlord shall be deemed to have
been released by Tenant from all liability or obligation for the return of such
Security Deposit, and Tenant agrees to look solely to such transferee for the
return of the Security Deposit and the transferee shall be bound by all
provisions of this Lease relating to the return of the Security Deposit provided
however that Landlord's lender is not responsible for the Security Deposit
unless actually received by Landlord's lender or its affiliate. The Security
Deposit shall not be mortgaged, assigned or encumbered in any manner whatsoever
by Tenant without the prior written consent of Landlord to be granted or
withheld in Landlord's sole and absolute discretion.
Article XIV Inspection
----------------------
Tenant will permit Landlord, or its agents or other representatives, to
enter the Premises, without charge therefor to Landlord and without diminution
of the rent payable by Tenant, to examine, inspect and protect the Premises and
the Building and to make such Alterations and/or repairs to the Building,
including the common areas of the Building, as in the sole judgment of Landlord
may be deemed necessary, and to make any Alterations and/or repairs to the
Premises as Landlord, in its sole judgment, may deem necessary, or to exhibit
the same to prospective tenants, purchasers or mortgagees, provided, however,
that with respect to perspective tenants, Landlord may only exhibit the same
during the last nine (9) months of the Lease Term or nine (9) months prior to a
potential recapture of all or a portion of the Premises. In connection with any
such entry, Landlord shall endeavor to minimize the disruption to Tenant's use
of the Premises.
Article XV Insurance.
--------------------
15.1 Landlord agrees that it will keep the Building insured against
loss due to fire and other property risks included in standard all risk
coverage/special form insurance policies, and covering loss of income from such
property risk.
17
15.2 Tenant, at Tenant's sole cost and expense, shall obtain and
maintain in effect at all times during the Term, a policy of commercial general
liability insurance with broad form property damage endorsement, naming
Landlord, and any mortgagee of the Building, any ground landlord and any other
party requested by Landlord as additional named insured(s), protecting such
parties against any liability for bodily injury, death or property damage
occurring upon, in or about any part of the Building, the Premises or any
appurtenances thereto, with such policies to afford protection to the limit of
not less than Five Million Dollars ($5,000,000) limit per occurrence and in the
aggregate with respect to bodily injury including death and property damage with
a deductible no greater than One Thousand Dollars ($1,000.00) for any single
occurrence and otherwise acceptable to Landlord, in Landlord's sole discretion.
Tenant shall obtain and keep in force during the Term of this Lease "all
risk"/special form property insurance covering the full replacement cost without
depreciation of the tenants furniture, all furniture as described on Exhibit D
attached hereto, fixtures and equipment, including Tenant's improvements and
betterments whether installed by the Tenant or the Landlord. Tenant shall also
carry business interruption coverage and loss of rents coverage. The limit for
loss of rents coverage shall be in the amount of one year's rent and shall be
payable directly to Landlord.
15.3 Said property insurance shall be written on at least a 90%
co-insurance basis. By way of example and not limitation, such policies shall
provide protection against ALL perils included within the Special Form
classification, including "fire and extended coverage," vandalism and malicious
mischief, theft, sprinkler leakage, water damage, sewer backup, and flood
damage. Tenant shall, at all times during the Lease Term, maintain in effect
statutory Workers' Compensation insurance as required by applicable law. With
the exception of Worker's Compensation, all policies shall include hold harmless
and waiver of subrogation endorsements in favor of the Landlord.
15.4 The insurance policy required to be obtained by Tenant under
this Lease (i) shall be issued by an insurance company of recognized
responsibility licensed to do business in the jurisdiction in which the Building
is located with a rating of at least "A" and a financial rating of at least
"Class X" (or such other rating as may be required by any lender having a lien
on the Building) as set forth in the most recent edition of "Best Insurance
Reports", and (ii) shall be written as primary coverage and not contributing
with or in excess of any coverage which Landlord may carry. Neither the issuance
of any insurance policy required under this Lease, nor the minimum limits
specified herein with respect to Tenant's insurance coverage, shall be deemed to
limit or restrict in any way Tenant's liability arising under or out of this
Lease. With respect to each insurance policy required to be obtained by Tenant
under this Section, on or before the Lease Commencement Date, and at least
thirty (30) days before the expiration of any expiring policy or certificate
previously furnished, Tenant shall deliver to Landlord a renewed certificate of
insurance therefor, together with evidence of payment of all applicable
premiums. Each insurance policy required to be carried hereunder by or on behalf
of Tenant shall provide (and any certificate evidencing the existence of each
such insurance policy shall certify) that such insurance policy shall not be
canceled unless Landlord and any other additional insured under this Lease shall
have received thirty (30) days' prior written notice of such cancellation.
15.5 Tenant shall not do, permit or suffer to be done any act,
matter, thing or failure to act in respect of the Premises and/or the Building
that will invalidate or be in conflict with insurance policies covering the
Building or any part thereof, and shall not do, or permit anything to be done,
in or upon the Premises and/or the Building, or bring or keep anything therein,
which shall increase the rate of insurance on or related to the Building or on
any property located therein. If, by reason of the failure of Tenant to comply
with the provisions of this subsection, the insurance rate shall at any time be
higher than it otherwise would be, then Tenant shall reimburse Landlord on
demand, for that part of all premiums for any insurance coverage that shall have
been charged because of such violation by Tenant and which Landlord shall have
paid on account of an increase in the rate or rates in its own policies of
insurance.
15.6 Landlord and Tenant agree to obtain and maintain throughout the
term of this Lease endorsements to their respective All Risk Coverage policies
waiving the right of subrogation of their insurance companies against the other
party and its agents and employees. Each party hereto waives all claims for
recovery from the other party for any
18
loss or damage to any of its property arising from a risk insured against in the
standard All Risk Coverage insurance policies required to be carried pursuant to
this article, even though such loss was caused by the negligence of the Landlord
or Tenant, their agents and employees and even though Landlord or Tenant may not
actually have maintained such coverage.
Article XVI Services and Utilities.
----------------------------------
Throughout the Lease Term, Landlord agrees to furnish to Tenant the
following services:
(1) Electricity during normal business hours for normal
lighting purposes and the operation of ordinary office equipment and the
operation of such equipment as identified in Exhibit B-1 hereto;
-----------
(2) Adequate supplies for toilet rooms;
(3) Normal and usual cleaning services for the Premises
(except for the computer room) after business hours each day
except on Saturdays, Sundays and legal holidays recognized by
the United States Government as set forth in Exhibit E; Hot and
---------
cold running water in the bathrooms;
(4) Air cooling/heating, when required, between the hours
of 8:00 A.M. and 6:00 P.M. Mondays through Fridays and between 8:00 A.M. and
1:00 P.M. on Saturdays, except on legal holidays recognized by the United States
Government ("Building Standard Hours"). Landlord reserves the right to establish
and collect a charge for air cooling/heating utilized by Tenant during hours
and/or days other than during Building Standard Hours, but Landlord's failure to
establish and/or collect such charge shall not be deemed a waiver of Landlord's
right to include all costs for air cooling in the computation of Operating
Expenses. The cost for cooling/heating and electric to Tenant other than during
Building Standard Hours from and after the Lease Commencement Date will be Fifty
Dollars ($50.00) per hour, subject to change from time to time by Landlord upon
written notice to Tenant (provided such charge reflects Landlord's costs only).
Landlord acknowledges that the separate air conditioning unit servicing the
computer room is not subject to the foregoing additional charge;
(5) All electric bulbs, ballasts and fluorescent tubes in
standard light fixtures in the Premises and the Common Areas;
(6) Lamping of all Building standard ceiling lighting
fixtures in the Premises; and
(7) An electronic card-key building access system which
will provide Tenant with twenty-four (24) hours per day, seven (7) days per week
access to the Building, Premises, elevators and parking lot, provided, however,
that Tenant acknowledges and agrees that repairs, hazardous conditions and
circumstances beyond Landlord's reasonable control may prevent access to the
Premises or parking lot from time to time.
Article XVII Liability of Landlord.
-----------------------------------
17.1 Landlord, its employees and agents shall not be liable to
Tenant, its employees, agents, invitees or any person or entity claiming through
Tenant for any damage (including indirect and consequential damage), injury,
loss or claim (including claims for the interruption of or loss to business)
based on or arising out of any cause whatsoever (except as otherwise provided in
this Section), including without limitation the following: repair to any portion
of the Premises or the Building; interruption in the use of the Premises or any
equipment therein; any accident or damage resulting from any use or operation
(by Landlord, Tenant or any
19
other person or entity) of elevators or heating, cooling, electrical, sewerage
or plumbing equipment or apparatus termination of this Lease by reason of damage
to the Premises or the Building; fire, robbery, theft, vandalism, mysterious
disappearance or any other casualty; actions of any other tenant of the Building
or of any other person or entity; failure or inability of Landlord to furnish
any utility or service specified in this Lease; or leakage in any part of the
Premises or the Building, or from water, rain, ice or snow that may leak into,
or flow from, any part of the Premises or the Building, or from drains, pipes or
plumbing fixtures in the Premises or the Building; or use by Tenant of
furniture, in each instance, only to the extent such damage or claim was not due
to the gross negligence or willful misconduct of Landlord or Landlord's agents,
contractors, or employees. Any property stored or placed by Tenant or its
employees, agents, invitees or any other person or entity claiming through
Tenant in or about the Premises or the Building shall be at the sole risk of
Tenant, and Landlord shall not in any manner be held responsible therefor. If
any employee of Landlord receives any package or article delivered for Tenant,
then such employee shall be acting as Tenant's agent for such purpose and not as
Landlord's agent. For purposes of this Article, the term "Building" shall be
deemed to include the land.
17.2 (a) Tenant shall indemnify and hold Landlord, its
employees and agents harmless from and against all costs, damages, claims,
liabilities, fines, suits, expenses and damages of any kind (including
attorneys' fees) asserted by or on behalf of any person, entity or governmental
authority against Landlord, directly or indirectly, based on or arising out of
(a) Tenant's use and occupancy of the Premises or the business conducted by
Tenant therein, (b) any act or omission of Tenant or any employee, agent or
invitee of Tenant, or (c) any failure of Tenant to perform any of Tenant's
obligations under this Lease.
(b) Landlord shall indemnify and hold Tenant, its employees and
agents harmless from and against all costs, damages, claims, liabilities, fines,
suits, expenses and damages of any kind (including attorneys' fees) asserted by
or on behalf of any person, entity or governmental authority against Tenant,
directly or indirectly, based on or arising out of any act or omission of
Landlord or any employee, agent or invitee of Landlord.
17.3 If any landlord hereunder transfers the Building or such
landlord's interest therein, then such landlord shall not be liable for any
obligation or liability based on or arising out of any event or condition
occurring on or after the date of such transfer. Within fifteen (15) days after
any such transferee's request, Tenant shall attorn to such transferee and
execute, acknowledge and deliver any requisite or appropriate document submitted
to Tenant confirming such attornment.
17.4 Tenant shall not have the right to offset or deduct the amount
allegedly owed to Tenant pursuant to any claim against Landlord from any rent or
other sum payable to Landlord. Tenant's sole remedy for recovering upon such
claim shall be to institute an independent action against Landlord. Tenant shall
not seek the consolidation of any such action brought by Tenant with any action
brought by Landlord hereunder unless required by law.
17.5 If Tenant or any employee, agent or invitee of Tenant is
awarded a money judgment against Landlord, then recourse for satisfaction of
such judgment shall be limited to execution against Landlord's estate and
interest in the Building or the proceeds from the sale of the Building (or the
amount of the proceeds from the sale of the Building if such proceeds have been
distributed or commingled with other funds of the Landlord). No other asset of
Landlord, any partner of Landlord or any other person or entity shall be
available to satisfy, or be subject to, such judgment, nor shall any such
partner, person or entity be held to have personal liability for satisfaction of
any claim or judgment against Landlord or any partner of Landlord.
Article XVIII Rules and Regulations.
------------------------------------
Tenant, its agents. employees, and invitees shall at all times abide by
and observe the rules and regulations attached hereto as Exhibit F. In addition,
---------
Tenant, its agents, employees, and invitees, shall abide by and observe such
other reasonable and non-discriminatory rules or regulations as may be
promulgated from time to time by Landlord, with a copy sent to Tenant, for the
operation and maintenance of the Building: provided, however, that the same are
not
20
inconsistent with the provisions of this Lease. Nothing contained in this Lease
shall be construed to impose upon Landlord any duty or obligation to enforce
such rules and regulations, or the terms, conditions or covenants contained in
any other lease, as against any other tenant, and Landlord shall not be liable
to Tenant for violation of the same by any other tenant, its employees, agents,
or invitees. If there is any inconsistency between this Lease and the rules and
regulations as set forth in Exhibit F, this Lease shall govern.
---------
Article XIX Damage.
------------------
19.1 If the Premises or the Building are totally or partially damaged
or destroyed thereby rendering the Premises totally or partially inaccessible or
unusable, then Landlord shall diligently repair and restore the Building and,
only to the extent insurance proceeds are made available from Tenant's insurer,
the improvements within the Premises, to substantially the same condition they
were in prior to such damage or destruction; provided, however, that if (i) in
Landlord's reasonable judgment such repair and restoration cannot be completed
within one hundred eighty (180) days after the occurrence of such damage or
destruction (taking into account the time needed for effecting a satisfactory
settlement with any insurance company involved, removal of debris, preparation
of plans and issuance of all required governmental permits) or (ii) twenty
percent (20%) or more of the Premises or fifty percent (50%) or more of the
Building is damaged and less than one (1) year would remain of the Lease Term or
any renewal thereof upon completion of the repairs, then either party shall have
the right, at its sole option, to terminate this Lease as of the sixtieth (60th)
day after such damage or destruction by giving written notice of termination to
the other party within forty-five (45) days after the occurrence of such damage
or destruction.
19.2 If this Lease is terminated pursuant to Section 19.1 above, then
all rent shall be apportioned (based on the portion of the Premises which is
usable after such damage or destruction) and paid to the date of termination. If
this Lease is not terminated as a result of such damage or destruction, then
until such repair and restoration of the Building and, provided insurance
proceeds for the replacement of the improvements within the Premises are made
available from Tenant's insurer, the Premises are substantially complete, Tenant
shall be required to pay the Base Rent and Additional Rent only for the portion
of the Premises that is usable while such repair and restoration are being made.
Landlord shall bear the expenses of repairing and restoring the Building;
provided, however, that Landlord (i) shall not be required to repair or restore
the contents of the Premises, including without limitation, alterations,
decorations, furnishings, fixtures and equipment used or installed in the
Premises by or on behalf of Tenant and any other personal property of Tenant,
and (ii) shall be required to repair and restore the improvements within the
Premises only to the extent that insurance proceeds for same are made available
from Tenant's insurer. Tenant shall not be entitled to any compensation or
damages from Landlord for loss of the use of the whole or any portion of the
Premises or for any inconvenience or annoyance occasioned by any such damage,
repair or restoration.
19.3 Notwithstanding anything herein to the contrary, Landlord shall
not be obligated to restore the Premises or the Building and shall have the
right to terminate this Lease if (a) the holder of any mortgage fails or refuses
to make insurance proceeds available 7for such repair and restoration, (b)
zoning or other applicable laws or regulations do not permit such repair and
restoration, or (c) the cost of repairing and restoring the Building would
exceed fifty percent (50%) of the replacement value of the Building, whether or
not the Premises are damaged or destroyed, provided the leases of all other
tenants in the Building are similarly terminated.
21
Article XX Condemnation.
-----------------------
20.1 If all or any portion of the Building or the Premises or
occupancy thereof shall be permanently taken or condemned by any governmental or
quasi- governmental authority for any public or quasi-public use or purpose or
sold under threat of such a taking or condemnation (collectively,
"Condemnation"), and such Condemnation shall materially and adversely affect
Tenant's use of the Premises then this Lease shall terminate on the date
possession thereof is taken by authority and rent shall be apportioned as of
such date. In the event of the Condemnation of any portion of the Premises which
does not materially and adversely affect Tenant's use of the Premises, then this
Lease shall continue in full force and effect as to the part of the Premises not
Condemned, except that as of the date possession is taken by such authority
Tenant shall not be required to pay the Base Rent and Additional Rent with
respect to the part of the Premises Condemned. Notwithstanding anything herein
to the contrary, if twenty-five (25%) or more of the Land or fifty percent (50%)
or more of the Premises, or the Building is Condemned, then either party shall
have the right to terminate this Lease as of the date title vests in such
authority.
20.2 All awards, damages and other compensation paid by such authority
on account of such Condemnation shall belong to Landlord, and Tenant assigns to
Landlord all rights to such awards, damages and compensation. Tenant shall not
make any claim against Landlord or the authority for any portion of such award,
damages or compensation attributable to damage to the Premises, value of the
unexpired portion of the Lease Term, loss of profits or goodwill, leasehold
improvements or severance damages. Tenant may, if allowed by statute, seek such
awards or damages for moving expenses, loss of profits and fixtures and other
equipment installed by it which do not, under the terms of this Lease, become
the property of Landlord at the termination hereof. Such awards or damages must
be made by a condemnation court or other authority and must be separate and
distinct from any award to Landlord for the Land and Building and shall not
diminish any award of Landlord.
Article XXI Default of Tenant.
-----------------------------
21.1 Each of the following shall constitute an Event of Default: (a)
Tenant's failure to make any payment of the Base Rent, Additional Rent or any
other sum (i) within five (5) days notice from Landlord that such payment has
not been made ("Landlord Notice") or (ii) if Tenant has received three (3) such
Landlord Notices during such Lease Year within five (5) days after such
payment's due date; (b) Tenant's failure to take possession of the Premises
within sixty (60) days of the Lease Commencement Date; (c) Tenant's violation or
failure to perform or observe any other covenant or condition, which violation
or failure continues for a period of thirty (30) days after notice thereof from
Landlord, or if such violation or failure is remediable but is of such a nature
that it cannot be remedied within such thirty (30) day period, then for such
longer period (not to exceed ninety (90) days subject to Force Majeure ) as may
reasonably be required, provided that Tenant promptly commences and diligently
pursues such remedy to completion; (d) Tenant's abandonment or vacation of the
Premises; (e) an Event of Bankruptcy as specified in Article XXII with respect
to Tenant, any general partner of Tenant (a "General Partner") or any Guarantor;
or (f) Tenant's dissolution or liquidation.
21.2 If there shall be an Event of Default, including an Event of
Default prior to the Rent Commencement Date, then Landlord shall have the right,
at its sole option, to terminate this Lease. In addition, with or without
terminating this Lease, Landlord may re-enter, terminate Tenant's right of
possession and take possession of the Premises. The provisions of this Article
shall operate as a notice to quit, any other notice to quit or of Landlord's
intention to re-enter the Premises being hereby expressly waived. If necessary,
Landlord may proceed to recover possession of the Premises under and by virtue
of the laws of the Commonwealth of Virginia, or by such other proceedings,
including re-entry and possession, as may be applicable. If Landlord elects to
terminate this Lease and/or elects to terminate Tenant's right of possession,
then everything contained in this Lease to be done and performed by Landlord
shall cease, without prejudice, however, to Landlord's right to recover from
Tenant all rent and other sums due under the terms and conditions of this Lease.
Whether or not this Lease and/or Tenant's right of possession is terminated,
Landlord may, but shall not be obligated to, relet the Premises or any part
thereof, alone or together with other premises, for such rent and upon such
terms and
22
conditions (which may include concessions or free rent and alterations of the
Premises) as Landlord, in its sole discretion, may determine, but Landlord shall
not be liable for, nor shall Tenant's obligations be diminished by reason of,
Landlord's failure to relet the Premises or collect any rent due upon such
reletting. Whether or not this Lease is terminated, Tenant nevertheless shall
remain liable for any Base Rent, Additional Rent or damages which may be due or
sustained prior to such default, all costs, fees and expenses (including without
limitation reasonable attorneys' fees, brokerage fees, expenses incurred in
placing the Premises in rentable condition and tenant finish necessitated to
obtain the new tenant) incurred by Landlord in pursuit of its remedies and in
renting the Premises to others from time to time. Tenant shall also be liable
for additional damages which at Landlord's election shall be either:
(a) an amount equal to the Base Rent, Additional Rent and other
amounts due Landlord which would have become due during the remainder of the
Lease Term, less the amount of rental, if any, which Landlord receives during
such period from others to whom the Premises may be rented (other than any
Additional Rent payable as a result of any failure of such other person to
perform any of its obligations), which damages shall be computed and payable in
monthly installments, in advance, on the first day of each calendar month
following Tenant's default and continuing until the date on which the Lease Term
would have expired but for Tenant's default. Separate suits may be brought to
collect any such damages for any month(s), and such suits shall not in any
manner prejudice Landlord's right to collect any such damages for any subsequent
month(s), or Landlord may defer any such suit until after the expiration of the
Lease Term, in which event the cause of action shall be deemed not to have
accrued until the expiration of the Lease Term: or
(b) an amount equal to the Present Value Damages. "Present Value
Damages" shall be an amount equal to the present value (as of the date of
Tenant's default) of the difference between (i) the Base Rent and Additional
Rent that would have become due through the date on which the Lease Term would
have expired but for Tenant's default, and (ii) the fair market rental value(as
reasonably determined by Landlord) of the Premises for the same period, which
Present Value Damages shall be payable to Landlord in a lump sum on demand. For
purpose of this Section, present value shall be computed by discounting at a
rate equal to one (1) whole percentage point above the discount rate then in
effect at the Federal Reserve Bank of New York. Tenant waives any right of
redemption, re-entry or restoration of the operation of this Lease under any
present or future law, including any such right which Tenant would otherwise
have if Tenant shall be dispossessed for any cause.
21.3 Landlord's rights and remedies set forth in this Lease are
cumulative and in addition to Landlord's other rights and remedies at law or in
equity, including those available as a result of any anticipatory breach of this
Lease. Landlord's exercise of any such right or remedy shall not prevent the
concurrent or subsequent exercise of any other right or remedy. Landlord's delay
or failure to exercise or enforce any of Landlord's rights or remedies or
Tenant's obligations shall not constitute a waiver of any such rights, remedies
or obligations. Landlord shall not be deemed to have waived any default unless
such waiver expressly is set forth in an instrument signed by Landlord. If
Landlord waives in writing any default, then such waiver shall not be construed
as a waiver of any covenant or condition set forth in this Lease except as to
the specific circumstances described in such written waiver. Neither Tenant's
payment of a lesser amount than the sum due hereunder nor Tenant's endorsement
or statement on any check or letter accompanying such payment shall be deemed an
accord and satisfaction, and Landlord may accept the same without prejudice to
Landlord's right to recover the balance of such sum or to pursue any other
remedy available to Landlord. Landlord's re-entry and acceptance of keys shall
not be considered an acceptance of a surrender of this Lease.
21.4 If more than one natural person and/or entity shall execute this
Lease as Tenant, then the liability of each such person or entity shall be joint
and several. Similarly, if Tenant is a general partnership or other entity the
partners or members of which are subject to personal liability, then the
liability of each such partner or member shall be joint and several.
21.5 If Tenant fails to make any payment to any third party or any act
herein required to be made or done by Tenant, upon the occurrence of an Event of
Default with respect thereto, or sooner if such failure presents a material risk
to Landlord's interest in the Building
23
and Landlord gives Tenant prior written notice of same, then Landlord may, but
shall not be required to, make such payment or do such act. Landlord's taking
such action shall not be considered a cure of such failure by Tenant or prevent
Landlord from pursuing any remedy to which it is otherwise entitled in
connection with such failure. If Landlord elects to make such payment or do such
act, then all expenses incurred, plus interest thereon at the lesser of a rate
per annum (the "Default Rate") which is two (2) whole percentage points higher
than the highest Prime Rate as published in the Wall Street Journal's Money
Rates Column, or (ii) the highest non-usurious rate permitted under the laws of
the jurisdiction where the Building is located, from the date incurred to the
date of payment thereof by Tenant, shall constitute Additional Rent.
21.6 Landlord's Default and Tenant's Remedies. In the event of any
----------------------------------------
breach or default by Landlord under this Lease which breach or default is
remediable and which (i) continues for a period of thirty (30) days after notice
thereof from Tenant, then in addition to all other rights and remedies of Tenant
under this Lease and at law or equity, Tenant may (but shall not be obligated
to) cure such breach on behalf of Landlord, and upon demand by Tenant Landlord
shall promptly pay to Tenant the reasonable and actual costs and expenses of
such cure. Provided, however, that such breach or default is of a nature that it
cannot be remedied within a thirty (30) day period then Tenant shall not have
the foregoing right unless Landlord is not diligently pursuing a remedy to
completion. Notwithstanding anything contained in this Lease to the contrary, in
the event of an emergency situation, the correction of which is Landlord's
responsibility, Tenant shall immediately notify Landlord or the property manager
orally or by facsimile, and upon the failure of Landlord or the property manager
to promptly correct the emergency situation, Tenant shall have the right to
correct the same and receive reimbursement therefor provided that the failure of
Landlord to immediately correct the emergency situation shall not be considered
a Default under this Lease. An "emergency" situation shall be presumed if the
prompt or immediate failure to cure has the potential to result in injuries to
persons or damage to property.
When Tenant makes demand for payment, Tenant shall furnish Landlord an
itemized statement of the costs and expenses incurred for cure. All costs and
expenses incurred or advanced by Tenant under this Section 21.6 shall accrue
interest at the Default Rate from thirty (30) days after the date Landlord
receives a demand for payment and an itemized statement of such costs and
expenses until payment is made in fully by Landlord. Tenant's rights hereunder
to cure Landlord's default shall not be deemed to (i) impose an obligation on
Tenant to do so, (ii) render Tenant liable to Landlord or any third party for an
election not to do so, (iii) relieve Landlord from any performance obligation
hereunder or (iv) relieve Landlord from any indemnity obligation herein.
21.7 Delay; Waiver. No delay or omission by either party hereto to
-------------
exercise any right or power accruing upon any noncompliance or default by the
other party with respect to any of the terms of this Lease shall impair the
exercise of any such right or power or otherwise be construed to be a waiver
thereof, except as otherwise herein provided. A waiver by either of the parties
hereto of any of the covenants, conditions or agreements hereof to be performed
by the other shall not be construed to be a waiver of any subsequent breach
thereof or of any other covenant, condition, or agreement herein contained.
21.8 Other Remedies. If either party shall fail to perform any of the
--------------
covenants, conditions, requirements or obligations attributable to it under this
Lease, then the other party shall have the right to seek any and all remedies to
which it may be entitled at law or in equity, including injunctive relief or an
order to compel performance.
Article XXII Bankruptcy.
-----------------------
The following shall be Events of Bankruptcy under this Lease: (a)
Tenant, a Guarantor or a General Partner becoming insolvent, as that term is
defined in Title 11 of the United States Code (the "Bankruptcy Code"), or under
the insolvency laws of any state (the "Insolvency Laws"): (b) appointment of a
receiver or custodian for any property of Tenant, a Guarantor or a General
Partner, which is not dismissed within forty-five (45) days of such
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appointment or the institution of a foreclosure or attachment action upon any
property of Tenant, a Guarantor or a General Partners (c) filing of a voluntary
petition by Tenant, a Guarantor or a General Partner under the provisions of the
Bankruptcy Code or Insolvency Laws; (d) filing of an involuntary petition
against Tenant, a Guarantor or a General Partner as the subject debtor under the
Bankruptcy Code or Insolvency Laws, which either (i) is not dismissed within
forty-five (45) days of filing, or (ii) results in the issuance of an order for
relief against the debtor; or (e) Tenant, a Guarantor or a General Partner
making or consenting to an assignment for the benefit of creditors or a
composition of creditors.
Article XXIII Subordination.
---------------------------
23.1 This Lease is subject and subordinate to all ground or underlying
leases and to all mortgages and/or deeds of trust which may now or hereafter
affect the real property of which the Premises form a part, and to all renewals,
modifications, consolidations, replacements and extensions thereof. This clause
shall be self-operative and no further instrument of subordination shall be
required by any mortgagee or trustee. In confirmation of such subordination,
Tenant shall execute within twenty (20) days any certificate that Landlord or
such ground lessor or holder of such deed of trust may reasonably request.
Notwithstanding the foregoing, the party secured by any such deed of trust shall
have the right to recognize this Lease and, in the event of any foreclosure sale
under such deed of trust, this Lease shall continue in full force and effect at
the option of the party secured by such deed of trust or the purchaser under any
such foreclosure sale in which event Tenant shall attorn to such purchaser and
shall recognize such purchaser as the Landlord under this Lease. Upon such
attornment such purchaser shall not be (a) bound by any payment of the Base Rent
or Additional Rent more than one (1) month in advance, (b) bound by any
amendment of this Lease made without the consent of the holder of the deed of
trust existing as of the date of such amendment, (c) liable for damages for any
breach, act or omission of any prior landlord (provided, however, purchaser
shall be responsible for any such breach, act or omission that continues after
the date of attornment but only to the extent it occurs after such date), or (d)
subject to any offsets or defenses which Tenant might have against any prior
landlord provided, however, that after succeeding to Landlord's interest, such
purchaser shall perform in accordance with the terms of this Lease all
obligations of Landlord arising after the date such purchaser acquires title to
the Building. Within twenty (20) days after the request of such purchaser,
Tenant shall execute, acknowledge and deliver any requisite or appropriate
document submitted to Tenant confirming such attornment. Tenant waives the
provisions of any law or regulation, now or hereafter in effect, which may give
or purport to give Tenant any right to terminate or otherwise adversely affect
this Lease and the obligations of Tenant hereunder in the event that any such
foreclosure or other proceeding is prosecuted or completed.
23.2 At the option of any landlord under any ground or underlying
lease to which the Lease is now or may hereafter become subject or subordinate,
Tenant agrees that neither the cancellation nor termination of such ground or
underlying lease shall by operation of law or otherwise, result in cancellation
or termination of this Lease or the obligations of Tenant hereunder. Tenant
covenants and agrees to attorn to such landlord or to any successor to
Landlord's interest in such ground or underlying lease subject to the attornment
provisions set forth above. In that event, this Lease shall continue as a direct
lease between Tenant and such landlord or its successor.
23.3 (a) After receiving notice from any person, firm or other entity
that it holds a mortgage or deed of trust on the Building or the Land, no notice
from Tenant to Landlord alleging any default by Landlord shall be effective
unless and until a copy of the same is given to such holder, provided that
Tenant shall have been furnished with the name and address of such holder. Any
such holder shall have an additional time period equal to the initial time
period allowed to Landlord, after receipt of notice from Tenant of a default by
Landlord under this Lease to cure such default before Tenant may exercise any
remedy hereunder. The curing of any of Landlord's defaults by such holder shall
be treated as performance by Landlord.
23.4 Landlord will endeavor to obtain a nondisturbance agreement from
Landlord's present mortgagee in substantially the form attached as Exhibit G.
Landlord will use
25
commercially reasonable efforts to obtain a nondisturbance agreement from any
future mortgagees.
Article XXIV Delivery at End of Lease Term,
------------------------------------------
24.1 On the Lease Expiration Date, Tenant shall without notice quit
and surrender the Furniture and Premises broom clean and in the same order and
condition in which they were on the Rent Commencement Date (except for ordinary
wear and tear and damage by fire or other casualty, which damage is governed by
Article XIX), together with all Alterations which may have been made in or
attached to the Premises unless Landlord elects to have Tenant remove the same
in accordance with this Lease. Upon surrender, Tenant shall remove its Personal
Property and movable trade fixtures and repair any damage to the Premises caused
thereby. Any property of Tenant not promptly removed shall be deemed to have
been abandoned by Tenant and to have become the property of Landlord and may be
retained by Landlord or disposed of at Tenant's expense (Tenant hereby agreeing
to remain liable for the cost thereof even though this Lease shall have
terminated) as Landlord shall so desire.
24.2 If Tenant or any party claiming under Tenant remains in
possession of the Premises, or any portion thereof, after the Expiration Date,
no tenancy or interest in the Premises shall result therefrom, unless Landlord
elects as hereinafter provided, but such holding over shall be an unlawful
detainer and all such parties shall be subject to immediate eviction and
removal. If, without consent of Landlord, Tenant or any party claiming under
Tenant remains in possession of the Premises, or any part thereof, after the
Expiration Date, Landlord may, in addition to its other rights, elect, in its
sole discretion, to treat such holding over by Tenant as the creation of a
month-to-month tenancy subject to all of the terms, covenants and conditions set
forth in this Lease insofar as the same are applicable to a month-to-month
tenancy, except that Tenant shall pay a monthly Base Rent equal to two (2) times
the monthly Base Rent in effect during the last month of the term of the Lease.
Article XXV Covenant of Landlord.
--------------------------------
25.1 Subject to the terms and conditions of this Lease, Tenant shall,
during the Lease Term, quietly occupy and enjoy the full possession of the
Premises without molestation or hindrance by Landlord or any third parties
acting or claiming by or through Landlord.
25.2 Landlord hereby reserves to itself and its successors and assigns
the following rights (all of which are hereby consented to by Tenant): (i) to
change the street address and/or name of the Building and/or the arrangement
and/or location of entrances, passageways, doors, doorways, corridors,
elevators, stairs, toilets, or other public parts of the Building, (ii) to
control and operate the public portions of the Building and the public
facilities, as well as facilities furnished for the common use of the tenants,
and to make improvements or modifications to the Building or the Land in such a
manner as it deems best for the benefit of tenants generally, and (iii) to
erect, use and maintain pipes and conduits in and through the Premises (any such
pipes or conduits to be above hung ceilings or inside walls). Landlord may
exercise any or all of the foregoing rights without being deemed to be guilty of
an eviction, actual or constructive, or a disturbance or interruption of the
business of Tenant or Tenant's use or occupancy of the Premises. Landlord shall
perform such work in a manner so as to minimize interference with Tenant's
business.
Article XXVI General Provisions.
-------------------------------
26.1 No Representations by Landlord. Tenant acknowledges that neither
------------------------------
Landlord nor any broker, agent or employee of Landlord has made any
representations or promises with respect to the Premises or the Building except
as herein expressly set forth, and no rights, privileges, easements or licenses
are acquired by Tenant except as herein expressly set forth. Tenant, by taking
possession of the Premises, shall accept the same "as is" (subject to the work
to be performed pursuant to Exhibit B), and such taking of possession shall be
conclusive evidence that the Premises and the Building are in good and
satisfactory condition at the time of such taking of possession, minor punch
list items and latent defects excepted.
26
26.2 No Partnership. Nothing contained in this Lease shall be deemed
--------------
or construed to create a partnership or joint venture of or between Landlord and
Tenant, or to create any other relationship between the parties hereto other
than that of Landlord or Tenant.
26.3 Broker. Landlord recognizes Cushman & Wakefield and CB/Richard
------
Ellis (the "Brokers") as the sole brokers procuring this Lease and shall pay
said Brokers a commission therefor pursuant to a separate agreement between said
Brokers and Landlord. Landlord and Tenant each represent and warrant to one
another that except as set forth herein neither of them has employed any broker,
agent or finder in carrying on the negotiations relating to this Lease. Landlord
shall indemnify and hold Tenant harmless, and Tenant shall indemnify and hold
Landlord harmless, from and against any claim or claims for brokerage or other
commission arising from or out of any breach of the foregoing representation and
warranty by the respective indemnitors.
26.4 Estoppel Certificate. Tenant agrees, at any time and from time
--------------------
to time and within twenty (20) days after written request by Landlord, to
execute, acknowledge and deliver to Landlord a statement in writing (i)
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications, that the Lease is in full force and effect as
modified and stating the modifications), (ii) stating the rent payable and dates
to which the rent and any other charges hereunder have been paid by Tenant,
(iii) stating whether or not, to the best knowledge of Tenant, Landlord is in
default in the performance of any covenant, agreement or condition contained in
this Lease, and if so, specifying each such default of which Tenant may have
knowledge, (iv) stating the address to which notices to Tenant should be sent,
(v) stating the commencement and expiration dates of this Lease, including any
optional renewals and (vi) certifying to such other matters as Landlord may
reasonably request ("Estoppel Certificate"). Any such statement delivered
pursuant hereto may be relied upon by any owner of the Building or the Land, any
prospective purchaser of the Building or the Land, any mortgagee or prospective
mortgagee of the Building or the Land or of Landlord's interest in either, or
any prospective assignee of any such mortgagee. If Tenant fails to deliver the
certificate as required, Tenant hereby acknowledges that the Estoppel
Certificate is true in all aspects and can be relied upon by third parties.
26.5 Waiver of Jury Trial. LANDLORD, TENANT, ALL GUARANTORS AND
--------------------
GENERAL PARTNERS HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON OR IN
RESPECT OF ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT HEREUNDER, TENANT'S USE OR
OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE. Tenant consents
to service of process and any pleading relating to any such action at the Tenant
notice address set forth in Section 26.6; provided, however, that nothing herein
shall be construed as requiring such service at the Premises. Landlord, Tenant,
all Guarantors and all General Partners of Tenant waive any objection to the
venue of any action filed in any court situated in the jurisdiction in which the
Building is located and waive any right under the doctrine of forum non
conveniens or otherwise, to transfer any such action filed in any such court to
any other court.
26.6 Notices. All notices or other communications hereunder shall be
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in writing and shall be deemed duly given if delivered in person (with receipt
therefor), or sent by recognized overnight delivery service or where sent by
certified or registered mail, return receipt requested, first-class postage
prepaid, (i) if to Landlord at 1058 Thomas Jefferson Street, N.W., Suite 200,
Washington, D.C. 20007, Attn: Julia A. Tolkan, with a copy to Thomas J. Colucci,
Walsh, Colucci, Stackhouse, Emrich & Lubely, P.C., 2200 Clarendon Boulevard,
13th Floor, Arlington, Virginia 22201, and (ii) if to Tenant at 45 Danbury Road,
Wilton, Connecticut 06897, Attn: Kenneth J. Hall, Executive Vice President and
Chief Financial Officer with a copy to Bishop Nowotnik, Manager-Corporate
Facilities and Administration_____________, with another copy to Gould & Wilkie
LLP, One Chase Manhattan Plaza, New York, New York 10005, Attn: George J. Walsh,
Esquire unless notice of a change of address is given pursuant to the provisions
of this Article. All notices sent by recognized overnight delivery service shall
be
27
effective upon receipt and all notices sent by mail hereunder shall be deemed
for all purposes to have been received by the addressee three (3) business days
after the date of mailing.
26.7 Invalidity of Particular Provisions. If any provision of this
-----------------------------------
Lease or the application thereof to any person or circumstances shall to any
extent be invalid or unenforceable, the remainder of this Lease, or the
application of such provision to persons or circumstances other than those to
which it is invalid or unenforceable, shall not be affected thereby, and each
provision of this Lease shall be valid and be enforced to the fullest extent
permitted by law.
26.8 Gender and Number. Feminine or neuter pronouns shall be
-----------------
substituted for those of the masculine form, and the plural shall be substituted
for the singular number, in any place or places herein in which the context may
require such substitution.
26.9 Benefit and Burden. The provisions of this Lease shall be
------------------
binding upon, and shall inure to the benefit of. the parties hereto and each of
their respective representatives, successors and assigns. Landlord may freely
and fully assign its interest hereunder.
26.10 Entire Agreement. This Lease, together with the Exhibits
----------------
attached hereto, contains and embodies the entire agreement of the parties
hereto, and no representations, inducements or agreements, oral or otherwise,
between the parties not contained in this Lease and the Exhibits, shall be of
any force or effect. This Lease may not be modified, changed or terminated in
whole or in part in any manner other than by an agreement in writing duly signed
by both parties hereto.
26.11 Authority. Landlord and Tenant hereby covenant each for
---------
itself, that each has full right, power and authority to enter into this Lease
upon the terms and conditions herein set forth. If Tenant signs as a
corporation, each of the persons executing this Lease on behalf of Tenant does
hereby covenant and warrant that Tenant is a duly authorized and existing
corporation, qualified to do business in the Commonwealth of Virginia, that the
corporation has full right and authority to enter into this Lease, and that each
and both of the persons signing on behalf of the corporation were authorized to
do so.
26.12 Time of the Essence. Time is of the essence of each provision
-------------------
of this Lease.
26.13 Attorney's Fees. If as a result of Event of Default, Landlord
---------------
uses the services of an attorney in order to secure compliance with such
provisions or recover damages therefor, or to terminate this Lease or evict
Tenant, Tenant shall reimburse Landlord upon demand for any and all attorneys'
fees and expenses so incurred by Landlord, provided that if Tenant shall be the
prevailing party in any legal action brought by Landlord against Tenant, upon
rendering of a final non-appealable judgment, Tenant shall be entitled to
recover for the fees of its attorneys in such amount as the court may adjudge
reasonable.
26.14 Captions. Article and Section headings are used for
--------
convenience and shall not be considered when construing this Lease.
26.15 No Recording. This Lease shall not be recorded. This Lease
------------
shall not be recorded in any office legally established for the purpose of
giving public notice of real estate records and any attempt to do so by Tenant
may be treated by Landlord as an Event of Default under this Lease. In the event
Tenant does record this Lease or any memorandum thereof, Tenant by such act
irrevocably constitutes and appoints Landlord as its special attorney-in-fact to
execute any and all documents required to remove the Lease or any memorandum
thereof from the public records.
26.16 Governing Law. This Lease is governed under the laws of the
-------------
Commonwealth of Virginia.
26.17 Examination of Lease. Submission of this Lease for examination
--------------------
or signature by Tenant shall not constitute reservation of or option for lease,
and the same shall not be effective as a lease or otherwise until execution and
delivery by both Landlord and Tenant.
28
26.18 Survival. Tenant's liabilities existing as of the expiration
--------
or earlier termination of the Lease Term shall survive such expiration or
earlier termination.
26.19 Force Majeure. If either party is in any way delayed or
-------------
prevented from performing any of its obligations under this Lease due to fire,
act of God, governmental act or failure to act, strike, labor dispute, inability
to procure materials or any other cause beyond such party's reasonable control
(whether similar or dissimilar to the foregoing events), then the time for
performance of such obligation shall be excused for the period of such delay or
prevention and extended for a period equal to the period of such delay or
prevention provided however that in no event shall Tenant be excused from timely
paying Rent, Additional Rent, and any other amounts due hereunder.
26.20 Acknowledgment by the Parties. Landlord and Tenant understand,
-----------------------------
agree and acknowledge that:
a. This Lease has been freely negotiated by both parties; and
b. That, in any controversy, dispute, or contest over the
meaning, interpretation, validity, or enforceability of this Lease or any of its
terms or conditions, there shall be no inference, presumption, or conclusion
drawn whatsoever against either party by virtue of that party having drafted
this Lease or any portion thereof.
26.21 Deed of Lease. For purposes of Section 55-2, Code of Virginia
-------------
(1950), as amended, this Lease is and shall be deemed to be a deed of lease.
26.22 Lender Consent. Within two (2) days after the date on which
--------------
this Lease is fully executed by the parties, Landlord shall submit a copy of
said Lease to its mortgage lender Riggs Bank. If said lender either approves
this Lease or fails to respond within five (5) days after receiving such Lease,
then this Lease is deemed approved by such lender and this Lease shall be in
full force and effect in accordance with the terms. In the case of no response
by such lender, Landlord shall confirm such non-response to Tenant on the sixth
day after lender's receipt of this Lease by faxing a note to Mr. Bishop Nowotnik
at 203-761-0770. If, however, the lender disapproves of this Lease within said
five (5) day period, Landlord shall so notify Tenant within two (2) days
thereafter and this Lease shall be null and void and of no further force or
effect and Landlord shall forthwith return to Tenant any security deposit or
rent payments theretofore made by Tenant.
26.23 Option to Expand.
----------------
(A) Tenant shall have a continuous first right to lease any or all
of the remaining space on the second floor of the Building ("Second Floor
Expansion Space"). If Tenant exercises its expansion option pursuant to this
Section 26.23 and the commencement date of such leasing of the additional space
is (a) within 365 days of the Effective Date, all the terms and conditions of
this Lease (including Base Rent (calculated on a square foot basis), the Base
Operating Expenses and Base Real Estate Taxes ) shall apply to the Second Floor
Expansion Space; or (b) Three Hundred Sixty-Five (365) days or more after the
Effective Date the terms and conditions, including rent, will be at market rate.
Landlord shall notify Tenant of any bonafide offer to lease all or a portion of
the Second Floor Expansion Space and deliver to Tenant a copy of any such
written bonafide offer together with an amendment to this Lease whereby such
Second Floor Expansion Space is included within the definition of Premises
herein. Tenant shall within five (5) business days of receipt of such notice,
either (i) notify Landlord that Tenant is not exercising its right to expand
into the Second Floor Expansion Space or (ii) sign an amendment to this Lease
that provides for Tenant to expand into the Second Floor Expansion Space
pursuant to the terms and conditions set forth herein and commence paying rent
no later than the commencement date in the bonafide offer. In the event Tenant
notifies Landlord that it is not exercising its right to lease the Second Floor
Expansion Space, Landlord may lease all or a portion of the Second Floor
Expansion Space pursuant to such bonafide offer. If Tenant does not notify
Landlord pursuant to (i), above, or sign an amendment pursuant to (ii), above,
Tenant shall be deemed to have notified Landlord that it is not exercising its
expansion right pursuant to this Section and Landlord may lease such space
pursuant to the bonafide offer.
29
Notwithstanding the foregoing, if there is no bonafide offer for any such space
from a third party, Tenant still has the first right to lease all of the
remaining space on the second floor of the Building, but Tenant shall not have
the right, absent a third party offer, to lease less than all of the remaining
space on the second floor. If there is a bonafide third party offer, Tenant
shall have the right to either (i) lease all of the remaining space on the
second floor, or (ii) lease the space covered by the third party offer.
Additionally, the parties agree that an executed letter of intent from a third
party setting forth the terms of a proposed leasing shall constitute a bonafide
offer but other forms of written submissions by third parties or their brokers
may also constitute bonafide offers.
(B) Tenant shall have a continuous first right to lease additional
space on the first and third floors of the Building ("Expansion Space") at
market rates, terms and conditions. Landlord shall notify Tenant in writing of
the availability of any such space and the market rates, terms and conditions
and Tenant shall have thirty (30) days to either (i) accept such offer in
writing ("Acceptance Notice") or (ii) notify Landlord that it is not exercising
its option to lease the Expansion Space. In the event that Tenant accepts such
offer, Landlord shall provide Tenant with a lease for such space and Tenant
shall execute such lease with market rent, terms and conditions, for the
Expansion Space within fifteen (15) days of receipt of the lease from Landlord.
. If Tenant notifies Landlord that it is not exercising its option to expand,
pursuant to (ii) above, Landlord may lease all or a portion of the Expansion
Space at approximately such market rates, terms and conditions without any
further obligation to Tenant. If Tenant does not notify Landlord pursuant to
(ii) above or execute a lease within the time period herein, Tenant shall be
deemed to have notified Landlord that it is not exercising its expansion rights
pursuant to this Section and Landlord may lease all or a portion of the
Expansion Space at approximately such market rates, terms and conditions without
any further obligation to Tenant.
(C) Notwithstanding the foregoing, Tenant shall not have such option
to expand into the Second Floor Expansion Space or the Expansion Space if at the
time Tenant seeks to exercise its right to expand or at the time the lease term
on the expansion space would have otherwise have occurred (i) Tenant has
assigned the Lease or sublet more than forty percent (40%) of the Premises; or
(ii) Tenant has committed an Event of Default.
(D) Whenever in this Lease it is provided that a rent to be paid by
Tenant is to be the "market rent" or "market rate" such rent or rate shall be
determined as follows: Landlord and Tenant shall each appoint an independent
commercial real estate broker having at least ten (10) years of brokerage
experience in the general area in which Reston is located. Those two (2) brokers
shall coordinate in good faith in an effort to agree upon such rent or rate. If
those two (2) brokers reach agreement as to such market rent or rate, the
Landlord and Tenant shall be bound by such determination and the brokers shall
submit their determination to the parties in writing. If, however, the brokers
are unable to agree upon the market rent or rate, they shall appoint a third
independent broker of similar experience. The three (3) brokers shall then
coordinate in good faith in an effort to agree upon such rent or rate. If they
are able to reach agreement, they shall submit their determination in writing to
the parties. If they are unable to reach agreement within ten (10) days after
the third broker is appointed, then each of the three (3) brokers shall submit
their determinations in writing to the parties and the parties shall use the
average of the three (3) determinations as the market rent or rate for purposes
of this Lease. Each party shall pay the costs and expenses of the broker
appointed by it and shall share equally the costs of the third broker. If for
any reason a party fails or refuses to appoint a broker, then the determination
of the broker who is appointed shall be binding on the parties. Until the date
that the market rent or rate is determined by the brokers, Tenant shall continue
to pay at the same rental rate per square foot that Tenant had been paying (in
the case of the exercise of the lease extension option) or is then paying (in
the case of leasing additional space). Once the brokers determine the market
rent or rate the parties shall make such additional payments or refunds as are
necessary to properly reflect the rent due to the date of such determination.
26.24 (A) Satellite Dishes. So long as this Lease remains in effect,
----------------
Tenant shall be entitled to install, operate and maintain on the roof of the
Building, at Tenant's cost, up to three (3) satellite dishes that are not larger
than 24" in diameter (the "Dishes"), subject to the terms and conditions of this
Section 26.24. Any Dishes installed by Tenant on the roof of the
30
Building may only be used by Tenant for the purpose of communicating among
Tenant's offices or with Tenant's customers, suppliers and other parties with
whom Tenant conducts business (provided that in no event shall Tenant utilize
the Dishes to provide any services to any other tenants of the Building, or to
any third parties) and no third party provider my install any dishes on the roof
of the Building as a result of this Section 26.24 unless such third party
provider and Landlord execute a separate agreement permitting the same.
(B) Utility and Other Charges. Tenant shall pay for all
-------------------------
utilities consumed to install, maintain, operate and remove the Dishes and
associated equipment, together with the actual cost of any engineers or
consultants employed by Landlord to review or monitor same, to the extent not
separately metered, all as reasonably determined by Landlord. Tenant shall be
responsible for all costs associated with such metering of electrical
consumption of the Dishes and associated equipment, including, but not limited
to the cost of installing, maintaining, repairing and reading the metering
devices and subpanels. Tenant shall pay all taxes or other charges reasonably
attributable to the Dishes, including, without limitation, any increase in the
Building's real property tax.
(C) Installation of the Dishes. Prior to the installation of
--------------------------
the Dishes, Landlord shall have the right to reasonably approve the type, size,
height, weight and location of the Dishes and the manner and method of
installation and removal of the Dishes and related equipment, to, among other
things, insure that the Dishes will not adversely affect the roof or structural
elements of the Building. In the event Landlord in its reasonable discretion
determines that anything relating to the Dishes, including the installation and
removal thereof, could adversely affect the Building, Tenant shall not have the
right, described herein, to install such Dishes.
(D) Governmental Approvals. Prior to the installation of the
----------------------
Dishes and related equipment, Tenant shall secure and shall at all times
thereafter maintain all required approvals and permits of the Federal
Communications Commission and all other government authorities having
jurisdiction over the Dishes, the Building and/or Tenant's business, including
its communications, operations and facilities. Tenant shall at all times comply
with all laws and ordinances and all rules and regulations of municipal, state
and federal governmental authorities relating in any way to the Dishes including
but not limited to the installation, maintenance, height, location, use,
operation, and removal of the Dishes and related equipment and shall fully
indemnify Landlord against any loss, cost, or expense arising out of or in
anyway relating to the Dishes including but not limited to the installation,
maintenance, operation, or removal of the Dishes and equipment by Tenant.
Landlord makes no representation or warranty that applicable laws, ordinances or
regulations permit the installation or operation of the Dishes at the Building.
(E) Access to the Roof and Building. Tenant shall have the
-------------------------------
right, to be exercised as herein set forth, to enter upon the roof of the
Building for the purpose of gaining access during business hours, provided it is
daylight and provided further that such access and Tenant's installations do not
cause damage to or interfere with the operation or maintenance of any part of
the Building or with any other tenant's operation. In addition, Tenant shall
have the right, at its cost, to be exercised as herein set forth, to install
such equipment, conduits, cables and materials (hereinafter called "the
connecting equipment") in shafts, ducts, conduits, chases, utility closets and
other facilities of the Building as designated by Landlord as is reasonably
necessary to connect the Dishes to Tenant's other machinery and equipment in
other parts of the Building, subject to the requirements of any Laws and subject
to the connecting equipment not over-burdening such shafts, ducts, conduits,
chases, utility closets and other facilities. Tenant shall have the further
right of access to the areas where such connecting equipment is located for the
purpose of maintaining, repairing, testing and replacing the connecting
equipment; provided, however, Tenant shall notify Landlord each time Tenant
requires such access (which notice may be oral), and provided further that such
access and installations do not cause damage to or interfere with the operation
or maintenance of any part of the Building or with any other tenant's operation.
(F) Costs. Tenant shall within ten (10) days reimburse
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Landlord for the cost of repairs of any damage to the Building directly or
indirectly caused by Tenant's installations or the operation, maintenance or
removal thereof.
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(G) Maintenance of Dishes and Equipment. Tenant, at its
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expense, shall be solely responsible for and shall maintain the Dishes and
related equipment in a safe, structurally sound, clean and sightly condition.
Tenant shall not permit a mechanic's lien or liens to be placed upon the
Premises or the Building as a result of any Work made by it and agrees, if any
such lien be filed on account of the acts of Tenant, promptly to discharge the
same. In the event Tenant fails to discharge any such lien, it may be paid by
Landlord after written notice to Tenant without releasing Tenant and the cost
charged to Tenant as Additional Rent under this Lease.
(H) Indemnity; Insurance. Tenant agrees to indemnify and save
--------------------
harmless Landlord and its employees and agents from and against all costs,
damages, claims, liabilities, suits, expenses and damages of any kind arising
from, growing out of or resulting from or in connection with Tenant's
installation of the Dishes or Tenant's use of the roof of the Building or any
other areas in the Building where Tenant's related equipment is located,
including costs, attorney's fees and other expenses incurred by Landlord in
defending any such claim. All of Tenant's insurance obligations hereunder shall
apply to the Dishes and Tenant's use of the roof and Building under this
Section.
(I) Non-Exclusive Rights. The rights of Tenant hereunder shall
--------------------
not be deemed to give to Tenant the exclusive right to use the roof of the
Building and shall not preclude Landlord from granting the right to use the roof
of the Building to others. The rights of Tenant hereunder shall be exercised
without causing interference with the activities being carried on by others with
the same or similar rights. Tenant shall not change or materially alter the
Dishes or related equipment agreed to herein without the prior written consent
of Landlord, which consent shall not be reasonably withheld or delayed. Tenant's
Dishes shall not interfere with the use of the Building by Landlord or any
tenants thereof, or with any antenna or satellite dish users on the roof or the
Building as of the date hereof.
(J) Relocation of Dishes. Landlord shall have the right to
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cause Tenant to relocate the Dishes from the point of installation to another
area on the roof of the Building, provided that (i) Landlord shall reimburse
Tenant for the reasonable out-of-pocket costs of such relocation within thirty
(30) days after billing and (ii) the relocation shall not have a material
adverse impact on Tenant's use and operation of the Dishes, as relocated.
Landlord shall have the right to cause Tenant to remove the Dishes if the Dishes
interfere with the use of the Building by Landlord or any other Tenant and there
is no acceptable space on the roof to which the Dishes can be relocated.
(K) Removal. At the termination of this Lease, the Dishes and
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the related equipment installed under the terms of this Section shall be removed
by Tenant, at Tenant's sole cost and expense, and Tenant shall restore the roof
and the Building to as good condition as existed immediately prior to
installation of the Dishes and related equipment. If Tenant is required to
repair the roof or any other part of the Building pursuant to this Section,
Landlord shall have the right to choose the contractor or roof repair service
that shall make such repairs.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease under seal
on the day and year first hereinabove written.
WITNESS/ATTEST: LANDLORD:
11720 SUNRISCORP., L.L.C.
By: _________________________
Title: ______________________
WITNESS/ATTEST: TENANT:
MERCATOR SOFTWARE, INC.
By: _________________________
Title: _______________________
33